On May 29, 1973, President Richard M. Nixon, Alexander M. Haig, Jr., unknown person(s), George P. Shultz, Herbert Stein, Roy L. Ash, Arthur F. Burns, Kenneth R. Cole, Jr., John T. Dunlop, and John B. Connally met in the Oval Office of the White House from 4:03 pm to 5:10 pm. The Oval Office taping system captured this recording, which is known as Conversation 929-017 of the White House Tapes.
Transcript (AI-Generated)This transcript was generated automatically by AI and has not been reviewed for accuracy. Do not cite this transcript as authoritative. Consult the Finding Aid above for verified information.
I got off with quite a session.
He didn't mind the idea of leaving.
I thought Henry was just awfully tough.
We finally got down.
Push comes to shove.
He said he'd be willing to announce his departure in July and leave without labor debt.
He said now he would leave.
The decision was made to do it.
Come on.
But he would leave as soon as he announced his departure.
He couldn't go to the meetings he had some time.
Well, I expected that.
I expected it, you expected it, not me.
And he got into the wardrobe business.
He said, I'm the only clean one here, and I have to stay.
For that reason.
He said, certainly in a month or two, that'll be different.
So right now, the book is all I left to discuss.
I said, well, yeah, but I won't be able to come to these meetings.
I'm finally down on it.
It would be very hard for me to be supported.
I wish some of them may be mad.
Then I came back and I said, now look, Bill, I said, don't be mischievous.
The President's handing over for some kind of argument, you know what I mean?
He's only mad at the last moment.
I said, I came, I said, this is largely my fault.
as a result of the reality that you were going to be.
To me, how to take the best advantage of that situation.
And he said, well, calm down, Secretary of State.
And I said, well, that's fine.
I didn't hear anything else.
He has agreed that he would wait about Labor Day, and we could announce it either late July or after the summer.
He said that there would be no difficulty with entering and selling people for a living.
Between now and then.
Between now and then.
That's important.
And he said now, of course, all of this is dependent on how hard he goes.
discussed because of work.
He never assumed the other, that maybe he left me because we were making changes because of what I did.
He has a point there, though.
He has a point there.
Then I hit the end.
I started to fuzz the whole thing up because I didn't want to be any animosity.
And you, of course, made it clear that I wasn't trying to push him out.
No, sir, I made that verdict.
I said, really, I said, don't you misread this subjectively.
The premise, you know, wasn't you relieved.
And it was a question of, uh, either way, you know, that was a reality that had to be faced.
I had told him at the beginning that, uh, if he wanted an ambassadorship, uh, of course, that got him mad.
He said, no, no.
He's a very high ego.
But the more he thinks about it, the more he's going to get.
There's no sense in kidding ourselves.
He said he would talk to you about it.
I said, fine.
I said, well, I've come under the suspension of the president.
He's aware that you were leaving and likes this solution because it keeps Henry on the reservation.
I've met a time when we cannot afford to have a break with these constrictions.
Just the other day, they said, well, your assumption of life is different than my assumption of history.
We couldn't get out of the shore.
I think it's true.
I said, I'll be awesome.
I said, I for four years have watched history.
1910 had a period that makes no difference.
The fact is, it's not a time for the President to have any confining of these kinds of frictions when he's got so much else to deal with.
He's still wrong.
Next time, we're going to make a difference again, but at some hellish expense to the President himself.
Well, what are we, what are we, uh, we've got to meet with the economic guys, and I read the science papers, and, uh, and, uh, what are your plans for the rest of the year?
No, I have plans to sit in on the economic things that go on the wall there.
Yeah, good.
And afterwards, to be sure that they get on with the taxes.
Right, good.
And I've got work to do, you know.
Yeah, I think we want to think about it.
This was unsettling to him, but I didn't leave it as a position where at the end he left it, he busted up.
Yeah, I know.
It's moved over.
He has, he is definitely going to leave in the summer.
And I think that's very important.
The problem is happening.
He doesn't like that.
He doesn't want to, uh, he don't accept that.
Painful.
But you know, that's ego.
You gotta name it.
I don't mind substance.
That, that's fine.
You don't think that you could, uh, you don't think that you could manage this with Rush?
You understand what I'm saying?
And with Rush.
Really, the problem with Rush is
I don't, I don't, I don't, but with Rashi, he's going to have that problem.
Yeah, we would.
I'm talking about that.
Bill, we, Bill, Bill, Bill, Bill, Bill, Bill, Bill,
Well, come in, all the economists.
Hello, Arthur.
John, how are you?
Come on, John.
No protocol in here.
John's over here.
He'd like to be on the left.
Oh, yes.
First time.
This time.
Hold it.
Hold it.
Hold it on the right.
Yeah.
I'm moving to the left.
You got it?
Yeah.
I was trying to say that, uh, I don't believe, I don't believe that this is not here today.
I was quite impressed when I ran into her, to the effect that a number of major figures come out, you know, that she told us about, and she was sexually violent.
Well, you know, in the first week of June, this Friday, you'll get employment on one.
Go back to the wholesale price index.
The following Friday, during the week, we will get the nice equipment expenditure as well.
Uh, well, at least for our public health event, we'll probably have the information on Friday.
And, uh, we will also get the revised retail table figures for April, since those figures are supposed to be, uh, under lockable for the first time.
It will be pretty important to know, uh, whether we can get it tied up until they decline there.
But I think probably the most important thing will be to find the equipment, uh, for every day.
and the education that would give them the strength to invest a little better in their own way.
Now, I should say just within this room, there are about 1,500 numbers.
They have completed the manufacturing sector.
And where they previously had made an 18% increase for manufacturing manufacturers for 73, they now have 17.
But it did lead to me that we were...
Thank you.
Let me work.
Closer, Tony.
We got a decline in durable orders.
We got a little decline in...
The figures of April, and now we have today the leading indicators, which are keeping down for the first time.
And I do support the idea of the economy as a rule, and I want to figure out how long we want it to stay.
We haven't had any figures since we made the decision to indicate that things were more moving than we had thought.
Well, I think the question I heard is, talking around this discussion of obsessing the strength of the will in particular, and the investment cycle, if it turns out that the rate of increase in paper sheds is diminishing, this is exciting.
the economy is kind of sunning down.
We had a big burst in the first quarter.
Well, I think we are now still in the early stage of capital goods boom.
Business capital must be rising, rising with extraordinary
And this will continue.
The figures that are coming in are alarming to me.
I do not expect, as we read them, the figures are always late.
And I see practical wisdom in waiting.
And as Herb suggested, let's see what the figures show.
I had a business friend do some very discreet questioning today, telephoning all over the country, talking to the dust of the sea, looking at any change in the sun.
And this is one of the biggest stories I've heard.
Now, this contrasts very sharply with the psychology of investors and their sentiment has been very poor, has been deteriorating, and apparently consumer sentiment has been declining.
Now, we face another wave, as I see it, a dangerous move in business and investment.
but also a boom in inventory investment.
I checked this morning and found that the inventory sales ratio at the present time, the ratio of inventories to sales, is lower than many times since 1950.
So the businessmen are sure inventories, if visible, that is coming.
Now, you argue, well, this is wonderful, it's a good thing, but, uh, this is the rate of expansion of Canada, he says, and the, uh, we have the Federal Reserve, they've taken, uh, actions.
Right?
Constantly.
Billion per can.
I've got a speech appealing once again to bankers who must not extend the appeal to businessmen.
We've taken new regulatory measures that are mandatory.
We can't reach non-member banks.
We can't reach foreign banks who rise up in this country, but we've sent special letters of appeal to them.
So I see the picture as a dangerous one.
I think we may face a recession later on if we don't get just a little more of that control.
Beyond that, I think we have a serious problem of inflation.
Surveys of popular opinion indicate that this is what people are worried about, far more than anything else.
And we have an unhappy country.
We're prosperous, very prosperous, but it's an unhappy prosperity.
in good measure because of the inflation, what's happening in the stock market, and the interest rates rising the way they have been, and of late the Federal Reserve has in good measure been responsible for it.
Well, where are we going to be?
The Federal Reserve, we can go further than we have been.
We've already come off the bar and run the risk of bringing down the recession.
That would make no sense.
That would be more likely.
I think we've got to, for psychological reasons, for political reasons, for economic reasons, try to slow down the boom and take some new measures with a view to curbing the inflation, which is so troublesome to the earth.
Well, if you look at my shop, I think we've gone pretty far.
Beyond that, I think I would do something visible on the wage and price of beer.
And beyond that, I would do something on the physical side.
Now, it's true that before the election, we had decided, well, there are going to be new taxes.
And I've given a video of thought to that.
And the two measures, you've heard me speak to them before, which I think are reasonably consistent with that election pledge.
One is variable investment tax credit.
The purpose there is stabilizing the economy and the revenue effects are incidental.
And another is the compulsory savings plan, which you could set up the weirdest way.
You see, you have to exempt individuals below a saving count of 10,000.
You might want to burden them with a full RCO.
on business rather than individuals, and then on individuals, individuals in the upper income bracket.
You can do that in various ways.
It's composed for saving, tied to income in the case of individuals beyond a certain level of income, tied to profits in the case of corporations.
You can, at one extreme, just cite all of that purchasing power and pay no interest at all.
At another extreme,
pay a market rate of interest, I wouldn't do the latter.
Then, as for degree of effectiveness, you can make that money available to the Treasury.
Or, if you want to have maximum restraining effect on the economy, you can ask the Treasury or have the Treasury lock those funds up in the Federal Reserve, you see.
Now, the beauty of these 50 places is, as I see it, that every person
You do it now, and his life will not first take power.
And though he's too smart, there's no such thing as an expert on the economic future.
Take my word for it.
Six months later, if you want a reverse course, you can do that.
A regular type of tax, you see, where you're stuck with it.
How credible, Lord.
Let's talk about that.
not in terms of recommending it, but in terms of getting it.
Do you know what the, do you know what the hell we went through trying to get a tax bill before the response to the tax bill, if you can get something like this to happen?
I don't, I don't regret it a little bit.
I don't know what the tolls are hitting on me or the Congress.
I, well, I'll take that.
The, uh, the reduction of listeners to variable investment tax credit means that the person
Are we done?
I think this would be fun.
Well, maybe when I go further, no, there's no bulls rule anymore.
There's no bulls rule in the house, etc.
So what we're talking about is throwing this into a tax package, which should be of that much trust.
You've got a tax package out there now that Wilbur Mills is working on.
You know, whatever it is, the tax bill, the war over these days.
But you would prove, this is what I'm suggesting, what I'm asking, you would prove this sentence as another possible amendment to the tax proposals that are out there now.
And I would get, I don't think I would do it unless Wilbur Mills was willing to join you.
You can keep going for it.
This has to be done in a certain way.
For example, my board can put forward a proposal along these lines in connection with the report of the Congress and what we have to do.
And then what I recommended was a range from 0 to 10 or perhaps 15%.
We'd like it to be a regular state.
You see a little break in the business, you see.
Now, if, now, now, now, if you set the range, let's say, between three or four on one hand, and 15 or 16 on the other, you're gonna get a very different response from the business, because they can see a higher average investment tax credit themselves, and I think that side is already higher.
And you can meet that proposition.
As far as the Congress is concerned, there's always a political problem of discretion or regardation of the president, but there are too many places for limiting that.
Firstly, does giving Congress a certain veto power let us take an act on the reorganization of that machinery?
Secondly, modify that so that Congress can go beyond that.
For example, suppose that you want to go from a 7 to 10.
Right then, under special machine rate, Congress could move between the range of 9 and 11.
Go one below yours, or go up above, or possibly two points below or above.
So the Congress could play a larger partnership role.
Now, whether with these changes the thing would be saleable or not to the Congress, I don't know.
But as the President moved, and the President moved into Congress,
Uh, I think they will see in this immediate effect is an increased tax on business.
I think, I think they'd be less important on the, on the Democratic side.
Henry Washington would buy quickly much of it.
Makes me wonder if it's the right thing to do.
Any other views?
Mr. President, I understand all that Arthur has to say.
One of our problems is that we, very, very hard, a year and a half ago, in arguing with the investment tax credit, we didn't have enough investment in this country.
And particularly in manufacturing, we're going to have to get more competitive.
And we're getting an increase in investment.
I think, Arthur, we discussed this at a great length yesterday, and we all agree that
In a sense, the level of investment is not even adequate now.
So we all want to see more investment.
And it's only a question of the rate of change of the investment and whether it can be reasonably sustained that worries everybody, or worries Arthur, or worries the rest of us.
But in a sense, we are looking for a lot of things, including the investment tax credit, in order to bring about some results.
And we now are seeing those results.
So we have success.
It worked.
It worked so well.
I suppose we're saying that maybe we even have too much of a good thing, but we don't think we're there.
Mr. President, I would say just three things.
As to my view of the substantive economic situation, I would tend to join the statements of Herman and George, and be not quite so pessimistic as others.
On the other hand, in terms of what to do, I would find that the proposal would fit my view of the economy as well.
Quickly, the compulsory savings are, as I would call them, an economic stabilization reserve of life.
just on business because it is just business this last few months or two weeks without reporting such tremendous products and it really won't hurt business in any substantive economic way.
The public perception of it would be that we're taking on the right guys at this time.
I don't know if we're not really being hurt by the way we were doing, but with labor negotiations coming up, I think we should be frustrated.
responding to those problems that have been reported.
Coming to a gas tax that we talked about at some point yesterday, which has a whole reason and great rationale to play the energy position.
And then that would be kind of a package of what to do.
It would have economic effect.
It would have an earth effect.
And most of all, I think the visible presidential and administrative posture that first
We are interested in the subject, we are working on the subject, we have a position on the subject, and we're taking leadership on the subject.
And they are to me, making sense of what we should be doing here.
I would agree with all that, but I'm glad we had a long discussion yesterday.
I know we can probably do it all in a little while.
Worked also on a cemetery in Paris.
We reviewed that and tried to put the pieces together.
I developed grave doubts about the excise bags.
They're dead.
I defended Mr. President as the economist.
I was the economist trying to defend him.
I'm proud of siphoning on purchasing power.
I'm proud of dealing with energy problems.
But I think that, I think that the psychological and political effect of the increase in the exercise tax at this time could be injurious.
People are so worried about inflation.
And the average man thinking about this, what does he see?
Prices are up.
He's going to travel during the summer.
It's going to cost him more.
And then you've got wage contracts, about $4 million or so, tied to the cost of living index.
The cost of living index will go up a little.
And then I recall, I think I'll write in this, when Tom Padu, before his election, what did he do?
To deal with the inflation problem, he was working for the French people, and he was under severe criticism.
What he did was to lower the excise tax.
Now, a guy like me, looking in from the outside, could criticize things.
They're making other problems.
But I didn't believe he was probably right.
Well, this is something to think about.
I believe I got hurt.
Yes, I did.
Theoretically, this is good.
But I didn't believe he was right to be this person.
It's a question of, first, it should stand alone.
It should stand as a package of things that fall heavily in another direction.
And second, we have to consider a lot of the alternatives.
The other alternatives, the alternatives are a shortage that I think most all forecasts will say is going to be there, and with an expectation to drive slower, or an expectation to do something to not have the shortages that are being announced currently with political alternatives.
So to me, the issue of the tax at this time is a particularly tight-linked one, not because of the economics as much as the energy heading.
The energy heading is generally, first, we do have charges, but secondly,
can portray that it is a fact that the Arabs, most of all, are the ones that are doing the best out of our present energy condition.
And we're going to take that tax, as we yesterday discussed, and use it as an energy R&D funding mechanism.
We don't like to have
increased in effect total take without raising federal or without raising income taxes that we're all committed not to raise.
We haven't raised income taxes.
We have raised some money to not only accomplish domestic R&D, but to say to the Arabs, we really mean it.
We're going to go strongly against R&D.
We're going to go strongly for more R&D.
We are portraying it as a half patriotic thing and a half economic matter.
rather than we're just trying to collect money furthermore that effect will be probably to reduce consumption about down to the level where the shortage that we otherwise would have to deal with by the means will then be covered by just the elasticity of the market.
We need some money to not only accomplish domestic R&D, but to say to the Arabs, we really need it.
We're going to go strongly against R&D.
We're going to go strongly for more R&D.
We are portraying it as a half patriotic thing and a half economic matter, rather than we're just trying to collect money.
Further more than that, in fact, we'll be probably to reduce consumption about down to the level where
the shortage that we otherwise would have to deal with by the means.
Will that be covered by just the elasticity of the market?
or reduce consumption.
So we've avoided applying other pictorial mechanisms by applying this one.
We can build pictures as a, uh, we can raise the cash, and we can signal to the Arabs that we're going to spend X billion dollars to R&D, so we're not going to be having to cut off here.
So it's more than just raising money.
Sure, I realize it's negative economics, but it's anything that we do has some
Mr. President, I think that
The people of the country are concerned about energy and concerned about inflation.
I'm not so sure that he wants to take any more out of his pocket, though, to have to finance it, whether it's through an excise tax or an income tax.
I think they'd be pretty concerned about that, and I think that would be a very hard thing to sell.
I think the thing that you mentioned, Roy, about the...
uh the business savings that kind of thing attacks on business and gets set aside or whatever i think people would buy that kind of thing i think they would see that fact they'd probably cheer a little bit about it that's what it's happening the total package seems not to be requested the total package seems to be heavily of business and
There's something that individuals have to pay heavily on business, because business at the moment stands in a poor-raring position when it comes up to these negotiations.
And we've got to be seen doing something about those big profits.
It can either be many people pulling the big profit measures in to account for their profits in terms of which price to throw, or it can also be the form of
In fact, compulsory savings apply just to business earnings itself.
But I agree, yes, the tax-giving of all is bad politics, but yes, the tax could be packaged, though, with other things that would, at least in a good way, but I think it's also about competition.
But then, I think, I don't think it's quite in our hearts to leave that situation.
There are two or three things that can be done in the next week or ten days that are on the price and weight control area, which could be visible as far as we're concerned.
One, we have pending reports in the request of steel companies to increase their prices by about 4.8% on cheap steel.
uh and strip which constitutes about 40 of the products in the steel industry uh how we handle that whether fully hearing as the statute might seem to mandate whether we call them in to discuss it the data are now available and that's one opportunity to do something visible second the forms that are now coming into us as a result of the may 2nd action that we're
the pre-qualification forms and the profit forms are now before us and we could do a fairly visible profit sweep through the companies as these matters come in and I think show great concern about that as the project is
said the area of executive compensation is large increases in some corporations as you recall the president was a matter that they were members of our labor management and we are definitely going to do something then 33 we could
So there are a group of things that can be done on the way to the price side.
On, there's one other group of measures in the press which I have been very strong for and which I think has been helpful in my opinion.
I believe that the fact that the lumber prices have now come down very markedly and I think will continue to decline.
has been very substantially related to the supply measures which we have jointly taken with the agricultural department and others.
And it seems to me those measures can also be extended to scrap steel, where the government owns all kinds of scrap steel and they're making measures to get them sold.
That would be an important component in the price of steel and it would be helpful.
There are a whole series of supply measures of that sort which I think would be genuinely helpful in this.
areas, no one of them are very large, but activities on all those fronts, it seems to me, are imminent and can make some contribution to us.
If one, perhaps only the general observation, that I do think that if one reached a conclusion that the cattle boom is out of hand, I would like to ask one question
I think it's very important, Arthur, to know whether this is capital equipment, machine tools, and so forth, and to what extent it is construction.
To the extent that I have a day-to-day ceiling of construction, as you know I do, my opinion is that the capacity aspects of that are not yet close.
And I'm not only talking about those currently in effect, but the orders that come.
So I must say, I'm much distressed.
As George Holtz knows, by the decision of the oil companies, having not built an auto refinery for five or six years, they all of a sudden announced that they were going to build a chemical that would be a happy strain on certain manpower resources and so on.
Life is not as long as it seems to have been an auto refinery, because that's what she is very serious about.
uh given so i think it's important to know whether the capital home is how much of it is in the notion that some
The insulation of this province at this point, some postponement of their expenditures, I think might be a good thing.
I would lose that, it's not super easy.
But I do think that if the zoo turns out to be an artist's lease of speed, maybe right, then that would be a good forecast.
Well, we've heard from the economists, John was here, folks.
I'm not sure.
I don't know what you folks think.
I don't know what I meant, but I think we were talking before.
How do you see it now?
I'm not sure we've clearly identified our objectives.
I know I'm not clear on what we want to achieve.
I must say, I think we have two or three problems.
They don't all call for the same solution.
One of them is the problem of Wall Street that's having a very great deal to do with the basic question of people's fear in this country.
And that's not going to be solved by any problem that's been discussed here.
That's a separate, distinct problem in my view.
And I don't know of any solution to that at all.
They've got a bad situation, their overhead is bad, their volume is low, and they can't expect the volume to be sufficiently strong to maintain the overhead and the expansion of the existing waterway to keep it up.
plus the fact that they're fixing commission rates and it changed the two to three hundred million dollars that you know that's been taken out of it out of the market at the time they didn't have enough liquidity to sustain themselves so they're looking at a tax bill that uh
The first place, their whole business, nearly every one of them went public.
And I'll be late for this.
They went public.
They felt their movie set at 30 times earnings or set at 5 times earnings.
Most of them were set at 40 to 50 to 70 percent of market value.
And their market value, they're over as far as cash.
They're over as far as cash.
That's cash.
And if they're actually set below the cash value of the company, that's
So, obviously, every one of these things in the rest of the country, the president's hand in the legal right, they're singing the blues.
So, that's a separate state problem.
Now, but this has a lot to do with the attitude of the American people about what kind of a problem we've got in front of us.
Now, on the general economic picture, as I see it, we're right where we hoped to be and pray we'd be and fought to be two years ago.
You've got high savings, you've got high spending, you've got the capital goods investment, which
We recognized we were low weight before.
We were not competing with other countries around the world.
We analyzed our plant and our equipment and our plant investments in Croatia, Germany, Australia, Sweden, Switzerland, and so on.
And we had the most obsolete, divisible plant of any major industrialization in the world.
We're not getting out of it.
We've just done it.
I agree with Arthur that the rate is too steep.
We can't sustain the rate.
We're not going to sustain the rate.
We're not going to sustain it.
But we were on such a low base.
And sure, when you get this kind of kick, you're going to have an increasing rate.
Corporate profits are not too high.
They were too high in relation to 65, 66, 67.
That's my view at least.
They're high in relation to 69 and 70.
But my God, that was the lowest it had been since 1938.
If you remember, we talked about it.
We decided you have to do something about it.
Now, obviously, I don't know the answer to this.
If the present corporate profits and the present economic activity is such that it's going to trigger big wage escalations, then we ought to do something.
But if that's the problem, that doesn't identify us as the problem.
Now, rate of inflation, yes, it's number one on the head for rates before I get to it, sir.
Inflation, well, what is the rate of inflation?
rate of inflation is slightly in excess of 6%, say 6.5.
But every single economic study that I know anything about predicts that during the last half of this year, it'll be 4%, not over 4%.
That means that the rate's not going to be coming down during the last half of the year.
So I don't see anything to be concerned about that.
Now, if it's on the way down, if it's on the way down at 4%, we can live with it.
Well, we had 3.45 last year.
Of every European country, the lowest of any European country is about 6.6%.
But from that, okay, an excess of 10%.
So if we can keep the rate during the last half of this year around 4%, I just don't think we've got that much of a problem.
I think we have a political problem.
I think we have a psychological problem.
There are fairly major proportions.
If that be true, then let's talk about it.
Let's address ourselves to that type of a solution, but I'm not sure if you've been to that.
I think this is what we can do.
We can conjure up some things into...
that give us some reason to talk about it.
My only answer to it, and I do have a partial answer to it, is that we did come up with one or two things that we think are politically acceptable, whether or not they make great economic sense or have enormous economic impact inside the board, but not a freeze.
Anybody for a freeze at this point?
All right.
Mr. President,
We've been debating these questions.
And each of us is conscientious.
We chose to assemble the operation agreement.
The most important reason for a freeze that I will see is that the world will freeze tomorrow, next week.
And then for a 30 day period of freeze on prices, that compels us to work out a policy within 14 days.
If we can work out a policy without a freeze, I'd be great.
Now, the point I'd like to make about the stock market.
I don't pretend to be an expert on the stock market, but I do know that a rising interest rate has a strong negative impact on the stock market.
And I do know also, or I think I know, that
If the general public comes to view that we've got inflation under control, the stock market, I think, will revive.
And I don't think we're necessarily stuck for 18 months.
If I thought so, I'd be much more worried.
I think we have incredible inflation policy.
And if people stop worrying about these escalating interest rates, do you know what's been happening to interest rates?
My God, they're shooting up on the interest rate here this night.
Now you take the federal, the prime rate is up to seven and a quarter, it's going towards eight.
And we'll be there in five or six weeks.
At the same time, there's a difference that seems to be on there.
Rather remarkable.
What do you think of the gas tax?
I don't think it's all that bad, but I wouldn't do it as a tax credit.
I'd do it as an energy tax.
Obviously, it wasn't a tax committee kind of good, but you defended it on the basis of, you defended it on a political basis of what you have to do to rescue, you don't say this, but in fact you say it, to rescue this nation from the bondage of the Arab world.
You're not that sure of that.
I think the energy crisis is much more acute than we've let anybody believe.
But let me go one step further.
I don't do anything unless until we frankly reprogram some business around this country to sell it.
That's an integral part of it, because you need to get out of the Washington department to sell anything.
You can't sell, you couldn't sell an ice cream on a 110 degree day to have two cents a gallon in Washington because nobody sold that.
What do you want us to sell you?
Now, I'm not necessarily, you can't, you've got to get out of this Washington department and this Newfoundland area to sell anything.
We have to talk about our package and what we have here to try to understand.
We have all these, the basic status quo to say that we all deal.
That's fine.
Maybe we can get some attention.
Right there.
That's George.
George Mitchell.
You sell weed to a biller.
He pays $700,000 in tax, but it's about $400 million.
It goes right back into agriculture to help subsidize the farm.
Oh my God, I can't believe it.
I should have denied it.
If you're going to repay anything that's cheap, just say we want to repay those bread taxes.
But I believe in all that time you test people, though, that they either have a dozen other things that you can come up with.
If that's the objective.
And frankly, go to the country with us.
And here's what we're doing in the process.
You tell them that I've had a trade bill in Congress for 90 days and no action.
I've had a tax bill out there and no action.
And not only do we have any Congress in the legislature.
Basically, I hit the Congress.
They told me this morning we had a trade bill on us.
I think that's what we're going on to do.
And all the rest of it.
And we've got to have some actions on it.
Let me, uh, let me, uh, I agree with her.
I agree with her.
uh for example when we look back to our august 1971 policy we did a hell of a lot for political reasons but we had a rationale for all of the economic
At least we believed that when you reach out.
Yes, sir.
So we helped him to believe that it was all, well, we, there were various reasons.
I mean, he had some concern about gold, and he had some concern about that then, the connection to that tax, you know, and where this kind of tax would come from.
So, but we believed, mind you, that it was the right thing to do.
So I'd like to start with that proposition.
The second point is that, uh, that my own
We've got a reaction with regard to how the economy is performing.
And this is not based on looking at the figures that are .
My only reaction is that the economy is performing well.
And that the inflation will .
I say that because we're arguing different things here.
We hear everybody around here say that confidence in the low-end consumers have a bad confidence, investors have a bad confidence, and so forth.
And yet you're in a hell of a boom.
Now, so your confidence is low, and the consumer confidence is low, then why the hell do people buy retail savings?
I have confidence, the most unreliable thing, since we've been here in the past five years, ever to look at it as to those inventions that purchase silver as confidence.
I don't mean any goddamn thing.
The best index of consumer confidence is what consumers do.
In that mission survey, always I looked at that man figure.
And I have never yet found that there's any relationship between that figure and what consumers are doing.
Let me just say that on that point, what we have is a contradictory situation on the one hand.
And this is the point that I concern about on the one hand.
We don't want to throw up every little bath over here.
My point is that with the economy running pretty well in many ways, and with the prospect that this is only a bad reaction, that the inflation is going through,
I do not want to take any action, which we both, or which I can, can't, can't destroy what is good about the persons of Jewish in order to get an illusory, what could be an illusory benefit on the, shall we say, consular confidence political side.
Now I, having said that,
I, of course, as John, as John Connolly, am more keen and aware of political problems than the rest of them.
And I happen to be.
And for that reason, let me say that when you have, and you do have at the present time, in the country, and in Congress, and so forth, a feeling of, well, why the hell doesn't the government do something?
When you have that kind of a feeling,
What you have to realize is that we helped create that vision.
We have made the American people, by our own satisfaction and rest, we've made them feel rather comforted with the controls.
And they have a wife.
They thought they were working well.
They wonder why the hell did we get rid of them.
Now, the Vikings haven't treated them like children.
It's very difficult for them for us to say no.
Not in all the ways.
And by children, I mean your financial writers and all the rest of the rest of the world.
So let me put it this way.
Except on major, where the attitude is more healthy.
Generally speaking, deep down, what you have is a feeling that this is a pretty apartment, current apartment.
You frankly have a feeling of insecurity, a desire to get out.
Why can't Washington solve all the mine problems?
That's really the hardest thing.
The Wall Street looks here.
Your election is up here.
Now, what we really like to say is this.
I think at this very period, when there's a hell of a lot of people in this country, the so-called leaders, who have, who I don't believe we have a rise anymore.
who really want control, who feel that that's the best way to work.
So we're in a strange box.
We're in a strange box.
None of us really believe in control.
I don't.
I am very strong.
I think that, well, even if people want, you don't give people something they want.
You know, it's bad.
And yet, having said that,
We cannot operate in a vacuum in these things.
You cannot, for instance, you cannot just go along with the status quo.
An overabundant majority of people may want something done.
Even though they may not know what.
But what we have to do is to find something to do that is at least wrong.
At least wrong.
that is most stable.
Now, the ideas that I hear today tend to run in that direction.
I don't think your paper would argue for doing that.
You just said you'd like to take a look at weak.
I don't think that we are doing nothing more.
We are doing something.
We are doing something.
We are doing something.
We are doing something.
We are doing something.
We are doing something.
Let us say, we're talking, we're looking now at, say, Tuesday.
What I'd like to have is, uh, if you'll be back to see Friday's announcement, like I said, of course.
All right.
All right, let's go to Paris.
When are you going?
I'm going to Paris.
Well, we have a testimony on Monday that we're going.
But I think now we're going to Paris.
There's an OECD meeting.
There's a major meeting there.
Oh, I see.
Well, let me say this is more important than the OECD event now.
I think that on this point, right now, that my next decanto is that you've got to get Monday.
Monday or Tuesday, that's next to the program.
I'm going to sit down here.
That's what we did it for.
We wrestled with the damn thing.
I've not been digging now, but I'm a slam bang.
August 15, 1971, that is what it's called for.
I am not for the freeze.
I don't, I think our, it's unrealistic.
That's just my feeling at the present time.
But I think the main point is that anything, any action intended to shoot an enormously non-sensitive and panicky is the wrong thing right now.
Because part of the problem now is the feeling of a non-sensitive.
I'm looking at the psychology of the thing, which is not the kind of joke.
Although we're trying to address it.
But what I feel, what I do feel, is that we have here some things that have been suggested that are generally acceptable.
That you would accept them all, but you would accept some.
I mean, that's what we have to look at.
Certainly, everything we hear from Dr. Dunlop, there isn't anything there to inform,
In terms of the tax package and so forth, I must say the gas thing is still a concern to me.
But let's argue.
I'd be willing to look at it.
I'd be willing to look at it.
I share our first concern in terms of, frankly, just sticking to the person who could raise these prices and show you're saving this energy.
But nevertheless, let's look at that, too.
Certainly in terms of the investment tax thing, in terms of the forced savings by business and so forth and so on, that kind of thing is a pretty good politician.
I don't think it would be perfectly realistic, Arthur, I don't think they'd have a prayer in front of this Congress.
In fact, I would say we'd have one hell of a night getting through this Congress of the tax bill like it's fine.
That's why.
The matter of fact, when they talk about this tax bill, it was written under the law.
You get to the wrong kind of a tax bill, I was the first man to believe it.
And they didn't have any confidence in that.
I'll be honest.
It just aren't going to sign the wrong kind of a tax bill.
I mentioned Reagan, don't you?
It was going to sign the wrong kind in 1969.
That was a hell of a statement.
I'm not going to do it again.
I know you have some.
I know you have some.
Well, that isn't too bad.
I didn't know it was better than the kind of a bill they've been talking about.
Well, we're going to do the same deal with the rest.
Do you know how to pull some of the crap that's going on there?
Sure.
They think that it's awesome.
Sure.
And here it is.
On the other hand, you see 20 of the masses.
Everybody controls it.
It doesn't matter whether they control it.
They say things are thrown down there.
I mean, that's political power.
I don't mind that.
That doesn't matter.
I mean, I'd be quite cynical that we have to do something like that.
Yeah.
We'd love for that knowledge.
What makes it go up and down?
But I feel as, let me say this, I think your date's too, too, too, too, too soon.
When are you going to be back from Paris?
When are we going to be back?
All right, let's say this.
Let's say this.
What day of the week is that?
What are we talking about?
Let's have another meeting.
Let's hear this plenty of time.
Your staff's plenty of time.
Let's have another meeting.
And actually, once the victim's set up, they're occupied.
I've got a set up.
It's Friday.
It's Thursday.
A set up is Thursday.
I was going to have a week.
A week from Friday.
All right, a week from Friday.
How's that?
There's a reason for the time.
I have to be in Paris.
I have to be in Paris.
You're on the program Friday morning.
Your view, however, can be my expressions.
Sure, sure.
Well, what do you think?
I'll show you what would just happen.
And I want to, and the best thing is to take an extra day of really doing the right thing.
I don't want to rush about your business.
Well, maybe.
Could we, what do you suggest?
Trying to meet, not originally.
We're going to need to act this time, next time.
I'm trying to get a memo to you on Monday before we all.
This Monday?
No, a week from today.
A week from today?
A week from yesterday.
A week from yesterday.
A week from yesterday.
Or we all go to Paris.
Good.
And then we come back with you.
But what time do we meet?
Shall we say Friday?
I'd like to do that.
Well, I think Friday is important, because let's say Friday morning.
Fair enough.
And I suggested that my homie wasn't doing it.
So, be close to him.
I've got a bunch of people in this group.
I would take the dimensions that we're talking about here.
Well, rather than just doing them, I think that we ought to counsel the left.
Why not get it specified to me?
What you do doesn't mean a damn thing to me.
The main thing that's going to affect people is to say, I want to put it all in one package.
Would you agree, Tyler?
I agree.
Yeah, that's right.
So, you know, what are you going to do to defend it?
You know, we're going to announce it as part of a whole package, see, so that you can tell us what we're doing these things.
Partially.
Partially.
Psychologically.
That's right.
So, visibility.
Visibility.
What's that?
I can find the visibility, but I've got to have something to say.
That's right.
See, I can't go out there and just talk about the fact that all these things are going to go away from me.
Because they are good.
That's it.
You know, the only point is you don't want a penalty.
You know, we've been talking about that for a lifetime, all the time.
We'd like to take it.
But I'm always thinking this speaks to the Housewives.
You spent the lowest percentage of your wage dollar on food of any person in the civil rights world, and she says, have her do goddamn homework.
That's what she said.
Well, I said, we're going to need to come up with some ideas.
You may not buy it, but I recommended the SEC to put a regulation on institutions that they can't market over
5% of their holdings, any one stock, any one fund, there's not a lot to have out of these mutual funds from the bank, but it showed up in the corporation.
It would still have a lot of confidence in it.
It ought to be done.
It should have stood absolutely.
Well, I would like to see it.
I would really like to.
Reg, I've got it.
I hate to use that word, but let's go.
Let's go to the developer of mine, Arthur, and all of us around here.
That's come up with a total package.
Don't do a thing now.
Don't do anything more.
Don't announce anything more.
And we'll hit her on Friday.
And let's set that as a date.
Fair enough.
And I'll start studying on Monday.
I'll spend the whole week on it, except for Monday, Thursday, and Friday.
Well, I do appreciate all of you.
Now I have to go over and work on the other side of the street.
I've got to go to work.
Thank you for your time.
John, just think how lucky you are you aren't going to high school.
I don't know, but we need you to buy me a new one.
Yes, sir.
Now if you want to work with me, I'm sorry, but then it's the majority that will be the way.
All right, thank you.
Have a good trip.
Thank you, Steve.
I've got to get my hand up so that I can put this on and send you a copy.
That's it.
All right.