Conversation 939-003

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That's right.

He's got me all down, man.

Yeah, I'm calling.

Mr. Allen, I'm trying to get a picture of you.

I'm sorry.

Well, I would like to go, but this cable here has got to go back around the back of the camera.

Thank you.

I don't think we'll get it.

All right.

Um...

Yes, John is coming.

Stay on the line.

You wanted one of these?

Yes.

Thank you.

A lot of early initiatives have failed, and I want to say that I have a lot of strong actions I have ordered today with regard to the American economy.

Actions that will be important to you in terms of the way that you earn and the prices you pay for it.

You know what I mean?

Be prepared.

I get your love and prayers.

Thank you very much.

Since we've, once more, we're going to do what you guys chose.

I don't know.

Sir, uh, we will cue you 45 seconds after 8.30.

In other words, we're using the 45-second curvy way to get Commander and everyone else.

You can look at it now, you know, that sort of thing.

It's a normal pattern.

Well, what do you mean?

In other words, I don't...

I don't need to let you know that we've got 45 seconds before I have to play it over.

Then, I'll give you some of this.

It's my code that I'm going to use.

Don't you do that.

I'll do it.

I think I'll go about 18 minutes, so...

Okay.

On that time, you can get in the movie at that time.

Bill?

Bill says he figures it's about 18 minutes.

And he said it.

I see.

Plus I had to live, you know.

I see Ryan there.

Oh, excuse me, I...

You're related, no?

No, I'm not.

Well, ain't he great?

He's a, uh...

He's a fabulous father.

He's a good person.

And young.

Mm-hmm.

I wish I had a few.

Ah, you're doing great.

He's a fun person, you know.

He's a good person.

Look at him up.

Bill, are we on air?

0830 right now.

They're about 45 minutes, sir.

Bill, we're at 10, tell me when we're at 30 seconds.

We're at 30 seconds.

We're going in about 10 seconds, sir, but hold for my view, please.

Ready?

I want to talk to you tonight about some strong actions that I have ordered today with regard to the American economy.

Actions which will be important to you in terms of the wages you earn and the prices you pay.

But first, since we've been hearing so much about what is wrong with our economy over the past few months, let us look at some of the things that are right about the American economy.

We can be proud that the American economy is by far the bravest, the strongest, and the most productive economy in the world.

It gives us the highest standard of living.

We are in the middle of one of the biggest, strongest booms in our history.

More Americans have jobs than ever before.

The average worker is earning more today than ever before.

Your income buys more today than ever before.

In August 1971, I announced the new economic policy.

Since then, the nation's output has increased by a phenomenal 11.5%.

A more rapid growth than any comparable period in the last 21 years.

More than half a million new civilian jobs have been created.

And that's more than any comparable period our world has seen.

At the same time, we owe per capita disposable income.

that means what you have left the spectrum after taxes and after wages has risen by seven and a half percent in that period this means that in terms of what your money will actually buy in the past year and a half your annual income has increased by the equivalent of four weeks pay now if we consider these facts

We can see that in terms of jobs, of income, of growth, we are enjoying one of the best periods in our history.

And we have every reason to be optimistic about the future.

But there's one great problem that rightly concerns every one of us.

And that is the issue of rising prices, and especially rising food prices.

I think that in the last year, we have brought the rate of inflation in the United States down to 3.4%

That gave us the best record in 1972 of any industrial country in the world.

But now, prices are going up at unacceptable prices.

And the greatest part of this increase is due to rising food prices.

This has been caused by increased demand at home and abroad, by crop failures abroad, and, as many people in various areas of the country know, by some of the worst weather for crops and livestock that we have ever experienced.

For whatever the reasons, every American family is confronted with a real and pressing problem of higher prices.

And I have decided that the time has come to take strong and effective action to deal with that problem.

Effective immediately, therefore, I am ordering a freeze on prices.

This freeze will hold prices at levels no higher than those charged during the first eight days of June.

It will cover all prices paid by consumers.

The only prices not covered will be those of unprocessed agricultural processed products at the farm levels and rents.

Wages interests dividend will remain under their present control systems during freeze.

Now the reason I decide not to freeze wages is that the wage settlements reached under rules of phase three have not been a significant cause of the increase in prices.

And as long as wage supplements continue to be responsible and non-inflationary, a wage freeze will not be imposed.

The freeze will last for a maximum of six days.

This time, we usually have often put into place a new and more effective system of controls which will follow the freeze.

This new Phase 4 of controls will be designed to contain the forces that have sent prices so rapidly upward in the past few months.

It will involve higher standards, more mandatory compliance procedures than under Phase 3.

It will recognize the need for wages and prices to be treated consistently with one another.

Addicting to boom prices, I have received reports from various parts of the country

of many instances of sharp increases in the price of gasoline.

And therefore, I have specifically directed the Council to develop new Phase 4 measures that will stabilize both the prices at the retail level of food and the price of gasoline at your service station.

In announcing these actions, there is one point I want to emphasize to everyone of you listening tonight.

The baseboard that follows that breeze will not be designed to get us permanently into a controlled economy.

On the contrary, it will be designed as a better way to get us out of a controlled economy, to return as quickly as possible to the free market system.

We are not going to put the American economy into a straitjacket.

We are not going to control the boom in a way that would lead to a bust.

We are not going to follow the advice of those who would propose actions that would lead inevitably to a permanent system of price, wage controls, and also rich.

Such actions would break good headlines tomorrow, and bad days six months from now, for every item we found in terms of red and black markets and eventually a recession that would mean more unemployment.

It is your prosperity that is at stake.

It is your job, this is it.

The actions I have directed today are designed to deal with the rise in the cost of living without jeopardizing your prospect or your job.

Because the key to curbing food prices lies in increasing supplies, I have not raised the price of unprocessed agricultural products at the farm level.

This would reduce supplies instead of increasing them.

It would naturally result in even higher prices for the food you buy at the supermarket.

Beginning in 1972, we embarked on a comprehensive new program for increasing food supplies.

Among many other measures, this included opening up 40 million more acres for crop production.

In the months ahead, as these new crops are harvested, they will help hold prices down.

But unfortunately, this is not yet helping in terms of the price that you pay at the supermarket today, or the prices you will be paying tomorrow.

One of the major reasons for the rise in food prices at home is that there is now an unprecedented demand abroad for the products of America's farms.

Over the long run, increased food exports will be a vital factor in raising farmers'

in improving our balance of payments, in supporting America's position of leadership in the world.

In the short term, however, when we have shortages that sharply rise in prices of food here at home, I have made this basic decision.

In allocating the products of America's farms between markets abroad and those in the United States, we must put the American consumer

Therefore, I have decided that a new system for export control on food products is needed.

A system designed to hold the price of animal feedstuffs and other grains in the American market to levels that will make it possible to produce meat, eggs, milk, and rice as you import.

I shall ask the Congress on an urgent basis to give me the new and more flexible authority needed to impose such a system.

and exercising such authority, this will be my policy.

We will keep the export commitments we have made as an aid.

We will also consult with other countries to seek their cooperation in resolving the worldwide problem of rising food prices.

But we will not let foreign sales, price meat and eggs off the American table.

I have also taken another action today to stop the rise in the cost of living.

I order the Internal Revenue Service to begin immediately a thorough going audit of the books of companies which have raised their prices more than one and a half percent above their January season.

The purpose of the audit will be to find out whether these increases were justified by rising costs.

If they were not, the prices will be rolled back.

The battle against inflation is everybody's business.

I told you what the administration would do.

There is also a vital role for the Congress, as I explained to the congressional leader just a few moments ago.

The most important single thing the Congress can do in holding down the cost of living is to hold down the cost of death.

For my part, I shall continue to beat those spending bills that we cannot afford, no matter how noble sounding their names may be.

If these budget busters become law, the money would come out of your pocket at higher prices, higher taxes, or both.

There are several specific recommendations I have already made to the Congress that will be important to holding down prices in the future.

I again urge quick action on all of these proposals.

Congress should give the President authority to reduce tariffs in selected cases in order to increase supplies of scarce goods and thereby pull down their prices.

This action will help on such scarce items as meat by what it's in.

And in particular, the tariff we now add on imported meat should be removed.

Congress should provide authority to dispose of more surplus commodities now held to the government stockpile.

Congress should let us away quickly with the Alaska pipeline so that we can combat the shortage of oil and gasoline we otherwise have.

I will also soon send to the Congress a major new set of proposals on energy, spelling out new actions I believe are necessary to help us meet our energy needs and thereby lessen pressures on fuel prices.

In its consideration of new farm legislation, it is my goal that the Congress put high production ahead of high prices so that farm prosperity will not be at the cost of higher prices for the consumer.

If the Congress sends me a farm bill or any other bill that I consider inflationary, I shall veto that bill.

Beyond what the administration can do, beyond what the Congress can do, there's a great deal you can do.

The next 60 days can decide the question whether we shall have a continuing inflation that leads to a recession or whether we deal responsibly with our current problems and so go forward with a big risk prosperity and a swift return to a free market.

You can help by giving your senators and congressmen your support.

when they make the difficult decisions to hold back on unnecessary government spending.

You can help by saying no to those who would oppose a permanent system of controls of this great productive economy of ours, which is the wonder of the world.

Let there be no mistake.

If our economy is to remain dynamic, we must never slip into the temptation of imagining that in the long run, controls can substitute for a free economy or permit us to escape the need for discipline in fiscal and monetary policy.

We must not let controls become anarchism.

We must not become addicted.

There are all sorts of same simple things that would give the appearance or offer the promise of controlling inflation, but that would carry a major risk of bringing on a recession, and it would not be effective in controlling inflation.

Rigid, permanent controls always look better on paper than they do in practice.

We must never go down that road, which would lead us to economic disaster.

We have a great deal to be thankful for as Americans tonight.

We are the best clothed, best fed, best housed people in the world, where they have to be of every nation and every state.

This year, for the first time in twelve years, we are at peace in Vietnam, and our courageous prisoners of war have returned to their homes.

This year, for the first time in a generation, no American is being drafted into the armed forces.

This year, we find our prospects brighter than any time in the modern era for a lasting peace, and for the abundant prosperity such a peace can make possible.

Next Monday, I will meet in the South, here in Washington, with General Secretary Reichsmann from the Soviet Union.

Based on the months of preparatory work that has been done to this meeting, and based on the extensive consultation and correspondence we have had, much of it like this, I can confidently predict tonight that out of our meetings will come major new progress toward reducing both the burden of arms and the danger of war, and for a better and more rewarding relationship between the world's two most powerful nations.

Today in America, we have a magnificent opportunity.

We hold the future, our future, in our hands by standing together, by working together, by joining in bold and sensible policies to meet our temporary problems without sacrificing our lasting strength

We have achieved what America has not had since President Eisenhower was in this office.

Full prosperity without war and without depression.

This is a great goal and working together we can and we will achieve that goal.

Thank you.

I was worried about the cameras.

I was really worried.

I don't see him here.

I think he's right here.

He's right there in this room.

Okay.

I don't see him here.

I don't know.

Thank you very much.

All right.

That's the way it is.

Yeah, yeah, yeah.