And if we win all those fights, and now let us say the income gap, and the wealth gap, and the education gap have for the most part been closed - let us say hypothetically, knowing what we know now about public policy, that we could close the education gap so that it was only a couple percentage points, and we could make sure that hiring barriers and educational barriers had been leveled down, and unemployment among African Americans right now instead of being double was only 10 percent higher than white unemployment - if we got to that point, first of all, America as a whole would be a lot richer. Second of all, the African American community would not just be wealthier, but it would actually also be more politically empowered by virtue of having more resources. Third, I actually believe that some residue of discrimination would lessen, because it is my view that there is a certain percentage of the white population that stereotypes and makes assumptions about African Americans because they do not inject the history of slavery and Jim Crow into current incarceration rates, or crime rates, or poverty rates, or what have you - but if they started having more middle-class black kids who are friends with their kids, eating Cheerios in their kitchen, their attitudes start changing. If we achieve all that and there is still a gap, at worst we are much better positioned to pursue strategies to close that final gap. And at best we might surprise ourselves in terms of how well we are doing. So there is going to - as I said before, it is a generational project just to get America to live up fully to its ideals and to have the kind of society where everybody has a shot, and every kid is getting a good education, and people are getting living wages, and they have decent retirement. Black folks are still doing a little bit worse off than whites, but it is not like it was 20 years ago, then we can have a discussion about how do we get that last little bit. How do I close that first three-quarters of the achievement gap, education gap, wealth gap? What gives me the best chance to do that? And I am pretty darn sure that if America is a just society and treating people well right now, irrespective of past wrongs, that I am going to close a big chunk of that gap. I have seen it. This is what I always take away from something like My Brother's Keeper - it is almost an analogy.

Interview with Ta-Nehisi Coates


I look at some of the kids that I interact with, and they were born with so many disadvantages. And you could start off in your first interaction with them saying, Unless they get a lot of compensatory help, they are not going to be able to compete; they are just so far behind, and they are wounded and they are hurt. His mother was a drug addict, and his dad is in prison, and he has no sense of direction. And there is no doubt that the more you did for him, probably the better he would do, but what is always striking to me is he just got a little bit. He just had a few adults paying attention and telling him he was worth something while he is in juvee, he is just got somebody who is willing to pay his community-college fees, and suddenly you have got this young man sitting there who is so self-aware that to ENTITY of the United States he can say, Look even though I look like I have got my act together, I have still got pains, wounds, there're issues I still have, and yet I am going to be a teacher and I can tell my story, and here is how I am thinking about social change in the community. And I am thinking to myself, Wow. I believe he can close that gap, and my conclusion is that five years from now, if you ask me who has a better shot of being a great teacher in a school, that guy or some kid who grew up in an upper-middle-class community who out of all kinds of good-hearted impulses wants to be a teacher, I am betting he ends up being the better teacher. Now, I do not want to exaggerate; having as many African American men as we have had in the criminal-justice system, and the amount of time it takes for the damage done by that to wash through our society and our communities, the disadvantages born out of kids being undiagnosed with mental-health problems early, or not getting the kind of exposure to reading and math when they are 4 or 5 or 6 years old , that carries a cost. So I guess maybe we can agree that in some ways you are more optimistic than me, and in some ways I am more optimistic than you.

Interview with Ta-Nehisi Coates


You are maybe more optimistic than me in terms of the ability to persuade a society to make up for past injustices; but maybe I am more optimistic than you about the ability to persuade a society to make up for current injustices and the capacity of the victims of those injustices to catch up pretty quickly. Were you surprised relatively early on in your presidency when people criticized you for not having a quote-unquote black agenda ? I mean, I think if you worked at the community level in Chicago and then a politician on the South Side of Chicago, and worked at the state level, then you are pretty familiar with all the variations of politics in the African American community and criticisms you may get. If you are not familiar with those or you do not have a thick enough skin to take it, then you probably would not have gotten here. So it did not surprise you at all? I think, and look, ENTITY, I do not want to discount those criticisms, but offsetting those criticisms is that I have 90 percent or 95 percent support in the African American community and it is not sort of Well, he is black, so it is okay. We are not going to say anything even though we are seething. And I hang out with a lot of middle-aged black women, and they are not casual in their support of me. Partly because they understand the constraints of this society. It is one thing if they were watching and we were not working on poverty issues, and we were not working on education issues, and we were not working on health-care issues. You know, they are pretty sophisticated; they understand that I am trying to move an aircraft carrier here, I am not just steering the speedboat. And so part of it is, I think, intellectual, and part of it is obviously emotional as well. Michelle and I have never felt as if, at any stage, folks did not have our backs. And as a consequence, I think that just spurred us on that much more to make us want to do the right thing, and do our best in the positions that we have. So perhaps more substantive than that early-on critique, for instance - and Valerie and I talked a little bit about this - when you attempted to bring in some of the Black Lives Matter activists and folks refused. And I heard you address this at Howard, too. What I would say - did you understand why some of them refused? Could you comprehend it? Oh, I absolutely could comprehend it.

Interview with Ta-Nehisi Coates


A couple of them refused because they are 20, or 21. It is the same as when we were working on immigration reform and there was a young Latino man, young immigration activist here who, in the Roosevelt Room, refused to shake my hand. And I am going around the table shaking everybody's hand. And he made a point of saying, I cannot shake your hand; you are deporting too many people. And I just said to him, Young man, I am glad that you feel so passionately about this issue, but you are with ENTITY right now in the White House. You have got to think about what is going to be most effective in getting what you need, what you are trying to accomplish. Like a 21-year-old would, which is sort of a mixture of defiance and uncertainty and embarrassment. Look, so I guess I do not - one of the things you understand, and it is hard to do, but you - and I am not saying I am impervious to criticism - but one of the things that you come pretty early on to understand in this job, and you start figuring out even during the course of the campaign, is that there is ENTITY the person and there is ENTITY the symbol, or the office holder, or what people are seeing on television, or just a representative of power. And so when people criticize or respond negatively to me, usually they are responding to this character that they are seeing on TV called ENTITY, or to the office of the presidency and the White House and what that represents. And so you do not take it personally. You understand that if people are angry that somehow the government is failing, then they are going to look to the guy who represents government. And that applies, by the way, even to some of the folks who are now Trump supporters. They are responding to a fictional character named ENTITY who they see on Fox News or who they hear about through Rush Limbaugh. What I am trying to get at is a theory - you are very unique in the sense that you are ENTITY but you have also been an activist. You have actually occupied both roles. Is there utility - In not being so close to power? Yes, and it is the reason why I am always interested in engaging in people who are pushing us and pushing against the status quo.

Interview with Ta-Nehisi Coates


But having been an activist, the only thing that I am always encouraging activists to do is, once you have raised the issue, and even through controversial means, you have to come behind it with an agenda and the possibility of reconciliation if power meets your demands. And that was true during the civil-rights movement, that was true during the union movement, that is always been true. And so the only time I get frustrated with activist criticism is if I have recognized them, and invited them to work with me to figure out how we solve this problem that they are concerned about, and either they do not engage out of the sense of purity - I am not going to shake his hand - or you are not sufficiently prepared so you do not even know what to ask for, or you are not being strategic as an activist and trying to figure out how the process has to work in order for you to get what you want. I thought Brittany Packnett, who was one of the Ferguson activists, really interesting, smart young lady, really impressive - you might want to talk with her. So she was one of the organizers of the Ferguson movement, ended up joining our task force. She came in here and she just knew her stuff. And I do not think at any point backed off, even in our first meeting, saying, Here is what we are concerned about; here is where we are disappointed in the Justice Department's response; here is what we need. But she was sufficiently well-informed and engaged that it was very easy then to say, You are right about this, you are wrong I think about that, but I am not sure, let us sit down and see if we can hammer out a strategy that we agree with. And by the way, I want you talking to that police chief over there and that sheriff, because I think you might be able to persuade them if we break this down into its component parts. Now, in contrast, there have been times where, let us say on LGBT issues, when we were trying to end Do not Ask, Do not Tell, and I got the Pentagon and Bob Gates, a Republican holdover from the Bush administration, to authorize a study of how you might end Do not Ask, Do not Tell, headed up by Jeh Johnson, who at that time was a council to the Justice Department.

Interview with Ta-Nehisi Coates


And it was going to take a year to conduct that study, issue a report, and figure out how it might be implemented, what effect it would have on unit cohesion and military effectiveness. And I had laid out this strategy because if I could get the Pentagon's imprimatur on this thing, then I knew that we could end up getting legislation passed to reverse the policy, and we could get the branches of all the military to implement it. But during the course of that year, probably every speech I gave, I'd have gay activists just screaming at me during rallies. Not only do I agree with you, but I have actually got a strategy to execute, we are executing it, and in what sense do you think that you yelling at me here is going to advance your cause? But the problem was, and we saw some of this in the immigration-reform issues as well, was they had not done sufficient homework to know that I did not have all the capacity they thought I did in order to just execute this through the stroke of a pen. So I think that where I have gotten frustrated during the course of my presidency has never been because I was getting pushed too hard by activists to see the justness of a cause or the essence of an issue; I think where I get frustrated at times was the belief that ENTITY can do anything if he just decides he wants to do it. And that sort of lack of awareness on the part of an activist about the constraints of our political system and the constraints on this office, I think, sometimes would leave me to mutter under my breath. Very rarely did I lose it publicly. No, and the reason I say that is because those are the times where sometimes you feel actually a little bit hurt. Because you feel like saying to these folks, you think if I could do it, I have just done it. Do you think that the only problem is that I do not care enough about the plight of poor people, or gay people, or immigrants, or ? But do not they have some level of distrust towards you? They do not trust you to ultimately follow through. And is not that kind of the mind-set that the activist has to have? I mean, I think there is a benefit to wanting to hold power's feet to the fire until you actually see the goods. I get that.

Interview with Ta-Nehisi Coates


And frankly, sometimes it is useful for activists just to be out there to keep you mindful and not get complacent, even if ultimately you think some of their criticism is misguided. I will give you an example that is outside the issues of social justice, but the criticism that some on the left consistently have given us around drone strikes. The truth is that this technology really began to take off right at the beginning of my presidency. And it was not until about a year, year and a half in where I began to realize that the Pentagon and our national-security apparatus and the CIA were all getting too comfortable with the technology as a tool to fight terrorism, and not being mindful enough about how that technology is being used and the dangers of a form of warfare that is so detached from what is actually happening on the ground. And so we initiated this big process to try to get it in a box, and checks and balances, and much higher standards about when they are used. But the truth is that, in trying to get at terrorists who are in countries that either are unwilling or unable to capture those terrorists or disable them themselves, there are a lot of situations where the use of a drone is going to result in much fewer civilian casualties and much less collateral damage than if I send in a battalion of marines. And I think right now we probably have the balance about right. Now, you would not know that if you talked to Human Rights Watch or Amnesty International or some of the international activist organizations. Certainly you would not know that if you were talking to some of the writers who criticize our drone policy. But I have actually told my staff it is probably good that they stay critical of this policy, even though I think right now we are doing the best that we can in a dangerous world with terrorists who would gladly blow up a school bus full of American kids if they could. But if suddenly all those organizations said, Okay, the ENTITY administration's got it right, and we do not have a problem here, the instinct towards starting to use it more, and then some of those checks and balances that we have built up starting to decay - that is probably what would happen. So there is an example of where I think, even if the criticism is not always perfectly informed and in some cases I would deem unfair, just the noise, attention, fuss probably keeps powerful officials or agencies on their toes.

Interview with Ta-Nehisi Coates


And they should be on their toes when it comes to the use of deadly force. I wanted to ask you about it, so I am glad you brought that up. You know, you are a great - and I do not want this to come of as a gotcha question, I want to have a discussion here about this to the extent that we have time, a discussion about this - Oh we better, I mean, we have time, we have spent a lot of time - We have around 15. You know you have talked quite a bit about your admiration for Dr. Martin Luther King Jr., which is sincere and heartfelt. Have you thought much about how you reconcile that, not just with you yourself, but actually with the office of being ENTITY, which does involve killing - it is part of it as commander in chief - do you think much about reconciling those two things? When you take on the position of ENTITY, you are committing yourself to, first and foremost, protecting the American people. You are accepting an institutional role that requires you to make hard decisions and hard choices, and as a consequence you have to take your moral sense and not put it aside, but rather take that moral sense and apply it to the particulars of a job that is going to test those ethical and moral precepts differently than if you are a professor, or a business person, or a dad. And if I were not comfortable with the judicious use of our military to protect the American people, than I should not have run for ENTITY. And having said that, I do think that the wisdom of a King or a Gandhi can inform my decisions. Will this actually result in America being safer, or the most lives being saved? But these kinds of questions arise not just in the military sphere. Going back to the discussion we were having about immigration reform, some of the most challenging discussions I have had are with activists who essentially would argue that any immigrant from Central America, let us say, who gets here to this country should be allowed to stay because their country is dangerous, their country is poor, and the opportunities for that mom and that kid are much greater here, and why would you send them back? I agree with you, from a moral perspective, that a child from Honduras is worth the same as my daughter. God is not a respecter of boundaries; he is not saying that American kids deserve a better life than Honduran kids.

Interview with Ta-Nehisi Coates


But I am ENTITY of the United States, and the nation-state by definition means that boundaries mean something and borders mean something. And I have to be able to implement a policy that does not completely erase borders and boundaries. Not because I think that Honduran child who is gotten here is less worthy of love, attention, opportunity than my child, but because I am ENTITY of the United States of America and I am not speaking as a religious leader. I have got certain responsibilities that I have to carry out in a very specific institution and in a specific moment in time. So why do not you ask one last question? And then we can decide how much more you have got. I wonder if part of this is the fact, as we talked about last time, that the idea of a black ENTITY was so remote to everybody that if it happened, it must mean that all these other things would be true about the world - the world would change. I do not want to use the word postracial or anything like that. But the expectation of the idea of a black ENTITY was almost abstract to people. Oh, I have got to tamp this down a little bit. People are going to expect me to split the seas? Well, we used to talk about this in the middle of the campaign. We had to get out of Chicago so quick. Election night happens, suddenly I am talking to Ben Bernanke and Hank Paulson and trying to figure out whether the world's going to fly apart, and Michelle is trying to figure out where the girls are going to go to school. And we pack up and leave and basically our house in Chicago just became like a time capsule. My desk in my home office still had stacks of articles and bills and stuff from 2008. And probably last year I went back, maybe it was earlier this year, and I just start going through some stuff and there was an article - it was the , and this was at the height of ENTITY Hype, I mean I'd just been elected - Were you tired of it? But I read the - there is an interview of me in there - and I read through it, and what is interesting was, I was pretty realistic to people about what we could get done, and the situation we were in, and trying to tamp down expectations.

Interview with Ta-Nehisi Coates


If you listen to my stump speeches, if you listen to what I said at Grant Park, I kept on saying, Look, this is not just about me, this is not going to happen in one year, or one term, or even one presidency. And we tried to layer into everything we were saying a sense of hope, but also realism. I do not regret the excitement, because I do think that it helped us accomplish as much as we did. I do not regret the fervor, because I do believe, in the African American community but also for other communities, and I know from talking to people, for communities around the world, the election of an African American to the most powerful office on Earth meant things had changed, and not just in superficial ways. That in some irreversible way the world was different. But I can say with confidence that I never bought into the hype, and I made sure that the people around me did not buy into the hype, and I did not surround myself with people who fed me the hype. And I am glad of that as well. Because I think we would have made a lot more mistakes and would have accomplished a lot less had we not been grounded in some basic truths. And I would say this, I will go back to those black ladies I was talking about who love them some Barack and love Michelle even more - and by the way, they are not middle-aged anymore, because I am now middle-aged. As fervent as they were, as excited and happy as they were when I was elected, they had to go to work the next morning. They still had trouble paying those bills. They might have still had a son who was in trouble with the law or could not get a job because of a felony record. And in many ways they are my touchstone, because they are what I meant when I talked about the audacity of hope. If you read that passage, it talks about not blind optimism, but it is hope in the face of difficulty, hope in the face of uncertainty - that is what makes it audacious. Those are the ladies sitting in church. And in the same way that they might feel a joy and release on Sunday, they are still going to work on Monday. And that is who I was listening to during this process. And if at the end of my presidency they feel like I did a pretty good job, then I will feel pretty good.

Interview with Ta-Nehisi Coates


I want to announce the appointments in the permanent grade of General of the ENTITY, under this new bill which just passed the Congress March 23, of General Marshall, General Douglas MacArthur, and General Eisenhower, and General Henry H. Arnold. Admiral Leahy, Admiral King, Admiral Nimitz, and Admiral Halsey; General Vandegrift, and Admiral Waesche--Watchee, however he pronounces that name. And I am reappointing Claude L. Draper, of Wyoming, to be a member of the Federal Power Commission. He is a Republican member of the Federal Power Commission. His term expires, I think, about June. I am sending his name down, and-- He is a member of the Federal Power Commission. He is now on the Commission. And what State is he from, sir? All four of them are Fleet Admirals. Yes, the others are Fleet Admirals--Generals of the Armies. Permanent grade for life, with all the salary and emoluments that have gone with it during the wartime. And it creates for the ENTITY an elder statesmen organization for national defense. These men will not, under that increase, have to go into any advertising business, or go to work for any airplane companies, or anything else, for their support. That--for once, a Republic, I think, has been fair to the people who have taken it through one of the greatest emergencies in the history of the world. That is all that I have to announce ENTITY, to clear away any possible doubt, could you tell us whether Secretary Byrnes has your full support and backing, in pressing for immediate Security Council action on the Iranian question? He certainly has, or he would not be doing it. ENTITY, in their half-hour discussion with you this afternoon, did Mr. Fitzpatrick and Mr. Flynn of New York State discuss with you the possibility of Senator Mead's candidacy for Governor of New York State? They discussed every phase of the New York political situation, and I was very much interested, and was a very careful listener. They did discuss Senator Mead's candidacy for Governor of New York. What did they say about it? I did not ask them that. ENTITY, it was suggested on the Hill this morning that you call a Big Three conference. They have been making that for months, I think. ENTITY, getting back to the New York political situation again --if I may.

The President's News Conference


and I do not like to ask what might seem to be a badgering question, but if I could ask, how it squares with your answer of a week ago or so, that you were willing and able to discuss Missouri politics, but that you were not ready to discuss New York politics? I was a listener to two able New York politicians. ENTITY, can you tell us anything, sir, about the possibility of Mr. Mead running? I do not know a thing about it. The best way to do is to talk to Senator Mead. ENTITY, when it was announced that you would postpone the atom bomb tests, the primary reason--official reason-given at that time was that it would take too many Congressmen out of Washington.1 Yesterday, Speaker Rayburn said that things were going so well in Congress on emergency legislation that they could have a spring recess. I have not talked to Speaker Rayburn on a spring recess, but the reason expressed in the release is exactly the reason why the atomic bomb plan was postponed. On March 23 the Press Secretary to ENTITY had announced that the tests scheduled for May 15 and July 1 would be delayed for about 6 weeks. The reason given for the delay was that a large number of Congressmen had expressed a desire to witness both tests but owing to the heavy legislative schedule would be prevented from doing so if the tests were held on the dates originally fixed. I just wondered if anything had happened in Congress since then, that made it possible for them-- to take a recess? The best way is to discuss that with the leaders in Congress. ENTITY, have you got any letters for or against the test? In this morning's paper, ENTITY, there was a story that another factor in that delay was the construction of measuring instruments--of instruments to help measure the effect of the blast. I have not heard it. The first I have heard it. The reason was the one expressed in the release, and no other reason affected my postponing the test.  That is a matter that is being handled by the Labor Department, and I hope by the Governor of California-just as I told you last time it was brought up. In view of your professed backing of Secretary Byrnes, do you have any misgivings about Russia taking a permanent walk? ENTITY, along the line of the food situation, the UNRRA food subcommittee, following Governor Lehman's lead, has suggested all the United Nations going back to food rationing.

The President's News Conference


Have you got an appeal on that? The--as I said the last time that this was brought up, the thing, if it became absolutely essential and the emergency was of a long enough duration that it would be necessary for us to go back to food rationing, I certainly would be in favor of doing it. But this is an emergency proposition, and the reimplementation of food rationing would take longer than the emergency is supposed to last. ENTITY, can you tell us whether other names came into your political conversation with the two gentlemen from New York? The best thing for you is to talk it over with them. I remember particularly that they did discuss Senator Mead. ENTITY, does that mean that you are backing Senator Mead for the gubernatorial nomination-- I told you that I did not interfere in New York politics, outside of the State of Missouri. Did you state to them, ENTITY, the particular feeling that you expressed a couple of weeks ago, that you thought Senators ought to remain in the Senate? I did not discuss that phase of the matter. When it comes up to me, I will discuss it. ENTITY, from New York there are some reports that Mr. Byrnes has been talking to you about this deadlocked Security Council. There is also speculation on reports that there is a possibility that you or he might try to get some help from Mr. Stalin. I am wondering if anything like that is in the wind? Byrnes is in touch with me every day. He just phoned me a half hour ago on the situation. What did he say, ENTITY? He said that the matter would come up at 4 o'clock, and it would be discussed at the Security Council. I have no comment to make on what may happen. The matter that was under discussion--whatever it was. The matter that was under discussion between you and Secretary Byrnes? The matter that is under discussion at the Security Council, will come up at 4 o'clock, and we hope to settle it. ENTITY, would you care to make any comment on the special State Department report on international control of atomic energy, which will be released at 8 o'clock tonight? I have no comment to make. ENTITY, have you had any reactions from Congress to your appeal of last Saturday night, on party unity and responsibility? Yes, I have had lots of responses from Congress. They are in favor of it, most of them.

The President's News Conference


ENTITY, did Mr. Baruch tell you he wanted his name withheld from consideration--consideration at this time? I think he told Senator Connally that he would like to have it delayed, and I confirmed that statement to Senator Connally. Do you know of any reason for that? You had better ask Mr. Baruch. I want to ask you about that tie that caused so much----is that-- You know, that tie seems to have caused more trouble than the speech itself. And as I said, I have had that necktie, I think, for 4 or 5 years, and have worn it on several occasions. I think I wore it at the Gridiron dinner, if I am not mistaken. No comment was made on it then, because you people were familiar with such a tie. You were not setting any such new style? Just interested in it--indicating that things are getting back to normal? ENTITY, there are reports that Secretary Forrestal has started organizing a civilian advisory committee--invited about 75 or 100 very prominent people to belong to it--advisory committee to the Navy Department; and some of the proponents of the merger of the armed services say that it--actually it is an antimerger organization-- I have not heard about it. It has not been discussed with me. ENTITY, have you made your selection of the--for the Under Secretary nomination? I will announce it to you when I get ready. Do you expect a coal strike, ENTITY? I have no comment to make on that. Your guess is as good as mine. ENTITY, do you expect to issue a statement or proclamation any time, when Mr. Small and Mr. Wyatt get ready with the real--put all the details of their program for these construction committees into effect, which requires a great deal of civilian cooperation? Whatever it takes we will proceed to do, to get that program put through. That is one we are really behind, with everything we have. I am sorry, I did not understand the question. Would you please repeat it for me? I am hoping that South America will join us in sending food to Europe, and I am sure they will.

The President's News Conference


ENTITY, have you anything to say about the forthcoming primaries in New York where Congressman O'Connor is running against Jim Fay? This is not collusive on the part of Fred and myself. As a matter of fact, ENTITY, I had the dope last week down at Warm Springs that there was some movement on foot for you to sound off against Mr. O'Connor but I held it up too late and I was scooped in the Sunday morning papers. I knew that somebody would ask the question so I have a perfectly good statement here. I shall read it to you and I shall give it to Steve and he will give you copies so you will not have to take it down. Will you read it slowly, sir? And the first sentence is in quotes-you will see why afterwards. The ENTITY of the United States ought not to interfere in party primaries. And then the second sentence is not in quotes. That statement, in one form or another, is appearing these days throughout the Tory Press. The idea is that the ENTITY should be aloof from such sordid considerations as who wins the primaries in his own party. But actually these primaries will determine to a large extent the makeup of the next Congress. And that, in turn, will determine whether or not the ENTITY can keep his campaign promises to the people. Campaign promises are supposed to be the responsibility of the whole party. But in practice the head of the party alone is held responsible for them. In American politics any one can attach himself to a political party whether he believes in its program or not. We hear the phrase read out of the party, but it does not mean anything. No one is read out of the Democratic or the Republican , Party. There are many prominent Democrats today who are heart and soul against everything the Democratic Party has stood for since 1932. And those men are still in the party. What is worse, not one of them was candid enough to oppose the renomination of ENTITY in 1936, although after four years there was no doubt whatever as to the program ENTITY was pursuing. The same hidden opposition, after giving the New Deal lip-service I in 1936, turned around and knifed it in Congress in 1937 and 1938. Now that election time has come around again, the hidden opposition hides the ax behind its back and prepares to give the ENTITY lip-service once more.

Excerpts from the Press Conference


In those circumstances there is nothing for the ENTITY to do-as the responsible head of the New Deal but to publicly repudiate those who have betrayed the New Deal in the past and will again. I no longer believe in the platform of the Democratic Party as expressed in the New Deal; I am running for re-election as a member of the Republican opposition to the New Deal, then there would be no reason and no excuse for ENTITY Roosevelt to intervene against them. The voter could take his choice between the New Deal and Tydings' record of consistent opposition to it. But Tydings tells the voters he supports the bone and sinew of the New Deal. He wants to run with the Roosevelt prestige and the money of his conservative Republican friends both on his side. In that case it becomes the ENTITY's right and duty to tell the people what he thinks of Millard Tydings. That is why we welcome the report that Roosevelt help is going to be given to Tydings' opponent, Representative David J. Lewis, and to James H. Fay, candidate for the nomination in the Sixteenth Congressional District of New York. Fay is running against Representative John J. O'Connor, one of the most effective obstructionists in the lower house. Why should not the responsible head of the New Deal tell the people just that? How do we use that? Is it to be in quotes, then? Referring to the statement regarding support for the Democratic platform, among the items in that class do you include your Court plan? The Court plan was not in the platform, but the Court plan is no longer an issue because, in effect, we obtained ninety-eight per cent of all the objectives intended by the Court plan. I made that clear on many occasions. In other words, any disfavor you may hold to any member of the House or Senate is not based on the Court plan? How-ever, it will not prevent the continued use of the assertion, will it? I hate to bother you with so much state politics, but out in Kansas it looks like a pretty bitter fight between Clyde Reed and Senator McGill. Reed supported you in 1936 and did not support Governor Landon. I wondered if you were going out that way any time in the fall? Frankly, I have not heard anything about the Kansas situation. Do you contemplate going into Wisconsin and Minnesota? Really, it is honestly true that I have no plans and no dates after this coming trip.

Excerpts from the Press Conference


Last night, you enthusiastically endorsed the tax simplification concept and said you have instructed the Treasury to fashion a final bill. The word from some parts of the business community is that one part of that deal has already been struck; namely, that you will change the Treasury proposals and continue favorable capital gains tax treatment and accelerated depreciation and in return that you would continue the present taxation of dividends. Well, let me just say about that that I am hard put to answer a specific question of that kind. the one of what we want, the tax reform; the other with the necessity of coming in with the budget. We have been long hours around that Cabinet table on the budget matter and, finally, have now submitted it. We have not yet begun that process on the tax program. I think, as I have said before, I think that Treasury study was probably the finest and broadest study that is been made of the tax structure that I can ever remember. And I hesitate to give any opinion on any single thing until-again, those of us who've sat around the table on the budget are going to sit around that same table now on the tax program and go at every facet of it. I think we recognize that in that study-I do not think anyone has said, Why, buy this entirely as it is -we recognize there are things in there that are options. And so, I do not think that I could or should give an answer on a specific of that kind. Well, apart from the specifics, sir, it is been argued that venture capital has helped fuel the American economy in recent years. I think you agree with that. Does it worry you that by eliminating the special treatment given to capital gains that that might kill the goose that is laying the golden eggs? This is one of the things that- And, so, I think that this'll be one of the points that will be very much discussed, because the whole aim of both of these things-well, in addition to the tax reform being necessary to eliminate a lot of unfairness-and the biggest unfairness of all is the complexity of the present tax system-but, in addition to that, we are looking to these both as things necessary for economic growth. And, therefore, we are going to look at this tax proposal and at anything as to whether it could contribute to economic growth or whether it could set economic growth back.

Interview With a Group of Senior Executives and Staff Members From the Wall Street Journal


Is that a suggestion-you'd like to keep the current capital gains tax treatment? No, you are getting me to- -to give an opinion on it. What I am saying is, we will be giving each of these things consideration on that basis that I just outlined. Well, let me ask another concept question, then. Well, the way the Treasury proposal lowers individual tax rates is by increasing corporate taxes by 37 percent. Again, as a concept, do you generally favor that approach of individual versus corporate taxes? The corporate tax is given a ceiling of lower than the- Not the rates, but overall corporate taxes would go up about 37 percent under the Treasury proposal while individual taxes would come down. Is that a general approach that you endorse? I, as I say, I have not even made an attempt to study that bill in detail that much to know that. I assume that that would mean things that would be taken away from them that are present deductions. I would have to be convinced of the need to do that, because I am a believer that one day we must recognize that only people pay taxes. And someday I would hope that we could arrive at a tax structure that would recognize that you cannot tax things; you only tax people. Well, you also said last night that this was not going to be a tax increase under any disguise. If the bill is modified to meet the objections of some critics, whether it is from the business community or elsewhere, could it be that the bill would be a revenue loser? And would that be acceptable to you? I think what we are talking about here is a tax reform, and you are striving for neutrality in this. Now, in that kind of a reform, I am also sure that there are going to be some people, obviously, who are going to pay more tax than they are paying now. But, then, you are talking about people who are unfairly not paying a share of the tax today. And if you-the aim of this kind of a tax program, and I think this is true of all three of the proposals that are now before us-the two that are up in the Congress now, plus this Treasury report-I think it is true that one of the targets there is the large amount of tax that is not being paid, many times legally, by virtue of the complexities of the present tax laws, in which some who fairly should be paying a share are avoiding it.


And with the simplification comes a straightening out of that kind of a problem. And if it is revenue neutral, it will end up actually providing more revenues from the simple reason that you will broaden the base of the economy. Let me try one more tax question, sir. You also spoke favorably about the notion of lowering rates and, as you just said, broadening the base by eliminating many exemptions. But right after you did that, you then called for two new exemptions; namely, enterprise zones and tuition tax credits. Does not that just encourage others to try to carve out their own special places for their own pet write-offs and threaten to unravel that whole concept of lowering the base by broadening-or lowering the rates by broadening the base? Well, if you are trying to make a tax program more fair, which is also part of this proposal-take the issue you have raised of tuition tax credits. Here you have, I think, a very broad-based on fairness in the country-you have got people who are compelled to send their children to school under the law, because we believe that a democracy can only exist if you have a literate citizenry. And yet these people who, if they choose or feel they can get a better education for their children, choose a private or parochial school, independent school of some kind, they pay the full cost of sending their child to that school. But at the same time, they are paying the full cost that parents of children are paying-they are paying that in taxes to support the public school system. Now, if you stop and think what the additional cost to public schools would be if suddenly the independent schools closed and all those students were turned over to the educational market-and it would not mean an increase in revenues for public education, because already they are getting the money from those parents-you could see what a burden this would be. Well, it seems to me that it is only fair that some parent-as a matter of fact, the ultimate fairness would be educational vouchers. Does government properly support a school system, or does it provide the funds directly to the students to get an education? They could take that voucher and go where they want, and you put competition back into education. ENTITY, on the politics of tax simplification, the general idea does not seem to have a lot of support among the Senate Republican leadership, and the business community has its problems with some of the provisions.


What can you do, personally, to turn around the opposition from these kinds of people who are normally in your corner on things? I am -at the beginning, you said at the beginning what- Well, I think that there are some people, simply on the basis of what was revealed of the Treasury Department study, that read into it things they thought were inimical to their interests and immediately took off. But I think in many instances, when you sat down with those people and pointed out what the change in rates did, some of their hostility disappeared. I think the most important thing that we are going to face is, once we have settled on and agreed on a package that we believe is fair and is the reform that is needed, is then to make sure there is no misunderstanding or lack of understanding of what it will actually mean to the taxpayer. Basically, we found that the overwhelming majority of people were going to get a sizable decrease in taxes, based roughly on this setup, and that those that were not were going to get an increase were people who, as I say, are not presently paying their fair share. More generally on the economy, you have made it pretty clear that you believe that we are on the brink of a sustained economic boom. Are you worried that this might be cut short by the Federal Reserve? And would you like to have a greater say in Federal Reserve policy? Well, we try to work very closely, as closely as we can, with the Federal Reserve on this. And so far, I must say, right now they are on target-and that is we need a money supply that is commensurate to the growth in the economy and to continue that growth without inflation. And that provides two lines between which you must stay. And so far, as I say, right now they are right on target with that. Were you comfortable back in July and August? I think there were some times when it fluctuated widely and when they got well below their target and all. But, as I say, we are trying to stay in close touch with them. And I think we have made it plain what we believe. There are times when it is not an outright decision of theirs that sees the money supply fluctuating, and the fluctuations can be caused from other and outside forces. If we could shift to foreign policy for a moment. Your administration is obviously headed into a battle with Congress over the aid to the contra forces in Nicaragua.


Last night, you said that aid was necessary to our own self-defense. What I keep wondering is, would you like to see the contras actually overthrow the Sandinista government? And, if not, what is the purpose of aiding them? The purpose of aiding them is to aid literally the people of Nicaragua, who are striving to get the government that the revolution promised them. If you will recall during the revolution, the revolutionary forces appealed to the Organization of American States for help. And they asked the Organization if they would please try to persuade Somoza to step down and, thus, end the bloodshed. And, in return for this, they gave the Organization of American States the declaration of principles of what it was they were seeking in the revolution. This was all the civil rights and human rights, freedom of speech, freedom of labor unions, freedom of religion, and all of these things. Now, what happened we saw happen once before with Castro's coming to power in Cuba. He had other allies that wanted a democracy, and he never admitted to his true leanings until that revolution was over. Well, what happened was the faction known as the Sandinistas took over. They ousted a number of other revolutionary leaders; some of them were exiled; some, I think, were done away with; some imprisoned. But they have set up a totalitarian government. Their allies are Cuba, the Soviet Union, the Communist bloc, even Mr. Qadhafi, and now Iran is getting into the picture. But they have set up a totalitarian government. They have betrayed the principles that the people of Nicaragua were fighting for. And what we think is that we should be on the side of those people who actually are only asking for the democracy that they'd fought a revolution to get. It sounds as though you are saying that the objective is an entirely new government in Nicaragua. Well, when you answer a question that simply, though, and you come back, then, you see, you get into the thing-well, are you talking about individuals or are you talking-you are talking about the governmental form. Now, if that governmental form can come by way of the people who are presently in that government and who then will be willing to stand for elections at appropriate times, that is fine. But that is what it is really all about, is getting the revolution the people fought for.


On a similar kind of question, Secretary Shultz has been giving speeches about the need to retaliate against terrorism. But, in fact, there has not been any U.S. retaliation for the attacks on our Embassies and our Marines, and five Americans right now are being held hostage- Is your policy on using force against terrorism really any different from the Carter administration's? Well, I think you are putting some apples and oranges together there. The Carter situation was not dealing with unknown, hidden terrorists. They were dealing with a legitimate government, and not a very good government, but- -at least it was the government of the nation. You knew who you were dealing with; you were dealing with a national entity. The problem with terrorism so far and why, as I have said, much of the answer lies in what we are going forward with now, and that is better relationships with all the other democracies to where we will make extradition easy, we will exchange intelligence information. There are two ways you could deal with terrorism, and one of them is terrorism itself. Suppose in revenge, just on the basis that you think some people of a certain group or sect or belief did this, and then you strike back and perform the same kind of brutal crimes against some of those people, without any knowledge or assurance that you are getting the people who perpetrated the first crime. Well, that is no way to fight, and we do not believe in that. The thing is, you have to find an ability to locate the source, if possible; obviously, the best way is if you can infiltrate and then get some advanced information on when they are going to strike-be prepared for them. Our problem with the worst terrorist act-the big one, of course, was our Marines in the Embassy, was nothing but some suspicion of a certain locale in Lebanon, and yet there was no way to sort that out or separate it out from a community of other people and no way to strike back without causing a lot of innocents to die. And what we now, I think, are looking at is the possibility that some terrorists actually do have national support and backing. Then, with that established, then you can let that government know that there is going to be redress against that government if these acts continue. On the broad question of arms control and the U.S.-Soviet relationship, you talk about arms control agreements with deep cuts and offensive weapons and extensive verification.


When you do that-are not you really asking the Soviet Union to become an entirely different kind of country? And can we really expect that in our lifetimes? Well, I am not going to be euphoric about this, but I do think that one of the things we have going for us at this time, that has not been present in much of our previous negotiations, is that we go to the table now in a situation in which you are not going there looking at the Soviets as if, Well, they are people just like us, and maybe if we talk sweetly enough, why they will be conned into being nice, too. The only way you are ever going to succeed in negotiations is if you can go there with a situation in which it is to their practical interest also, that their interests are served by coming to an agreement. And I think the fact that we go there now with our own military buildup, with them seeing that the alternative to legitimate arms reduction could very well be an arms race with an industrial power that they know they cannot match; in other words, we are saying to them, We are not going to let you get a monopoly on power to the point that you can start winning by simple ultimatums-threats of, 'Surrender, or die'-so make up your mind. You either join in a legitimate reduction in which both of us will reduce in such a way that neither one of us represents a threat to the other, or you face that kind of a race. It was all summed up in a cartoon. I know your paper does not have cartoons, but- But a cartoon one day and it-right back early on in our military rebuilding-and it was two Russian generals, and one of them was saying to the other, I liked the arms race better when we were the only ones in it. And I think that is been the situation over a number of years. On the military buildup, one of the prominent things is the Strategic Defense Initiative. And would you continue to favor this, even if your own scientists concluded that it could never be leak-proof and that even a few missiles would always get through and destroy cities? Oh, I have never asked for 100 percent.


That would be a fine goal, but you can have a most effective defensive weapon even if it is not 100 percent, because what you would have is the knowledge that-or that the other fellow would have the knowledge that if they launched a first strike, that it might be such that not enough of their missiles could get through, and in return we could launch the retaliatory strike. Now, that is not really the goal of the Strategic Defense Initiative. I tie that to what I think is the goal of these arms negotiations. The Soviet Union-Chernenko and Gromyko both have publicly stated that they would like to see the elimination, ultimately, of nuclear weapons. All right, they have said it. Now, if they really mean it, we can go to a table and sit down and start negotiating reductions, aiming toward the elimination of those weapons. If they do not mean it-or either way-I think that to go forward with this research on a strategic weapon is hand in hand with that goal, that ultimate goal. Well, wait a minute. How many missiles would we have to build to get enough through on a first attack that we would not be threatened with, then, the retaliation? And then they will see the value that this is what I mean by making nuclear weapons obsolete-they will see that this defensive weapon could be a contributing factor to eliminating such weapons. Okay, now we have got you. We can launch the first attack. I do not think this country is ever in a position where it wants to do that. We do not start wars. We have no intention of starting one now. Look, we are willing to join you. We will do away with ours. You do away with yours. We have got this thing here now, this defensive weapon, and we are very willing to use this, not to enable us to fight you, but to simply do what we both want, and that is get rid of the weapons. ENTITY, let me bring you back if I may Leaving aside David Stockman's indelicate remarks about the military caring more about their pensions than the security, for which he is apologized, do you agree with the substance of his remarks that the system of military retirement benefits is bloated and the taxpayers should not be bailing out farmers who took out bad loans? Well, right now, we are offering a program in which we are hopeful that we can salvage some of those farmers.


The situation we are facing today with those farmers is one other people in other lines of work have faced, and it is the result of ending an era of building your business on expected inflation. And farmland, unfortunately, was one of those things that, in an inflationary world, zoomed in value. And then they borrowed on the basis of that as security. And when we were successful in bringing down inflation, one of the first things that happened was the nose-diving of that land. How about the other part of his criticism-the military pensions are bloated? I have to think this is a little different than any other pension program you want to name-the military. They go into a profession or a business-profession is the word; I guess it should be used-in which they know that, say, in a matter of a certain number of years, even though in any other line of activity they would be literally at their prime-your business or mine or anything else-but they know that the physical requirements are such that they are going to be out. Now, there is that coupled with the sacrifice that is made by the military. I talked to a retired military man-in this case he was an officer and reached high rank-and he had retired, and then he had found other employment. But he told me that one of the reasons-retiring was that in 31 years of his marriage-they sat one night and totted it up-20 years of the 31, they had been separated from each other, that he, in the call of duty, for 20 of his 31 married years had not been-he and his wife had not been together. He was out there in the world someplace. That is worse than someone running for President. That is worse than someone running for President. Sir, Larry Speakes would not forgive me if I did not ask at least one question about the budget deficit before we leave. I knew you'd be mad if I did not get that in, though. You know, in fiscal years '83, '84, and '85 we will have budget deficits of about $600 billion. At the same time, unemployment's coming down, inflation is staying around 4 percent, interest rates have actually come down a little bit. Yes, they come to a point where they matter. I have been saying that for about 30 years. Yes.


I think just one of the most wonderful things to see and to hear is to hear my own words coming back at me from over those years by a few Democrats right now, who suddenly have discovered deficits. And yet for 50 years, with the exception of about 4 years in that 50, they have controlled the Congress of the United States. But why do not they affect inflation and interest rates and unemployment now, if they are so bad? No, what they can do is get to a point in which the total debt-and remember, with all their moaning and crying, the national debt was about a trillion dollars when I came into office. And the first of those major big deficit increases occurred after I was in office. However, it was not my responsibility, because your first 8 months in office, you are on the other fellow's budget. I do not come into office and declare how much we can spend. The budget is there until the following October. In fact, when the bottom fell out of the economy in July of '81, not one facet of my economic program had been passed as yet. So, it could not have had anything to do with that deficit. But what is happening now indicates the danger that over the 50 years, the situation keeps getting worse. And let me give you one. When we put into effect the War on Poverty, which started in the last half of the sixties and ran through the seventies-and poverty won, because the rate of increase in people in poverty increased in spite of the War on Poverty and all those great programs-but in the 15 years from 1965 to 1980, the budgets multiplied to 5 times what they were; the deficit went to 38 times what it had been. So, you have got a built-in, structural deficit. And the President-to call it the President's budget-the President is responsible for submitting to the Congress what they have required in the programs they have legislated. And the Congress, in turn, when the President-and this is the situation a President's in-when the President submits and says, We can run this program for this amount of money, and it is less than what the Congress thinks you should, the Congress insists that you spend more money. And they even tell you that if at the end of the year there is any money left, you are going to have to spend it before the end of the year. And, of course, it is multiplied, and it is gotten worse.


I am asked to ask you the first questions. My name is ENTITY, and everybody else will introduce himself when he asks his first question. In another interview a few days ago in Moscow, gave a remarkable characterization of your qualities as a politician, and he praised your realism. After three meetings and many talks one-to-one, how would you characterize , and what do you regard as his main qualities? We can get into discussions where perhaps we are disagreeing quite firmly, and yet there is no personal animus in that with him. I think he solidly represents his country. I have suspected sometimes that he, having been raised in that particular country from childhood, believes some of their propaganda about us. But as I say, we can debate and discuss, and I think he is very sincere about the progressive ideas that he is introducing there and the changes that he thinks should be made. When it is over, I think that there is actually a degree of friendship between us. According to the State Department, we are moving toward an agreement that would allow American psychiatrists to visit Soviet mental hospitals to determine if dissidents are being imprisoned there. The Assistant Secretary of State for Human Rights was quoted as saying that there seems to be a genuine interest in the idea of such a visit and in bringing the problem of abuse of psychiatry to an end. Do you think that a formal agreement could be ironed out during your visit to Moscow? I think that some of these things with regard to human rights is not just trying to interfere with their internal affairs at all. But in view of the fact that our country is made up of people from all over the world-and I have used the term myself previously in discussing with them that when a man takes a wife, he does not stop loving his mother-and you perhaps are aware that Americans all retain a feeling of their heritage, even those whose grandparents or great-grandparents first came to this country. I think when Americans get acquainted with each other the first thing they inquire is, you know, what is your background. And as time has gone on, most of us have to name three or four countries in our heritage if our ancestors came a few generations back. And the result of that is that in becoming closer and developing a relationship between the two countries we are affected by public opinion and by people in our country who resent if they think that in the land of their heritage people are being treated unfairly.

Interview With European Journalists


So, this is one of the reasons why I am trying to impress upon the General Secretary that if we are to develop relationships, and better relationships in trade and so forth, that can be done better if there are not elements in our country that believe that somehow the country of their heritage is-the government is being unfair to the people, because they still consider they have a relationship there. And so, it is not a case of just wanting to impose our rules on them. It is to try and impress them with the need to eliminate some of the things that have grown with their system and that are unfair treatment, that are denying human rights to their own people. Could you please assess the prospects for a strategic arms treaty with the Soviet Union before you leave office on January the 20th. And do you see any possibility of another summit with Mr. Gorbachev later this year to sign such an agreement? Well, I will not rule it out. I will not say it is impossible because it does look as if a START agreement-I do not think there is any way now that the START agreement could come to a signing point in this summit. It is a far more complex treaty than the INF treaty that we did agree upon. Now, with ratification of that, I think that this summit will advance us further in the START discussions, and those people of ours and theirs that have been negotiating in Geneva on this will continue. And I hope that it can come about while I am still here, and I think they feel the same way just because they believe that there would be perhaps unnecessary delay then if you had to wait while a newcomer in this office settled in and got around to working with them. And so, I would hope that we can iron out the still-undecided points before I leave. And then I could see where we might decide that it should be signed in a meeting rather than several thousand miles apart in the-when the signatures take place. And I have wondered, then, if perhaps the-since we will have each been to each other's country, rather than try to choose which country to do it in, maybe we'd pick a neutral locale. And I want to remind you for some of your prophecies. You said very interesting things just at the beginning your first term not just about America but about the Eastern bloc.

Interview With European Journalists


You said they are bound to be in very difficult times if they do not change the-will be going downstairs in the dustbin of history-or something like that. I think you are a very good prophet-but they have changed lots of things-perestroika, Hungary, Chinese. How do you feel like a prophet? Well, I did not set out to be a prophet, but I just believe strongly that government can become too domineering and when-well, I thought in our own country that we had drifted to a point where government was, in a sense, at an adversarial relationship with its own business and private sector. And so, we set out to reduce regulations that we thought were unnecessary, to return authority to our States. We are unique in the world in that we were created as a federation of sovereign States. And much of our law and so forth was left with the States and the local communities nearest to the people, and then certain things that had to be done by the Federal Government. But this was not new with me in feeling that the central government had gone too far in imposing itself on these other elements. Franklin Delano Roosevelt, when he ran for election in 1932-one of his platform planks was that he would restore authority and autonomy to the States and local communities that he said had been unjustly seized by the Federal Government. So, this was not -and he was of the opposite party. But this we have done. And I think it has been responsible for the longest economic expansion in our nation's history, which we are in right now. And so, I could obviously see that, well, I disagreed with the whole theory of socialism and its advanced partner, communism, because that was a total imposition on the people. We set out, Vice President Bush was put in-I put him in charge of a task force to investigate how many regulations we could eliminate that had been imposed on the people and on local governments and so forth. And that commission was so successful that we estimate that we have eliminated 600 million man-hours a year of complying with government paperwork throughout the country. So, I am still critical of that system, but again I think that is not too far away from what the General Secretary is trying to do. He has found and is advocating changes. He is getting resistance from some of the bureaucracy, but he is suggesting changes that are obviously based on improving the economic situation in his country.

Interview With European Journalists


And the question of whether the NATO allies of the United States are bearing their fair share of the Western defense burden has triggered an important foreign policy debate here in Washington and was raised recently in Brussels by Mr. William Taft. ENTITY, what is your view about the burden-sharing problem? Well, there is no question but that if we take it on a percentage of our gross national income we are perhaps having a higher figure in our defense spending than our trading partners are in NATO. And we have believed that since our Congress is making it more difficult for us to continue our rate of spending in defense that maybe our allies could increase their share somewhat. I do not think it is a problem that should cause any ill will between us, but we have in our meetings with our NATO partners suggested that it could be most helpful if they would assume a little bit more of the burden. May I come back, ENTITY, to Eastern Europe? We had these developments in Hungary last weekend, and we had a peaceful change of power in Czechoslovakia last year. How do you see these developments? Could this be the beginning of a process which could reach the Communist hierarchy in Romania, in Bulgaria, in East Germany as well? Well, I think that is possible that the-the most recent one-I think we cannot rule out the fact that there was an age problem, that one man had been there quite a long time. I do not know exactly what his beliefs and policies are, but they seem to be somewhat, well, let us say, in the same mold as the General Secretary of the Soviet Union. And I think we have to expect that, and it probably is a good thing to see happening with those countries, that glasnost is practiced in them also. The advice that I would give to my successor with regard to relationship with. Yes, in regard to his name-I mean- Well, I would certainly try to inform him fully of all that had been accomplished in these last few years, now with this relatively new head of state. And I think I would try to convince him that this progress should continue. As I said in the first meeting, one-on-one with the General Secretary, I pointed out to him that it was rather unique that there we were in a room in Geneva, Switzerland, probably the two men in the world that had within our power to maintain the peace or to start a third world war, and neither one of us seemed to want a third world war.

Interview With European Journalists


And there can be no denying that there is something of the superstate about our two nations, and we can have a bearing on the peace and prosperity of the world, depending on how we get along. And so, I suggested to him that we did not mistrust each other because of our weapons, we had our weapons because we mistrusted each other, and that maybe what we should do is not just deal with arms and numbers of weapons but see if we could not get at the things that made us mistrust each other. And I think we have been doing quite a bit of that. And so, I would try to pass that on as a chore that the next President should continue. ENTITY, your Panama policy seems to be in deep trouble. You rejected a military solution to overthrow General Noriega, and your economic sanctions have so far failed to force him out, despite inflicting grievous harm on the Panamanian economy. And now Vice President Bush is saying that he opposes the dropping of drug charges against General Noriega. Well, he and I disagree on that. I recognize how it looks to some people with regard to that as a part of our effort. And I think he is aligned with this-that the goal must be the removal of Noriega from power. Here is a man who is able to actually drive the President of Panama into hiding for, literally, fear of his life. Now that is the goal, and we tried to do that with economic measures. We are still in a position of negotiating. The disagreement, however, over whether we were doing business with a drug dealer or not was based on a rather unusual thing. And that is when lawyers in this country got an indictment against Noriega on the basis of dealing with the drug dealers, they overlooked-you know, when I say it is unusual, it is unusual that you indict literally the head of another state-but they overlooked the fact that the Panamanian Constitution makes it impossible to extradite this man in response to the indictment. Well, then you have to say the alternative is that he stays there in power and able to continue his drug trafficking. And if it means quashing an indictment that cannot be enforced, I would suggest that that is not too high a price to pay for getting rid of him. ENTITY, will you explain some secret of the American mind that is about economy. Why are still so many people talking gloom in the middle of a boom?

Interview With European Journalists


I made some remarks about that to an audience just a few days ago in a speech of mine. It is amazing how even much of our media can-well, I described it like being in a hall of mirrors and coming up with a false image. We announce a figure that we had the highest amount of exports in our history just last week. And how do they get at that? They will find some-I described it as their ability to see the dark cloud behind the silver lining. We took some practical steps in addition to those regulations that I mentioned. We had a complete overhaul of our tax system. Now, I am not a genius that thought of this all at once by myself, but I know that if you look back through our history invariably tax reductions have resulted in an increase of revenue for the Government. As a matter of fact, centuries ago there was a man named ibn-Khaldun who said in the beginning of the empire, the rates were low, and the revenue was high. At the end of the empire, the rates were high, and the revenue was low. When we got our tax reform, that brought the top bracket in our income tax, for example, down from 70 percent on the people who could earn in that bracket. When we brought that down to-well, now it is 28 percent. But first, our first move was to bring it down to 50 percent. Well, even that resulted in a great increase in the revenues from that same segment of people. Well, now, this has to mean that those people were so busy at that 70-percent rate in tax shelters that they were seeking, or in just simply not earning any more beyond a certain point because how much was taken away from them, once you made an incentive that they could keep almost three-quarters of every dollar they earned, they started earning more dollars and stopped looking for tax shelters. And the same has been through all of the brackets. That was one of the great features, I think, of our recovery. And then the other was getting government out of the way of the private sector. Our country, I think, probably leads the world in entrepreneurship. We have created in the last 5 years 16 million new jobs. Now, most of those jobs have been created by new or small businesses-not the great corporations with their thousands and thousands of employees, but the individual with an idea that goes into business for himself or the individual that is got a few employees and then suddenly he is got 200.

Interview With European Journalists


Let us say that the bulk of the new jobs were in those industries that employed less than 500 people. Well, all of this is what has resulted in what the leaders of your countries in our meetings have called the American miracle. And as a matter of fact, many of those leaders have been very frank in saying to me that they would like to be able to remove some of the restrictions and restraints on the private sector, private enterprise in your countries. And we talk about that a great deal, and maybe we are going to see some results elsewhere. ENTITY, I know you are still very much in charge, of course, but next January you will leave the White House. And how would you like to be remembered, and what about the Reagan legacy? Well, I would like to feel that what I had left will be continued-the economic policies and the restraints on government. And one other thing, when we came into office, our defense capacity had been so reduced that on any given day 50 percent of our military aircraft could not fly for lack of spare parts, 50 percent of our naval vessels could not leave harbor for the same reason or for lack of crew. So, at the same time that I was trying to reduce the spending of government and the share that it was taking in the private sector, I had promised in the campaign I was going to restore our military. Well, we not only did that, but at that time, there was a great wave of feeling across our country that, well, that things were not the way they used to be, and there was a lack of patriotism. I likened it to the fact that I said I thought the people were ready for a spiritual revival. And I am pleased to tell you that that has happened, and I get more mail and more people stopping me, if I am out on a public appearance or something, to tell me that the thing they are grateful for is the renewal of patriotism and feeling about our country. Maybe I ought to just be happy to be remembered at all, but I'd kind of like it if those were the things they remembered. May I just give you a suggestion? When you leave office, please go on doing your Saturday message. that you know the business that I used to be in, and I have always described that in Hollywood, if you did not sing or dance, you wound up as an after-dinner speaker.

Interview With European Journalists


And so, I did not sing or dance, and I was out on what I-all my personal appearances were out making public speeches. And I did my own speeches and talked on what I wanted to talk about. And basically, it was-even then, with no thought of ever being in public life-it was against the growth of government and the imposition. When I was making those speeches in those days in Hollywood, the top bracket of the income tax was 90 percent. And I knew what it was like to refuse a good script and not make a picture because I was not going to work for 10 cents on the dollar after I'd reached that bracket. So, I can assure you, I am going to-there are a lot of things I want to campaign for that still have not been done. So, I will be out there addressing the people. In America-I do not know whether it is true in your countries-we have a great many private organizations, and there is always a demand for speakers. So, I will be doing that. And as a matter of fact, I have already picked out one topic I am going to speak on. You know that an amendment to the Constitution came about a few years ago that limited the President of the United States to two terms; there cannot be a third. Well, now, I cannot object to that while I am in this job. It would sound like I am doing it for myself. But as soon as I am out of here, I am going to try to arouse the American people to get that constitutional amendment changed, canceled, because I think it is an interference with their democratic rights. They should have the right to vote for whoever they want to vote for, for as long as they want to vote for them. And I am going to see if I cannot arouse the people to get that changed. ENTITY, may I, on behalf of my colleagues, thank you very much for this interview. We wish you a pleasant trip to Moscow and a most successful summit.

Interview With European Journalists


What do you expect to be accomplished out of Tokyo summit? And what special roles do you see Japan can play in areas beyond economic constitution in--of global partners with the United States? First, let me say I think the G-7 meeting will be a very important opportunity for the leaders of the major industrialized countries of the world to reaffirm their commitment to global growth, to democracy, and to security concerns. I believe there will be serious discussions about three issues on the economic front, one really perhaps for the first time. The first is that I think there will be a real discussion about how we can coordinate our economic policies in ways that will produce growth. From the first week I was in office, we have spent a lot of time working through the finance ministers, the foreign ministers, and others to talk about how we can coordinate our strategies. For many years, other nations have asked the United States, for example, to lower the budget deficit. And we are working very hard on that, first through this $500 billion deficit reduction program that has now been passed by both Houses of our Congress, then through taking on a health care problem which is the biggest source of our growing deficit. And we need to make sure we are coordinating those policies with things which will produce an overall higher level of growth than we now have. It is a big problem for the United States, because two-thirds of the new jobs we have created here in the last 5 years have come from increased trade with other nations. The second issue I think that we will discuss and, I hope, make some genuine progress on, creating a more open trading system and increasing the chances that we can successfully conclude GATT by the end of the year. The third thing that I hope to see a very serious discussion on is the microeconomic policies of each of our nations and how we can all do a better job of creating jobs within our economy. Even Japan, with its very low unemployment rate by western standards, is having some trouble now creating new jobs. But it is a very big problem for the United States and for every other country represented around this room today. What kind of labor support systems do you have; what kind of education and training systems do you have; how do you target investment to create jobs? The west, and increasingly Japan, are having difficulty creating new jobs, even in times of economic growth.

Interview With Foreign Journalists


If you trace the last 6 or 7 years you can see that in all the western nations, even when there is growth, there is some trouble creating new jobs. So I think that this will all be-we will deal with this, and I hope in a very informal and forthright atmosphere. It will be an interesting summit, because there will be several of the people there attending their very first one, first G-7, all at the same time. The second point you made about Japan's role in the world, I am going to do what I can while in Japan to strengthen the bilateral relationship between the United States and Japan. In many, many ways it is our most significant bilateral relationship and the key to what happens between the United States and Asia. It is interesting, even though we have incredibly important ties to Europe, economic ties, we have a huge-40 percent of our trade is now with the Pacific. It accounts for almost 2 1/2 million jobs in America, trade with the Pacific. And we have major security concerns, as you know, with regard to Japan and with Korea. So I am very hopeful that even though Japan is going through a period of political transition, which I hope the Japanese people will view with excitement and interest, not with too much concern, this is a normal thing for a democracy. And periodically you go through these periods of significant change, and I view it as a positive thing for a great country. I think it will leave you stronger and in a better position in the world. So I hope we will discuss a lot of our bilateral economic as well as strategic concerns there. And I hope that when I leave Japan, our relationship will be even stronger than it is when I enter. ENTITY, there was a court decision this week that is a roadblock to ratification of the NAFTA agreement. Your administration has said that you will go ahead, but you do not appear to have a lot of wiggle room in Congress on some of your other economic initiatives. And I am wondering, first of all, how you are going to ensure the passage of NAFTA. And secondly, on the eve of the summit, this raises the whole issue of the conflict between environmental concerns and economic growth, and whether it is drift nets in the Pacific or toxic waste in Mexico or the whole problem of aid to the former Soviet Union, that conflict between the environment and economic growth underlies a lot of these issues.

Interview With Foreign Journalists


And I am wondering how you see reconciling those issues at the G-7. Let me mention the NAFTA first and then I will answer the larger question. First, on the narrow issue of the lawsuit, we announced within an hour after the court's decision that we would appeal. And we believe we can win an appeal, and we can win it within the appropriate time. There may also be some other avenues which will permit us to do some kind of environmental impact statement and still meet the time limit. There is a strong opposition to the agreement in some quarters in the United States, and the relative economic problems that we all face now make that more difficult. It makes some in Europe less enthusiastic about the GATT now. It is the same reason-it is just-a part of it is almost endemic to the human condition. I do think we have the votes to pass NAFTA in the United States Senate. And I think that-and we do not have today the votes to pass it in the United States House. First of all, by successfully concluding the agreements now subject to negotiation between Canada and Mexico and the United States to strengthen our common efforts at lifting labor standards and environmental quality, particularly along the Rio Grande River, which has been a huge problem. And I should say by way of background for the rest of you, the reason the labor standards issue is so big is that there was a report issued in this country last year that indicated that the Caribbean Basin Initiative of the United States, where we tried to get investment in Caribbean countries and put plants down there, had not led to increasing the per capita incomes of the people working in those businesses; that because the people were so poor, that a lot of the people who had taken the money that the United States Government had put out had still depressed their wages and increased their profits. So we have given some thought to this labor standards issue here and the environmental issue. So I think if we get those agreements that will help. The second thing that will help is if we have to just make the case, you know. Now when we have an agreement, it is a lot easier to defend the jobs argument. Right now there is a simple argument against NAFTA being waged by, articulated by Mr. Perot in this country and others, that you cannot make a trade agreement that takes down all the barriers with a country on your border with a per capita income that is only one-eighth as much as yours is.

Interview With Foreign Journalists


Everybody will take their money and invest in the other country. Well, it has great superficial appeal, but the truth is that anybody who wants to go to Mexico and invest their money for low wages can do so today. But the market opening measures that have been taken by President Salinas in the last few years have led the United States from a $5 billion trade deficit to a $6 billion trade surplus with Mexico. And we are in effect because Canada, as you know, is our biggest trade partner-we are now building this hemispheric economic bloc that we want. And so I think we can refute it on the merits. The third thing we have to do is ask the economists to consider what will happen if we do not pass the trade agreement. Our relationships with Canada are secure, and we have a bilateral agreement, and that is fine. But we could go back in our relationships with Mexico, which would mean economic problems for Mexico, more trade barriers, fewer jobs in America, more illegal immigration. A lot of problems could develop for the United States if we do not do the NAFTA. However, I believe that our goal ought to be to find ways to make preserving the environment good economics. At the Rio conference last year, Japan, Germany, and many other European countries were proving that you could do that because they were down there promoting environmental technology while the United States was trying to stop the environmental agreements. I think that our country was not as wise as many of the nations here represented in the way they approached the Rio conference. We have now signed on, the United States has, to the Biodiversity Treaty. And we have basically adopted a policy of long-term environmental preservation with an aggressive effort to figure out how to make jobs and incomes and prosperity flow out of that. And I believe that there are lots of opportunities to do that. If I might just mention one, our bilateral aid package to Russia that is now making its way to the Congress focuses heavily on what we can do with our technology to help them to reduce the problems that their nuclear industry-and not simply their bombs but their nuclear power plants, for example-present to them, and what else we can do in the area of energy and the environment to help to clean up their environment in ways that are good for their economy and good for ours. So I think there is a lot of opportunity there.

Interview With Foreign Journalists


You just said in the beginning, ENTITY, that you hoped that Tokyo would, and I quote you, increase the chances of successfully concluding a Uruguay round by the end of the year. Can I turn that around and say do you think that a failure to do that would seriously jeopardize the whole G-7 process as it currently exists? That was one point that Prime Minister Balladur made to me in our meeting here. And I know it is difficult to lead when you have troubles yourself. All of us have economic troubles. All of us, to a greater or lesser extent, have some political conflict within our countries. But I think that it is very important-and almost to change the atmosphere and the attitudes of the peoples of the G-7. Yes, we are having economic trouble. And the fact that we are all having it should be some indication that there is some sort of historic change going on here and not that there is some character flaw in our people or some great mental breakdown in our countries or something else. This is a tidal wave of global change going on here. We have innovative work forces; we have great bases of technology; we have an understanding of how the world works economically. And I think we have within our power the means to move forward and break out of this problem we are in but only if we have the courage to keep changing. And so I would say, to try to answer your question directly, there have been debates for years about whether the C, -7 process accomplishes anything. But if nothing else, if we can agree among ourselves to take an expansive view of the future and to talk about the strengths of our nations and to recognize that there are only three ways to grow our economies. One is through the changes we make internally, the microeconomic changes; the other is through coordinating our larger macroeconomic policies; and the last is through creating a more open system of trade so that there is global growth. It is hard for the wealthy countries to grow wealthier unless the people below us are getting wealthier and can buy more of our products. And so I feel very strongly that we ought to come out of the G7 with a more vigorous commitment to get the Uruguay round done. Now let me just say what I have done in that regard. I have repeatedly said that the United States would bend over backwards to get that done this year, that there are changes that we would like to make.

Interview With Foreign Journalists


When the C-7 finance ministers and central bank heads were here not very long ago at Blair House across the street, I went over and personally met with all of them and reaffirmed my commitment to this. So I do not know what else I can do, except that I think a lot of this is a matter of attitude. We have to try to lift our own visions and lift the spirits of our people and realize that when you are in difficulty, the worst thing you can do is to hunker down, to withdraw. When you have difficulties like this with a fundamentally sound system, the time is to change, to be innovative, to be creative, and to reach out. And I think that is what we have got to begin to do at the G-7. The tone, the atmosphere, the ideas that are discussed in that sense may be far more important than anything specific that comes out of the communiqu?. What direction are we going to take the world in? ENTITY, nobody seems to be happy with the G-7 process, not to mention the results. I wonder if you could define for us-elaborate on what you just said-that the purpose of the G-7 in today's world and tell us what you would like to change. Well, I do not want to be too presumptuous, since I have never attended one before. I have only read about them before. You know, I always followed them very closely. But what we are striving for-I think the other leaders agree with me, including those like Chancellor Kohl, who is been to many of these. My own view is there ought to be enough time at these C, -7 meetings for a serious discussion among the leaders without a lot of bureaucratic procedures and rules and regulations about these big issues. What can we do to create more jobs? How do you explain the fact that France, for example-let us take France. France had a productivity growth rate that was the highest in Europe in some of the years of the late eighties and still had relatively high unemployment. The United States, which has far fewer labor supports than most of the European countries do, still has difficulty getting its unemployment rate below 7 percent. We are well into 2 years after the worst of our recession, and yet we are 3 million jobs behind where we would ordinarily be at this point after a recession.

Interview With Foreign Journalists


We should discuss these things, and we should think about whether we can learn things from one another about how to create jobs in the west. We should be able to really talk through very frankly what the political and other economic barriers are to getting the GATT done and really think about it and talk about it. It is far more important than what is in the specific words of the communiqu?, whether we come out of there with some sort of commitment to do something, to take action, and to move. Let me just give you one example. I am trying to do something that our country has not done before. We are trying to dramatically cut our Government deficit at a time when our economic growth is slow. Traditional economic theory would say if you have a sluggish economy, you do not cut spending and raise taxes; you might do the reverse, right? Why am I trying to do that? Because we are in a global economy, and the United States deficit caused an imbalance in the global economy, okay? But now, this can work for us for a while just on our own, because we had so much debt in the 1980's accumulated at high interest rates, by bringing down the deficit, interest rates in America have dropped very low. So businesses and homeowners are going out now and refinancing their debt, and that puts a lot of new money into our economy. So I can get a little bit of growth just on what we do here. But in the end, this will only work if there is an expansionary policy in Japan, if Europe is able to resume a higher level of growth so that the system is brought into balance, because what we do has a complementary action in the rest of the G-7. So these are the things, it seems to me, that really matter. And that is why I think these G7 meetings can really make a difference. But I think that if we get all hung up on-you know, we all have to have these prepared statements, and we are afraid we are going to say one word out of the way or make one little mistake which makes a huge headline in some country. And then we have got to have every little word right in these communiqu?s. I think that is just-that takes a lot of time and energy away from what we should be doing, which is focusing on how we can make the lives of our people better and fulfill our responsibilities as leaders of the world.

Interview With Foreign Journalists


ENTITY, you said earlier, speaking of G-7 leaders, that their job is to lead. Why has this happened and what can you do at the summit to clarify U.S. goals and reassure U.S. allies? Well, let me first of all take issue with you-I mean, not the perception. The other nations of the world have asked the United States for years and years and years internally to do one thing. The only thing they ever asked of us internally was to do something about our budget deficit, which caused a significant imbalance in the global economic relations. I read about it for years before I became ENTITY. And we are doing that, and it is very tough to do in tough economic times. And we are going to wind up with a very tough deficit reduction plan that we believe is good for our economy over the long run. And it is not been easy to do, but we are doing that. Secondly, the major crisis this world has faced since I have been ENTITY, I think, was what would happen to democracy in Russia. And when it became apparent that democracy was in trouble in Russia because of what was happening with President Yeltsin, I immediately publicly supported him. I called every other leader in the G-7 and many others around the world and asked for people to support him. And I think that we had something to do with the outcome of events there. I announced a $1.6 billion aid package to Russia, and we have now, by the way, obligated well over half of that money. And then I announced another $1.8 billion bilateral aid package to Russia which passed the House of Representatives with 75 percent of the vote almost last week, bipartisan support. It is going to fly through the Senate. The IMF gave their first installment, $1.5 billion, to Russia the day before yesterday, and we are going to discuss that at the G-7 summit. I think-and that is a huge potential market for all of us and a major political issue. And I think that is the big issue we have faced, and I think we have done it very, very well. Now, the only point of contention between us that I can see-we will come back to the Japanese issue; you asked that and I have not forgotten-but the only-in Europe is that we have not agreed entirely on how to handle Bosnia, although we have done a lot of work together.

Interview With Foreign Journalists