Richard Nixon photo

The President's News Conference

August 04, 1971


THE PRESIDENT. [1.] Ladies and gentlemen, I would begin this with a brief resume of the conversation I have just had with the Secretary of State, because I know the subject will probably come up in any event.

This is with regard to the Pakistan refugee situation. To recap what we have done: As far as the refugees who are in India are concerned, we have provided $70 million in aid to date, being administered through the U.N. High Commissioner for Refugees. And we are prepared to provide more. That, incidentally, is more than all the rest of the nations of the world put together, so it is a substantial amount.

As far as those in East Pakistan themselves are concerned, whereas you know there are prospects of famine in the event that the crop reports are as bad as they seem to be, at this point we have 360,000 tons of grain ready for shipment there. We have also allotted $3 million for the purpose of chartering ships for the purpose of getting the grain into the overcrowded ports.

As a further step, the Secretary of State has worked out with my very strong approval a plan to go to the United Nations next week to talk to the responsible and appropriate members of the United Nations, including the U.N. High Commissioner in that office, to see what additional steps can be taken on both fronts to help the refugees in India from East Pakistan and also to help those who are in East Pakistan and are presently confronting famine situations.

With regard to a problem that was addressed by the House yesterday, we do not favor the idea that the United States should cut off economic assistance to Pakistan. To do so would simply aggravate the refugee problem because it would mean that the ability of the Government of Pakistan to work with the U.N., as it presently has indicated it is willing to do so, in distributing the food supplies, its ability to create some stability, would be seriously jeopardized.

We believe that the most constructive role we can play is to continue our economic assistance to West Pakistan [Government of Pakistan] and thereby to be able to influence the course of events in a way that will deal with the problem of hunger in East Pakistan, which would reduce the refugee flow into India and which will, we trust, in the future look toward a viable political settlement.1

1The flow of refugees and the growth of an insurgency movement in East Pakistan seeking secession from Pakistan increased existing tensions in the border area of India and East Pakistan, and led finally, in late November 1971, to open warfare between the Pakistani Army and the Indian Army which had crossed into East Pakistan in aid of the insurgents.

On December 7, the United Nations General Assembly passed a resolution calling on India and Pakistan to institute an immediate cease-fire and to withdraw their troops from each other's territory. A statement by Press Secretary Ronald L. Ziegler on the resolution was released December 12 and is printed in the Weekly Compilation of Presidential Documents (vol. 7, p. 1656).

We are not going to engage in public pressure on the Government of West Pakistan [Government of Pakistan]. That would be totally counterproductive. These are matters that we will discuss only in private channels.



[2.] Q. Mr. President, can you tell us any more about your forthcoming trip to China, when it is likely to occur, and can you give us your assessment of what effect you think this will have on ending the war in Vietnam?

THE PRESIDENT. As far as the timing is concerned, I cannot add to what I said in the original announcement. It will be before May 1. The time will be worked out sometime within the next 2 to 3 months, I would assume, and a considerable amount of preparatory activity must take place, setting up the agenda, setting up the number in the official party. These are matters, of course, that must be discussed and worked out before the time of the visit is finally announced.

Second, and I know a number of you are interested in who is going, that is a matter still to be decided. It was raised by Dr. Kissinger and by Premier Chou Enlai in their conversations and will be worked out by mutual agreement.

As far as our party is concerned, it will be a small working party. The only ones that presently are definitely going are, of course, the Secretary of State and Dr. Kissinger and myself. Beyond that, whatever others will be added will be determined by mutual agreement between the parties concerned.

Now, as to the effect the visit will have, and the conversations will have, on Vietnam, I will not speculate on that subject. I will only say that as the joint announcement indicated, this will be a wide-ranging discussion of issues concerning both governments. It is not a discussion that is going to lead to instant detente.

What it really is, is moving--as we have moved, I believe, in the situation with regard to the Soviet Union from an era of confrontation without communication to an era of negotiation with discussion. It does not mean that we go into these meetings on either side with any illusions about the wide differences that we have. Our interests are very different, and both sides recognized this, in the talks that Dr. Kissinger had, the very extended talks he had with Premier Chou En-lai. We do not expect that these talks will settle all of those differences.

What is important is that we will have opened communication to see where our differences are irreconcilable, to see that they can be settled peacefully, and to find those areas where the United States, which today is the most powerful nation in the world, can find areas of agreement with the most populous nation in the world which potentially in the future could become the most powerful nation in the world.

As we look at peace in the world for the balance of this century, and for that matter even in the next century, we must recognize that there cannot be world peace on which all the peoples in the world can rely, on which they have such a great stake, unless there is communication between and some negotiation between these two great super powers, the People's Republic and the United States.

I have put this in general terms because that is the understanding of the People's Republic, Premier Chou En-lai, and it is our understanding our agenda will be worked out at a later point; before the trip it will be very carefully worked out so that the discussions will deal with the hard problems as well as the easy ones.

We expect to make some progress, but to speculate about what progress will be made on any particular issue, to speculate, for example, as to what effect this might have on Vietnam, would not serve the interests of constructive talks.


[3.] Q. Mr. President, may I ask a related policy question on Vietnam?


Q. There have been some suggestions, including some indirect hints from China, that a negotiating forum involving a conference, an Asian conference to be held in Asia, primarily with Asian participants but with the United States as well, might be a better forum for negotiating a settlement in Vietnam. Can you speak to that?

THE PRESIDENT. Mr. Bailey [Charles W. Bailey 2d, Minneapolis Tribune and Minneapolis Star], the question of whether there should be an all-Asian conference, with the Government of the People's Republic participating, as you know, has risen several times over the past few months, and was raised before our announcement was made.

As far as we are concerned, we will consider any proposal that might contribute to a more peaceful situation in the Pacific and in the world. However, at this point there is no understanding between the United States and the People's Republic as to whether or not out of this meeting should come that kind of proposal.

Let me say on that score, there were no conditions asked for on either side, and none accepted. There were no deals made on either side or accepted, none offered and none accepted. This is a discussion which will take place with both sides knowing in advance that there are problems, but with both sides well prepared. This is the secret of any successful summitry.

As you know, parenthetically, I have always taken somewhat of a dim view of summitry when it comes in an unprepared form. But both sides will be well prepared, well in advance, on all points of major difference, and we will discuss any points of difference that could affect the peace of the world.


[4.] Q. Mr. President, is there any diplomatic reason why you might not visit the Soviet Union before going to Peking? It has been suggested and speculated upon.

THE PRESIDENT. In view of the announcement that we have made on Peking, the visit to Peking will be the first visit that I will make. Obviously, it takes a great deal of time to prepare a visit, and to attempt now to--and the Soviet Union, I am sure, feels exactly the same way-to attempt to rush around and have a summit meeting in Moscow before we go to Peking would not be in the interest of either country.

I would add this point, too: When Foreign Minister Gromyko was here, we discussed the possibility of a possible summit meeting, and we had a very candid discussion. He agreed and said that his government leaders agreed with my position, which was that a meeting at the highest level should take place and would be useful only when there was something substantive to discuss that could not be handled in other channels.

With regard to the Soviets, I should also point out that we are making very significant progress on Berlin. We are making good progress on SALT. Discussions are still continuing on the Mideast, although there I will not speculate about what the prospects for success are in view of the fact that Mr. Sisco2 is presently in the area exploring with the governments concerned what the possibilities of some interim settlement looking toward a final settlement may be.

2 Joseph J. Sisco, Assistant Secretary of State for Near Eastern and South Asian Affairs.

Having mentioned these three areas in which we are negotiating with the Soviet Union, I will add that if the time comes, as it may come, and both sides realize this, then the final breakthrough in any of these areas can take place only at the highest level, and then there will be a meeting. But as far as the timing of the meeting before the visit to Peking, that would not be an appropriate thing to do.


[5.] Q. I was thinking of such a thing as a settlement on the SALT talks.

THE PRESIDENT. Mr. Theis [J. William Theis, Hearst Newspapers and Hearst Headline Service], when I said there was good progress being made on SALT, it is still a very technical and sticky problem for both sides because it involves our vital interests. Let me emphasize that in SALT, both sides are asked to make an agreement which limits them. This is not unilateral. We, on our part, will be having very severe limitations with regard to our defensive capability, with ABM. They, on their part, will have limitations on their offensive capability, their buildup of offensive missiles.

Neither side can make those decisions lightly, without very, very basic discussions, but the fact that we have at the highest level committed ourselves to working toward an agreement simultaneously this year on both those issues, and the fact that since the talks at Helsinki began that we have made progress, gives hope that we are going to make an arrangement.

But to speculate that maybe we are going to get that done before we go to Peking, I think, would be ill-advised.


[6.] Q. Mr. President, why have you not accepted the Vietcong proposals after all these weeks of probing, or given some formal reply?

THE PRESIDENT. I have noted some criticism in the press about the fact that Ambassador Bruce had to leave August 1. Incidentally, I am most grateful that he stayed an extra month, because his doctor got hold of me and said he should have left July 1. But, in any event, his having left August I, and Mr. Porter not being able to arrive of the latter part of August, there has been some speculation, in fact there is--and I understand this--criticism in the press and the Senate and the House that the Administration is not interested in negotiating a settlement, that we are not considering the various proposals that have been made by the VC and the North Vietnamese.

Now, just so the members of the press will not get out on a limb with regard to predicting what we are. or are not doing, let me make one statement, and then I will go no further.

We are very actively pursuing negotiations on Vietnam in established channels. The record, when it finally comes out, will answer all the critics as far as the activity of this Government' in pursuing negotiations in established channels. It would not be useful to negotiate in the newspapers if we want to have those negotiations succeed.

I am not predicting that the negotiations will succeed. I am saying, however, that as far as the United States is concerned, we have gone and are going the extra mile on negotiations in established channels. You can interpret that any way you want, but do not interpret it in a way that indicates that the United States is missing this opportunity, that opportunity, or another one, to negotiate.


[7.] Q. Mr. President, one of the points being mentioned in the comments on the negotiations is the election in South Vietnam this fall. Is that a factor that does have some bearing on the pace of the negotiations?

THE PRESIDENT. It has certainly in terms of the North Vietnamese. As you know, the stumbling block for them in negotiations really is the political settlement. As they look at the election this fall, they feel that unless that election comes out in a way that a candidate they can support--or at least that they are not as much against as they are President Thieu--but unless it comes out that way, it will be very difficult for them to have a negotiated settlement.

With regard to the elections, let me emphasize our position. Our position is one of complete neutrality in ,these elections. We have, under Ambassador Bunker's skillful direction, made it clear to all parties concerned that we are not supporting any candidate, that we will accept the verdict of the people of South Vietnam.

I have noted, for example, that President Thieu has invited observers to come from other nations to witness the election. I hope observers do go. I think they will find, I hope they will find, as they did when they observed previous elections in Vietnam, that by most standards they were fair.

As far as observers from this country are concerned, we have, of course, several Members of the Senate and others that have indicated a desire to go. We, of course, have no objection to that. We want a fair election, and we, of course, have some observers on the scene in the person of the Ambassador and his staff who will watch that election.


[8.] Q. Mr. President, the last time you gave some stock market advice to us, it turned out pretty well. What would you do now, buy or sell?

THE PRESIDENT. With regard to the stock market, I suppose my advice should not be given much weight .because I am not in the market. It is so easy to make predictions where your own assets are not involved.

I will say this: I would not sell the United States economy short at this point. And long term, I would not be selling my investments in the American economy, whether it is in stocks or real estate or what have you, selling them in a panicky way.

The stock market has come up, even at its present level of 850, 230 points since I made that prediction. I can only say that my long-range prediction for this economy is still what I said at the first of this year.

At the first of this year, when the very same people had written--and I have read the news magazines and business magazines, and not, of course, any of the columns you have written this week--but I have read all the rest this week, and the gloomy predictions about the economy: its going down, nothing good about it. I read them also for November of last year, exactly the same gloominess, the same words, and so forth.

I said then, and all of you were present then, I thought 1971 would be a good year for the economy, and 1972 would be a very good year. I stand by that. When we look at, for example, the first half of this year, it is not what people say about the economy, it is what they do about it that counts.

GNP is up a record $52 billion. Retail sales now, in June--and the first indications as far as July are concerned, it will stay at this level--are at record highs. Consumer spending is at a record high. Construction, particularly in housing, is near record highs. Inventories--and this is another indication of what will happen to the future for those who may be thinking of investing their money in businesses--inventories are abnormally low in view of the high level of retail sales.

Now what this tells me is that there is a lot of steam in the boiler in this economy, and you cannot continue to have high retail sales and low inventories without eventually starting to rebuild. Therefore, my projection for the balance of this year is that the economy will continue to move up as it has moved up in the first half.

That doesn't mean that there will not be aberrations in the monthly figures. It does mean, however, that the economy has a great deal of strength in it. This is a period when it is absorbing almost 2 million people who have been let out of defense plants and the Armed Forces and is absorbing that with a lower rate of unemployment than was the case in 1961, 1962, 1963, which were the last 3 peacetime years before Vietnam when the unemployment rate, as you recall, averaged 6 percent.


[9.] Q. Mr. President, in that connection, to continue that, does that mean that you are still resolutely opposed to any incomes policy or, specifically, wage-price controls?

THE PRESIDENT. I think, Peter [Peter Lisagor, Chicago Daily News], it is well to identify incomes policies and wage price controls for what they are and what they are not, because, as a matter of fact-and this gives me an opportunity to set the record straight with regard to some greatly blown up differences that I am supposed to have with my very good friend Arthur Burns, and perhaps you were too polite to ask that direct question--

Q. Well, I will ask it. [Laughter]

THE PRESIDENT. I thought that would be the follow-up, so I anticipated it. Let me get at it this way:

Arthur Burns, in terms of monetary policy and in terms of fiscal policy, has followed a course that I think is the most responsible and statesmanlike of any Chairman of the Federal Reserve in my memory. In other words, you have seen an expansionary monetary policy, and that is one of the reasons we have had an expansionary economy in the first 6 months of this year.

He has also stood firmly with this Administration in its responsible fiscal policy, resisting, for example, spending above what the economy would produce at full capacity. He has strongly supported me in those efforts.

That brings me to an area where he has taken a very unfair shot. Within this Administration, the Office of Budget and Management, on a reorganization plan 2 months ago, recommended that the Chairman of the Federal Reserve, because he basically is our central banker, should be raised to the same status as the central bankers abroad. I enthusiastically approved the idea. However, when the matter was raised with Dr. Burns by my associates, he indicated that neither he nor any other individual in a high position in Government should take a salary increase at a time that the President was going to have to take some strong measures, as I am going to take, to limit salary increases in other areas of Government, including, for example, blue-collar workers.

So, consequently, while there is not any question but that the Federal Reserve position will eventually be raised to the Level I position that was recommended, Arthur Burns--and, incidentally, George Shultz, who is also on this list as a recommendation of the Ash Council-Arthur Burns and George Shultz, being the responsible men that they were, asked that there not be an example set by them of a pay increase which would make it very difficult for us to deal effectively and responsibly with pay increases in other sectors of the Government. So we find that Burns agrees--that I agree with Burns, let's put it that way. I agree with Burns very strongly on his monetary policy, on his fiscal policy, the question that he has raised with regard to an incomes policy.

But when we talk about an incomes policy, let's see what he is not for. He is unalterably opposed, as I am, to the Galbraith3 scheme, which is supported by many of our Democratic Senators I understand, of permanent wage and price controls. Permanent wage and price controls in America would stifle the American economy, its dynamism, its productivity, and would be, I think, a mortal blow to the United States as a first-class economic power.

On the other hand, it is essential that Government use its power where it can be effective to stop the escalation or at least temper the escalation in the wage price spiral. That is why we moved on construction, and we have been somewhat successful, from 16 down to 9 percent. That is why we moved to roll back on oil price recently.

3 John Kenneth Galbraith, prominent economist, author, and professor at Harvard University.

As far as the two recent settlements, the one in the railroads and the one in steel , on the plus side, the fact that they were settled was positive; the fact, too, that in the case of railroads, they spoke to the problem of productivity by modification of work rules, and the fact that the steel settlement also spoke to the problem of productivity by setting up productivity councils, that was constructive.

On the other hand, I would be less than candid if I were not to say, and I know that the leaders of the rail industry and the leaders of the steel industry know this, that this kind of settlement where a wage increase leads to price increase, and particularly in steel where the industry is already noncompetitive with foreign imports, is not in the interest of America; it is not in the interest of labor; it is not in the interest of industry.

Dr. Burns, without being completely specific, has only suggested the idea should be considered. That is why Secretary Connally said we welcome the move by several Republican Senators to hold hearings with regard to the setting of wage-price supports. That is why Dr. Burns has said that we should move to attempt to temper these increases.

The problem here is, how can we move without putting the American economy in a straightjacket? In other words, as Secretary Connally raised in his statement this morning, "Are we to have criminal penalties?" Are, for example, the wage-price guidelines to affect all the industries down to the corner filling station or the grocery store or the meat market, as the case might be, or will they affect only major industries?

As far as this Administration is concerned, I can say this: I have asked the Secretary of Labor to bring to my attention every major wage-price negotiation which may be coming up in the future, and I will use the power of this office to the extent it can be effective to see that those negotiations are as responsible as possible.

On September 21, we will have a meeting of our Productivity Commission, and subject A in that meeting will be this same problem. Because as we look at America's trade balances, which have deteriorated over the past 10 years--but as we look at America's competitive position, it is essential that American industry and American labor sit down together and determine whether, at a time when we are in a race, we no longer can be number one simply because we were that big and that strong after World War II, whether we determine we are going to get out of the race or whether we are going to tighten our belts and be responsible in wage-price decisions so that we can continue to be competitive in the world.

That speaks to the problem of an incomes policy, this meeting that we will have. The only question of difference between Arthur Burns--and some Senators have raised this question-- is: What is the degree to which, in tackling this individual wage settlements, we have compulsion, we have criminal penalties. I don't think they want compulsion or criminal penalties.

Then the question is: How far will persuasion go? Our record shows that in most countries abroad that have tried it, except for very small countries that are tightly controlled, persuasion alone will work for only 3 or 4 months.

So as far as we are concerned, I am glad to consider recommendations for tackling the problem. I will tackle them, and I am serving notice now that we are going to take up the problem with the Productivity Commission. We are going to look at each individual settlement in major industries where there is going to be wage-price negotiations and use the influence we can to keep them in line, and, in addition to that, we will consider a recommendation on wage-price boards. But I will reject it if I find--and I have yet to find any recommendation that did not have this ingredient in it--if I find that it would impose a new bureaucracy with enormous criminal powers, to fasten itself on the American economy. That, I think, would do far more harm than good.


[10.] Q. In the same line, to follow up that question, if the settlement in the steel industry and particularly the raise in prices which was recently announced is not good for the country and not good for labor and management, why do you not call in the leaders of the steel industry and use your influence to get them to change the increase in prices and then, if necessary, other parts of the settlement which are so inimicable to the country?

THE PRESIDENT. Calling in the steel industry and getting them to change would not be effective. As you may recall, in one instance earlier this year, we were able to get a steel rollback. That had a temporary beneficial effect. But at a time that the steel industry has negotiated a settlement of this nature, at a time when its profits at 2 1/2 percent are the lowest of any major industry, to tell the steel industry that after they have negotiated a settlement they must roll back their price and run at a loss is simply unrealistic. They are not going to do it.

The longer term answer here is for the steel industry--and this is what we have addressed ourselves to--and the labor to recognize that now that they have had their settlement, now that labor has gotten a good increase, an increase consistent with aluminum and cans and others, now that steel found it necessary to raise prices, that this may be good temporarily for both but in the long run it will simply mean less steel sold and less jobs. And that is why we are zeroing in on the productivity side because increases in productivity can be the only answer where a wage increase of this magnitude takes place.


[11.] Q. Mr. President, a minute ago you mentioned something about doing something about wages for Government employees.

THE PRESIDENT. Yes. One of the problems, difficult problems that I confronted last year and that I will confront again this year, is a recommendation to increase the wages for blue-collar workers within the Government. I have examined that situation, and I have determined that an increase in the blue-collar wage scale would not be in the interests of our fighting the inflation battle.

Speaking to the same point, we have a situation with regard to the Congress and some of its appropriations bills. We are trying to keep our budget within the full employment limits for 1972.

The Congress already has exceeded our budget by $5.4 billion. That includes mandatory spending, which they have imposed upon us, and additions to the appropriations bills. Before they get through with the appropriations process I hope that comes down.

But that will be highly inflationary unless the Congress speaks to that problem more effectively. What I was indicating, in other words, Herb [Herbert Kaplow, NBC News], was that I am indicating in advance the decision that I do not intend to approve the wage increase relative to the blue-collar workers in the Government. Under those circumstances, I could not, of course, approve an increase in salaries for people as underpaid basically as Dr. Burns is, considering what he could get on the outside, or Dr. Shultz is, considering what he could get on the outside.

Q. How many people are there in the blue-collar area?

THE PRESIDENT. I don't have that but it is a significant number. Incidentally, I think it is an equitable decision because they have had some substantial increases in the past. It is a question of whether we just continue for a short time.


[12.] Q. Sir, you also mentioned guidelines in a manner that suggested that you might accept the concept of numerical guidelines. Did you mean to suggest that?

THE PRESIDENT. No. What I meant to say was that my study of the situation indicates that guidelines in this country have always failed; they have never worked. Guidelines in other industrial countries, including Canada, for example, and Britain, have worked only for a short time and then have fallen because guidelines basically connote voluntary compliance and voluntary compliance goes on only for a brief time.

Now, as far as what I am saying, it is that our approach at this time is a selective one to take those particular industries that are coming up for bargaining and to use our influence as effectively as we can to see that those settlements are responsible.

Secondly, that as far as a wage-price board is concerned, that it would be considered favorably only if the hearings that are going to be taken in this field, only if the hearings can convince me that enforcing an incomes policy could be accomplished without stifling the economy.

It is the problem, in other words, of enforcement, because I come back to this fundamental proposition: I have yet to find except for the extremists on the left-and I don't say this in a condemning way; it is only an observation--the extremists on the left of the economic spectrum have always favored a totally Government controlled economy.

They believe that. I don't believe it. They believe that we should have permanent wage and price controls and that Government should determine what wages should be and what prices should be. I do not believe that. Dr. Bums does not believe that, if you have read his speeches over the years. He is a strong opponent of that.

The question is: How can we address ourselves to the problem of wages and prices without having those mandatory criminal penalty features which would lead us to something we all are trying to avoid. This is why this is a matter for discussion. It is not one yet for decision, but I will continue to work on individual settlements as I have said.

Q. Mr. President, would it be fair to say, then, that in view of what you said there and what you said earlier that you will consider recommendations of the wage and price board, that you are giving renewed and perhaps more favorable consideration to some form of wage-price board, assuming that they don't have penalties?

THE PRESIDENT. No. I am saying that I shall continue the policy of moving aggressively on individual settlements on a case-by-case basis. Second, I will address this particular problem in a meeting with the major leaders of American industry and American labor at the Productivity Commission meeting on September 21. Third, with regard to wage-price boards, I have still not been convinced that we can move in that direction and be effective. However, Secretary Connally, in his statement this morning, raised all the questions that should be raised on that. As far as we are concerned, we have an open mind in terms of examining the various proposals to see if there is a new approach which we may not have thought of.

I have serious doubts that they will find such a new approach, but I do want to indicate that we will examine it because we all agree that the wage-price spiral is a significant danger to this expanding economy. The question is, what do we do about it, without going all the way to a totally controlled economy.


[13.] Q. Mr. President, Dr. Burns, before the Joint Economic Committee, said he didn't think we were making much progress against inflation. Do you think we are?

THE PRESIDENT. I read Dr. Burns' statement quite carefully. What he was saying is what I would say. I would say this with regard to inflation; I would say it with regard to unemployment: I am never satisfied and never will be satisfied, and anybody in the free economy is never satisfied and should never be satisfied, with anything except perfection. That doesn't mean that we are going to reach perfection.

Now with regard to inflation, I will just point to the numbers. Inflation, which, of course, was boiling along when we came into office in January of 1969, reached its peak in 1970, 6 percent. Then the CPI [Consumer Price Index] dropped to 4 percent in the first 6 months of 1971. Now 4 percent is still too high, but that is progress.

The GNP deflator--which of course goes far beyond the Consumer Price Index, as you know; the GNP deflator covers all, the whole spectrum of the economy-in the first 6 months of 1971, was the lowest in 3 years. That is progress-not enough, but it is progress.

In the last month the CPI was higher than the average it has been for the first 5 months. But we all know these month-to-month variations are not what count. My view is that we are making progress against inflation, but it is going to require continued strong policies on the part of the Administration with the cooperation of the Congress in limiting our budget expenditures to full capacity or full employment revenues. That is the battle we will continue to wage, and it will also need cooperation from labor and management in limiting the wage-price spiral.

On the unemployment front, we have a somewhat similar problem, as I pointed out a minute ago. The last 3 peacetime years before the Vietnam war expenditures began to hypo the economy were 1961, '62, and '63. Unemployment in those years averaged 6 percent. We, at this point, have brought unemployment below 6 percent, not as much as we would like. It reached its peak in January. It was 6.2. What the figures will be for this month you will know on Friday. I don't know what they are myself. I will read them as you do and that is the way it should be with the BLS [Bureau of Labor Statistics] figures.

But in any event, the unemployment curve is down; 6.2 was the high; we are now below 6 percent. I believe that it will continue, with monthly aberrations, on a downward course through the balance of the year.

I believe that as we go into 1972, I still stick with my prediction that we shall see unemployment continue to move downward and that 1972, for that year, will be a very good year.

I would point out one final thing on the unemployment facts, as I have often pointed out: As of this morning--I looked at the numbers--over 2 million Americans have been let out of the armed services and out of defense plants since we started to wind down the war in Vietnam.

If they were in the services or in the defense plants at the present time, unemployment would be 4.3. But the other side of that coin is that casualties when we came in were 300 a week. This week, last week, they were 12.

I just think the price is too high to pay. We believe that our goal of a new prosperity, of low unemployment, but with peace and not at the cost of war, is one that Americans are willing to work toward.

We are going to achieve that goal. Getting back to our stock market question, I will simply say this: Everybody else has been prophetic about the future. I think the prophets who presently say that the American economy is on the skids, that we have made no progress on inflation, that the economy is not moving up, who ignore the $52 billion increase in GNP, who ignore the increase in retail sales, who ignore the strong, positive elements in the economy, I think by the end of this year that they are going to look bad so I will go out on the limb to that effect, but by the end of this year I might look bad.

Let's just hope that they do rather than myself, because all of us are involved.


[14.] Q. On the casualties, Mr. President, do you think that the figures of 12 per week and so forth in that category, are they an aberration or does your policy envision them to continue to decline during this year?

THE PRESIDENT. No, they are not an aberration. They are the result, frankly, of first an American withdrawal. American forces in Vietnam today, as you can tell from reading the reports, are in defensive positions. We are frankly just defending the areas in which we have responsibility, and there are less of them. Consequently, our casualties go down for that reason.

Second, however, they are down for another reason. The enemy doesn't have the punch that it had because the other point to look at is that South Vietnamese casualties are also substantially down from what they were. What has happened is that the two operations, Cambodia and Laos, so very severely disrupted the enemy's ability to wage offensive actions that for both Americans and South Vietnamese the level of fighting is down.

There again will be aberrations up and down, I would assume. Nobody can predict that. But the war is being wound down and, as far as Americans are concerned, we trust it will continue to go down.

HELEN THOMAS (United Press International). Thank you, Mr. President.

Note: The President's eighteenth news conference was held at 11:36 a.m. in the Oval Office at the White House on Wednesday, August 4, 1971.

Richard Nixon, The President's News Conference Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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