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September 1984 Incoming (6)
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September 1984 Incoming (6)
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Records of the White House Office of the Deputy Chief of Staff (Reagan Administration)
Michael K. Deaver's Correspondence Files
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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Deaver, Michael: Files
Folder Title: September 1984 Incoming (6)
Box: 21
To see more digitized collections visit:
https://reaganlibrary.gov/archives/digital-library
To see all Ronald Reagan Presidential Library inventories visit:
https://reaganlibrary.gov/document-collection
Contact a reference archivist at: [email protected]
Citation Guidelines: https://reaganlibrary.gov/citing
National Archives Catalogue: https://catalog.archives.gov/
note
Democratic Congressional Campaign Committee
Tony Coelho, CA
Chairman
September 17, 1984
Mr. Michael Deaver
Deputy Chief of Staff
The White House
1600 Pennsylvania Avenue, N.W.
Washington, D.C. 20006
Dear Mike:
When speaking before groups and to the
press, I regularly credit you with your great
skill in helping get your boss's message across.
Now I am pleased that I can add to that list
of kudos your well deserved recognition as
one of PLAYGIRL's ten most sexiest men.
What's your secret?
Could you try and be little less effective
over the next 50-odd days? I know my colleagues
would greatly appreciate it.
Sincerely,
1
TONY COELHO
CHAIRMAN
the
Suite 319, 400 North Capitol Street
Washington, D.C. 20001
(202) 789-2920
Paid for and authorized by the Democratic Congressional Campaign Committee.
THE WHITE HOUSE
WASHINGTON
September 25, 1984
Dear Mr. Wetzel:
I am writing in response to your recent letter to Mike
Deaver concerning the Bureau of Alcohol, Tobacco and
Firearm's designation of the Alexander Valley as a
viticultural area. Mike asked me to review the situa-
tion which has been done during the past few weeks.
As I am sure you know, and as I learned, the approval
of any viticultural area is often sensitive, sometimes
a complex and protracted process. This is especially
true in the case of the Alexander Valley with two
competing proposals. The issue is now under final
review within the Bureau and Treasury. Treasury and
ATF are carefully evaluating the data presented during
the public hearings and in written comments. It is
Treasury and ATF's goal to assure that the interests of
all parties are fully considered and to decide the
issue based on the criteria established in ATF's
regulations for delineation of a viticultural area.
We asked for action as soon as possible and Treasury
indicated that a final determination should be made in
the near future.
Sincerely,
Can Sall Craig L. Fuller
Assistant to the President
for Cabinet Affairs
Mr. Harry Wetzel
Chairman and Chief
Executive Officer
The Garrett Corporation
9851 Sepulveda Boulevard
P.O. Box 92248
Los Angeles, CA 90009
Jordan
July 16, 1984
Mr. Michael K. Deaver
Deputy Chief of Staff
Assistant to the President
The White House
7600 Pennsylvania Avenue
Washington, D.C. 20500
Dear Mike:
I am writing to confirm Harry Wetzel's concern regarding the Alexander Valley
appellation.
Equity is all in favor of the determination of the Alexander Valley boundaries
consonant with its historically recognized limits. Those of us, including the
Jordan Winery, who have contributed to its current recognition are naturally
distressed by the efforts to enlarge it for commercial coat-tail reasons.
I am fully aware that you and your staff have many concerns that indeed transcend
the importance of an appellation designation. On the other hand, as Wetzel points
out, a large group of us, who are long time fans and supporters of President Reagan,
are hopeful that this matter can be fairly settled by an enlightened administration.
You and Carolyn are overdue for a wine country visit.
Best personal regards,
JORDAN VINEYARD & WINERY
Thomas JmP N. Jordan, Jr.
TNJ/ec
Jordan Vineyard & Winery. 1474 Alexander Valley Road. P.O. Box 878, Healdsburg, Alexander Valley. California 95448 (707) 433-6955
CF
THE GARRETT CORPORATION
GARRETT
241881
9851 sepulveda BOULEVARD POST OFFICE BOX 92248
LOS ANGELES, CALIFORNIA 90009
CHAIRMAN OF THE BOARD
AND CHIEF executive OFFICER
July 10, 1984
The Honorable Michael K. Deaver
Deputy Chief of Staff
Assistant to the President
The White House
1600 Pensylvania Avenue, N.W.
Washington, D. C. 20500
Dear Mike:
I am writing on behalf of myself and some good
Republicans. By "good" I refer to people who have
given generously of their time and substance to the
Party and the present Administration.
All of us own vineyards in the Alexander Valley in
Sonoma County. The Alexander Valley is also an
appellation area and our wine grapes carry the
Alexander Valley appellation recognition.
Recently, a few growers and wineries in the Cloverdale
area (an area never considered a part of the
Alexander Valley) have applied to BATF to be included
as a part of the Alexander Valley for appellation
purposes. We strenously object to their request to the
BATF. There is no rationale to their request other
than to take underserved advantage of a very desirable
appellation. They did not create the reputation of
excellence that the Alexander Valley has attained.
That was done by those on whose behalf I am writing.
Quite frankly, they are "poaching" and we object.
Let me list the names of those on whose behalf I am
writing:
Henry F. Trione, owner, Geyser Peak Winery;
Director, Wells Fargo Bank; Director, Fiber
Board Corporation.
ONE OF THE SIGNAL COMPANIES
The Honorable Michael K. Deaver
July 10, 1984
Page two
Tom Jordan, owner, Jordan Oil and Gas
and Jordan Winery
Edward H. Gauer, Rancher and vineyardist;
former CEO and owner of Roos Atkins
Robert F. Erburu, President and CEO, TIMES
MIRROR; Alexander Valley vineyardist
Arch Monson, Director of The Signal Companies;
Director of Ampex; former President of Boy Scouts
of America; Alexander Valley vineyardist
Robert Young, owner, Robert Young Vineyards
Russell H. Green, Jr., Hoot Owl Creek
Vineyards and independent oil and gas operator
We have asked for help from Pete Wilson and he has
been very supportive. Nevertheless, the issue is still
not resolved.
We all believe that any assistance we could get from
you would be most beneficial. Will you help us,
please?
For your information, we understand the matter rests in
the hands of Mr. Edward Stevenson at Department of
Treasury, and Mr. William Drake at BATF.
Sincerely,
Harry Harry Wetzel
we
Avell B Jesmed
Greg Schnacky
9259 Perry Highway
Pittsburgh, PA 15237
September 19, 1984
President Ronald Reagan
The White House
Washington, DC 20500
Dear Mr. President:
By way of introduction, I am one of your former Florida foot
soldiers. In 1980, I was committeeman for Jacksonville's Precinct
02 on the Duval County Republican Executive Committee. The soles
of my shoes took some wear and tear as I canvassed Precinct 02, and
other precincts, in the effort to "make America great again." You
will be pleased to learn that my precinct, and Duval County (joking-
ly referred to as Southern Georgia), was carried by you on November
4, 1980.
When you visited Jacksonville on September 4, 1980, I served
as a driver for the CBS News team. Due to the fact the Leadership
'80 was hurrying to take off for Louisiana, I didn't have a chance
to ask you for your autograph. Please, take a moment to send me
a color photo with the inscription "To Greg from Ronald Reagan.
11
Appreciatively,
Greg Schnacky Grea Schnacky
Enclosure
Jacksonville, Florida
Security clearance
badge given me
by the Secret
April 14, 1980
Service on
A 5
Gregory W. Schancky
September 4, 1980
5327 Playa Way
Jacksonville, Florida 32211
Dear Mr. Schancky;
At the organizational meeting for the County Committee,
you were elected to membership of the committee to re-
present your precinct 02.
Congratulations!
I want to warmly welcome you to this membership and de-
finately look forward to working with you.
our challenge between now and November 4th will be a
true test for us. However; the responsibility of
Citizenship does not stop on that date, does it?
On Monday, April 21, 1980, 8:00 P.M. on the 15th Floor
of City Hall you will be offically installed. Please
come to this event or call Margaret Mock, 384-8716 if
you cannot make it.
A program on "Coal Fired Energy Pro
presented.
Official Member
Sincerely,
Reagan
Survey Committee
Rex R. Rhea
County Chairman
Greg Achnocky Signature
National Conservative
REPUBLICAN PARTY OF FLORIDA
Political Action Committee
OFFICIAL POLL WATCHER
1981
SPONSOR
1981
Greg John T. Dolan, a Name Chairman, Schnacky NCPAC
Gug is on authorized behalf of Freenet 10 on November 4,
1980
1500 Wilson Boulevard, Arlington, Virginia 22209
Drwal County
Claymont Veleware
Fill
September 1984
Dear Sir:
Because I care about thes
wonderful country I am writing to
you
will be a WINNER.
President Reagon is and always
I. wrote to him concerning prayer.
Without proyer there can not be a
morally decent society.
I also would like to see all
american born cityzens become once
again a first class citizen.
please me know
get I can help in any way
Very truly yours
Mrs. Florence Linconney er.
P.O. But 1424
[792 2442]
Welmington, 19899 Delaware
FRANK M. HOAK III
488 West Road
P.O. Box 668
New Canaan, CT. 06840
September 25, 1984
Dear Mike:
Just thought I would let you know that our oldest daughter Heather is
enrolled at The George Washington University as a freshman in the School
of Government. She is living a few blocks from you at Guthridge Apartments,
2115 "F" St. NW, Washington DC 20037; phone 728-9371.
She is also in the Naval ROTC program which is in its first year at GWU.
We talk about you often and I just thought I would mention to you that she
is in town and is available for odd jobs in case you can't find anyone else,
halls
Fraternally,
france
FAIRFIELD - MAXWELL LTD.
International Fill Finance, Ocean Transportation and Management
September 24, 1984
CONFIDENTIAL
The Honorable Michael K. Deaver
Assistant to the President
Deputy Chief of Staff
The White House
Washington, D.C. 20506
Dear Mr. Deaver:
Thank you for your letter of August 17th. As
fiscally responsible American Asians, we are delighted that the
President recognizes the magnitude of the national deficit and
is taking positive measures to resolve this problem.
On the international front, the huge trade deficit
has unsettled some Members of Congress and labor unions. The
President's decision on the steel issues shows great wisdom.
His recognition that a problem exists assuages the anxieties of
the steel producers and voluntary quotas give the U.S. a
flexible instrument useable by USTR Bill Brock. Mandatory
quotas could bring adverse reaction in other sectors and cause
negative reaction from eight million farmers.
Constructive solutions in which I assume you played
an important role, emphasize the leadership qualities of
President Reagan. The opposition is grandstanding for organized
labor. Those tactics demean Mr. Mondale and negatively affect
his standing in the eyes of the voters.
Several members of the RNC have taken credit for
organizing the heckling at Mondale/Ferraro rallies. Organized
managed heckling is the type of tactic which undermined Nixon.
The Reagan/Bush team can win on superior merit. Organized
heckling disturbs the American sense of fairness and could
produce negative reactions. We are happy that the President
disassociated himself from this "low-road" approach.
Relative to Asia, the U.S. Asia Institute is
receiving favorable signals from Japan, PRC and South Korea.
The trips you made to that area are starting to bear fruit.
277 Park Ave., New York, N.Y. 10172
Tel. (212) 421-2850 Cable: Taskmor Newyork Telex: 420535.235304 WU 149534
Page 2
Prime Minister Nakasone has approved a "Made in
America" Fair in 1985. Should not the Administration support
this positive effort as it could open the door for hundreds of
millions of dollars in sales for U.S. producers. Nakasone is
also pushing his countrymen on Japan's Defense responsibilities
within the emotional capacity of Japan to accommodate.
The People's Republic of China will open up oil
concession opportunities for medium sized companies. It is out
of character for Communist nations to enlarge the monopoly of
oil giants. In either case, PRC will need Texas "know-how" and
this program represents a bigger opportunity for more American
firms.
President Chun of South Korea is seeking to establish
direct confidential ties to the White House and Congress. He is
not satisfied with the regular military channels who have an
"old buddy" relationship with West Point and Annapolis
schoolmates. These military generals all speak English. Chun
does not. Do we want language convenience or good relations
with the controlling power structure?
I will be leaving for Japan October 4th for six weeks
of conferences with economic and political leaders.
Please feel free to call on me if I can serve the
President or the White House on any delicate matter. You can
contact me through our Embassy in Tokyo, U.S. Asia Institute,
Mrs. Mary Sieg at our office, or at the Okura Hotel in Tokyo.
With warmest personal regards, I am
Yours respectfully,
Kay Sugahara
Chairman
KS:mys
P.S. You may rest assured that I have already applied for
absentee ballots for myself and my wife as part of our Eagle
responsibility to reelected Reagan/Bush.
$ .
KAY SUGAHARA
Tokyo Trip, October 4,1984
Through November 22, 1984
Hotel Okura
Telephone - 011-3-582-0111
Mrs. Mary Sieg
Fairfield-Maxwell Ltd.
(212) 421-2850
Olympic International Ltd.
011-81-3-435-5477
U.S. Asia Institute
(202) 544-3182
***** 74744 OF STATE
THE ELEPHANT CLUB
MINNESOTA
Independent
Republicans
October 21, 1984
file
Michael Deaver
The White House
Washington, D. C. 20003
Dear Mike,
It was indeed nice to meet with you again and especially a special
pleasure to enjoy dinner with you and your lovely wife, Carolyn.
Beverly and I certainly enjoyed the Inner Circle meetings. I also
was very pleased to learn that you had put your house up for sale
in California and you would be continuing on in Washington and work-
ing with President Reagan. All of us have either heard or read how
valuable you are to the President.
I was delighted to have the opportunity to visit with you for a few
minutes about President Reagan stopping in Minnesota. I was glad
to learn that you had discussed that possibility that very morning.
I am very confident that a stop over visit by the President before
the election can help us not only win the Presidential race in
Minnesota but also be of great help to our Congressional candidates
and our State legislative races.
I have talked to a lot of friends of Fritz but they are not going
to vote for him for President.
Again, thank you for the opportunity to discuss this matter with you
and I assure you I will be working hard for the Reagan Bush ticket
along with my responsibilities as State Finance Chairman.
Yours very truly,
Charley
C. C. Jackson Jr.
CCJsh
Co-chairmen: Robert N. Wolfe and E. Tom Binger
8030 Cedar Avenue, Room 202, Bloomington, MN 55420 612/854-1446
LEADERSHIP
84
President
Joe M. Rodgers
Executive Director
September 25, 1984
fill
Mary A. Howe
Program Directors
Lynn Collins-Urbanski
Senator Paul Laxalt
Kym L. Hill
Victoria A. Hughes
Room SR323A
Russell Building
Washington, D. C. 20510
Dear Paul:
I'm sure that it is no surprise to you that Mary Jane Wick is
going "beyond the call of duty". The Presidential Ten Club,
which she and her Administrative Assistant, Beedy Richey, are
completely responsible for, will raise over five hundred thousand
dollars before November 6th. This program is also making many
long time supporters of our President very happy by having an
active part in the 1984 Campaign. Mary Jane is also making sure
a fundraiser for Senators Percy, Jepsen, Humphreys and challenger
Lousman will be a success in Chicago, plus she is active in
several other important efforts also. I cannot overly stress the
importance of her job to our programs. She is literally giving
hundreds of hours.
I thought you might like to write and say "thank you" to Mary
Jane for the extra effort she is making.
Look forward to seeing you.
Sincerely,
x Joe M. Rodgers
JMR/dt
P.S. I hope each of the people receiving a copy of this letter
will also say "thank you" to Mary Jane.
CC: Mr. James Baker, III
Mr. Michael K. Deaver
Mr. Ed Rollins
Leadership '84, Inc.
410 First Street, S.E. Suite 200 Washington, D.C. 20003 (202) 646-4800
PHYLLIS SCHLAFLY
PRESIDENT
68 FAIRMOUNT
ALTON, ILLINOIS 62002
(618) 462-5415
EAGLE FORUM
LEADING THE PRO-FAMILY MOVEMENT SINCE 1972
316 PENNSYLVANIA AVE., S.E., SUITE 203, WASHINGTON, D.C. 20003, (202) 544-0353
jue
September 25, 1984
Dear Mike,
I saw you on network television the other day explaining the
President's television strategy. All I can say is, if you are the
architect (as is widely believed), you are a genius. Congratu-
lations. Enclosed is a column I just wrote on this subject.
I only hope that you will use that same genius to create some
Reagan coattails for our Senate and House candidates. Illinois is
a crucial state. We are hoping that Percy will pull through
(although the odds are formidable), and we have the chance to pick
up three House seats for Republicans. If we don't get them this
year, we never will.
With best wishes,
Faithfully,
Hayllis
FROM: Phyllis Schlafly
RELEASE: OCTOBER 15, 1984
68 FAIRMOUNT, ALTON, ILLINOIS 62002
(618)462-5415
THE MEDIA'S UNHAPPINESS WITH REAGAN'S IMAGE
The national media are going through a terrible reappraisal of their own power.
Their first comeuppance was the reaction of the American public when the media were not
invited to President Reagan's liberation of Granada; their second blow is the realization
that Ronald Reagan will win big because he uses television so effectively.
Oh, the horror of it all! When Professors S. Robert Lichter and Stanley Rothman a
couple of years ago made their landmark survey of the attitudes of the media elite, and
asked the mighty moguls who run CBS, NBC, ABC, and PBS which groups should rule America,
the media identified themselves as the group most fit to rule. They think of themselves
as the Philosopher-Guardians whom Plato thought should rule society.
Then, in early 1984, (to borrow a famous Sam Goldwynism) Ronald Reagan "included them
out" of his stunning landing in Grenada. The media indignantly got up on their high horse
at such lese majesty, and cried around about the "chilling effect" that such impertinence
would have on the First Amendment.
The media elite were stunned when the American public collectively said "ho, hum; who
cares?" After a couple of days of trying to claim that Reagan had rescinded the First
Amendment, the media elite's own polls reported that the score was Reagan-1, media-0, with
the President still at bat and nobody out on his side.
This fall, public opinion polls have discovered that Ronald Reagan will be a land-
slide winner, not only with the conservatives who invented his candidacy, but with both
parties, both sexes, every section of the country, and even every age group. Even more
devastating to the national media's self-importance is the realization that the chief
reason why Reagan is so popular is that he has effectively used the medium of television.
So now we hear the cries of anguish from the media. Television networks give us
in-depth analyses purporting to convince viewers that the White House staff has "managed"
television coverage in order to conduct a campaign of "image," and that the President is
"isolated" from reporters and won't answer their questions. The New York Times prints a
page-one "political memo" that "Reagan appears to succeed by avoiding specific issues,"
and that "Reagan's skill as a performer and the communicative impact of television seem to
have combined to turn incumbency into a political weapon of awesome potency."
The Times moans that reporters have diligently shown "a consistent, detailed interest
in such issues as the Federal deficit, tax policy and nuclear disarmament, but Mr. Reagan
has mounted a campaign in which 'issues' are clearly secondary." The Times complains that
President Reagan creates "visual images," invokes "themes" such as "leadership,"
communicates "shared values,' and stimulates "moods."
Those are just crocodile tears. The media are not unhappy because a campaign of
"image" and "moods" has replaced a campaign of "issues"; they are just disconsolate
because they didn't create the "images" and the "moods" to which the American people are
responding; Ronald Reagan did.
The media are certainly not against the triumph of images over issues. They are just
angry that Ronald Reagan is better at creating images than they are.
The presidential election of 1964 is a good example of the many elections when
"image" and "mood" won out over "issues." The national media ganged up to hang on Barry
Goldwater the false "image" that he was a "trigger-happy warmonger," and to build in the
American people the "mood" that we would be more "comfortable" if we elected Lyndon
Johnson.
The careful exposition of the issues of war and peace made by Goldwater and his
supporters was detailed, accurate, timely, and prophetic. But it was like King Canute
hopelessly trying to talk back the incoming tide because Goldwater and his facts were
overwhelmed by the false images created by media power.
The unscrupulous political TV ad showing the little girl picking daisies before she
was blown up in a mushroom cloud was merely the 30-second version of the daily barrage of
"image" propaganda heaped on Goldwater by the liberal establishment determined to defeat
him.
Ronald Reagan comes through loud and clear on television because, in the modern
colloquialism, "he's for real." That's an image, that's a mood, that's moral and
political leadership; and that's what the American people want.
Lord,
Abbett
Co.
63 WALL STREET
NEW YORK 10005
September 25, 1984
(212) dell 425-8720
Mr. Michael K. Deaver
Deputy Chief of Staff & Asst. to the President
The White House
1600 Pennsylvania Avenue
Washington, DC 20500
Dear Mr. Deaver:
In 1981 Lord, Abbett & Co. queried some of the nation's leading economists,
corporate officers and government policymakers, for their opinions on the
health and future expectations of the U.S. economy. The enthusiastic
response from those surveyed was gratifying. The resulting article was well
received by the 150,000 shareholders of Affiliated Fund, one of the largest
equity mutual funds in the country, with assets of about $2 billion.
As the nation assesses the well-being of the economy today and expresses its
aspirations for the future in the coming Presidential elections, we feel a
reprise of our earlier survey is especially timely. Would you help us by
providing some brief information for this update?
You 11 find a questionnaire attached which we hope you will fill in and
return to us in the enclosed envelope. There is also space for written
remarks, if you would like to take this opportunity to address one or more
of the issues.
Xeroxed copies of our first economic survey and its companion article are
enclosed to show you how we presented our findings in Affiliated's 1981
annual report. As always, our efforts are directed toward helping our
shareholders and prospective investors to keep abreast of events which could
influence the overall business climate and, consequently, their personal
investment plans for the future.
Again, we appreciate your contribution to our endeavor and thank you for
your time and cooperation.
Sincerely,
John M 1 barthy
Ronald Phymal
John M. McCarthy
Ronald P. Lynch
Managing Partner,
Managing Partner,
Lord, Abbett & Co.
Lord, Abbett & Co.
Chairman, Affiliated Fund
President, Affiliated Fund
Special Report
The Nation's New Direction:
What it Means
to the Economy, to Business,
to Shareholders
Boosting American industrial pro-
gram for economic recovery repre-
ductivity is the chief goal of the Eco-
sents a departure from the traditional
nomic Recovery Tax Act of 1981. The
short-term, stop-and-go policies of the
new tax law seeks to attract large
past. Equally strong, however, was the
amounts of new investment capital,
conviction that the old policies had
mainly through lowering the tax
failed, and that a new approach was
burden on businesses and working
necessary.
Americans. These tax reductions are
expected to generate huge amounts
Major Challenges Ahead
of new investment capital, not only
Our survey asked: In terms of our
for new plant and equipment, but to
economy, what do you think is the
modernize existing productive facili-
single biggest challenge of the 1980s?
ties as well. Everyone stands to bene-
According to Labor Secretary
fit if the new direction in economic thinking succeeds in
Raymond J. Donovan, the biggest task ahead is
creation
stimulating higher levels of savings, investment and pro-
of an economic climate in which improved rates of real
ductivity.
growth can not only be established but also sustained
What are the expectations for the success of the eco-
I think that the savings and investment incentives incor-
nomic recovery program? To find out, Lord, Abbett & Co.
porated in this year's tax changes will do a lot. Free markets,
sought the views of U.S. senators, representatives and
disencumbered from unnecessary and uneconomic regu-
government officials, executives of companies in the Af-
lation here and abroad, and a return to earlier produc-
filiated Fund portfolio, and economists, in a Survey on the
tivity growth rates should do the rest
Economy of the U.S. We are pleased to offer this report on
For others, however, inflation remained the #1 enemy.
views of key policymakers.
Many viewed the high inflation rate of the past ten years
Most survey participants recognized that the new pro-
(Continued on page 7.)
Letter to
mary participants in satisfying the
appreciation to long-term investors.
large capital-spending needs of the
As we explore the broad spectrum of
Shareholders
country. Our holdings in the interest-
undervalued securities, we hope to
(Continued)
sensitive sector-banks, electric utili-
identify those companies most likely
ties, insurance, natural gas and tele-
to benefit from the revitalized econ-
Over the years, we have stressed
phone companies-have been main-
omy which promises to evolve.
the need to shift our economy away
tained in anticipation of a cyclical
As always, we welcome your ques-
from its consumer orientation toward
decline in interest rates. We are keep-
tions on our investment policies and
savings and investment. With greater
ing an underweighted position in the
procedures or any other matters.
tax incentives, business confidence
energy group due to lackluster de-
will strengthen and capital-spending
mand and weak pricing caused by
increases should substantially out-
conservation and recessionary condi-
pace the rest of the economy for
tions throughout the world. Represen-
Alvin H. Berndt
many years.
tation in the consumer area is light
Chairman of the Board
The portfolio of Affiliated Fund
because the greater incentive to save
has been structured to benefit from
and invest should tend to dampen the
the changing priorities developing in
borrow-and-spend psychology.
John Milarty
our economy. We have a heavy con-
We believe the recent market tur-
John M. McCarthy
centration in the producer sector-
bulence has created a number of at-
President
basic industries, machinery and tech-
tractive investment opportunities
nology; these sectors should be pri-
which can provide substantial capital
November 27, 1981
Useful
Special Report
Measures
of Good Value
Long-term Optimism
The Cost of $1 DJIA Earnings
$40
Characterizes Survey of
35
30
Generally
the U.S. Economy
Overvalued
25
20
17
In a survey on the U.S. economy
Q. Do you think the new tax bill is
15
Fairly
conducted by Lord, Abbett & Co., a
likely to induce companies to under-
Priced
10
select group of our country's key
take capital programs in the next few
Generally
5
thinkers, business leaders and policy-
years that probably would not have
Undervalued
makers was asked to indicate its views
been considered otherwise?
o
35 40 45 50 55 60 65 70 75 10/31/81
on the state of the nation's economic
yes 90.3%
health and the possible developments
no 9.7%
The Price-of-Earnings is commonly
stemming from the 1981 tax and budget
Q. If the end result of the tax pro-
used as an indicator of value: If you
legislation. While the program does
gram will be a stimulation of produc-
can buy one dollar of yearly earnings
have its share of detractors, our survey
tivity, in what time frame can we
for ten dollars or less, you probably
shows overwhelming support for this
expect to see the results?
have a good deal.
new economic strategy.
less than 2 years 14.5%
Economists were chosen because
less than 5 years 71.0%
The Cost of $1 DJIA Dividends
of their technical familiarity with the
5 years or more 14.5%
subject. We included government
$40
Q. Do you expect the tax and budget
Generally
officials, acknowledging their respon-
Overvalued
programs will be successful or unsuc-
35
sibility in the passage of the present
cessful in reducing the secular rate of
30
program and the role they might play
27
inflation?
successful 73.0%
25
in drafting any subsequent legislation
Fairly
unsuccessful 23.8%
Priced
required to insure a turnaround in
20
18
the economy. And finally, we looked
undecided 3.2%
15
to chief executive officers and chair-
Q. Which two policies do you think
Generally
10
Undervalued
men of the boards of major American
will be the most important factors in
5
corporations-it is their companies
accelerating further growth in our
o
which can, in effect, initiate the wel-
productive capacity?
35 40 45 50 55 60 65 70 75 10/31/81
comed moves toward greater produc-
generous depreciation
tivity. Please remember, however, that
allowances to business
34.8%
our survey does not necessarily rep-
increased exclusion for
The Price-of-Dividends provides the
interest income and
complement to the earnings indica-
resent a consensus of all economists,
the lowering of
tor: If you can buy one dollar of divi-
legislators and corporate executives.
capital gains taxes
26.6%
dends for eighteen dollars or less, then
The response rate to our survey
greater inducement to
there's a good chance you're making
was a gratifying 31%; we are pleased
spend on research and
a wise long-term investment.
to share this cross-section of views on
development
22.0%
the U.S. economy.
lower rates of taxation on
October 31, 1981
Q. Do you think a larger-than-normal
wages and salaries
16.5%
A Good Time to Invest
portion of the individual's tax saving
some other policy
10.1%
3 Clear Signals
will be used to recapture some of the
(some examples cited: higher invest-
ment tax credits, incentives to employ
Benchmark
lifestyle that has been eroded or do
of Good
Actual
and train unskilled and unschooled, cur-
Value
10/31/81
you think the individual will save a
rency reform)
DJIA
greater portion of the tax reduction?
Q. Do you anticipate a moderation
Value
975*E
853+
save 68.4%
of wage increases over the next sev-
Price for
spend 31.6%
eral years?
yes 82.5%
$1 DJIA
Earnings
$10
$ 6.94
Q. Do you believe that the new tax
no
14.3%
Price for
policies will offer business sufficient
undecided 3.2%
$1 DJIA
incentives to increase investment
Dividends
$18
$15.17
Note: Some respondents did not an-
*Book Value on 10/31/81
appreciably and raise productivity?
swer every question; percent-
+Market Value stated as the DJIA
yes 80.6%
ages are based on the number
E=Estimated
no 19.4%
of answers to each question.
Special Report
The Nation's
other industrialized nations. To alleviate this problem,
corporate tax breaks in the new law focus on faster and
New Direction
more generous capital cost recovery allowances for build-
(Continued from page 2.)
ings, industrial equipment and vehicles. The new law also
as the result of unwise increases in federal
offers tax credits for research and development, another
area in which American industry has lagged recently.
spending and money supply, and recom-
J. J. Loftus, vice chairman of Republic Steel* stressed
mended greater restraint in both areas. Several survey
the need to renew America's commitment to capital in-
participants saw other obstacles to be overcome: balanc-
ing the federal budget; lessening wage and benefit in-
vestment saying: "Spending on new plant and equipment
has been pathetically low compared with other advanced
creases; lowering interest rates.
nations. We need to rebuild our capital stock and reap the
"Productivity improvements will be the biggest chal-
lenge, on the assumption that inflation is being brought
productivity benefits that will accompany such change."
under control," added George Barber, chairman and chief
Will the new tax law help increase U.S. industrial output?
executive officer of Anchor Hocking Corp.*
Representative Jack Kemp (R.-New York) and Senator
William V. Roth, Jr. (R-Delaware), whose earlier tax cut
Getting-and Staying-Productive
proposals form the backbone of the present legislation, are
Economist Arthur B. Laffer, a member of President
confident of the tax act's productivity-boosting effects.
Reagan's Economic Planning Advisory Board, pointed
"The Economic Recovery Tax Act of 1981 will unques-
out that the new direction in economic policy "offers the
tionably contribute to a long-term increase in the growth
opportunity for sustained real growth on a long-term basis.
of American productivity. By increasing the savings rates
Staying on track with the objectives of reduced govern-
of businesses and individuals, the new tax act will con-
ment growth, regulation and lower marginal taxation is
tribute to an acceleration in productivity. Our older, more
critical to maintaining a free economy and healthy real
capital-intensive industries, such as autos and steel, will
growth longer term."
benefit particularly from the capital cost recovery provi-
The new economic recovery program recognizes, above
sions. Small and quickly growing new businesses will
all, that U.S. capital spending has fallen behind that of
(Continued on page 10.)
Viewpoint
"Taking a Stand"
through policies designed to enable
the accompanying reduction of capi-
and encourage business to marshal
tal gains taxes should help to increase
and utilize our vast physical and
the availability of venture capital; and
Capital formation, new production
human resources more effectively,
incentives for productive activities-
efficiency and innovation through re-
search and development are seen as
and to reorganize work patterns in
for saving, working, and risk-taking-
essential elements needed to defeat
ways that will motivate workers to
should all be enhanced."
high inflation, high interest rates and
realize their full creative potential."
Paul A. Volcker, Chairman, Board
the growing disenchantment among
William M. Batten, Chairman, New
of Governors of the Federal
many Americans about the costs of
York Stock Exchange
Reserve System
the goods and services they buy. Var-
ious leaders in government and in in-
"We expect to
"Capital formation, investment and
dustry and key economists share their
see major expan-
collective bargaining must focus on
hopes for a revitalized economy.
sion in the sav-
efficiency and productivity which are
ings rate, for a
the best guarantors of economic prog-
"We will have to
variety of rea-
ress needed to respond to changing
create an envi-
sons. One, of
world markets."
ronment that can
course, is the ex-
stimulate all-out
D.M. Roderick, Chairman, U.S.
pectation, borne
efforts to develop
Steel Corp.
out in the past,
Murray L. Weidenbaum
new technolo-
that cutting indi-
gies, new proc-
Looked at in isolation, the new tax
vidual and family income tax rates
esses and new
law offers the prospect over time of
across the board will generate a more
products and
improving the environment for busi-
than proportionate increase in savings.
William M. Batten
services, not only
ness and personal savings and invest-
What will make the shift more dura-
by new enterprises, but by established
ment. Investment incentives should
ble is a shift in inflationary expecta-
businesses as well. Our best projec-
be strengthened by the capital cost
tions."
tions for the 1980s show that we can
recovery provisions; the lowering of
Murray L. Weidenbaum, Chairman,
raise the investment efficiency ratio
top bracket marginal tax rates and
Council of Economic Advisers
Sylvia Porter (Continued)
near retirement. You can manage
The Nation's
switches at little or no cost.
Q. When should you make your con-
New
putting in $2,000 a year until age 65.
And say that earns 12 percent com-
tributions?
Direction
pounded quarterly. That will produce
A. As early in the calendar year as
(Continued from
a nest egg for you of $1,106,453! And
possible for you so that your money
page 7.)
that $2,000 per year is deductible on
can start working under a tax shelter.
your income tax return, whether or
You can, though, contribute at any
benefit from the increased invest-
not you itemize your deductions.
time during the calendar year and
ment incentives for individuals," said
Representative Kemp.
The Advantage
$1,106,453
"The new capital cost recovery pro-
of Tax-sheltered
Growth to a
With IRA
visions will inject billions of dollars
($2,000 a year)
of new investment capital into our
Person in the
Without IRA
50% Tax Bracket
nation's business community.. I
($1,000 a year)
believe the capital formation provi-
sions, particularly the cost recovery
$2,000 contributed
provisions and associated liberaliza-
yearly, at 12% com-
tion of the investment credit are the
pounded quarterly.
most important for increasing our na-
tion's industrial productivity. The
changes here are truly dramatic," Sen-
The green bar in each
pair shows the growth
$604,611
ator Roth said.
The vast majority of our survey's
of annual tax-deductible
investments of $2,000
participants-92.7%-believes that the
made at the beginning
new tax law will induce companies to
of each year in a 12%
undertake capital improvement pro-
account (compounded
quarterly) with all
$326,754
grams that they might not otherwise
have considered. Almost 90% expect
growth sheltered. The
black bar shows the
to see productivity gains by 1986 or
results when, without
$172,911
earlier.
the tax shelter, the
able is immediately
halved for a person in
the 50% tax bracket.
$14,458
$14,080
$24,962
$87,732
$59,362
$85,951
$121,763
But, in order to get-and stay-
annual $2,000 avail-
productive, business must first suc-
$40,570
$39,620
ceed in attracting the necessary in-
$5,999
vestment capital. "Capital availability
And, then, the growth
will be adequate to finance growth
on the money left for
with an adequate return if monetary
investment is itself cut
5th
10th
15th
20th
25th
30th
35th
policies continue on a path of mod-
quarterly by taxes.
YEAR
YEAR
YEAR
YEAR
YEAR
YEAR
YEAR
eration and deficits are reduced
Q. How should you invest your IRA?
into the next calendar year until you
sharply as a percent of GNP," said
A. Virtually all financial institutions
file your tax return. Try to start Janu-
John W. Hanley, chairman of the board
(banks, insurance companies, mutual
ary 4, 1982.
of Monsanto Co.* Most of the survey's
funds, securities dealers) will be com-
Q. What about part-time workers? Can
participants expressed similar op-
peting for your IRA funds. Most in-
timism about the future availability
they set up IRAs, too?
stitutions can efficiently handle your
of new capital.
A. Yes. All working people under age
IRA, so your prime consideration
Caution Notices
70½, whether or not covered under a
should be based on your position to
qualified retirement plan, are eligible
A high percentage of survey re-
take risks and the rate of return you
to contribute to an IRA. This includes
spondents-83.6%-believe that the
seek. You could buy mutual funds
the self-employed, government work-
new tax policies will succeed in in-
investing in stocks in anticipation that
ers and all workers in private indus-
creasing investment and boosting pro-
the combination of dividends and cap-
try. It includes full-time and part-time
ductivity. But there were caution
ital gains will produce a return higher
workers-and even students, working
notices from prominent sources.
than some guaranteed investments.
summers. The amount put into the
"The combination of special stim-
Whatever you do, keep in mind that
IRA can be all or any part of the first
ulants for research and development
an IRA is a TAX SHELTER and all
$2,000 earned yearly.
expenditures, cutbacks in the tax
earnings of an IRA are treated alike
rates on investment income and
when you finally withdraw your funds.
To repeat. Do not shrug off this shelter.
capital gains, and multiple tax
Aim for the highest total return from
Copyright, 1981.
breaks for savings will tilt the scales
your IRA to retirement, taking more
Reprinted with permission,
sharply toward business investment.
risk if you are relatively young and
Universal Press Syndicate.
But several words of caution are in
switching to safer investments as you
All rights reserved.
order. The tax stimulus comes at
high cost. If the generous business
Easing
Capital Gains Tax: Here's a wel-
tax cuts, coupled with huge indi-
come change for all long-term inves-
vidual cuts, generate huge federal
Your Tax
tors. While the minimum holding
deficits in the face of a rising econ-
Burden
period remains twelve months, the
omy, the federal government's de-
effective maximum tax on capital
mands for credit will absorb the
gains has been reduced to 20% from
added private savings and will gen-
28%. (The gain after 60% exclusion is
erate an investment-stifling level of
taxed at a maximum rate of 50%.)
interest rates as an offset to the in-
Prior to
June 10,
vestment-stimulating tax incentives."
June 10,
1981 and
- Walter W. Heller,
1981
thereafter
Professor of Economics,
by John J. Gargana, Jr.
Long-term
University of Minnesota,
Vice President-Finance,
capital gains
100%
100%
Chief Economic Advisor to
Affiliated Fund
Deductible
Chief Financial Officer,
portion (-)
60%
60%
President Kennedy.
Lord, Abbett & Co.
Portion
Another of the nation's senior econ-
included
omists was careful to qualify his
in income (=)
40%
40%
April 15th will be less taxing for every
Maximum tax
assessment.
wage earner and saver as a result of
rate (x)
70%
50%
"The long-term effect of the 1981
extensive remedies legislated in 1981.
Maximum
Tax Act on productivity will depend
The new law-appropriately called
long-term
on what goes with it. One cannot
the Economic Recovery Tax Act of
capital gains
do something to the revenue side
tax rate (=)
28%
20%
1981 also included provisions to
of the budget without also doing
improve productivity of American
Gift Tax Reduction: Annual gifts
something to the expenditure side
business and industry and to strengthen
excluded from taxation have been
or the borrowing side. If the con-
its competitive position in interna-
lifted from $3,000 to $10,000 as of
sequence of the 1981 Tax Act will
tional markets.
January 1982. A couple can double
be to make the budget deficit
The shareholder, as a result, can
the annual exclusion by giving a gift
substantially larger than it would
expect more than tax relief. The leg-
of $20,000 jointly. This new provision
otherwise have been, even the di-
islation will ultimately translate into
is especially rewarding to those who
rection of the effect on productiv-
higher corporate earnings, growing
wish to "invest now" to help a child or
ity is uncertain because of the
dividends and brightened prospects
to cover a family member's future
possible negative effect of the def-
for rising stock values.
education expenses, for instance. In
icit on private investment. If the
'82, under the annual gift tax exclu-
consequence will be to make de-
Here are some highlights:
sion, a couple can give a gift of Affil-
fense expenditures substantially
Individual Tax Relief: Tax rates have
iated shares, with a value of up to
smaller than they would otherwise
been changed both for joint and sin-
$20,000 per donee in preparation for
have been the effects on produc-
gle tax returns; as a result, everyone
tomorrow's higher costs.
tivity will either be negative or
will have more money to save or invest.
irrelevant.
If the tax cuts are
On October 1, 1981 all taxpayers
FREE
substantially matched by cuts of
received a 5% withholding rate reduc-
non-defense expenditure we can be
tion. Tax rate reductions of 10% will
Retirement Planning
fairly confident of a favorable effect
go into effect in July '82 and July '83.
Information
on the long-run growth of produc-
For Everyone
tivity. One can only guess at the
A Sampling
of Tax
magnitude of this."
Brackets
'81
'82
'83
'84
Please send me free information
-Herbert Stein,
Joint Returns
about the following:
Individual Retirement Accounts now
Economist,
$ 24,600
Professor of Economics,
to
29,900
32%
29%
26%
25%
for all wage earners
Keoghs for those with self-employment
University of Virginia.
45,800
income, part- or full-time
to 60,000 49
44
40
38
403 (b) plans for employees of non-
A Promising Start
60,000
profit organizations
Despite the restraints and qualifi-
to 85,600
54
49
44
42
Rollover IRAs for those who receive a
cations, most saw the new program
215,400
lump-sum distribution from other tax-
and Over
70
50
50
50
sheltered plans
for economic recovery as a good first
Single Returns
Simplified Employee Pension plans
step, but one that must be adhered
$ 18,200
Print Name
to, even as the going gets tough. "We
to
23,500
34%
31%
28%
26%
must remember," said Senator Roger
Address
34,100
W. Jepsen (R.-Iowa), "that the goal is
to 41,500 49
44
40
38
City
State
Zip
a long-run goal and give the program
41,500
MAIL TO: Retirement Planning Department
to 55,300
55
50
45
42
Lord, Abbett & Co.
time to work."
63 Wall Street, New York 10005
108,300
AFF-1
*An Affiliated Fund portfolio company.
and Over
70
50
50
50
Bradley A. Blakeman
50 Kent Road
1851 Cresthiem Dribe
Halley Stream, Long Island
Palm Springs
New York, 11580
California, 92262
(516) 825-0983
(619) 327-2742
7575
Fell
Fell
September 25, 1984
Mr. Michael Deaver
The White House
Washington, D.C.
Dear Mr. Deaver,
As the Motorcade Advanceperson for President Reagan's visit
to New York on September 23 & 24, 1984, I would like to take
this opportunity to thank you for arranging for the motorcade
drivers to meet the President and take photographs.
Touro Law School students have volunteered their time and effort
in support of the President on his last six visits to New York.
I know I speak for them, when I tell you what a priviledge it
has been to meet the President and persons such as yourself.
We look foward to assisting the President, the staff and press
on many more visits and hopefully some day to Touro Law School.
Best wishes.
Sincerely yours,
Brays.Bah
BRADLEY A. BLAKEMAN