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Press Conference of L. William Seidman, Assistant to the President for Economic Affairs, and Ron Nessen, Press Secretary to the President
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Press Conference of L. William Seidman, Assistant to the President for Economic Affairs, and Ron Nessen, Press Secretary to the President
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Digitized from Box 18 of the White House Press Releases at the Gerald R. Ford Presidential Library
FOR IMMEDIATE RELEASE
NOVEMBER 15, 1975
OFFICE OF THE WHITE HOUSE PRESS SECRETARY
(Paris, France)
THE WHITE HOUSE
PRESS CONFERENCE
OF
L. WILLIAM SEIDMAN
ASSISTANT TO THE PRESIDENT
FOR ECONOMIC AFFAIRS
AND
RON NESSEN
PRESS SECRETARY TO THE PRESIDENT
THE GEORGE V HOTEL
10:28 P.M. Paris Time
MR. NESSEN: We are going to have Bill Seidman
tonight to give you a good deal of substance on today's
talks. Before we do, let me just clean up a few odds and
ends.
We have one announcement on tomorrow's schedule,
which you should have already. Press Pool No. 6 should
be in the press center and ready to go to the chateau at
7:30. This will be the day long protective pool at the
chateau and also to go to church and back with the
President.
I think your poolers probably have told you already
that the President held a meeting of about 20 or 25 minutes
with President Giscard shortly after the arrival. The meet-
ing largely concerned President Giscard outlining what he
had in mind for how the meeting should be conducted.
The rest of the afternoon President Ford spent
in a series of meetings with various members of his staff,
including Alan Greenspan, Bill Seidman, Secretary Kissinger,
Secretary Simon, Dick Cheney and myself. He also took a
short nap in the afternoon.
The reception was slightly late getting started,
and it started about 6:10 and it was cut short. The reception
consisted mainly of a kind of formal greeting of the
Presidents, Prime Ministers, and their Foreign Ministers
and Finance Ministers.
The actual meeting began at 6:21 and lasted
until 9:17, somewhat longer than anticipated, at which point
the Presidents and their Ministers went into dinner.
MORE
- 2 -
The Presidents and Prime Ministers agreed tonight's
meeting was penetrating, friendly and useful. The subject
of tonight's meeting was economic recovery. Each of the
six Presidents, or Prime Ministers, had an opportunity to
speak at some length, giving their views on this subject,
and there were also questions and comments made by the
other leaders.
Now, what I propose to do is that Bill Seidman
will give you a rather full summary of the presentation that
President Ford made at tonight's meeting.
Just one or two other notes.
The remaining items to be discussed during the
course of the next few days are trade, monetary affairs,
energy, relations with the developing countries, and East-
West economic relations. It has not been completely
decided what the topic of tomorrow morning's meeting will
be, although it is likely to be either trade or monetary
affairs.
The Finance Ministers of the six countries will
hold their own meeting, separate meeting, tomorrow morning
at 9:30 at the chateau, and Secretary Kissinger will have
a private breakfast meeting with Mr. Callaghan at 8:30
at the British Embassy.
Q Subjects?
MR. NESSEN: Obviously, international finances,
but nothing in particular.
Bill does have, as I say, a rather full summary
of the presentation President Ford made tonight, and I
think at this point it would be best for him to come and
give you that.
Q Is there any bilateral or extra economic stuff
going on during this week? In other words, is there any-
thing outside the economic sphere, business to be transacted
by Kissinger or the President?
MR. NESSEN: That is, talks that deal with subjects
other than international economics?
Q Yes.
MR. NESSEN: Not that I know of.
Q The phrasing "penetrating, friendly, useful,"
how were those words decided upon, and by whom, and who
are we quoting? You?
MR. NESSEN: You are quoting me telling you that
this is the language the six leaders felt most accurately
described tonight's meeting.
Bill?
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- 3 -
MR. SEIDMAN: I will try to go through and give
you some of the key points that the President made in
his presentation and then if you would like to ask questions
about it, we can talk about the interpretation.
The President began by expressing his satisfaction
at the consultations that he had previously had with many
of the leaders and stated that they represented important
inputs into our own policy-making.
He then talked about interdependence and the
need for cooperation, and stated that the summit springs
from an enormous interdependence of our societies and common
values that we share. He indicated that obviously they
could not resolve all problems at this meeting but the
objective was to achieve a better understanding of them.
He noted that the leaders had the opportunity
to help shape the future of the world's economy and that
the issues, however, could not be on purely a technical
basis, that the way that economic problems were handled
would have important political implications and that the
solving of economic problems would require political will.
He then made a short summary, giving the
current state of the U.S. economy and he noted that in
his opinion we must focus not only on the current problems
but on longer range policies. He stated that the policies
which he had been advocating were designed to diffuse
inflationary pressures which affect all economies and set
in place policies which would encourage investment, job
creation and productivity. He explained in that regard
his proposal for tax cuts and accompanying limitations on
spending.
He stated that our recovery is now seven months
old and has shown even greater strength than we had earlier
anticipated. Industrial production at the most recent
figure was increasing at a seasonally adjusted rate of
13 percent, total civilian employment had increased over
a million and a half jobs and we had had one of the largest
productivity increases in our history. Real GNP had
increased at an annual rate of over 11 percent in the last
quarter and that we anticipate another large advance in
the making for the current quarter although somewhat less
than the third quarter.
He stated that the outlook is for a continuation
of a strong recovery in the United States. He cited as
evidence the inventory liquidation which has just been
coming to a termination, that final sales had continued
strong, which would in the course require substantial
increases to inventories.
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- 4 -
Business fixed investments, which has been one
of the weaker parts of the economy, had now bottomed out
earlier than anticipated and we look for recovery in the
period ahead.
He said that monetary and fiscal policies put
in place by the U.S. Government are calculated to
accommodate a strong business expansion.
He also said that Chairman Burns had assured
him that the rate of money creation over the next year
will be adequate to insure sustained recovery. He
anticipated that GNP would grow at an average rate of six
to seven percent throughout the middle of next year and
an average rate of approximately five percent from the
middle of next year through 1977.
He said that he remained confident that inflation,
while not at the level that we would like to see it, is
essentially under control. He noted that there had been
some recent figures that were adverse, especially in
the WPI, but he said that he did not believe that those
were indicative of the trend over the next year or year
and a half.
He also stated that the expectation of lower
rates of inflation in the money and capital markets would
contribute to a decline in interest rates which had
started over the last four to six weeks.
He then commented on the world recovery as opposed
to his comments on the United States, noting that for the
first time in a substantial period of time the major
cycles of the countries involved had almost coincided,
thus making a deeper recession which was made more difficult
by the quintupling of the price of oil.
He said that the oil price increase has clearly
contributed toward the creating of a climate of uncertainty
and it has substantially increased inflationary pressures,
and has had a significant deflationary impact on our
economies.
He said he shared the view of what he understood
was also the view of the leaders there, that the private
sector demand has been inhibited by a lack of confidence
and that a return of confidence was essential to the
recovery of the economies involved. He felt certain
that the reflationary measures which had been taken by
all countries would result eventually in a substantial
strong gain in consumer expenditures thus boosting the
economic recovery.
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- 5 -
He noted that U.S. recovery had proceeded ahead
of most of the countries involved -- in fact, all of the
countries involved -- and he said that we expected to
continue our recovery with a real output gain of between
seven and eight percent between the second quarter of
1975 and the second quarter of 1976. Such a shift would
expand the volume of world trade by three to four percent.
But he also noted that a somewhat faster growth
of the U.S. economy than now envisioned would make only
a modest contribution to world recovery. A percentage
point of additional growth of the U.S. economy over and
above what is now expected would affect the growth of the
European economies in the order of one tenth of one
percent in 1976, according to our estimates.
In discussing restoring confidence and economic
growth, he stated that we are able to reaffirm our
confidence that although the response to stimulus policy
measures is slower than in most post-war periods, recovery
from the precent recession is clearly well underway. The
vitality of our industrial democracies, the leadership
we are able to provide to the rest of the world and the
quality of life that characterizes our societies depend
upon our ability to achieve sustained economic growth
without inflation.
He then went on to note that there are a number
who believe that economic growth will be impossible to
sustain in the future and he categorically rejected that
view. He stated that he was convinced that the market
economies would be able to make the adjustments and
technological changes necessary to economize on scarce
natural resources and continue to have a growing economy.
He made a particular point of saying that we must
provide the kind of economic climate that encourages
confidence and enhances the incentives for business to
invest. He stated that his program for limiting the
growth of Government expenditures was designed to achieve
this result; limiting Government spending will release
the savings necessary to finance investment.
He also noted that confidence depends on
consistency and national economic policies, resisting
the pressures for stop and go measures that have inevitably
resulted in greater economic instability and uncertainty.
In short, we must pursue a steady course if we
are to achieve larger investments and sustained growth.
MORE
- 6 -
He proposed that we set as our objectives --
and one that he believes can be achieved -- a generalization
of recovery during 1976 among the major industrial countries,
restoration of sustained and vigorous economic expansion
and high levels of employment for 1977, and a reduction
in the rate of inflation. And, as part of that, a
restoration of vigorous growth in the volume of world
trade.
He then spoke briefly about the various areas
that will be discussed tomorrow, and as mentioned by Ron
Nessen, involving trade, energy and the other areas which
Ron mentioned, merely stating that each one of these was an
important part of the overall plan to achieve the goals which
he had cited.
I think that perhaps gives you a rundown on the
overall.
MORE
- 7 -
Q Mr. Seidman, the President criticized stop
and go measures, as you said. Was that in reference to
the American experience or in Europe or where?
MR. SEIDMAN: The question was, the President
spoke out against the stop and go economic policies, and
the question was, was that in criticism of the American
policy or of all of the countries.
I think it was a result of the American experience,
and as a result of that experience, he wanted to give the
benefit of his thoughts to all of the leaders involved.
Q Mr. Seidman, did the President discuss the
New York situation with any of the leaders, or all of
them?
MR. SEIDMAN: I was not at the meeting, as you know,
and it was not a part of his initial statement.
Q Did the President suggest any specific means
to be taken for international coordination that could
lead to the accomplishment of the goals?
MR. SEIDMAN: He suggested that they pursue
discussions further in the program to decide what would
be the appropriate mechanisms to further cooperation and
the kind of economic policy-making which would take into
account the policies of other countries, and that will be
a subject for their discussion tomorrow.
Q Were there any comments by the President
on the recent downturn in the U.S. leading indicators?
MR. SEIDMAN: Yes, I think he stated quite
clearly that he did not believe those were indicative
of the trend and that we were in a strong recovery and
he expected it to continue and that the one or two indicators
that had turned the other way were not, in fact, indicative
of the way the economy was expected to go through the next
year.
Q Mr. Seidman, at one point you said he said
real GNP would increase 6 to 7 percent next year, and
later on you said he said we expect to see an increase in
output, 7 percent second quarter and 7 to 8 percent the
second quarter of 1976.
Is that for two different categories, or are
we talking about the same thing?
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- 8 -
MR. SEIDMAN: One is industrial production and
the other is GNP?
Q Yes, is that the fact, one is supposed to be
industrial production?
MR. SEIDMAN: Yes.
Q Is that the second one you mentioned?
MR. SEIDMAN: The second one I mentioned was
GNP between 1975 and 1976, 6 to 7 percent, right?
Q When you say 6 to 7 percent for next year and
5 percent mid-1976 to 1977, was that industrial production?
MR. SEIDMAN: That was GNP.
Q The second is industrial production?
MR. SEIDMAN: I will run over them again, if
you like.
Q I just want to know which is which.
MR. SEIDMAN: Just so we will have it exactly,
I will tell you right out of here. We are now talking
about real output between the second quarter of 1975
and the second quarter of 1976. That is 7 to 8 percent.
That is what I stated.
Q I thought you said 6 to 7.
MR. SEIDMAN: If I did, I meant 7 to 8.
Q You said 6 to 7. You meant up to --
MR. SEIDMAN: Up to that year. But, the increase
between the second quarter and the second quarter of 1976
was 7 to 8 percent.
Q Would you go over the preceding figure?--
MR. SEIDMAN: Which preceding figure?
Q The one Walter is talking about. Industrial
production.
MR. SEIDMAN: We anticipate the GNP figure will
grow an average of 6 to 7 percent through the middle of
next year. The other figure was from the second quarter
to the second quarter of 1976.
MORE
- 9 -
Q You had a 5 percent figure, too.
MR. SEIDMAN: That was beyond the middle of 1976.
Q And that is GNP?
MR. SEIDMAN: Yes.
Q Did he talk about unemployment figures at
all?
MR. SEIDMAN: He only said with regard to unem-
ployment it was too high, that he expected it to be coming
down at a rate slower than he would like, but he expected
that over the next year the trend would be towards declining
unemployment. He did not give any figures.
Q Did anybody question the $28 billion
extended cut in the tax decrease program?
MR. SEIDMAN: Since I wasn't there, I cannot
tell you what they said. I can only tell you what the
President presented.
MORE
- 10 -
Q
Was this remark about a one percent
increase --
MR. SEIDMAN: In GNP in the U.S.
Q
-- his way of saying that further stimulative
procedures adopted in the United States would not have that
significant effect on the world economy?
MR. SEIDMAN: I think he wanted to evaluate that
for the people involved so they would see our estimates of
what the effect of it would be.
Q
Was that in anticipation of some sort of
pressure on him for further stimulative --
MR. SEIDMAN: I think it was a part of the
interchange and discussion in determining what the effect
of our policies would be on them and in that regard he
wanted to give them his best judgment as to what the result
would be now that we are at the current levels of growth
we are at.
Q
Mr. Seidman, was the President in effect
saying that the United States policy is now having an
optimum of impact on the economies of other nations?
MR. SEIDMAN: I think he was saying in his view
the growth we were experiencing was somewhat higher than
we had actually anticipated and, in that regard, was
having an effect on the economies of the other countries
involved, and that further increases beyond that would
have a rather minimal effect.
MR. NESSEN: For those of you who don't know
Bill -- L. William Seidman, Executive Director of the
President's Economic Policy Board.
For tomorrow, I would anticipate that we will
phone down information throughout the day and that at some
point later in the day -- at this time I can't tell you
the time -- we will have a briefing.
For the moment, at least, I would not like to
put a lid on for tonight. I want to check out one thing.
You will be busy writing anyhow and I will be back shortly
to tell you whether we are going to have anything further.
Q
Will we have information to go into a printed
pool report?
MR. NESSEN: Right.
Q
Is there anything more on the meeting
tomorrow?
MR. NESSEN: No, I wouldn't have anything on
that tonight.
END (AT 10:55 P.M. Paris Time)