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Speeches - Miscellaneous (including scripts), 1964-1974 [January 1972-August 1973]
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Speeches - Miscellaneous (including scripts), 1964-1974 [January 1972-August 1973]
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Governor Ronald Reagan's Speeches
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Ronald Reagan Presidential Library
Digital Library Collections
This is a PDF of a folder from our textual collections.
Collection: Reagan, Ronald: Gubernatorial Papers,
1966-74: Press Unit
Folder Title: Speeches - Miscellaneous (including scripts),
1964-1974 [January 1972-August 1973]
Box: P20
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/
1/11/72
GOVERNOR'S PRAYER BREAKFAST
Senator Hotel
Sacramento, California
January 11, 1972
Lieutenant Governor Reinecke, President of the Senate Jim Mills,
Speaker of the Assembly Bob Moretti, Pauline, March, Ike Livermore,
General Turnage, lovely ladies here with us at the table this morning,
and you distinguished people out there members of the military, the
Legislature, and the many who are involved here in state government.
I know this is billed as a response, and yet I think it's going
to be a humble effort to add to some of the very fine messages that have
been given to us this morning.
There has been much said about this morning the prayer that
akes place, and particularly among those in public life, and the
necessity, of course, for praying for what is right and not using
prayer to personal advantage.
I remember once playing football. It was a great moment in my
life when I discovered for the first time that I wasn't the only fellow
playing the game who prayed before each game. As a matter of fact, in
the years since then, I have never met a football player who didn't
pray before a game. And at the same time, I have never met one who
confessed that he ever prayed to win. And yet the temptation is always
there because we are only human.
Back in the dark days of World Nar II, there was a little Irish
priest in our land, and he couldn't forget his animosity toward the
one-time English conquerers of Ireland, and so even in the midst of that
ar, his sermons kept taking an anti-British note
until the bishop
-1-
had to
and he didn't want to impose his will on him
he had to sugges
chat in time of war, certainly he could mute this particular tone in his
sermons. And the little priest promised he would.
The next Sunday he prayed with no reference to the British, and
the following Sunday, and the following Sunday. But he was getting pretty
uptight. The tension was building. Finally, he rose to the pulpit, and
he said: "My sermon this morning is going to be about the Last Supper."
He said, "The Lord stood, and the Lord said 'one of ye here this night
will betray me. And he said, "I repeat: 'One of ye here this night
will betray me. "Up stood Judas Iscariot, and he said, 'Oh, I say now,
Governor, you don't mean me.
Sometimes I have to confess that while thinking of some particu-
larly recent days some of my own speaking could best be described by the
first sentence of the twenty-first verse of the 55th Psalm: "The words
of his mouth were smoother than butter, but war was in his heart."
But we had just been through the season a few weeks ago when, as
we do every year, our minds turned to that night so long ago when there
was no room at the inn. Now, there seems to be at least one day each
year here in Sacramento when there is room at the inn
here at the inn.
I think the challenge, and the question for all of us, is whether on a
daily basis we can start making room in that building across the street
or in all. those other temples of statehood here in the Capital City and
in other capital cities, where we become so frustrated and so confused
at times with problems that just seem so complex. Perhaps our problem
is that we continue to look for complex answers. We turn away from the
simple answers that might lease our frustration.
-2-
Because we have such an example, how complex was the answer the
young man from Galilee gave when the crudite men of the law the pharisees--
were questioning him and attempting to confuse him, and they asked him,
"What was the greatest of all the laws?" And without hesitation, he said,
"Thou shalt love the Lord, thy God, with all thy heart, and with all thy
soul, and with all thy mind." And he added to that first great command-
ment the second: "Thou shalt love thy neighbor as thyself." Then he
said to these learned men of the law, "On these commandments hang all the
law and the prophets."
Matthew, who chronicled this scene, then tells us that the learned
men huddled and talked together (You will note I didn't say they caucused).
But they didn't ask the young man any more questions.
But sometimes I think the voice of the pharisee is still with us.
le are finding complexities where perhaps none exist.
A decade ago, some learned men of the law decided that school
children saying, "Almighty God, we acknowledge our dependence on thee,
and beg thy blessing upon us, our parents, our teachers, and our country.'
that that simple. recital of a plea by students in a New York schoolroom
threatened the constitutional freedom of 200 million Americans. And the
men who made this decision all took their oath of office which ended with
the line, "So help me God."
So now there is no room in the school, and there are phariseo
voices that would deny Him entrance into other public places. Indeed,
the term "public place" seems to be enough now to warrant His exclusion.
Those same voices would drown out the phrase: "One Nation, Under God,"
ed they would erase from our currency the declaration, "In God We Trust."
I know that it will take more than one breakfast meeting a year
to still the voice of the pharisee. But there's something about this
-3--
annual meeting in the shadow of the Capitol that should give us hope the
(
this nation, under God, will keep on finding room, not only in the -inn,
but in all of its council chambers and within its borders.
I think our nation and the world needs a spiritual revival as it
has never been needed before a simple answer a profound and complete
solution to all the troubles we face.
George Berkeley, the eighteenth century philosopher for whom the
city of Berkeley, California, was named, said, "He, who has not much
meditated upon God, the human mind and the Supreme Good, may possibly
make a thriving earthworm, but he will most indubitably make a sorry
patriot and a sorry statesman."
I couldn't close this morning without expressing my thanks, and
I hope in behalf of all of you, to those wonderful people who have been
mentioned here already who do so much to make this meeting possible
the Judge, and to Gladys Sanderson and her ladies who make this a labor
of love each year to those who have provided this wonderful and inspir-
ing music, to thank all of you. And I can only say to you, then, in the
language of that first little priest I mentioned (it happens to be the land
of my forebears), may the roads rise with you and may the winds be always
at your back, and may the Lord hold you in the hollow of his hand.
X X X
-4-
2/21/72
REMARKS BY GOVERNOR RONALD REAGAN ON THE
FULTON LEWIS, III RADIO BROADCAST
MUTUAL RADIO NETWORK
February 21, 1972
This is Ronald Reagan and I am deeply concerned with the
future of our country and the political decisions we all must make
this year. I know it is standard campaign rhetoric to talk about
an election being the most important in our nation's history but it
is just possible that it could be true this time.
There is a Democratic myth that I think must be exposed.
The myth is that the Democratic party is the party of peace and
prosperity, of compassion for the working man, the disadvantaged
minorities, that it is better able to cope with economic problems.
Our new voters, the young people who will be going to the polls
for the first time, I have to say have little historical perspective
in the sense of politics and they see the present administration as
the establishment and therefore responsible for all the things they
don't like. Big impersonal government, government that's gotten
beyond their control, that they can't influence, doesn't hear their
voice. But I think they are blaming the wrong people. We have been
on the outside and when I say "we," the Republicans looking in through
most of the last four decades. For 38 out of the last 40 years the
Democrats have literally determined the policy of this nation. It
is true there has been a Republican President in the White House 11
of the last 40 years but for only one two-year term did a Republican
President have a Republican Congress. And, incidentally, as perhaps
a sign of the times, in that two-year period we knew the only time
the dollar retained its value and didn't lose any of its purchasing
power.
- 2 -
For the balance of the time we have had deficit spending and
continued inflation that has seen the American dollar of 1939 go to
39 cents at the time of Richard Nixon's election.
During these 40 years there have been three major wars, all of
them under Democratic administrations, and the only full employment
this nation has known in those 40 years has been as a result of one
of those wars. This is too high a price to pay for prosperity --
big impersonal government bureaucracy. At the beginning of those
40 years there was one federal employee for every 203 Americans.
When Richard Nixon was elected there was one for every 67. Social
engineers have been experimenting with social reform down through
these decades always with the sincere idea of helping the American
people. They set out to help the American farmer. Today there are
only half as many family farmers in the countryside as there were
before they started to help. They were going to help the wheat farmers.
After a few years and a few billions of dollars of helping the price
of wheat had been cut in half and the price of bread had been doubled.
The federal government was going to supply 26 million housing
units, low-cost housing units for the disadvantaged, and when they
finished helping in that regard there were 200,000 fewer houses than
when they started.
During the eight years of Camelot and the Great Society we
saw 7 million Americans on welfare become 16½ million, and 4 billion
of cost go to better than $20 billion. And still the program was
failing the very people it wanted to help the most.
- 3 -
Those people who say we should have a change and I keep hearing
this increasingly from those who would be President, do they mean a
change back to what we had three years ago? Because three years ago
crime and the inability to feel safe in our neighborhood and our homes
was uppermost in our minds. We were talking about long, hot summers.
We had accepted street riots and burning of our cities as a matter
of course and our educational institutions were centers of violence.
With all that going on we heard men in high office talking
piously of the need for more social reforms and that somehow we,
the law-abiding, were to blame. Well, such things have not been
commonplace during the years when Dwight Eisenhower occupied the
White House and it seems they have markedly decreased since Richard
Nixon entered the White House.
We now have an administration determined to fight crime instead
of finding sociological excuses for it. The President's appointments
to the United States Supreme Court are men who know the law and they
know the law of the judiciary is to interpret the law not to twist it
to make it conform to the social philosophy of the individual judge,
I know there has been great talk over
the years and yet after three years of Richard Nixon's administration
six times as many minority children are attending integrated schools
in the south as were in the Great Society and in Camelot. Ten times
as much money has been loaned to the Small Business Administration,
to minority businessmen in those communities than had been loaned in
all those other eight years. This President inherited inflation, he
didn't cause it. The answer to inflation was known under the previous
administration but many of the men who would now be President and were
part of that government before lacked the will and the courage to go
forward and take the steps and undergo the economic dislocation that
- 4 -
that would result from trying to bring inflation under control.
In the meantime we lost many of our foreign markets and the value
of our savings were eroded:
If you were earning $10,000 six years ago and are earning
$13,000 a year now you are earning $156 less in purchasing power
than you had six years ago. Three years ago 542,000 young Americans
were fighting in Vietnam. The death toll was 500 a week. Today
133,000 Americans are still in Vietnam and by May that will be
reduced to 69,000 and the death toll is less than three a week.
The President recently revealed a peace plan that he offered to
the enemy. It was immediately rejected by Senator Muskie in the
Washington Post. I think the Senator has a two-point plan -- bug out
now and let that last man who leaves shoot President Thieu. The
North Vietnamese and the Viet Cong didn't get around to rejecting
the President's offer for another ten days but you wonder sometimes
the price we'll pay for the political ambition of some men. In a
spirit of malice toward none the President made what must indeed be
the most unique proposal in the history of international relations.
His critics keep demanding a specific date for withdrawal from
Vietnam. They have one. It would be exactly six months from the day
that the enemy would accept these terms and those terms begin with an
immediate end to the killing. The men of both armies would return to
their homes. There would be no victor, no vanquished, no vengeance or
retribution. The government of South Vietnam has agreed to resign and
submit itself to the voters again along with other contestants in a
supervised election. Little has been made of the fact that no such
condition has been imposed on the enemy whose government is governed
by a non-elected military dictatorship.
- 5 -
And, finally, the United States would turn its great power
to rebuilding the war-torn lands of South East Asia, enemy and
ally alike. These men who would be President, who are so sure in
their rejection of this proposal. I wonder if they were that sure
a few years ago when it was a Democratic President's war, going on
without plan or purpose. Was Hubert Humphrey sure when he said
"the minute we back away from our commitments, the commitments we
have made in the defense of freedom, where Communist powers are guilty
of outright subversion, on that day the strength and freedom and honor
of the United States will be eroded. II
Or George McGovern who has said "North Vietnam can't benefit any
more from prolonged conflict than can South Vietnam." And I would
hope that we would be prepared to wage such a conflict rather than
to surrender the area to Communism.
Senator Muskie has said that "I believe that the credibility of
our word and our purpose are at stake. South Vietnam's loss would
be an enormous setback to the forces of freedom. "
And another Senator who hasn't declared for the Presidency but
who was Democratic chairman just two years ago, National Chairman,
said "we will hold Richard Nixon responsible if he turns South Vietnam
over to the Communists. "
Were they so certain then as they would have us believe that they
are today? Perhaps they should read a little piece that was written
by a California journalist, it was written in a kind of 'just supposing'
sense.
- 6 -
He said "just supposing you've been elected President and first
on your agenda is to shut off the war, but first you are taken down
into the bowels of the Pentagon where brilliant men of three generations
have devoted endless manhours to this problem. As the new President
you are shown the charts, the figures, the supplies and the logistics,
agreements and potential consequences of our successes and failures,
analysis of possible action and reaction to Russia and China. " This
huge compendium is known only to the minds of a few men. It adds up
to a staggering decision, perhaps another world war or at least blind
desertion of the POWs. What does the glib promoter, the promiser
of instant success do now? How confident does he feel? This goes
on not with this one problem alone but with many others.
And then one thinks of a recent photograph of Richard Nixon
kneeling on the beach with his dog staring out across the water. Al
the problems are his -- the loneliest man in the World. I think it is
time to quit criticizing, quit carping, to give him instead our
prayerful support in what must be one of the most danger-filled
moments of all history.
February 17, 1972
2/29/72
This is an unofficial public service transcript. THE ADVOCATES
is not responsible for errors of omission or commission.
Topic:
SHOULD STATES RAISE ALL PUBLIC SCHOOL FUNDS AND
DISTRIBUTE THEM EQUALLY?
February 29, 1972, at 8:30pm on PBS
Participants:
Advocate HOWARD MILLER (pro)
- Milton Shapp
Governor of Pennsylvania
- James B. Conant
President Emeritus of Harvard University
- James Guthrie
Professor of Education, University of
California at Berkeley
Advocate JOHN HARMER (con)
- Ronald Reagan
Governor of California
- Eureka Forbes
State Senator from Hawaii, member of the
Education Committee
- Lewis Solmon
Professor of Economics at the City University
of New York
Moderator:
MICHAEL DUKAKIS
Executive Producer: Greg Harney
Executive Editor:
Peter McGhee
Producer-Director:
Russ Morash
This Public Broadcasting Service (PBS) program originated
at WGBH, Boston.'
A Coproduction of
Further Information:
Glenn Esterly
Ben Kubasik
WGBH Boston / KCET Los Angeles
Pat Farmer
KCET Los Angeles
136 East 57th Street
Seen on PBS
WGBH Boston
4400 Sunset Drive
New York, New York
125 Western Avenue
Hollywood, California
10022
Boston, Massachusetts
90027
212 759-1063
02134
213 660-4111
617 868-3800
PUBLIC SCHOOL FUNDS/1
ANNOUNCER: Tonight, from Boston, THE ADVOCATES. Howard Miller (applause)
guest advocate John Harmer (applause) and the moderator, Michael Dukakis
(applause)
DUKAKIS: Good evening and welcome to THE ADVOCATES. Every week at this
time we look at an important public issue in terms of a practical choice.
Tonight our issue concerns the financing of our nation's public schools
and specifically, our question is this: Should States raise all public
school funds and distribute them equally? Advocate Howard Miller, says
"yes".
MILLER: Tonight we are talking about your child and everybody's child.
We propose the quality in education and end to the local property tax base
deciding excellence. With me tonight to support this proposal are Dr.
James Conant, President Emeritus of Harvard University, the Honorable
Milton Shapp, Governor of Pennsylvania and Dr. James Guthrie, Professor
of Education at the University of California at Berkeley. (applause)
DUKAKIS: Guest advocate, John Harmer, says "no".
HARMER: Tonight's proposal sacrifices freedom for the illusion of equality.
The cost would be a preposterous increase in taxes and a leveling down of
educational quality. With me to argue against full State funding are
Governor Ronald Reagan in Sacramento, California, and here in our studio
Professor Lewis Solmon of the University of New York and State Senator
Eureka Forbes of Hawaii. (applause)
DUKAKIS: Thank you gentlemen. Before we begin let me say a few words about
our guest advocate tonight. State Senator John Harmer represents the
twenty-first district of California which includes a large portion of Los
Angeles County. He has for five years been a member of his Senates
Committee on Education and he is currently Chairman of the California Senate
Republican Caucus. And now for some background on tonight's question.
Local control is the foundation of our public school system. Nationwide
there are over 17,000 school districts run by locally elected or appointed
school boards. Local controlhas meant local financing by levying property
taxes on the real estate within their districts. School boards raised
$20,000,000,000 last year, one-half the amount needed to operate the
schools, but property values vary from district to district. Thus school
districts with lots of high valued property find they can raise more money
and raise it more easily than their less affluent neighbors. As a result
within a given state, per pupil spending may range from $1,500.00 in a rich
district to $600.00 in a poor one. Since last August courts in five states
have concluded the differences produced by the present local financing
scheme discriminate against poor school districts. These cases say that the
present system is legally unacceptable. hut leave unanswered the question
of how schools are to be financed. Commissions in New York and Maryland belie
that the inequity cannot be remedied so long as there is any local financing.
Equal educational opportunity they insist requires equal per pupil expenditure.
PUBLIC SCHOOL FUNDS/2
To achieve this goal they would take local school boards out of the business
of raising money and give that task exclusively to the States. The Commissions
call their proposal "full State funding" and here are its principle features:
First, centralized financing - the State would collect all revenues for the
schools. This means a Statewide tax would replace the present local
financing system; second, equalized distribution - the State's would increase
the amount spent per pupil in poor school districts to match the level found
in wealthy ones; third, no add on - local school boards would lose all taxing
power. Thus communities could not add on to their State budget even if they
wanted to.And finally local control. Local school boards would retain
authority over questions of educational policy. And now to the cases. Mr.
Miller why should States raise all public school funds and distribute them
equally?
MILLER: Today millions of children in the United States are condemned to
an inferior education simply because of the accident that their parents
happen to live in school districts that have a low property tax base. This
results in the most unusual disparities within the State. The State of
Texas some school districts spend twenty times as much as others. The State
of Illinois some spend $2,300.00 per pupil and some only spend $400.00.
In California some spend $2,400.00 others spend only $550.00. That is not simpl
injustice to the students who are shortchanged, it's an injustice to all of us because
we lose the productivity and the humanity of those students who through no
fault of their own find themselves in inferior schools. The communities of
Brookline and Summerville in Massachusetts illustrate clearly, though they
are not the greatest disparity, what occurs throughout this country.
(film)
NARRATOR: Brookline - professional, middle-class, substantial homes, spacious
lawns. Summerville - working class, industrial, frame homes, small lots.
The tax base in Brookline is 3-1/2 the tax base of Summerville. Brookline
has more money to spend on the education of its children $1,471.00 per pupil.
Summerville can spend only half that amount $756.00. If you're lucky enough
to go to Brookline High you. get everything from swimming pools to language
labs.
TEACHER: (Speaking foreign language)
NARRATOR: Summerville stresses job training and has to put up with an old
building. Eighty-three percent of the students of Brookline go on to college
to further professional training, only 31% in Summerville. Fifty percent of
the Summerville students go straight on the job market with no further
training, only 12% in Brookline. The remarkable thing about Summerville
High is that it's a good a school as it is, that so much is done when
students are given only half the chance.
(end of film)
PUBLIC SCHOOL FUNDS/3
MILLER: About the injury that that does to this entire country, I've asked
to join us tonight the President Emeritus of Harvard University, Dr. James
Conant. (applause) Mr. Conant is also the author of widely read and respected
books on American education. Dr. Conant, you once supported the local prop
y
tax base for schools. Now you've changed your mind. Why?
CONANT: Experience primarily. I had the opportunity for ten years traveling
around the country, visiting high schools and school districts and I
discovered to my amazement that the scheme which I'd been told in the time of
World War II was going to equalize the amount tax base of all the districts
was not working. We had these enormous disparities which you've spoken of.
MILLER: Well those today
CONANT: Therefore, I concluded that if this couldn't be handled by the then
conventional methods of handling taxes plus some State aid, we'd better go
the whole hog and have full State funding.
MILLER: Well does money make a difference in education. Would increasing
the low schools make a difference?
PUBLIC SCHOOL FUNDS/4
CONANT: Well almost if you'll excuse my saying so, that's a ridiculous
question. One only has to go to a school district and talk to the super-
intendent and you'll see how much difference it makes, Well right off hand,
the number of teachers, and in the present competitive market, the salaries of th
teachers, all kinds of things. It certainly makes a great difference.
MILLER: But if the State phases all the taxes and dispurses them, will
that limit local control or give the local boards freedom to do other things?
CONANT: I should think it would remove from the local board burdens which
they carry because of the mix system we have, in which the financial arrange-
ments and the educational policies are all mixed up together. If you have
full States funding, if some State does it, then you will discover that the
school boards are free to concentrate their attention on educational problems.
They will still have responsibility or I assume they would, depending on what
the State legislature decided, they would still have responsibility of appointing
the District Superintendent, the principals of the high schools and could
involve themselves in a number of projects.
MILLER: Dr. Conant what is our concern here? Why should we want to raise
the level of expenditure and education throughout the country?
CONANT: Well I take it that one of the things that all of us are dedicated
to in this country is developing to the full potentialities of the next
generation. One could express it differently and say, that our task is to
have a school system, an educational system from kindergarten through the higher
education in such a way as the talents of each generation are developed
as they should be. Under the present system many districts where they don't
get a chance.
DUKAKIS: Alright Dr. Conant, Mr. Harmer has some questions for you.
HARMER: (Ahem) Dr. Conant we just saw a film which showed us two high
schools and it proposed to us that because only 30% of the students at one
high school go to college and 80% from another high school go to college
they get an unequal education. Now I ask you, is the amount of money spent
on a student the only factor that determines whether or not he'll go to
college?
CONANT: Certainly not the only factor. But its apt to be a very important
one.
HARMER: Alright. Let's - We have to note however that 30% of the students
at Summerville do go to college, so some of them do get a good enough
education to qualify for college. Now suppose we spent as much money on the
students at Summeryille as is being spent on the students at Brookline. Do
you have any reason to believe that financial equality in or of itself is
going to send more Summerville students to college?
PUBLIC SCHOOL FUNDS/5
there
CONANT: Well I would refuse to argue the proposition N was a one-to-one
correlation between the amount of money spent and the kind of education
provided. But by and large if yc 're going to make gross comparisons, you
find, easily find school districts which would be different, and different
in such a way that the poor district wasn't able to provide any kind of a
decent education.
HARMER: That's very true doctor, but we are here tonight being told that if
we give everybody the same amount of money, they automatically get an equal
education. Now under the centralized plan, Dr. Conant, will private schools
be controlled in the amount of money that they can spend
CONANT:
I know of no proposal facts against the constitutional that
you mentioned now.
HARMER: Alright. You just spoke very elegantly about the potentiality
of each American as being a great resource of this country and certainly
we agree. There's nothing in the centralization concept that says
body has to go to college. Nor is there anything in it that says
private schools, where the rich can still send their children, will stop
operating. So whose going to really pay for the centralized concept Dr.
Conant? What taxpayer is really going to bear the burden of it?
CONANT: I don't consider it, if I may say so, a centralized concept.
You're saying whose going to pay to raise the present amount of money spent
in some of the very poor districts. Of course, it's the people who live in
the wealthy districts and why shouldn't they?
HARMER: Well is it? That's my point. Is it really going to be the people
that live in the wealthy district? Isn't it a fact Dr. Conant that the
type of taxation that will have to take place will go to the middle income
taxpayer, the person who lives in Summerville, and what it's really going
to say is, the rich people can still get around this barrier, you still have
the disparity. You haven't done anything to solve the inequality, you've
just doubled the amount of money you're spending in education.
CONANT: Well I'd break that down if I may. In the first place whatever kind O
tax is assessed will depend on what the State Legislature decides when
they go into this new system. I don't know what it would be. Some people
have suggested a Statewide property tax. I myself would favor an income
tax, but whether you can have an income tax and a sales tax in any given State
depends on the history of that State and I'm not going to be dogmatic.
HARMER: Let me ask you one final question Dr. Conant. Is the structure of
education in this country such that it's really prepared to receive this
type of an input. Haven't we really seen, for instance, in Washington, D.C.,
in New York City, in New Brunswick where tremendous increases in financial
input have taken place. That you have a leveling downward of the quality
of education and you didn't really solve the problem?
PUBLIC SCHOOL FUNDS/6
CONANT: No, I'm afraid I couldn't agree with your diagnosis. I wouldn't say
the facts bore out at all.
HARMER: Are you familiar with the New Brunswick experience with centralized
financing?
CONANT: I am not only familiar with it, I first called it to the attention
of American educators.
HARMER: Alright. Is it not true Doctor that in New Brunswick their debt has
increased, their bonding has increased and the number of drop-outs from school
has also increased?
CONANT: Yeah, but there ma be other factors on that but on the whole
HARMER: Exactly. Financing itself is not the only factor and that's our
point.
CONANT: And on that point I readily agree.
HARMER: Thank you Dr. Conant.
DUKAKIS: Thank you Dr. Conant for being with us on THE ADVOCATES (applause)
CONANT: Thank you (Ahem)
DUKAKIS: Mr. Miller.
MILLER: Of course financing is not the only factor, it's simply the essential
factor, and to talk to us about to obtain that financing and what its genuine
cost is, I've asked to join us tonight the Governor of Pennsylvania, the
Honorable Milton Shapp. (applause)
DUKAKIS: Welcome to THE ADVOCATES Governor Shapp.
MILLER: Governor Shapp is our alliance on local taxation and local property
taxation the way to finance our schools?
SHAPP: The reliance on local taxation, particularly the property tax, is
probably the most inequitable way to finance schools or anyother operation
of Government.
MILLER: When we do raise the money though through our central source, why
should we distribute it equally as we talked about. Why distribute more to
the poor schools and attempt to bring it up?
SHAPP: Well actually it's the people living in the poorer districtsof our
State that our receiving the worst education today and if we're to have a
better society, we better do something quick in order to make sure that the
people in these areas have an opportunity for better education so they can
participate more fully in our way of life.
PUBLIC SCHOOL FUNDS/7
MILLER: Tell us about the cost. We hear estimates all the way from twelve
to twenty billion dollars to do this through the nation. Can we afford that
SHAPP: We can't afford not to do it. Actually what's breaking our cities
today is the fact that we're trying to finance the cost of education out of
current operating revenues, mostly the property tax. Education must be looked
upon as an investment, the most important investment we can make. It's an
investment in our people. If AT&T or General Motors try to finance a long
term investment out of current operating revenues they'd go broke. It takes
13 to 20 years before a person gets an education today, whether it be academic,
vocational or any other form. It takes that long before they can go out in
the world, earn a good living and then repay investments
MILLER: But do we have any examples in our history where we've understood
it to repayment?
SHAPP: Oh sure.
MILLER: That we made the investment and saw it come back manifold?
SHAPP: In other countries it's quite a major factor, but here in the United
States take the G.I. Bill of Rights. At the end of World War II the United
States spent some $27,000,000,000.00 to give free enducation to returning
Vets. By 1968, and this is only say some 22 years later, they already received
back about $87,000,000,000.00 extra, that's over and above what they would
have paid in taxes - $87,000,000,000.00 extra in the income tax because
the returning Vets got this education, were able to get a better job and
therefore pay more in taxes. So it's an investment, it pays off handsomely.
MILLER: What about the problem of local control?
SHAPP: It's not even mixed up in this because in Pennsylvania 53% of the
funds come from the State now and yet the local school boards still control
the operation of the schools.
MILLER: Thank you Governor.
DUKAKIS: Governor, Mr. Harmer has some questions for you.
HARMER: Governor Shapp I understand that your State just adopted an income
tax for the first time, is that right?
SHAPP: It is correct.
HARMER: Did the option of that tax provide for reduction in property taxes?
SHAPP: No it did not.
HARMER: Though it was an additional tax burden?
PUBLIC SHCOOL FUNDS/8
SHAPP: I inherited about a half-billion dollar debt.
HARMER: I know that feeling. I'm intrigued by your concept Governor that
this is an investment that's going to bring back returns manifold.
How
much did your State increase its investment in each child's education over
the decade of the 1960's? Do you know?
SHAPP: Well we have increased it now so that the State is putting up about
$900.00 per pupil.
HARMER: About $900.00 per pupil and how must is being spent in the most
expensive district in Pennsylvania?
SHAPP: About $1,500.00.
HARMER: Well there's a differential of $600.00. Now how many students
do you have in Pennsylvania?
SHAPP: Well about two-million two-hundred thousand.
HARMER: Alright. So my mathematics tells me that two-million two-hundred
thousand times $600.00 comes out to about a billion two-hundred million
dollars.
SHAPP: That's what we pay.
HARMER: Okay now. Oh no wait a minute. $600.00 Governor is the difference
between the average you're paying now and the most you're paying. Do you
realize that what you're advocating here tonight is bringing all of the
education in Pennsylvania up to the highest level.
SHAPP: Oh, that's wonderful. I think that's exactly what we should be doing.
HARMER: And you are advocating a one-billion two-hundred million dollar
tax increase for the people of Pennsylvania on top of the tax --
SHAPP: No.
HARMER: Well that's what you're saying.
SHAPP: No I'm not at all because what you're going to do is subtract from
that the property taxes that are playing at the local level now. You're
substituting one tax for another. But ---
HARMER: Now wait a minute Governor.
SHAPP: And equalizing. But the - hold on - Hold on.
HARMER: I just want to get at you. (LAUGHTER)
PUBLIC SCHOOL FUNDS/9
SHAPP: You Republicans are all like that. (LAUGHTER) No actually I agree
with the concept of getting away from local financing and turning more of it
States. But also until the Federal government realizes that it must
participate, then we're not going to have the real total value of education
that we could develop in this country. Now we have a welfare bill of our
own at the state of $600 million.
If the Federal government would
take over the welfare we'd have more money or if the Federal government,
through a trust fund, like our highway trust fund, would invest in some
revolving fund into our States, we could easily increase the expenditures
for education without reducing taxes -without increasing taxes- in fact, we
could reduce it.
HARMER: Why don't you carry your logic then through its conclusion and say
have the Federal government take over your public school system?
SHAPP: Oh no. You wouldn't take over
HARMER: Well that's the logical extension of what you're advocating.
SHAPP:They're paying money into our Federal school system now, same as into
your school system.
HARMER: Yeah.
SHAPP: Why not pay more. As I say about 53% of our money to our local
schools in Pennsylvania already come from the State. There's money from
the Federal government too, but you can still have local control of schools.
The fact that the money comes from one place does not mean that the control
has to go out.
HARMER: Well Governor before we zero in on the vote to control question,
let me point out one thing to you. The premise of the issue that you
are advocating here is that the expenditure for everybody will be raised
to the highest level in the State and you say that's great. But to be
consistent Governor, you can't raise it that high and then unplug the property
tax that's now being paid. If we're going to go ahead with your analysis
tonight, we've got to say that one-billion two-hundred million dollars more
of taxes will be imposed on the people of Pennsylvania. Now the question
is, you're advocating that that's an investment that will be returned to
us. You nearly doubled, in fact you more than doubled, your investment in
education during the decade of the 60's.' You began with $380.00 and now
you're up to $900.00 per ada, per each child, in other words. Did you double
Governor in that decade the quality of the education your students were
getting?
SHAPP: We doubled the quality in some of the schools, but the premise of
my proposition is simply that we must have equal education for our students
and we don't have that today. And what is happening is we're getting an
ever wider gap between the people who unfortunately live in the well-to-do
areas and can afford to educate their children better and we're finding today
in our ghetto schools and other schools. And unless we have a system of
uc
tion where all of our children can have the same opportunities, then we're
going to have an America that's going to be entirely different than it is
today.
PUBLIC SCHOOL FUNDS/10
HARMER: Then doesn't that bring us to what is really the motivation behind
this Governor. That what we're trying to do is meddle in the local school
districts. We've already tried to do this
SHAPP: We have to help the local school districts finance their educational
system so that they can have a better educational system for the children
in those schools
HARMER: And this is the way to do it by taking that decision away from the
local property taxpayers?
SHAPP: You're not taking any decision. Now you keep coming back to that
but the local decision could be made better based strictly on the educational
value of a program instead of our school boards as they are now spending
90% of their time on how to finance the schools -the construction, whose
schools- or how to finance the teacher
HARMER: May I comment to you Governor that the construction of a new
school is a very elementary -a very elemental and vital part of a decision
on terms of how the learning process
SHAPP: I know.
DUKAKIS: Gentlemen, I know I'm going to have to interrupt. Governor Shapp
is great to have you on THE ADVOCATES Thank you very much.
SHAPP: Thank you very much. (applause)
DUKAKIS: Mr. Miller.
MILLER: There's no takeover here. There's simply another jurisdiction doing
the taxing and equalizing it and the local board is still making all the
decision$, As we heard from 1960 to 1970 Pennsylvania doubled its cost in
education." In fact, it will spend an additional one-billion two-hundred
million dollars in the next five years no matter what it does because of
increased costs. The question is, will it distribute it equally or it will
maintain the current injustices that are harming us all. We say it should be
spent equally.
DUKAKIS: Thank you Mr. Miller we'll be back to you later for your rebuttal
case. Now Mr. Harmer tell us why States shouldn't raise all public school
funds and distribute them equally?
HARMER: There are at least three reasons why the centralist concept of
funding cannot be accepted. First, the plan is impossibly costly. In 1960
we spent $16,000,000,000.00 a year on public education. By 1970 we had
increased that outlay to more than twice as much, $43,000,000,000.00 a year.
Do you really think that you have a school system over twice as good as
it was ten years earlier? Now you are asked to again nearly double that
investment. Not only will the plan not help the poor school, it will pull
PUBLIC SCHOOL FUNDS/11
the good school down. Good schools will suffer as mandated equality will
really produce nothing more than mandated mediocrities. Finally, the plan
will end your local control that you now have over your school, what
happens in them and who will run them. In fact it happens today. Consider
the following example.
(film)
NARRATOR: Last spring the students in Prince George's County Maryland
asked that soft drinks be made available for lunch. Because the schools
receive Federal money under the national school lunch program, Miss Flora
Shoyer, Supervisor of Cafeterias, was concerned about violating a Federal
law. She consulted Thomas Glenn, Assistant Superintendent for Supporting
Services, who tossed the ball to Superintendent Dr. Carl Hassel, who pushed
the matter up to the Maryland Department of Education in Baltimore. For
a ruling they turned to the United States Department of Agricultures
Northeast Regional Office in New York. Before Franklin Kent issued a
directive, the following other parties had become involved: Herb Rorex
of the Departments Child Nutrition Program in Washington; Dr. Arnold Schaffer
of the Pan-American Health Organization and Maryland Senators Charles Mathias
and Glenn Beall. The Department of Agriculture ruled that the sale of soft
drinks during a lunch hour is a violation of the National School Lunch Act.
The students are now petitioning Congressman Larry Hogan for a change in the
regulations permitting them to drink Coke at lunch.
(end of film)
HARMER: If the sales of Cokes in schools can't be a local matter, what can
be? I know Governor Ronald Reagan shares my concern with the loss of local
economy and he's joining us tonight from Sacramento. (applause)
2-29-72
11 should st
DUKAKIS: Welcome to THE ADVOCATES Governor Reagan.
Paise all public
School Funds
REAGAN: Thank you.
Distribute them It
Equally
HARMER: Governor was this example of the cokes too extreme?
REAGAN: I don't think it was too extreme at all.
HARMER: Governor, what would happen in California if We adopted this plan
of centralizing the funding for schools?
REAGAN: Well I think in the first place it would be destructive to our
State's economy. It would require additional billions of dollars, and
California is already one of the highest tax paying States in the Union.
HARMER: From your experience Governor will this massive increase in spending
really provide a better education for the students?
PUBLIC SCHOOL FUNDS/12
REAGAN: Well simply spending more money doesn't improve the quality of
education or the performance of the schools. As a matter of fact one of
the most thorough studies that's ever been made of public education was
made by Dr. Coleman of John Hopkins a few years ago and he discovered,
strangely enough, there is absolutely no relationship between the cost of
education and the quality of education. A number of other things were
exposed that have long been firmly held beliefs about education in that
study. Most of the increase in spending goes to increasing teachers
salaries. This I am sure would give teacher's associations more Ieverage
in working on a centralized agency to further increase those salaries
and I just have to say that if you have a mediocre teacher raising that
teacher's salary doesn't automatically make them a good teacher.
HARMER: Governor has it bee your experience in California that simply
increasing the amount of money spent on education brings about a better
educated student?
REAGAN: No, as a matter of fact we've had a pretty good experience.
In the last five years State aid to public schools in California has
increased to where it's more than a half a billion dollars a year greater
than it was five years.ago. Now this is four times the amount of increase
as the increase in student enrollment and yet there has been no comparable
increase, or any at all, in the quality of education. I think that all you
do is create a bigger State bureaucracy to supervise the spending of the
money and greater local bureaucracies to make sure they were in conformity
with State laws and regulations and I think also when you take the spending
of the money farther away from the people who are paying for it, they're
not going to watch it as closely and you're going to have a very expensive
school system:
HARMER: Governor do you see any other dangers in this system, besides the
ones you've raised, if we should centralize financing of education?
REAGAN: Oh yes, there's a great danger of a loss of freedom that we have
now. Equality of expenditures doesn't end at the State level. If you're
going to equalize all the schools and spending within the State the next
logical step is you're going to equalize them between States and it doesn't
cost as much in some areas, even within a State or within other States, as
it does in others to provide the same quality of education and you're going
to wind up with a Federal bureaucracy and then you're going to add those
State and local bureaucracies that I mentioned before. Its happened in
welfare and in a number of other programs. Welfare is suppose to be locally
run and yet the control of the purse strings in Washington has imposed
literally thousands of regulations on the local control of welfare and made
it virtually impossible.
HARMER: Thank you Governor. That limits my time. I really appreciate
your presence.
PUBLIC SCHOOL FUNDS/13
DUKAKIS: Governor Reagan we have another Californian here who wants to
ask you some tough questions. Mr. Miller.
REAGAN: Alright.
MILLER: Governor, this all began in our State of California with Tony Serrano,
a young student in East Los Angeles. Let me ask you what you're answer
would be to ten year old Tony Serrano or to another student in the public
schools of Los Angeles as he says to you "Governor, why is it that in my
school there's only $600.00 per pupil spent and in the school down the
street there's $2,400.00 spent?"
REAGAN: Well when you use that disparity, you are referring to one particular
district, the $2,400.00 district. One particular district, and incidently
it doesn't happen to be made up of wealthy families. It happens to be a
small district with only a few hundred pupils, but in the vicinity of a great
industrial enterprise and it is the tax on that industrial enterprise property
that is paying for that $2,400.00.
MILLER: But what is your answer to Tony Serrano?
REAGAN: My answer to Tony Serrano is, and we've been trying to meet this and
solve it in California. Right now with our distribution of State aid we
scale it depending on the local tax burden to increase the State aid to those
who have less tax base than the others and we should do better.
MILLER: Then you do think that money makes a difference? More money will
improve the quality of education. That's why you distribute it on that basis.
REAGAN: Only to the extent that, of course, there is a need for certain
fundamentals, but there is a vast difference between setting a floor beneath
which no district can fall, a floor that would provide for a minimum basic
education, that would be adequate for everyone and still permitting local
school districts, if they want to tax themselves, to add luxuries in the
swimming pools that one of the other witnesses mentioned and a few things
like that and which I don't think are particularly educational, but nice
to have. If they want to do that, that should be their right. I object
to a ceiling beyond which no one can go.
MILLER: Well, why not raise the base to what the high now is. You think the
relevance of money. Where would you, for example, rather send your children
to school, Beverly Hills or Watts?
REAGAN: Well I don't send them to either (Laughter). They're in school in
Sacramento.
MILLER: But where would you send them if you lived in Los Angeles.
REAGAN: Well again I think that you're trying to draw a case that just
does not hold up. That this money alone makes the difference in education.
We have a school district in California that only has about 37 pupils, but
it has a utility line running through it and they 've build a townhall,
olympic size swimming pool and I am quite sure that they're not coming out
better educated than the students in either of the schools that you've
mentioned.
PUBLIC SCHOOL FUNDS/14
MILLER: Are-you telling us you really wouldn't care where they went to
school in Beverly Ilills or South Central Los Angeles?
REAGAN: I think any parent cares where they go to school, but I would make
the judgment, here in California, on the basis of what I know about some
schools that are doing a better job than others in educating their students
and it has nothing to do with the amount of money spent.
MILLER: Let me ask you about the question of local control. When President
Nixon, in his State of the Union message, indicated he was devising a new
Federal tax, value-added or other, he said that with that Federal tax whatever
he does will be routed in one fundamental principle, that local school
boards must have control over local schools. Do you disagree with the
President that one level of government can raise the money while it allows
local control in the local school board?
REAGAN: No, and you have hit exactly what is my philosophy and why I am
opposed to the kind of centralized raising up and putting a ceiling on.
It's very naive for some of your witnesses, they don't know the legislative
mind, if Mr. Harmer will forgive me, if they think that the purse strings
will not have some controls go along with them. On the other hand, it is
possible to use another echelon of government as a fund raising entity
and that level of government will return the money to a lower level of
government for its use. Now the sales
MILLER: Isn't that exactly what we're proposing?
REAGAN: No, it is not what you're proposing here. You are proposing a
centralizing of this. I am talking about a system such as in California
where the State, for convenience, collects all of the sales tax and then
gives a portion of it back to local government with no restriction on
how local government uses it.
MILLER: Well all that our proposal calls for based on the Maryland and other
proposals, is that the State collect the tax and dispurse back to the local
school board without restrictions on its use. There's no violation of local
control under that system, is there?
REAGAN: Well, but there is. In California just because the State supplies
some of the money, a great deal of that money goes to the local schools
earmarked exactly as to how it must be spent. I say that the State has no
other purpose -should help in equalizing and making sure that there is no
school district that falls below the basic educational level. But at the
same time I think that the State should give that money back simply for
education and it should be up to the local school district to decide whether
it goes to elcmentary, high school or how they use it or what they do with
it in their curriculum.
PUBLIC SCHOOL FUNDS/15
MILLER: Tell me Governor what are you going to do in California? You're
under a court order now to equalize expenditures and you and the legislature
are wrestling with this problem. Are you in fact going to equalize
expenditures between school districts as the court requires?
REAGAN: We have been seeking and so far have not been able to find a plan
-we've been doing this for three years- to find a plan that we can get total
legislative support that would equalize, as I have said before, a basic
level across the State but still permitting local schools to do above that
whatever they would like to do. Now we're not
MILLER: The court order that
REAGAN: We're not under a court order. The State Supreme Court gave an
opinion of a case that hadn't even gone to trial and simply by giving
this opinion allowed the case to go on in court. So the case is just now
being tested in court.
MILLER: Well the court decided, and other courts have, that the quality of
expenditure is a test for equal protection, did it not? That there must be
equality of expenditure?
REAGAN: Well again I come back to this, that We did not for an additional
half a billion dollars in State aid, we got no improvement in educational
quality in California.
MILLER: Well, no improvement. That's fascinating. Why no improvement?
Why do you think you pour money into the schools and it shows what you say
is no improvement?
DUKAKIS: Governor Reagan I have to break in at this point to say that the lot
of any Governor isn't a happy one these days and we hope you solve this vexing
problem at some point. Thanks very much for being with us on THE ADVOCATES.
REAGAN: You bet.
MILLER: Thank you very much Governor. (applause)
DUKAKIS: Mr. Harmer.
HARMER: I call as my next witness Professor Lewis Solmon (applause)
DUKAKIS: Welcome to THE ADVOCATES Professor Solmon.
HARMER: Professor Solmon is Professor of Economics at the City University of
New York and has written extensively on the economics of education. Professor
Solmon how much will this plan cost?
PUBLIC SCHOOL FUNDS/16
SOLMON: An enormous amount. We predict anywhere up to twenty billion dollars
a year and in order to bring, for example, all of the districts in Massachusetts
up to the level of Brookline, it would cost the typical family an average of
$432.00 a year in new taxes. Similar problem in Illinois would bring an
increase in income tax, or in any kind of tax, of $418.00 per family, and in
California $570.00.
HARMER: Do you think this increase in cost is worth it?
SOLMON: I think not. I think that we're going to end up with a little bit
of improvement in the worse schools but we can do that much more cheaply
without this plan. We've seen, as you pointed out, an increase in expenditures
in this country in the last eleven years from sixteen to forty-three billion
dollars, with only 19% increase in enrollment and I don't observe any improve-
ment in school quality.
HARMER: Is the system we now have capable of accepting this massive input
of money?
SOLMON: No, it will end up primarily in increased teacher's salaries without
very much improvement in the quality of teaching given their very strong
unions, their tremendous tradition of seniority and the general reluctance
of teachers to accept methods of improving productivity.
HARMER: You saw at the beginning of this program a comparison of two high
schools. Would this plan give the poorer students at Summerville an education
equal to the rich students at Brookline?
SOLMON: No. The tremendous increase in expenditures will once again move
towards producing equal facilities in the two different kinds of school
districts. Although this wouldn't be complete simply because it probably
would cost much more to attract a qualified teacher to an unpleasant ghetto
kind of area as opposed to a pleasant suburb. On the other hand the Coleman
report, which has also been- cited earlier, tends to imply that even if we
do achieve equal facilities we're not going to get equal educational
opportunities.
DUKAKIS: Professor Solmon can you tell us what the Coleman report is or was.
Very briefly.
SOLMON: Yeah. It's the report that Governor Reagan referred to. It's the
largest study of -a most comprehensive study- of the quality of educational
opportunities that's been done in the United States
DUKAKIS: Tell me in twenty seconds what it concludes, so that people can
understand.
SOLMON: It generally concludes that simply increasing educational facilities
improving teacher quality, expenditures, etc. does not lead to increasing
attainment in terms of scholastic appitude tests, etc.
PUBLIC SCHOOL FUNDS/17
DUKAKIS: Mr.- Miller it's your turn to ask a question. Sorry Mr. Harmer.
HARMER: Thank you.
MILLER: Dr. Solmon is there justification for the way we raise money for
schools now? Should we continue the local property tax base?
SOLMON: I really think that we have to increase expenditures on education,
I'm not arguing that we don't need expenditures. What I'm arguing is that
if indeed the family background and aid ability of various students are
different we simply will not achieve equality by equal standards.
MILLER: Well let's see because we're not just talking about starting high
school, we're talking throughout kindergarten and other. Tell me do you
think Governor Reagan implied
that he was against putting
a ceiling because he thought that school districts ought to be able to spend
more if they wish. Do you think wealthier school districts wish to spend
more, that investment will pay off in an educational return?
SOLMON: Certainly, well yes.
MILLER: I don't understand if it pays off for the wealthy school districts,
why won't it help the poor if you put them in there?
SOLMON: Expenditures indeed have returns. Okay.
MILLER: Of course expenditures have returns. This is the common Senae kind
of thing that we all know.
SOLMON: The question is are we advocating equal expenditures in each
district, indeed some of the expenditures advocated by the poorer district,
or required by the poorer district, whether it be for extensive vocational
programs, black studies programs, bussing within particular kinds of
communities, might indeed be very very expensive. What I'm against is
the formula which results in simply equal expenditures for each district
MILLER: Are you in favor of equalizing the expenditures as much as possible?
Do you think we ought to distribute the State and Federal money
SOLMON: I think that I'm in favor of spending what is necessary. I don't
know if that implies equalizing or ending up more diverse than we are now.
MILLER: I'm fascinated by the citation of the Coleman report by both you
and the Governor because of course, when the Coleman report is cited to promot
further integration or bussing, it's always pooh poohed as an inadequate
base. Then when it's used to propose further expenditure in the school then
we hear that Dr. Coleman was right all along and really what we need is
more integration, so I'm confused about what I should think about it,
PUBLIC SCHOOL FUNDS/18
Tell me about this twenty billion dollar expenditure? Over the next five
years we're going to spend an extra twenty billion dollars on our schools,
however we distribute it, aren't we?
SOLMON: Right.
MILLER: Okay. So we can talk about whether we ought to distribute it,
what we call equally, or whether we ought to allow it to be distributed in
the way it's now being distributed. What
SOLMON: I'm not -excuse me- really thinking of those two as the alternativeS.
I'm thinking of perhaps a formula based on need, based on equalizing the
ability to learn rather than the ability to spend, and I'm not arguing
simply that we should spend equal amounts or continue the same way that we
are now.
MILLER: Do you think we ought to continue the same way, that is we simply
decide on the basis of the wealth of the school district! Should we do that?
Continue the same way!
SOLMON: No.
MILLER: We clearly need a change from that.
SOLMON: Alright.
MILLER: It's a question of the change to what. And who is it that's going
to decide what the need is? I want to get to one of the Governor's favorite
boogie men.
SOLMON: It would seem to me that the people in the area, indeed the people
in the area where this living is going to take place. Indeed I've observed
that some of the greatest advocates of the local control are in very poor
areas.
MILLER: How do they get the money? I mean a poor area can only raise so
much from its own resources. Someone outside the area has got to raise the
money.
SOLMON: Right and I'm certainly not advocating only getting what you can get
on the property tax.
MILLER: Okay. Now why if you start with two groups, let's take a group of
Mexican-Americans in East Los Angeles. I take that because Anthony Serrano,
who started the whole thing, was in that school, and a group of white middle-
class youths in another
DUKAKIS: I'm going to have to cut in on you. We're just not going to get
that question
PUBLIC SCHOOL FUNDS/19
MILLER: We're not going to get the question?
DUKAKIS: We're not even going to get an answer.
MILLER: Okay.
DUKAKIS: Thank you very much Professor Solmon for being with us. (applause)
Mr. Harmer another witness.
HARMER: Equal money does not produce equal education and the only State in
this country that has a centralized form of financing is Hawaii and I call
as my next witness State Senator Eureka Forbes of Hawaii. (applause)
DUKAKIS: Welcome to THE ADVOCATES Senator Forbes.
FORBES: Thank you very much. It's very nice to be here.
HARMER: Senator Forbes with equal pupil expenditure in Hawaii are all your
schools equal?
FORBES: No they are not because money doesn't make the quality. A lot
depends on the quality of the neighborhood, on the background of the parents,
on the ability of the child and most of all I think on the teacher.
HARMER: Let's get to Mr. Miller's boogie man. Can a local community asses
itself to enrich its program?
FORBES: Under our system ---
HARMER: Under the centralized system?
FORBES: Under our centralized system we cannot. We tried at one time some
of the parents in one of the areas wanted to have some French classes in the
school and they were willing to assess themselves for it and they found that
they could not do this. Now under this centralized system we have not been
able to have the other programs, and we have under our centralized system;
we have no school board other than our one school board, we have elected,
rather advisory counsel appointed by the Governor.
HARMER: Senator Forbes we have time for one quick question. Where do people
in Hawaii go when they want special programs for their children?
FORBES: Many of them go to private schools. We have our language schools
and the children go after school to the language schools when the parents
want them to have that particular language and culture. Many
HARMER: Who sends the children to the private schools?
PUBLIC SCHOOL FUNDS/20
FORBES: I was just going to mention that. Many of our principals send
their children to private schools and our school board members, the chair-
man of our school board, has never had any children in the public schools.
DUKAKIS: And right now let's turn to Mr. Miller.
MILLER: In fact Senator Forbes the percentage of children in Hawaii going
to private schools has dropped steadily. In 1950 it was 19% of the total,
in 1959 - 17% and in 1971 - 15%. So even Hawaiians by percentage are sending
their own children to private schools less, recently.
FORBES: Well, however, at Punaho, the enrollment continues to go up and
the demand for space in Iolani continues to go up. The same is true of
our better schools. The Catholic schools have gone down.
DUKAKIS: Senator Forbes are those educational institutions?
FORBES: Yes they are.
DUKAKIS: Private schools?
FORBES: Private schools. Punaho is the oldest school West of - next to
the oldest school - West of the Rockies. Our oldest one is Maui.
MILLER: But you know Senator Forbes the percentage of students at Hawaii
in private schools, 15%, is substantially less than the percentage of
students in private schools in Massachusetts or New York or many other
States. Do you think that's because the other States have such a terrible
system of local property taxation?
FORBES: No I don't. I think it's probably because many of us have advocated
public schools and tried to urge our children to go, but we still have many
people who are sending their children, as I say many of our principals
are sending their children to private schools.
MILLER: Let's get to our disagreement. Do you propose that Hawaii go, I
shouldn't say back because it never had it, but go to a system of local
property taxation as opposed to a uniform tax?
FORBES: I'm not talking about going back to any property tax, the property
tax is spent by the counties. It is the only tax that they have, so that
our whole system is entirely different and I don't think it can be compared
to a system here.
MILLER: But one of your problems, is it not, is that you don't have any
local school boards and that's really the problem with the French, tit? If there
were a local school board and that local school board had decisions over the
equal resources it could have decided how to use those resources.
FORBES: Not under the present
PUBLIC SCHOOL FUNDS/21
MILLER: Not at the present
FORBES: This is what I have recommended. I have a bill in that I presented
last year to the legislature that we have local education councils elected
at the district level who can decide the needs of their community and what
they feel should be in their school.
MILLER: Absolutely, and you also think that since Hawaii will maintain the
uniform tax system that to each of those local school boards an equal amount
should be distributed?
FORBES: But I think they should be able to tax themselves if they want to
within their area
MILLER: But why tax themselves if they have control?
FORBES: No, no. Because they don't have control over any more than just
a set amount of money and there is a clamp on their head.
MILLER: But the average
FORBES: Alright, just a minute. But you cannot go beyond that and this is
the thing that holds us down with some of our experimental programs and
some of the things that we want to do.
DUKAKIS: We've run out of time for questions. Thanks very much for coming
on the show to be with us. (applause) Thank you.
Mr. Harmer.
HARMER: What you've seen here is not the advocacy
by Mr. Miller of
education reform but of tax reform. What we need is less meddling by the
State with our schools, not. more of it. Good quality education is not the
equivalent of money alone. It is the equivalent of a number of other factors.
The massive increase and outlay that Mr. Miller is talking about here will
not even begin to produce the results he's promised, in fact, it will produce
an overwhelming dismay when failure is realized.
DUKAKIS: Thank you Mr. Harmer. Now let's return to Mr. Miller for his
rebuttal argument in favor of the State's raising public school funds and
distributing them equally.
MILLER: The average per capita expense in Hawaii is $964.00 per pupil above
the National average, well enough for any part of Hawaii to teach French
if it wishes to if they simply create local school boards, which, of course,
is the model in every other State. We can't be mislead by the word "centraliz
What does that mean! We're simply talking about money collected by the State
to be disbursed equally. It's fascinating that when opponents talk about
PUBLIC SCHOOL FUNDS/22
this they oppose a ceiling because more money could help a wealthy school
district, but they also don't think that more money will help a poor school
district. Well the fact of the matter is that the poor school district needs
it more and it will help. And to talk to us to that point I've asked to
join us tonight Dr. James Guthrie. (applause)
DUKAKIS: Welcome to THE ADVOCATES Dr. Guthric.
MILLER: Dr. Guthrie is Professor of Education at the University of California
at Berkeley. Dr. Guthrie will more money and equalization of expenditures
help with our educational problem?
GUTHRIE: Without any question. We live in a capitalistic society, we have
a market oriented competitive economy. For most things you get what you pay
for and education is no exception to that. The consumer knows it. With all
due respect to my Governor, Mr. Reagan, most consumers when given the choice
between a high spending district and a low spending district, if allowed the
choice. will take the high spending district. They'll take the Beverly Hills,
the Grosse Pointes, the Great Necks of this nation. The consumer knows. He
knows money makes a difference.
MILLER: Have you done studies to verify that?
GUTHRIE: Yes I certainly have. Again, with great respect for James S. Coleman,
the primary author of the Coleman report, in the six years which have intervened
between the publication of that report and today, those scholars which know
it most deeply have invalidated its results. I'm privileged to be one of
those people who, in conducting my own studies, have found that dollars do
not make a difference finding in the Coleman Report is no longer valid,
MILLER: And you've conducted studies that indicate they do?
GUTHRIE: That's correct. I have.
MILLER: Tell me about this question of local control. Can we have the State
raising money and disbursing it and maintaining local control. Don't we
do some of that today?
GUTHRIE: Certainly we can. States today -typically States give away about
half the money they themselves generate. They give it to a local government
to spend and indeed as President Nixon has proposed, if the Federal government
can raise revenues and distribute them to local governments and not impose
added layers of Federal control, if the President says that is possible,
I believe it.
MILLER: What about this question of the ultimate bureaucracy? Do you think
the bureaucratics, this monster, will grow because we're now distributing
more money through the State than they are today?
DUKAKIS: This will have to be a very short answer now.
PUBLIC SCHOOL FUNDS/23
GUTHRIE: I find it interesting that the U.S. Office of Education, which
distributes about $8,000,000,000. UU a year for education, has less personnel
in it than the New York State Education Department, which distributes about
$2,000,000,000.00 for education a year.
MILLER: You can distribute more and do it efficiently.
GUTHRIE: You can distribute more and pay for less employees.
DUKAKIS: Mr. Guthrie, Mr. Harmer has some questions for you.
HARMER: Dr. Guthrie I'm intrigued that you among other eminent scholars
discredited Coleman. Would you agree that Patrick Moynihan and Frederick
Mosteller are eminent scholars in this field?
GUTHRIE: I would disagree. Frederick Mosteller is certainly one of the worlds
great statisticians. Daniel Patrick Moynihan is by no measure a great scholar
in this field.
HARMER: I see, but James Guthrie is?
GUTHRIE: I would not place myself above or below them. I would say that the
volume they have just produced has an interesting article in it by Marshall
Smith of Harvard University, in which Mr. Smith, after having reanalyzed
Coleman data, finds that the once highly touted social class effects found
by the Coleman report, no longer hold true. That they do not predict the
high pupil achievement that was once thought.
HARMER: But as to the whole volume, the whole volume, not just an article
in it. Mr. Mosteller tells me today on the telephone that, in fact, it
does say that the Coleman report and its findings were accurate. Again
would you tell us what Coleman said, Mr. Guthrie?
GUTHRIE: The authors of the Coleman report held that there was no relationship
between the amount of dollars spent. No relationship independent of a child's
social class between the amount of dollars spent and his school performance.
HARMER: Let's talk then about your Michigan study which tells us that if we sp
more money we get a better education. Are you telling us that your Michigan
study says that equal amounts of money to a student produce an equal education?
GUTHRIE: What all my work is dedicated toward is that equal dollars per studen
will go a long way towards achieving something much closer to equality of
opportunity, than that which we have now.
HARMER: You're saying then that in fact it does produce an equal result
between students in Brookline and students in Summerville?
PUBLIC SCHOOL FUNDS/24
GUTHRIE: I'm saying that it will allow us to have a much closer approximation
than is presently the case under our discriminatory system now.
HARMER: Let's get at your boogie man, or rather Mr. Miller's boogie man, the
matter of local control. Prior to the immergence of the Serrano decision
one of the great discussions in education was the question of decentralization
and in several of our large cities there was a decentralized program for large
school district, in which the funding was kept centrally as you are proposing
here and your local board supposedly ran the district. Isn't it true that
in perhaps the most famous of these the Ocean Hill Brownsville district of the
greater New York decentralized district, Rhody McCoy, the first superin-
tendent said "We failed, because they kept the money and left us all the
other decisions and in fact wiped us out?"
GUTHRIE: That may be true that he said that.
HARMER: Did you ever go to Ocean Hill Brownsville?
GUTHRIE: Yes I have been there.
HARMER: Is it your impression that he's wrong as a superintendent?
GUTHRIE: It is my impression that on this topic it is irrelevant. No one
to my knowledge has discussed
HARMER: The control of the money is irrelevant when it keeps the manager of
the system from being able to function?
GUTHRIE: Well I know of no full State funding proposal which would lift
from local people decisions about important things like personnel and
curriculum and the goals of education.
DUKAKIS: Dr. Guthrie we've run out of time and I have to interrupt. Sorry
Mr. Harmer. Thank you very much for being with us on THE ADVOCATES.
(applause) Mr. Miller.
MILLER: Does money make a difference? Where would you rather send your
child, Brookline or Summerville, Beverly Hills or Watts? Everyone can
answer that question, of course it makes a difference. If it makes a
difference to you, it makes a difference to the entire country. What kind
of country do we have that will cost from twelve to twenty billion dollars
a year. We spend forty to sixty billion dollars on a highway program;
forty billion dollars to get to the moon. Do we have the capacity to make
other trips and to go to other moons and to understand where our priorities
are. A society rests on how it develops its children. It is everyone's
interest. No one can hide. There is no education anyone can give his
child to compensate him for living in an unliveable society and the way to
make that society liveable is to equalize the educational opportunities.
(applause)
PUBLIC SCHOOL FUNDS/25
DUKAKIS: Thank you Mr. Miller for your minute summary. Mr. Harmer you
also have one minute to summarize your case.
HARMER: Money is not the only criteria. Past experience of centralization
has shown that the inescapeable result would be the demise of the local
school board. The immergence of a new bureaucracy, which would be enabled
to vastly affect the types of decisions that would have to be made in the
educational process. You would see further than that the development of
that power group within the educational system who would themselves, such
as the teachers in Hawaii, vote to strike even though a vast number of them
did not want to strike. What you've been offered tonight is not the promise
of equal education for equal money. What you have been told is, let us revise
your tax program. Let us stop the local taxpayer from being able to have
anything to say about the running of the school and in exchange for that we 11
pour twice as much money into your school as it needs to make it run effectively
and I say we cannot afford that now or any other time. (applause)
DUKAKIS: Thank you gentlemen. Now its time for you at home to act and to
express your views on tonights question. Write us THE ADVOCATES, Box 1972,
Boston 02134. What do you think? The question on which you'll be voting,
"Should States raise all public school funds and distribute them equally?"
Send us your "yes" or "no" vote on a letter or postcard. We will tabulate
your views and make them known to the White House, the members of Congress
and to others concerned with this issue. Everyone of your votes is important,
so remember the address THE ADVOCATES, Box 1972, Boston 02134. Recently TH
ADVOCATES presented a ninety minute special from Cologne, Germany, in the
first of two special programs devoted to a review of the Global United States
Defense posture. THE ADVOCATES debated the question, "Should the United
States drastically reduce its troops in Europe?" Of the more that twenty-
six hundred viewers across the country who sent us their votes, 2,116 or
80% were in favor of the proposal and 524 or 20% were opposed. And now
let's look ahead to next week. Thanks to our advocates and our witnesses
I'm Michael Dukakis. Please join us again next week at this same time.
Thank you and good night. (applause)
NARRATOR: THE ADVOCATESas a program and takes no position on the question
debated tonight. Our job is to help you understand both sides more clearly.
This program was recorded.
3/29/72
REMARKS OF GOVERNOR RONALD REAGAN TO THE TRUNK N TUSK CLUB IN PHOENIX,
ARIZONA, ON MARCH 29, 1972.
This is an annual affair with me, and I have also been present
here at others of your Trunk in Tusk meetings. So this is a very
enjoyable occasion.
And when you were honoring that very distinguished citizen and
party member and his lovely wife up here a moment ago, I was thinking
of what an age of cynicism it is.
The other day, I heard someone say that if you see a man assisting
a woman into as car, he has either acquired one or the other or both
recently. And I don't think that that's true at all.
You know, I'm sure you people realize the governor you have. I
know when I first met him at the first governor's conference that I
ever attended, there was one thing in my mind that I'm sure was on his.
We both discovered that we had inherited a sort of feud that raged
across the river that separated our two states. And I found great
agreement on the part of your governor in the decision to settle this
on the basis not of who was right, but what was right. And I think we
made great progress in doing that.
Now I have another thing. I'm over here in Arizona to see if I
could contract out with Arizona for senatorial representation in
Washington.
We've got two. One of them always votes wrong, and the other one
would vote wrong except ho's usually skiing in Switzerland with Toddy
Kennedy.
But absenteeism on the part of Democratic senators is commonplace
these days. The only way they can get a caucus among the Democrats i.
in Chicago whom the candidates are in between planos.
You know, it seems sometimes that if God had intended them to
fly so much he would have made them mayor of Los Angeles.
They've got a new system -- the Democrats -- now for picking
delegates to the convention. They're going to have twice as many as
we have. It's the only way they could outnumber the candidates.
Did you over stop to think of that traditionally little green man
from Mars should ever land in a flying saucer and approach a Democrat
and say, "Take me to your leader"? They'd both get pretty confused.
But of all the campaign gismos around now, the newest thing of
course the last few years has been watches.
Senator Muskie has ono. You wind it up and it doesn't tell you
the time. It just plays "The Little White Cloud that Cried."
And then McGovern has one. You wind it up and Teddy Konnedy starts
running.
Teddy has one. It isn't numbered 1 to 12. It says, "I'd rather
:76, or even :80, or maybe they'll forget by '84."
And of course Hubert Humphrey has one. You wind thouHubert Humphrey
watch and you never have to wind it again.
Of course, if any one of them gets elected there will have to be
a taxpayers watch. It won't tell time either. It will just wring its
hands.
And John Lindsay -- he doesn't need a watch. He's not going
anyplace.
Ho was visiting in California recently. We wanted to make him
at homo. We didn't collect the garbago for a couple of weeks.
2
As Republicans, aren't you proud of the way we stood up under
the blow of his leaving us? When he was in California, ho said he had
the second toughest job in the nation. And I think that's true, the way
he does it.
The last five years, he's doubled the city's budget. He added
as many employees as we have running the entiro government running the
State of California. In fact, the budget for the City of New York is
now $2 billion bigger than the California stato budget.
Now he did that while he was a Republican. What do you think is
going to happen now that ho is a Democrat?
I know that you all have been reading a lot about our own
convention since Jack Anderson volunteered to advance it. San Diego --
beautiful city -- you're going to love it. It's just a stone's throw
from the Western White House, and we're hoping the President doesn't
figure that out.
Well, seriously, we are in one of those raro moments in history
when our deeds and our actions in the months shead will set the pattern
for our children and their children, and for mankind for perhaps
generations to come. The peace and security of the world depend on our
fiscal economic stability and our willingness to remain strong at
whatover the cost.
Our opponents, almost to a man, are reciting the same litany.
We must change the direction in which this nation is moving. Somehow
this has a hauntingly familiar ring. We heard it first 12 years ago from
mon -- indeed, some of the same mon who are talking today.
3
They wore the men who were describing the Eisenhower years --
the years of poace and economic stability --- as a period of stagnation.
Woll, call it what they will. It was a time when even the most
reckless foreign adventurer talked very softly, because he knew the
will and the strength of this country were sufficient to protect the
citizens and the security and peace of the world.
Now these ambitious men on that day 12 years ago sought the
presidency. They were urging change. They wore playing on fears.
We heard the phrase for the first time in that campaign of missile gap.
of course, there was no such thing.
Earlier in the term, John Fitzgerald Kennody -- he was able to face
Nikita Khrushchov at a time of crisis, bolstered in the knowledge that
he had inherited from Dwight David Eisonhowor a 5-to-1 nuclear
superiority.
Richard Nixon's inheritance eight years later was not so substantial
During the eight years of Kennedy and Johnson, the missile gap became
a tragic reality. We live now with the knowledge that the day is not
too distant when a Soviet ultimatum could find us with no other choice
but surrender or die.
The President tries to restore our strength, and is thwarted by
those who would call for peace at any price. They call for unilateral
disarmament. They say it's time for a chango. Are they saying there
has been no change in these throe years? Or is it the chango that we've
noticed that they object to?
4
They would have us return to the old -- not move on to something
now. Return to Camelot and the Great Society, whose hallmark was
burning cities and organized rebellion in the academy. When inflation,
doliberatoly encouragod, eroded the value of our savings, our pensions,
and our Social Security. To that time of the bullion social consciousnes.
when it WCS fashionable to defend the criminal against society, instead
of the other way around; to denounce the American people -- a great and
compassionato people -- as racist and selfish, sick with greed.
You wonder if they believe honestly that our momories are so short
that we've forgotten that only three years ago we were looking forward
with dread to the long, hot summers. But only three years ago, 542,000
young Americans were fighting in Vietnam, and 500 of them were dying each
week.
Today less than 100,000 remain, and the death toll is only two a
week -- not 500. The draft calls are down from 300,000 a year to 50,000.
And we are well on our way to that volunteer army that Barry Goldwater
first called for in 1964.
Apparently none of that is good enough for these men who would be
president. They're so positive in their assurances that they alono have
the answers. But we should be cautious, because they were equally 28
positive when it was a Democratic war, and they expressed somewhat
different views.
You wonder, is Hubert Humphrey right now, or was ho right when he
said, "The minute we back away from our commitment, the commitment we've
made to the defense of freedom where Communict powers are guilty of
aggression, on that day the freedom and honor of the United States will
23
be eroded.
5
Senator Muskie said, "I believe the credibility of our word
and our purpose are at stake. South Vietnam's loss would be an enorm.
setback for the forces of freedom." of course, when he said that he
was only running for vice president.
Even super-dove McGovern said, "Wo should be prepared to wage a
prolonged conflict rather than surrender the area to the Communists."
And more recently, since the war did become Richard Nixon's problem,
the Democratic national chairman said, "We will hold Richard Nixon
responsible if he turns South Vietnam over to the Communists.'
Well, he's not turning South Vietnam over to the Communists. And in
recent weeks he has offered the most unique and generous plan for peace
in the history of international relations. It was immediately rejected
by the Washington Post and Senator Muskio. The enemy didn't get around
to turning it down for another two weeks.
Senator Muskie has a twompoint plan of his own: Bug out now, and
lot the last man to leave shoot President Thiou. I think really ho's
been playing Lincoln so long in this campaign that he wants us to surrend.
at Appomattox.
Perhaps somo of our liberal editorial writers are so mistrusting of
their own government that it is difficult to appreciate just how generous
the President's proposal really was. What if we reversed it? Has anyone
thought about this peace proposal that he has made -- how enormous it was
in its generosity?
6
What if his offer had carried a Moscow dateline instead of
Washington? Suppose it had been Moscow that proposed an immodiato
consefire, an end to the killing; that the men of all armics would
Scturn to their homes; all prisoners on both sidos would be freed;
there'd be no bitterness -- no victory, no vanquished -- no vongeance,
no reparations; the military unelected by any one dictatorship of North
Vietnam would offer to resign and submit to an internationally-supervised
election, with even the erstwhile enemy allowed to participate in the
voting.
And Russia generously would offer to rebuild all the war-torn
countries of Southeast Asia, enemy and ally aliko.
And what if such an effort had come from Moscow, and Washington
and Saigon had rejected it? How many professors would lead how many
students in a march on Washington?
But these men who would be president continue to insist that the
prisoners of war will be returned only if we will accept the enemy
terms. What if they're wrong? As one of them said he would do in such
an event, perhaps as cundidates they can afford to take chances with
other men's lives. But the President can't. He's the commander-in-chief
of these men, and he is the only man in the presidential sweepstskes
today who has said, "We will not abandon our young men to the enemy."
I think it's time that all of us made it plain to the President,
to the world, and to the enemy especially, that so long as they hold
even one young American captivo, 200 million of us pledge we will do
whatever has to be done to get him back.
7
Three years ago, we placed a new captain at the helm of the Ship
of State. It was war-battered, it was dangerously adrift in uncharted
waters. Now some are complaining because he didn't give us an instant
moonlight cruise. But the ship has headway, and slowly it's making its
way out of the shoals.
This President is trying to renew the spirit of our people, to
restore our sense of purpose and our pride in America. The highest
court in our land no longer indulges in social experiments in rewriting
the law. It interprets the Constitution. Colleges are once again
institutions of learning.
I found that out very personally just a few weeks ago in
at
California. It was a story that broke to the effect that/one of our
largest California state universities the students were so jammed at the
library in such a lack of facilities and books, and so forth that the
stood in line and couldn't complete their studies at all. And of course,
there having been a certain difficulty between the university and me
budget-wise, the inference was that this was caused by my budgetary
policies.
Now I knew better, because I have a warm spot in my heart for
college libraries. I figure that's where you learn what keeps you in
school, and it's also where you meet what makes kids' staying in school
pleasant. And I hadn't cut the budget for the library, so I demanded
publicly to know what had happened that had victimized these young
people.
8
And somewhat sheepishly, the chancellor of the university admitted
that there had been no change in the budget, there was no reduction
of the facilities for the library, there was no increase in the number
of the students. It's just that today the students had increased their
use of the library 27 per cent over what they were using it when they
were so busy picketing and demonstrating.
This President has called for an end to contralizing authority in
Washington -- a reduction of the federal bureaucracy that threatens to
make all of us tenant farmers on a federal plantation.
He has asked for a sharing of revenues and responsibilities with
state and local governments. And in the face of a hostile Congress tendin
toward peace at any price and unilateral disarmament, he has called for
a rebuilding of our defenses.
He inherited a near runaway inflation, the result of the guns-and-
butter policy of his predecessor. He knew that curbing inflation would
an
meet with/unpopularcooling of the economy, just as he knew that winding
down the war would add unemployment to the dislocation of the economy.
But he took on both tasks, accepting the shrill cries from those
who would blame him both for the high prices and the unemployment. Two
million defense workers, a quarter of a million Department of Defense
employees, and one million uniformed personnel have been thrown onto the
job market.
Now no one doubts or makes light of the seriousness of the problem
of unemployment. It is serious. Why, unemployment today has reached a
rate that is almost as high in this time of emergency as it was in the
entire three years of the Kennedy administration.
9
Of course, it is not usually presented that way. In fact, it
took a little digging to find that out. Because in those three years
of Camelot, no one ever suggested that there was a problem, and no one
in the frequent press conferences ever asked the President even once if
be intended to do anything about unemployment.
This points out what I think should be the great issue of the
coming campaign. The great mythology that has been built up about
polities in America, aided and abetted by large segments of the media
this country has been led a long way down a dangerous road.
Our sons and daughters are coming into their heritage of citizenship
a little early, and they, too, have been victimized by this myth. In
spite of and possibly because of a thousand different social science
courses, a great many of them lack a historical perspective in a politica
sense.
We're told they are registering 3-to-1 with our opponents, but t
to
possibly even a greater number are not registering at all because they
think it is useless. There's no difference between the two parties.
Government - the system, as they call it -- has become too big and
impersonal. It's beyond their ability to influence.
These young people are idealistic. They sincerely desire to take
a part doing and solving the problems of human misery that concern all
of us. They mustn't become captives to some demagogue who may appear on
the scene riding a white horse.
10
I think our task is to explode and expose that political myth.
We can begin with the fact that there is great fundamental and
philosophical difference between the two partios. We can begin by
telling our young people that what they find wrong is not of our
doing, because for virtually the last four decades - for 40 years --
the leadership of the Democratic Party has determined national policy.
And that leadership, in doing that, has tended to drift farther
and farther away from the beliefs and the desires of its own rank-and-
file party members.
It's true that in these 40 years, Republicans have occupied the
White House for 11. But only in one two-year term did a Republican
president have a Republican Congress. And, incidentally, that two-year
Republican term was the only time in the ontire 40 years that the dollar
retained its value and didn't lose a single penny in purchasing power.
Thirty-eight of the 40 years, our opponents have been in charge.
At the beginning of these 40 years, the federal government had one
employee for every 203 citizens. When Richard Nixon took office, there
its
was one for every 67. The dollar had lost 61 cents of/purchasing power.
And what a record they piled up in those 38 out of 40 years. They SE
out to help keep the family farmer as an American institution, for
example. And after 20 years and billions of dollars, there were only
half as many family farmers left. But in the Department of Agriculture,
there was one employee for every 22 farms.
They were going to help the wheat famrer. And they ended up
cutting the price of wheat in half and doubling the price of bread.
11
They started out to build in the urban areas 26 million low-cost
housing units, and managed to leave us with 200,000 less than we had
when they started.
Everytime they failed, they didn't cancel the failure. They
added more money and more failures on top of the others. They don't
solve problems, they subsidize them.
Our good American citizens of Indian heritage know something about
being helped by government. There's a story they tell in Washington
that illustrates what bureaucracy has done for the Indians. It has to
do with the Bureuu of Indian Affairs - one of those large acres and
acres of office space, with those rows and rows of desks and thousands of
people. And one day one employee in the corner of the room was sobbing
as if his heart would break. They finally persuaded him to tell them
was wrong. He said, "My Indian died. 17
This political myth has been told and retold so many times that even
some of us begin to accept it as truth: That the Republicans are the
establishment of business, finance, and wealth; that we subscribe to a
trickle-down theory of the rewards for the "haves" at the expense of the
"have-nots".
We don't bother to explain that if that's true, though, how come on
Wall Street that the Wall Street bankers, Democrats outnumber us 58-to-42
Or that in the 40 years there have been six presidents, and two of them
Republican started in poverty and in humble beginnings, and even those
successful in life, neither one of them accumulated wealth.
But out of the four Democratic presidents, three of them were
millionaires.
12
According to the myth, the Democratic Party is a party of peace.
The party is better able to cope with economic problems and to provide
jobs for working men and women.
Well, there have been four wars in my lifetime - all of them have
been fought under Democratic presidents. Now I don't charge that the
Democratic presidents caused those wars, but I wish that their
presidential hopefuls would stop charging Richard Nixon with being
responsible for this one.
And the party of the working man and prosperity in jobs. The only
full employment that we have known in these 40 years has been as the
result of one of those wars. Through most of the two terms of Franklin
Delano Roosevelt, in spite of the most Herculean efforts of social
engineering, unemployment remained at a full 25 per cent of the nation's
work force.
It began to go down when we became the arsenal for democracy with the
allies in Europe. FDR ran for a third term, happily stating and taking
credit, I'm sure, for the fact that the 25 per cent unemployment rate
had declined by that time to 14.6.
We had full employment only when we entered World War II. We know
it again during the Korean war, and we knew it when they revved up the
war in Vietnam. And we knew it until Richard Nixon began winding down
that war as Dwight David Eisenhower had ended the war in Korea.
But let's take note of the fact that even while he is windind down
8 war, he is slowly lowering the rate of unemployment. It isn't going
the other way.
13
According 00 the myrahy our opponents 620 DIRE champions of the
disadyantaged
in
OUR
minority communities.
But
which
party
was
it
not the Republican that based its political fortunes for more than
S half of this Sentury on a one-party rule in large sogment of this
hatton, where they shut their eyes to the fact that the constitutional
guaranteed of freedom to a large segment of our American citizens were
completely deniod?
And it was a Republican president who said those constitutional
rights will be provided and guaranteed at the point of bayonet if
necessary. And he provided the bayonets when it became necessary.
Today, after three years of this administration, there are six time
83 many Negro children attending integrated schools in the South, and
10 times as much money has been loaned by the Small Business Administrat
in the minority community than in all the eight years of Camelot and
the Great Society.
Lastly, the myth would have us believe that the Democratic Party is
the party of compassion. Well it's a rather selective compassion.
It is true they have sentenced a segment of our society to a
permanent life on the dole, even under the third and fourth generations
in Somo communities. Their compassion does not extend to the hardworki
tampaying citizen who labors five months out of the year to pay for the
Sost of government.
Our opponents have a gift for demogoguery. And they're practicing
it right now. They would have us believe that government can be practic
free for everyone, except a mysterious "they" that they have discovered.
This is a "they" they claim is not paying its fair share of the taxes.
14
"Loophole" is the magic word. And with it go the terms "oil depletion"
and "capital gains".
But they have more in mind than that. These two items would only
produce about $1.5 billion in added federal revenue, if they eliminated
them. They have in mind at least another $100 billion for all the free
goodies they intend to buy us with our own money. And that's by their
count, not ours.
The young senator from Massachusetts: He has in mind bridging the
gap -- if you'll forgive the expression -- to complete socialized
medicine with $77 billion worth of something he calls Teddycare.
There's no secret where the revenues will come from. They're
already on record in their own councils. When they say "loophole", they
go beyond those two items I mentioned. They mean your right to deduct
the interest on your mortgage, the taxes on your home, state and local
taxes, your medical expenses, your charitable contributions, when you're
computing your income tax.
These are the things they consider loopholes. And these items will
bring in, according to their estimates, another $18 billion they say the
federal government is letting get away from it.
From there, they will go to payroll taxes they've announced over
and above the income tax, increases in Social Security taxes, and eliminate
local and state governments' right to sell tax-free bonds -- which means
the federal government would take over all state and local capital
expenditures, including our schools.
15
Now I didn't invent this for campaign purposes. These are not
Republican charges against the opposition. These are their own words
and their own statements - their own desire to have, as they say, by the
year after next a $350 billion budget in this country.
Twelve years ago at a Republican convention, Senator Barry Goldwater
said, "Conservatives, grow up!" Well, I'd like to add, "Republicans,
wake up!"
Tired of contributing to the party? I don't think anyone can
blame you. It seems as if it's never-ending in this effort that we're
making to fight our way back.
But I have a memo that perhaps will impress you as how necessary
it is that we keep on doing this. Everyone has secret papers these days,
so I have mine. I refuse to give the source.
I have the budget of the Committee on Political Education of the
AFL-CIO for the coming campaign year. They have put it all together in
a memorandum -- their spending plans for Democratic candidates.
It's all line-itemed -- from voter registration drives and what
it will cost to get out the vote, 700 phone banks operating across this
country, door-to-door canvassing.
One line in the line-item will make you laugh: It reads, "Salaries
for volunteers."
There are figures for polling research, for full-time COPE employees
paid from union general funds -- without the consent of the rank-and-
file union members, I might add -- babysitters, drivers and transportatio
on election day, and direct cash contributions.
16
And the total: $72,425,110. And more then half of that will
not have to be reported as campaign contributions. It will be accepted
as the legitimate function of the Committee on Political Education.
This is the contribution of the hierarchy of Organized Labor -- the
labor lords - removed by too many years and tens of thousands of dollars
of salary from having any understanding of the real hopes and dreams of
the men and women they're supposed to represent.
They scramble and squirm trying to avoid offending one voter bloc
while appealing to another. They divide our citizenry into age groups,
ethnic groups, classes, and sections as they busily pursue combinations
of the young, and the black, and the poor, and so forth.
Well, there's a voting bloc waiting for us -- a voting bloc that
has been ignored by our opponents. But when we go after that voting bloc,
there must be no uncertain note to our trumpet.
In trying to curb inflation, and at the same time restore full
employment without a war, the President in his administration has resorted
to some things that are not commonly associated with Republican philosophy
There have been a number of Republicans -- perhaps some of you ----
disturbed at a Republican administration employing deficit spending, wage
and price controls, in this time of economic dislocation.
And some Republicans have said, "Is there any difference, aren't we
doing the very things for which we've criticized the opposition?"
Well, it so happens that, prior to last August, when he instituted
those controls, inflation had been reduced, but only to 4.6 per cent
from the 7 per cent level. And the American people still had the psychosi
the psychology of depression.
17
Since August, following five months since the institution of the
controls, the inflation rate dropped to 2.2 per cent.
But even if you still disagree, and say that you yourselves would
not have chosen those particular methods or tactics in fighting the
economicbbattle, we still as Republicans can recognize that deficit
spending and controls have been applied as temporary, bitter medicine
to a sick economy. And this differs drastically from the Democratic
policy of permanent controls, of a managed economy, and deficit spending
as an ongoing thing in good times and bad.
I have heard the men who are entrusted with the controls say that
OVON and over again the President tells them, "You must not institutionali
these controls; they must remain temporary and jerry-built."
And over and over again, the President has said, "As soon as the
economy shows the restoration that we need, there will be no deficit
spending. "
But he's walked a thin line between trying to cure the economic
ills without sliding over that thin line into the danger of a full-scale
depression.
Some Republicans reacted with fear when the President announced his
visit to Peking. Some said that if a Democratic president was going there
we as Republicans would be totally united in our opposition to such a
visit.
Well, you bet your life we'd be united in opposition if a Democratic
president was going ta Peking. And we'd have good reason to be in
opposition.
18
We have seen an American president bring us back the bitter fruit
of appeasement from Yalta and Potsdam. We have seen defeats snatched
from the jaws of victory in Korea.
We have seen an American president walk all the way to the
barricade in the Cuban missile crisis, and lack the will to take the
final step to make it successful. We have seen our nation disgraced
at the Bay of Pigs.
And we as Americans are not accustemed to seeing our young mon
asked to give their lives for a cause that is not worth winning, and
that they're not allowed to win.
But this president went to Peking -- a Republican president who
was fully aware of the nature of the enemy, who has no illusion about
the great ideological gulf separating us. He didn't go to negotiate
away anyone's freedom, nor did he go to forsake old friends and allies.
He wanted to open communications -- simply to take a step, if
possible, to remove us at least a little way from the possibility of a
nuclear confrontation.
The trip is over. And, despite the efforts of many in the press
to distort the outcome of that trip, I know, because I asked him what
would happen if the Red Chinese should attempt to take Taiwan by force.
And the President said to mo, "This country will protect and defend
Taiwan."
I know that many of us are uncomfortablo. But if we demand 100 por
cent adherence to what we think we would do if we were president, we
ignoro the fact that unless we are president and have access to all the
facts that he has, we don't know whether our decision would be any
different than his.
19
So let's stop giving him and let's stop giving each other
political saliva tests to determine whose Republicanism is better
than whose.
Let us address ourselves to that long noglected, that unrepresented
votor bloc. It's a voter bloc that's out there for everyone to see.
It crosses all ethnic lines. It knows no sectional boundaries.
It's made up of young people, of old people, of black people, of
white people, and of all the ages and shades in between. It is tho
most discriminated against bloc of voters in America today.
It's made up of farmers, it's made up of city folks. It's made
up of professional people and workers.
It's made up of people whose sons accept their country's call, if
and when it comes, not with any particular joy, but because they've
are
been raised to know that there/obligations that go with citizenship.
It's made up of people who get up and go to work in the morning.
They hope to give their children a better start than they had.
Most of them can be found in the church or synagogue come the
Sabbath.
They contribute to the United Fund, to the community chest, to
the March of Dimes, and all the other good causes that persist despite
the government's attempt to make charity a dirty word.
They're made up of Democrats, independents, and Republicans.
They're the very soul of America. They ask nothing of freedom but
freedom itself.
And that's our voting bloc.
20
That's the voting bloc that our opponents wouldn't even know
how to approach. Let us try to be deserving of them.
We have such a task in one of the most dangerous moments in
history. A journalist the other day in California probably described
it best of all: To all of those who think it is so easy to say "If
I were president
2" what they would do, be said, suppose you were.
He said, you had as a goal the ending of the war. You had several
other goals -- the restoring of the economy, building back of our
world trade, all these things.
Then, he said, you would be taken down into the bowels of the
Pentagon, and there men who had spent their lives studying things of
this kind would make you privy to all the possibilities and all the
ramifications of every decision. The possibility of World War III.
The possibility of losing our prisoners of war.
And this kind of briefing would be given to you on logistics and
supplies, our shortcomings, the possibility of enemy retaliation. And
you would be briefed on all the other major items, whether they had to
do with international relations, or whether they had to do with our own
economy and our own economic situation.
And then, he said, how smart would you feel?
And you think of a picture that appeared recently in the paper of
one man, squatting down on a beach in Florida with his arm around a dog,
looking out over the ocean, the problems -- all the problems of the world
on his shoulders.
The loneliest man in the world.
I think our task is cut out for us, and I think we know what we
have to do in the coming campaign.
21
Let's stand together. Let's grow up. Lot's wise up.
And then let's re-elect our President and this administration,
and carry on through the years -- the years it's going to take to
push back all that has been done to us in these last four decades, and
to restore freedom to this country.
22
5/1/72
Remarks of Gov. Ronald Reagan of California
Second General Session
60th Annual Meeting
Chamber of Commerce of the United States
International Ballroom, Washington Hilton Hotel
Monday, May 1, 1972
Thank you very much. I'm greatly honored Mr. Chairman at this invi-
tation. I am delighted to be here.
I hope that my appearance will prove the falsehood of the charge that
I have no compassion for the underprivileged. I always enjoy coming to Washington.
It's the only capital that's worse off than my own.
Ever since I've been here, though, I've been told how much the people
miss the Senators. I don't know whether they're talking about the baseball
team or the candidates for President.
You know in recent years there has been a new style in political cam-
paigning. All of the candidates have watches with their likenesses on them and
some have watches with their names. I've been listening to some of them talk,
and I think if any one of a number of them should get elected, the taxpayers
should have a watch. It wouldn't tell time; it would just ring its hands.
It seems as if the art of politics is to make people like you -- no
matter what it cost them.
But it is also an art of communication and communication of course,
I've also found, is more than just talking to someone -- it's being very sure
that you understand that what you heard in the first place is what they really
meant. I had that illustrated the other day. I'm not being sacrilegious
because the illustration came to me by way of a priest who told me a story
illustrating this point.
He said there was a man who lived in a little village near Jerusalem.
His name was Joseph. Joseph was married; his wife's name was Mary. And they
had a little boy. Joseph was a carpenter. And one day working in his shop,
his little boy came in and said: "Did you call me father?" And his father
said, "No, I just hit my thumb with the hammer."
As I understand, the theme of your meeting is, The Relationship of
Government and Business.
It's high time that such a seminar was held. For too long business,
outside of campaign contributions and some lobbying has held itself aloof
from politics. "Don't get too involved in truly partisan stands" -- that has
been the watchword.
Unfortunately, politics has not held itself aloof from business.
Now some of you are under the impression that because of the office
I hold, I appear here as an advocate of government. I suggest that you hold
your fire.
In some dim beginning, man created the institution of government as
a convenience for himself. And ever since that time, government has been
doing its best to become an inconvenience.
Government bureaus and agencies take on a life and a purpose of their
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- 2 -
own. They reproduce like amoebas. A government agency, is probably the nearest
thing to eternal life that you'll ever see on this earth.
But I wonder if it happens because so many of us -- all of us probably --
read and hear, end just repeat what we think is a truism -- that when a public
problem develops, government is forced to step in. That is utter nonsense.
Government can hardly wait to step in. As a matter of fact, government
is in the position of the fellow who will make a speech at the drop of a hat.
Dr. Parkinson often put it, when he said that government hires a man to
be a ratcatcher and before you know it, the fellow has become a rodent control
officer and has no intention of getting rid of the rat. They become his con-
stiuency.
May I usggest that in your deliberations here, you take time to consider
government itself as an institution; your relationship to it, and your role
in the great philosophical confrontation that is dividing the world today. But
paying particular attention to the domestic counterpart of that philosophical
division that is dividing this nation.
We've talked of a free world in contrast to the Communist bloc for
so long that many of us no longer give thought to the meaning of the word, or
how vast is the difference.
And we tend to forget at our peril, that the advocates of what Adlai
Stevenson called the idiocy of Karl Marx, have a missionary zeal to bless the
world with their ideology whether the world wants it or not. The funny thing
is it should be easier than it actually seems to be to dismiss their evangelical
claims.
Sometimes when I see our young people marching and holding up the clenched
fist, I know that what they 're really asking for is freedom, more freedom.
I sometimes would like to ask them if they've ever heard the names of Karel
Modjulski and Yatchik Hurok.
These were two students of their own age in the University of Warsaw.
They led a demonstration. It was nothing but a committee they put together
to go and talk about some grievances to the administration. They laid in jail
for ten and a half months before they were brought to trial and then were
sentenced to three years of hard labor in prison.
With all their talk of Utopia, if we really wanted to expend the effort,
we could match Lue achievements of the Soviet Union.
It would take some doing. We'd have to move 60% of our people back
to the farm; tear down 60% of our homes; scrap three quarters of our automobiles;
tear up 70% of our highways and two-thirds of our railroad tracks; disconnect
90% of our telephones and then all we'd have to do to really match them would
be to give up our freedom of choice as to the occupation we'd follow and where
we'd live, surrender our right to travel, to read what we want to read, to speak
and to worship. If we were able to do all of that, then, together with the
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Soviet Union, we would have succeeded in setting man and the dignity of the
man back a thousand years.
Now there are some in our land who would have us do that very thing.
But I think our very greatest danger of the moment comes from the
philosophical difference between two factions within our country as to just
how we make use. of government as an institution.
For the second time in this century, as you well know, free enterprise
is coming under assault. Even though it has offered a greater abundance to
a wider range of the citizenry than any other system ever before tried by man,
business is portrayed as a conspiracy against the poor, an exploiter of the
working man and the consumer.
You're blamed for many things, none of which you've done, and you're
denied credit for those things you've been doing very well.
Our own sons and daughters assail something they call "the establish-
ment." They're a little ashamed of what all of us have done and are doing.
They call for the establishment's destruction and yet they're a lit-
tle vague as to what they would install in its place. With great idealism,
they talk of a classless society in which there'd be no troubling decisions
to make because an all-wise and generous government would have planned everything.
It does a little good to remind them that a society without class
distinctions by virtue of birth or wealth can have classes determined by your
station within the political structure.
The plain truth is that government over the last four decades in the
United States has had a great chance to have its way and to exercise its will
over the free economy, and its record is far from good. It has preempted field
after field of human endeavor as logically part of its domain. It has fostered
the blind assumption that group compulsion is the only way to Utopia.
And slowly, silently, inch-by-inch the goal has become economic security,
not personal freedom. The state is portrayed as a smiling escalator perpetu-
ally going up to social justice.
Environmentalists delight in quoting Thoreau to bolster their case.
Well, I hope they won't mind if I use him for the same reason. Because
Thoreau said, "Yet this government by itself never furthered any enterprise
except when it got out of its way." The character inherent in the American
people has done all that. has been accomplished, and it would have done somewhat
more if government had not sometimes gotten in the way.
A government and business working together, each in its proper place,
makes for an irresistable force. But when government attempts to do those
things that are not its proper provinces, it does nothing as well or as eco-
nomically as the private sector.
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- 4
During most of this last half century, we've seen government attempt to
control the natural rhythm of the marketplace. A multi-billion dollar program
to save the American family farmer reduced this number by half, but it tripled
the number of employees of the Department of Agriculture and there is now one
for every 22 farms.
Then there was an attempt of equal cost to help the wheat farmer. And
they would be cutting the price of wheat in half and doubling the price of bread.
They set out to build 26 million housing units some years back and wound
up with a quarter million fewer than when they started.
In 1935 when Social Security was adopted, United States president said,
"We now see the end of public assistance in America."
In 1962 welfare was reformed, and another president said, "Perhaps it will
cost more to start with but eventually it will reduce the rolls by stressing self-
support and simplifying the administration of welfare."
In 1964, OEO, the poverty program, was adopted. It didn't cure poverty,
but it sure cured wealth. That one was signed into law and in doing so the presi-
dent -- a third president -- said, "the days of the dole in our country are numbered."
Well, over this period our population has increased 11%, but the welfare case load
has increased 130%. The cost has more than quadrupled and it continues to rise at
roughly around 27% a year. How long would you be in business if your overhead went
up 27% each year?
Forty years ago there was one federal employee for every 203 American
citizens. When the present administration took over in Washington, there was one
for every 67.
The average citizen today works almost five months a year to pay the cost
of government -- federal, state and local. In all history, no society has ever
taxed itself at this level and long survived.
We continue to approach elections adhering to the myth and labels of a
bygone era, bound sometimes by party loyalty, debating particular emotional issues
of the moment, ignoring the fact that whether we like it or not, we are choosing
inadvertently or deliberately, between two completely contrary and contrasting
philosophies.
On one hand we can succumb to the Marxian theory of inevitability: That
the world has grown so complex that only government has the answer -- or we can
heed the admonitions of that salty Englishman Lord MacCauley, who a hundred years
ago, admonished governments everywhere, "Our rulers will best promote the improve-
ment of the people by confining themselves to their own legitimate duties."
This means leaving capital to find its most lucrative course; commodities,
their fair price; industry and intelligence, their natural rewards; idleness and
folly, their natural punishment; by maintaing peace, by defending property, and
by observing strict economy in every department of the state. Let government do
this, and the people will assuredly do the rest.
- 5 -
Politics is too important to be left to politicians. You work in your
business constantly to reduce overhead or to increase production. You're seeking
to improve sometimes just the margin of profit by a fraction of a penny, or even
a fraction of a mill.
That one adverse decision by government, one slight alteration of the tax
regulations can wipe out such schemes and more. And nine times out of ten, those
alterations are made not to improve government, but to make things easier and more
convenient for the particular bureaucrat in that particular government agency.
Now, if sometimes your confidence in the free enterprise needs bolstering,
just think of the fact that you survived this long. What a tribute to the tremen-
dous virility of the free enterprise system that it has been able to survive these
decades of harrassment and nit-picking.
But let's not stretch things too far: Nothing is totally invulnerable.
At issue in the world today is the struggle for the heart and the mind of man.
Free enterprise contains the very essentials for freedom.
Do we really believe that capital is finding its most lucrative course?
Do we still believe that government is our servant having no power except that
granted by us? And if we believe those things, why has the business community
been so willing to advocate its real authority and its real powers?
Now I happen to be someone who thinks there is a connection between smoking
and cancer. I don't smoke. But I am terribly concerned when government takes it
upon itself to ban the advertising of cigarettes on television and that same gove.
ment is subsidizing the growing of tobacco.
We can afford all the government it takes to protect us from each other,
but we can't possibly afford the government it takes to protect us from ourselves.
The economist, Ludwig Von Mieses, was listening to the directors of several
major corporations argue a short time ago whether the ceiling on the corporation
tax should be 35 or 52%. And he said it was like Frenchmen during the revolution
arguing who should be first to the guillotine.
You remember some years ago -- just several years ago -- business was under
attack. This time by the Internal Revenue Service. You remember that at issue
was taking as deductible business expenses traveling expense accounts, business
gifts, gifts to employees, and so forth. It was really an issue of principles.
But suddenly business sat down with government to negotiate whether the man
on the road for the company should be allowed filet mignon or would have to settle
for the blue plate special.
They sat down to bicker about whether it was right to give $25 worth of
gifts to an employee or $35 to an employee.
Business abdicated again and lost by default.
- 6 -
Am I wrong in my supposition of what should have happened then, that
business should have said to government: "As long as we are spending the money
in the legitimate expectation and hope of making a profit, it is none of your
damn business how much we spend on our business operations."
Now I'm not suggesting that business declare war on government, I am
suggesting that we restore a little better balance in what should be a partnership.
Society can only be as great as the people are willing to make it. No government
can possibly afford the manpower to match the special genius and capacity for
solving problems as the private sector. And the private sector can share its
management skill and expertise with government -- federal, state and local. It
means lending your best manpower, not your cast offs to government.
I told this once to a group of English businessmen and I remember one
old gentleman turned to another one and he said, "You know he's right." He said,
"When government asks us for someone," he says, "Dash it all;" he says, "We tell
'em, here's the chance to get rid of old Cruckshaw."
A government by second rate men will be second rate government and second
rate government can be pretty expensive.
Five and a half years ago, I became a part of government. A funny thing
happened to me on the way to Death Valley.
You've been told that California is the most popular state in the Union.
A fourth of all the foreign-born in America live in California. Our groupings --
racially, ethnically and by religion -- and by economic status and division
between service industries and production industries and farming, and so forth,
make us actually a microcosm of the United States.
If California were a nation, it would rank seventh among the nations of
the world as an economic entity.
Five and a half years ago when I arrived on the scene, the budget for
that state was second only to the budget of the United States government. California
was spending a million dollars a day more than it was taking in. And for ten years
they had been adding 7500 new employees to state government each year.
You know, I discovered something for myself -- that confidence is something
you have before you understand the situation.
I made an appearance one day, back in those days we were worrying about long
hot summers and we were having riots on our campuses and so forth. There seemed
to be an excessive number of police around and I overheard somebody say, "Why does
he have SO much security" and there was a little kid standing there and I fell in
love with him because the little kid spoke up and said, "That's to keep him from
running away."
But I had two or maybe three things going for me. Never having held public
office for one, I didn't know all of the things you couldn't do.
Second, I had a simple faith in miracles; and three, I believe that the
peóple in California would like to help straighten out the mess.
- 7 -
One of the first things -- even before I took office, long before I took
office -- I asked the leading citizens of our state, leaders in industry and the
professions and in business to form a committee, not to screen applicants for
state jobs, but to be a recruiting force. I told them that I wanted people and
the first requirement was, that I wanted people who were not seeking a career
in government.
I wanted men that were willing to give a period of their lives -- whether
it was only a year, or two, three or four, to serve their communities and serve
in government. And one of the first orders I gave such men when they came to
work, was that their first job was to see if their department was necessary and
to get rid of it if it wasn't.
Believe it or not, in four months one young fellow walked in to my desk
-- a young junior executive -- threw the key on my desk, said, "I just performed
my last task, got my secretary another job. You don't need my department, I've
wound it down." And to this day, we've never missed it. As a matter of fact, I
haven't even found out where it was.
Employers gave up their best -- men that they had their eye on for future
leadership in the company. And they came to Sacramento and it was much with the
same attitude that a man would have in taking over a business that they had just
merged with another, or was a failing business. They came in and they were men
that looked at the problem and they asked questions -- why things were done the
way they were done.
In one department, a man took a look and learned he had four sections unde
him. The four section leaders had each been there 20 years in their positions.
He made them change jobs. They were horrified. They thought this was the end
of the world. In a matter of weeks, they were 20 years younger. They had suddenly
gotten into a place where they themselves started asking, well why do you do things
this way. Things began to hum.
One man asked the question -- now this was just a minor savings that
resulted -- but he pointed out that every year we send out notices telling people
when the renewal of their automobile licenses is due. He was aware that the
federal government was planning that move to eight cents postage. So he sent
out the notices a month early and we saved $100,000 on stamps.
Then, we gathered together in a room like this, literally, the industrial
business and professional leadership of the state of California. Now I'm sure
they must have felt we were going to ask for money. We weren't -- we were asking
for blood their blood.
They volunteered in the end. They provided about 250 experts in a number
of different lines and these experts gave us full time, free of cost to the people
of California, and went as teams into the 64 departments and agencies of the state
government. There missions were to see how private business practices could be
applied to make government more efficient and more economical.
They came back at the end of six months with more than 1800 recommendation
In the meantime the editorial comments were that once again government was making
a study which would lie gathering dust on a shelf.
8 -
Well they didn't -- today we have implemented more than 1,500 of those
recommendations.
We had and still have the help of the State Chamber of Commerce of Californi
They have been invaluable. We're working right now on a program together in the
State of California.
Now we have a turnover, of course, many of these men -- there was a season-
ing of young men -- I didn't mean for you to think that they were all young, and
we also had a seasoning of prematurely retired men who were delighted to step in
to harness and to work harder than they ever worked on their own jobs at government
We have a turnover as some of these young men get offers. They go back in the
private sector and I'm so proud to say that in many instances they go back at the
president level and even the chairman of the board. They're sought after and they
more valuable because of the experience they have had. The President, when he was
elected, took a number of them. As a matter of fact he raided us so much, that I
finally asked him if he wouldn't leave the fellows with us and just contract his
business out to us.
Today, California's budget is not second to the national budget, it is
fourth in the nation.
There's one state ahead of us and there's one city. New York City has a
budget of about 2 to 3 billion dollars, bigger than the budget for the whole State
of California. And that happened when he was a Republican. What do you think is
going to happen now that he's a Democrat?
We haven't been adding 7,500 new employees. We put a freeze on hiring
replacements five years ago for those that left government. We now have about
2,000 less than we had when we started and yet in some departments the work load
has increased 30%. In one department where it has increased 30%, they have fewer
employees but the service they perform used to take 39 days. It now only takes
ten days.
We pioneered a new approach in the care of the mentally ill. It has made us a
Mecca for people interested in that field. They come from all over the world to see
the success that has reduced the warehousing of human beings in those mental hospitals
from 26,500 five years ago to less than 9,000 right now. And we believe that we
will get down to only 3,000 -- most of whom will require permanent custodial care
in our state institution.
We have added 1,200 new highway projects to our regular construction
schedule. All of them are funded by money that formely went into administrative
overhead. We developed breakaway hardware for along our highways, signposts that
break. They reduce injuries should a driver 20 off the road and hit them.
We have a park system reservation now. Persons going on vacation can make
reservations in advance. Why should a vacationer have to take potluck if he wants
to go spend a weekend in one of our campgrounds or state parks? Now by computer
from all over the state throughout the year, a person can put in his deposit and
have guaranteed reservation of a parking space. The federal government has just
adopted this for some of the national parks this year. Incidentally, we're making
$200 a day interest on the deposits.
- 9 -
We've done all the ings you'd find common place and ordinary, but they
were strange to government. We have consolidated files, changed warehouse
procedures, centralized buying, and so forth.
But for three years we were frustrated and attempting to control the biggest
drain on our re.ources -- welfare. It was out of control in California as it is in
the nation. Once again we turned to the citizens. We had inhouse and outside help,
volunteers, young lawyers and other joined -- a task force. We had the considerable
help of the State Chamber of Commerce again. And then we went to work.
Welfare in California for years has been increasing at a rate of 40,000 new
additions to the caseload every month. We found there were people drawing a $1,000
a mong and still getting full welfare.
We found we were sending checks all over the U.S. -- and we were even
sending a check to a fellow who lived in Russia.
No one knows today -- in the nation -- how many people are actually on
welfare. There is no way to check. We found in our state they only knew how many
checks were being mailed out. We wanted to get the facts and the press helped
us out in this. Reporters went out and proved that they could get on welfare
four times the same day in the same office under four different names.
Well, we reformed it. Some of the reform required legislation. I have a
legislature that is not exactly sympathetic to any of the things that I've been
doing and they needed a little persuasion. So again we turned to the citizenry.
And before you knew it, a statewide Citizens' Committee was formed.
An organization all over the state to start building a bonfire. They
didn't exactly make the legislature see the light, they made them feel the heat.
And we got our welfare reform.
A year ago January, we started implementing and almost immediately brought
to a halt, the 40,000 a month increase and reduced it and made it instead a 20,000
a month decrease.
Someone asked us where did all the children go, were they out starving
someplace because they were no longer on the rolls. The plain truth of the
matter is we're convinced they weren't real children at all. They were paper
children. What we did was just make them start counting correctly.
We had the pleasure a few weeks ago of appearing before the U.S. Senate
Finance Committee here to discuss welfare reform and I was able to tell them that
this year, our savings amounted to $388 million due to those reforms. We're
budgeted next year for a savings of $708 million. But to those who say tha+ we
lack compassion and humanity, we were able to increase grants to the truly deserving
needy by 30%.
Our opponents charge that my administration is business-oriented. Well,
if they mean that I grant any special favors to business, that's not true. But
if they mean that they believe I am using sound business principles in governmen'
and giving the people the best product that we can give them at the lowest price,
they're exactly right.
- 10 -
We haven't been able to get far enough ahead to reduce on an ongoing basis
the tax burden of our people but we copied something else from you, from private
business, as we've made particular one-time savings. Before the legislature can
rev up and find a way to use that money, we gave it back in a bonus. We gave a
10% discount on the state income tax last year. We gave a 20% this year. So far
we have managed in one-time returns of that k'nd to return two and a quartor billion
dollars to the people of California.
Now all of this is met with tremendous resistance, particularly this giving
it back. It's been referred to by some of my opponents as spending. government
money. This is a pretty good example of the different in philosophy.
One legislator charged that my concept of government was entirely backward.
He said that I believed that government was supposed to figure out the revenues it
was receiving from the people and then fit the programs of government and their
costs within that revenue. And he said that is backward. He said government's
duty is to figure out what it wants to do for the people and then tell the people
how much it's going to cost them. That is the basis of the philosophical difference
in our land today.
You know, on one side in this confrontation is the decentralization of
government. A reduction of government size and power. But with no retreat from
government's responsibility to do those necessary things that the people cannot
do for themselves.
On the other side is a determined drive out in the open today -- if you
really listen and read what they're saying -- to have a redistribution of the
earnings of our people, and it's called a guaranteed income. And a total social-
izing of all health care service in spite of the fact that the practice of medicine
within the framework of the free enterprise system has reached the highest level
of quality and distribution here than it has in any country in the world.
Today a young Senator from Massachusetts is proposing more than a hundred
billion dollars a year worth of cradle-to-grave medicare.
Tax reform is talked by one side, yes, as a desirable goal, if we could
simplify and make it more equitable for everyone, without increasing government's
share of the people earnings. That would be a good tax reform. But they talk
about closing "loopholes" to catch some mysterious "they" who is charged with
avoiding a fair share of the tax burden.
Their tax reform is designed solely to increase government revenue because
the advocates of this reform believe that government involvement in our lives
should be vastly increased.
What do they call loopholes? They turn out to be the very provisions
without which the whole 'tax system would have long since proved unworkable.
Interest on the workingman's mortgage on his home, they say, is a loophole that
should be closed and no longer allowed as a deduction. He should have to pay an
income tax on his property tax and other state and local taxes. Medical expenses
should no longer be allowed. And charitable contributions should at least have a
ceiling on them of a few hundred dollars beyond which there would be no tax deduction.
- 11 -
Then, of course, comes that thing that would mark the end of local and
state government and make us all little brothers to big brother in Washington.
Do away with state and municipal interest-free bonds or tax-free bonds.
One economy proposal these last of the big spenders do support -- they're
determined to unilaterally disarm the United States and to work for reductions
that range from 15, according to their present declarations, to $33 billion in
the defense budget. It matters not to them that we have never before been in the
dangerous spot we are in today, where we're so close to the point when a Soviet
ultimatum would find us with no other choice but surrender, or die.
The hierarchy of organized labor, without consulting with the working men
and women it represents, has already made plain that labor will financially
underwrite by more $70 million and possibly as much as $100 million, candidates
adhering to the views that I have just expressed from that side of the philosophy.
It's about time that when we talk labor, we put a division in there
a dash between them, and make it plain that we're not talking about the men and
women, the rank and file membership of the union, we're talking about a hierarchy
that is many thousands of dollars in salary and many years away from even under-
standing the hopes and aspirations of the men and women they represent.
It perhaps gets me dangerously partisan, but with all the talk of what
might be an issue in a campaign, what really is an issue is this philosophical
difference. The preeminence of the individual, the free marketplace, the right
to own -- all of these things are on the block right now.
So, what do we do? Does the doctor fight alone against socialization of
his profession, or do we recognize that you can't socialize a doctor, without
socializing the patient? Unless government is peopled with those who believe
in freedom in the marketplace, we run the risk of being governed by those who
would substitute coercion for persuasion. If we sit back passively, fearful of
incurring government's displeasure in case we should back the wrong horse, then
we're just feeding the crocodile, hoping he'll eat us last -- but eat us he will.
To participate effectively, business must expose the false image building that's
gone on over these last few decades.
Too many of our young people who pride themselves on telling it like it is
are being told in too many social science courses the way it is not. The polls
reveal a widespread belief that business enjoys profits of 21% or more. You know
-- but few others do -- that it goes on year after drudgery year, bouncing around
between 4 and 5½. In the last 20 years, the profits for business in America have
increased 105%, but the salaries paid to employees of those firms have increased
232%, and government spending has gone up 340%.
The demagogue appeals to the cupidity that is inherent in all of human
nature. He says: "Relieve the individual of his burdens! If business is getting
away without paying its fair share, isn't it time for some of us to reveal to them
that business doesn't pay taxes."
- 12 -
Business collects them. Only people pay taxes. A hundred taxes are in the
price of an egg, and if you want toast with it, there are 151 in a loaf of bread;
116 in a suit of clothes, but if business is forced to collect too much tax, it
prices itself out of the market and becomes non-competitive, particularly on the
world scene.
At the same time, why shouldn't we begin talking about the billions of
dollars that business is spending voluntarily on environmental protection. The
billions of dollars to underwrite educational institutions and student aid programs.
And incidentally, the fact that in a single lifetime, under our free enterprise
system, we have reached a standard of living reserved only for the aristocracy
of most countries.
Eighty percent of our families have automobiles, 99% have the basic appli-
ances of refrigerators and radios and kitchen ranges, gas or electric and so forth;
95% have televisions.
Some, of course, would say, ah ha, he's now talking about that materialism
that we're so against.
Well, maybe so, but that materialism, has also cured the diseases that when
you and I were young, plagued mankind, crippled and killed mankind, and had done
so for centuries. And today, our young people don't even know their names.
That same materialism has made the United States support more symphony
orchestras, more home town opera companies, more little theatres, published more
books than any other country in the world. As a matter of fact, more than most
of the world put together.
Seven out of 10 of the prescriptions in the drug store today were not even
known 20 years ago.
Poverty in most of the world is a lack of food and shelter and clothing.
For the most past, poverty in America is a comparative thing based on not having
what is considered the average standard of living.
One half of all the economic activity in the entire history of many has
taken place under American auspices in the short life of this nation.
It isn't enough that I tell this story. I think that it is time that
business starts telling its story with all the voice at its command. You may
think that perhaps you have been because it appears in some pamphlets, or in some
of your trade journals.
But how often do you turn on the television set and if there is an occasional
story about business or businessmen play a part in the story, they usually are
portrayed as being greedy, as polluting the atmosphere, polluting the water, or
they're guilty of some kind of selfish chicanery. They're not exactly the hero.
And yet business is paying the bill. I remember in eight years of General
Electric Theatre, I knew what General Electric's views were, knew what mine were,
and yet somehow between the planning and the delivery, we just never could seem to
get a story on the air that would make the businessman a hero or that would make
a communist a villain.
- 13 -
We have to work and we better start with our own sons and daughters. This
is the most dynamic, humane and forward looking society in the world, and we do
care about the oppressed, the disadvantaged and the minorities.
Freedom and individual dignity are as important to us as the technology
that made them possible. Whatever the doomsday myth makers say, this is still
the brightest hope for men who seek a brighter tomorrow.
There is much to love in this country -- much that's worth preserving --
and too few voices are speaking in its behalf. We better change that or just
as sure as God is in his heaven, there will be a book written one day that will
be entitled -- The Rise and Fall of the United States of America.
Thank you.
6/13/73
Excerpts of Remarks by Governor Ronald Reagan
John F. Kennedy High School Graduation
Wednesday, June 13, 1973
Fremont, California
-1-
Since I left college, the world has undergone many changes, and
contrary to the pessimists, most for the better.
For example: there was a time when a speaker on this occasion
would tell the graduates, "on this day you know more than you knew
before
or will ever know again,'
Another standard was: "when I was 14, I thought my father didn't
know anything. By the time I reached 21, I was amazed at how much the
old gentleman had learned in 7 years.
I won't even say "a college is called a storehouse of knowledge
because the freshmen bring so much in and the seniors take so little
away. " But this is a day for mixed emotions, for looking back with
nostalgia and lookingahead, seeking a clue to the future.
You who are graduating have taken almost your entire lives. to
achieve this moment and from your perspective, the journey may seem
to have been a very long one. But to some of us here, it seems your
journey started only yesterday. Yes, it is a day for mixed emotions.
Some in this audience can still feel the clutch of your hand when
you took the first step on the education path that led to this day.
It is also an appropriate time to take inventory not only of
yourselves, but of your inheritance, the world and the social structure
you will be taking over in such a very short time.
Some of the rest of us are taking inventory, too
wondering if
've been able to give you the foundation, the sense of perspective,
the values which will enable you to develop your own potential to its
fullest, to shape your own ideas and ideals in a world where so many
others will try to hand you a tailor-made philosophy, a world where
the values you learned here are being challenged or ignored.
I am not going to give you any pearls of wisdom or even recall
for you those balmy days when I was in your shoes. As Bob Hope says,
things were easier in college then it was still legal to pray the
day before finals
You know things are different for you and for your generation.
It's a new world and for you, the future starts now.
But I would like to leave you with a few thoughts as you start
your own journey to whatever destiny holds for you. Some things don't
change.
Never let anyone tell. you the day of opportunity is over, that
you cannot aspire to whatever goal you set for yourself.
It's true, you may never use all the knowledge you gained here
in your daily lives. And that isn't really important. What is importa
is that you never forget or abandon the ideals and the values which
were imparted to you here.
You will find. that the most valuable thing you have acquired in
school is not the knowledge of some particular subject matter. The
most valuable thing you've gained in these years is the ability to thi
for yourself, to make up your own mind, to sift the myths from the
reality, the truth from the untruths. Unfortunately in recent years
there has been too many campuses where students have been taught what
to think, not how to think.
Never be afraid to try, to seek, to explore the outer limits of
your own ability. Even if you fail, you will gain in the attempt.
Keats called failure the highway to success. And so it is. "Every
discovery of what is false leads us to seek earnestly after what is
true."
Oh, I know you have some complaints. The world you will inherit
is less than perfect. Poverty hasn't been eliminated. Prejudice and
injustice still exist. We are thankful the war in Vietnam has ended
or at least has been interrupted. But war still exists. We haven't
found the answer to what has been called man's greatest stupidity.
3
And you look accusingly at those of us on the shady side of 30.
We haven't erased all the problems of human misery but I'll make no
apology for my generation.
Because no generation in all man's history ever fought harder
or paid a higher price for freedom. No generation has done more to
advance the dignity of man.
A few years ago in a meeting with some student leaders from the
University of California the generation gap was wide open. I've told
this story before but then (life begins at 40)
(Story student leaders "We invented")
But right now let me say--we need you--need you very much. It's
been popular in some quarters to try to discredit America, to twist
history and truth, to portray this country as a villain. And those who
do this defame the most compassionate and humane society the world
has ever known. We done more to heal the sick and uplift the
downtrodden than any other society in history. (In my life time.)
Some things about my present job are nicer than others, for
example I get to speak with many students, young people from all walks
of life. It's an experience I recommend for my contemporaries who
are discouraged about the so-called generation gap.
Contrary to the stereotype of the protesting student, the great
majority of you are fair-minded, inquisitive, with serious questions
about your own future, your role in society and how you can best serve
yourselves and your fellowmen.
You want change and there's nothing wrong with that. Each gener-
ation challenges the past and thinks the preceding generation failed
miscrably. So it was with us and so it will be when your children rea
this day, but do not cast aside all the hard won truths of the pas
4
only because they are old. The most lasting values, the eternal
verities are those things which make and are civilization are the
things for which men have always been willing to die.
During the height of the draft protests, the unrest about Vietnam,
a man I know got into an argument with a friend who although he was
himself a veteran--seriously questioned whether his 21-year-old son
should accept his call to military service.
He thought his son was too young, that he lacked the maturity to
even understand the issues involved.
"How old were you when you landed on Iwo Jima?" he was asked.
The man looked startled for an instant and replied: "I was 19 years
old. "
The point this incident illustrates is one that is as old as
man. It is a natural and human characteristic of a man to want things
to be better for his sons and daughters, to try to make their path a
little smoother, to spare them the struggles the older generation faced
I wish I could stand here and tell you--as you go forth with
diploma in hand that you have a passport to Utopia. I'm sure your
professors and your parents wish--with all their hearts that they coul
tell you there will never be another war, that all wrongs have been
righted, that injustice can never happen. We would like to be able to
tell you that you may look forward to a lifetime of prosperity and
happiness, with no more struggles, no time of crisis, no heart break
or disappointment.
We cannot make such a promise. Although you are the heirs to
the noblest experiment in freedom ever devised by the mind of man, we
cannot even assure you that you may not someday be called upon to
protect this freedom--not just once, but again and again if necessary.
Because it is so precious, freedom never comes cheap.
And the price you may be called on to pay to protect it may b^
as dear to you as it was to other generations who have, proceeded you.
To preserve that freedom, you must not only be willing to serve
your country in times of external crisis. You must also be constantly
vigilant to protect it from internal decay.
You must take an interest in and be part of every decision in
government, in every level of public life.
For 500 years, the city, State of Athens was the center of the
civilized world. The seeds of its destruction and downfall were plante
when its citizens began losing their sense of values.
The historian Gibbon wrote:
"In the end, more than they wanted freedom, they wanted security.
They wanted a comfortable life and they lost it all security, comfort
and freedom. When the Athenians finally wanted not to give to soci -Y,
but for society to give to them, when the freedom they wished for most
was freedom from responsibility, then Athens ceased to be free and neve
was free again.
Although we are the oldest continuing Republic in the world,
liberty as we know it in America is a relatively new concept for man.
Someone once said the best way to measure just how new is to think
of man's history as a time span on a giant clock.
Start at midnight, the first traces of civilization emerge from th
murk of savagery.
At dawn a Roman Republic appears and Pericles presides over an
enlightened Athens. But within the hour, the Greeks are slaves and
an emporor appears in Rome claiming he is God. By a combination
6
of military force, public bribery through bread and circuses, and
superstition he implants an imperial standard.
At eight this morning Christ was born, taught the dignity of man,
and was crucified.
As the morning went on Anglo-Saxon institutions slowly took form
in the common law.
At twenty minutes after 10, King John signed the Magna Carta.
By half past eleven, the United States, "conceived in liberty,"
appears.
In the minutes following, great nations try republican government
and fall before dictators.
We approach High Noon.
Where shall we be at five minutes after Twelve?
You and your generation will help supply the answer to that.
Parents and professors have helped guide your way this far. What
happens as that clock ticks off the afternoon and evening is up to you
If you cherish the values you have learned here, if you keep faith with
yourself and that which you know to be true, you can help make the
future a better time, not only for youselves, but for those who will
follow you.
On the tiny deck of the "Arbella" in 1630 off the shore of
Massachusetts, John Winthrop gathered a small band of pilgrims together.
He said: "We shall be as a city upon a hill. The eyes of all people
are upon us, so that if we shall, deal falsely with our God in this
work we have undertaken and so cause him to withdraw his present help
from us, we shall be made a story and byword throughout the World. "
You too have been preparing and in today's world the eyes of all
people are on you. You can carry on the building of a shining city
on a hill and preserve a golden hope for all mankind.
7/25/13
OFFICE OF GOVERNOR RONALD REAGAN
RELEASE: Immediate
Sacramento, California 95814
Ed Gray, Press Secretary
916-445-4571
8-9-73
REMARKS BY GOVERNOR RONALD REAGAN
ILLINOIS STATE SENATE FUNDRAISER
CHICAGO, ILLINOIS
July 25, 1973
Governor Dick Ogilvie, Governor Stratton, Attorney General Scott,
our dinner chairman Jim Bere, party officials, reverend clergy and our
honored guests here tonight, the Illinois State Senators, and you ladies
and gentlemen:
Somebody said "Why did you come 2,000 miles for an occasion of this
kind?" You would be surprised how far I will go to meet with a
Republican legislature.
You know, it is a wonderful thing about public life, there is a
great rivalry and it is a competitive thing and even within a party when
you have a meeting of the Republicans in the other house here, you find
that there is a rivalry between even the two houses. Maybe that is part
of the whole American system that works. I know we had one of our
legislators out there in the house. One night his wife awoke him she
whispered in his ear "there's a burglar in the house" and he says "No,
in the Senate maybe but not in the House."
This is a proud moment for me, to be invited to participate in this
event here in my native state. And if I let myself start to reminisce,
here so close to my birthplace, this would be a very long evening indeed.
But I do say to you that adding to this pleasure, a great deal to this
pleasure, is to be introduced by a man that I came to know and respect in
our meetings together in the governors' conferences throughout the country
Dick Ogilvie. I came to think of him as a greatly appreciated friend
and I never saw him in all those meetings ever falter in his duty and his
service to the people of Illinois.
Now, of course, in my saying that I am glad to be here I realize that
people in public life today are suspects, and everyone-- no matter what
you say they say "Well he's saying that because he's a politician."
it is a little like the fellow who was running for office and went out in
a little town andwent to the courthouse where he sat down on a bench
beside another fellow and told him he was there to solicit his vote for
public office.
- 1 -
Chicago Fundraiser
The fellow said "what are you going to do about the geese?" And
he looked and there the courthouse lawn was covered with geese. "Well,"
he said "I think you're right, isn't that interesting, I think they
ought to be protected." The fellow said "you just lost my vote, they're
a mess, look what they do to the lawn, they chase the kids, they peck
at your legs. The fellow moved down to another bench and made the same
pitch to the old fellow who was sitting there the same question, the
fellow said "what are you going to do about the geese?" "Well,' he said
"I think they 're a mess, look what they doing out there chasing the
kids, they ought to be destroyed." The fellow said "you just lost my vote
I raise geese, they're a part of the economy of this town." Well he got
to the third bench and sure enough he got the same question and this time
he had learned his lesson, he put his arm around the fellow's shoulders
and said "brother, on that question, I'm with you."
You know, it is a homecoming for me and I could be very nostalgic.
Of course when I lived here before I was a Democrat and my whole family
were Democrats. As a matter of fact, I had an uncle who lived here in
Chicago who won a medal once for never having missed voting in an election
for 15 years he had been dead for fourteen.
But there have been a lot of changes now, they do not close the
saloons on election day. Too many of the candidates are getting locked
in: Do you remember back in those days when you thought that nothing
could replace the dollar? Today it practically has!
I have learned a lot though, much of it in this present job. I have
learned that all the recipes for success have the same ingredients as a
recipe for a nervous breakdown it is the amount of each and the way you
mix them that makes the difference. I remember one day, and maybe I have
told you this before in some of my visits here, but you will just have to
understand that life not only begins at forty but so does arthritis,
lumbago, and the tendency to tell the same story two or three times.
When I was first governor I was on my way to the office and it seemed lil
every day the day would start and there were more problems being uncover'
and then I fell in love with a disc jockey. I do not know who he was
I heardhim on the radio and out of the clear blue sky he said "Everybody
should take unto himself a wife, because sooner or later something is
bound to happen you can't blame on the governor."
I have learned that one of the most important rules in politics is
poise which means looking like an owl after you have behaved like a
jackass.
Chicago Fundraiser
But the time has come I would like to communicate and I would like
to communicate a little bit with you communicate directly. That is a
little bit like the chicken that decided to lay an egg on the freeway
and said T11 lay it on the line but I better be quick."
Communicating, of course only that there are many ways of doing it
and it is one of the big problems of this day
communicating
with
each
other. And we seem to have so much difficulty in getting together in
groups.
Danny Villanueva who used to play for the Rams and then the Dallas
Cowboys told me a little story about communcating. He was over having
dinner one night with a young friend of his who played for the Dodgers.
And this young fellow and his wife had a new baby and while she was
bustling around getting dinner, the baby started to cry and on her way
through the room she said to her husband "change the baby. " He said
"change the baby 'm a ballplayer, that's not my line of work.' " And
she turned around, put her hands on her hips and she communicated: She
said "look buster, you fold the diaper like a diamond with the baby's
bottom on the pitcher's mound, hook up first and third, slide home plate
underneath, and if it starts to rain the game ain't called, you start
all over again."
But I had better get down to the business of communicating and what
it is I have to say to you in this gathering.
These are trying times, no question about that. We had to hold
special elections five times in California in the last few months to fill
vacancies in our California legislature. In three of those five district
the Democratic registration was around 70 percent, it was 3 to 2 in the
others. I just thought that you might like to know, we won all five.
I would suggest that the televised last rites of the Republican Party are
a little premature.
Now, nationally on the basis of registration ours is a minority
party. On the basis of philosophy, philosophical attunement that what
the bulk of the people of this country hunger for, we are the majority
party.
Coming through all the confusion of this day, one thing is
unmistakebly clear: Americans have had their night on the town of social
tinkering and social experimentation. They are now suffering the morning
after, and they are hungry for some good old ham and eggs of fiscal
common sense.
3 -
Chicago Fundraiser
They know that for someone to get something he has not earned,
someone else has to earn something he does not get. They no longer
belive they can remain safer on the streets and in their homes by giving
lawbreakers longer suspended sentences. I think they are even fed up
with movies that embarrass them in front of their children. And they
do not really believe that the government can spend our money more
intelligently than we can spend it ourselves. But the leadership of the
Democratic party is so deeply entrenched in the bankrupt policies of the
thirties that they have not yet discovered how far out of tune they are
with the millions of rank and file Democrat Party members.
At the National Governors' Conference last May, the Democratic
governors, ignoring the traditional rule against partisan political
activities, introduceda package of resolutions. The "whereas" were all
alike cries of doom. "Whereas the nation is undergoing the worst
economic crisis of the generation " "Whereas inflation " "Whereas
economic distress of the people " and of course "all of these things
just came into being under a Republican administration, we have never
had them before. And then came the "Be it resolveds. And without
exception, every "whereas" could be resolved by spending more money.
Creating new programs to restore both the health and vigor of the
country
restore the cuts in federal spending
forget all of the
things that they proposed were the same costly failures that we have had
around for too long a time. Their resolutions were, in fact, the typical
demogoguery that has become the political and economic mythology of our
times. James Burn, the economist, said, "when operating on a Democratic
politican, even the keenest analytic surgeon cannot separate demogogic
from solid tissue without killing the patient."
Perhaps the time has come to recognize that government is the problem
all too often and not the solution. Typical of this political mythology
is a story that appeared in an Eastern newspaper recently, The story
told of a welfare recipient who worked part-time for a farmer and one day
he stole a smoked ham out of the smokehouse. He took it to the grocer
and sold it to the grocer for $27. He took $20 of the $27 and bought
$80 worth of food stamps for which he was able to do by reason of being
on welfare. He bought the ham back for $29 and $51 worth of groceries;
he then put the ham back in the smokehouse, so the farmer got his ham back,
the grocer made a $2 profit, the welfare recipient had $7 in cash and $51
worth of groceries and the columnist then added, "with no one being the
loser. " No one unless you counted who paid for those food stamps.
Chicago Fundraiser
But that is the kind of thinking that is behind the current
proposal
for example, in the present flood of high prices that the
government can solve this. It gets seriously proposed in Washington by
ordering a cutback in the price of food and subsidizing the growers to
make up their loss. Well, that is a very simple solution, all you have
to do is take all of the people in the United States that do not eat, and
tax them so they can help pay for the food for the rest of us.
I thought it was a pretty good sample of this kind of mythology
during the last campaign. It was during the rush hour and I fell in
behind a workman's car who was on his way home, very obviously a workman,
and he had a bumper sticker of the kind we used to see back in the
depression days "Buy American' he was driving a Toyota.
Thomas Jefferson said "If the people have all of the facts they will
never make a mistake." But the trouble today is that the people today
have been and are being assailed over and over again with mis-statements
of fact. Some of our political pundits, on the media, in the press, make
pronouncements that are nothing more than their expressions, their own
opinion. And when subsequent events prove them wrong, there is no
acknowledgement of their error, they have already moved down to other
pronouncements. For example, when the President announced the mining of
the harbor at Haiphong in May, the TV analysis was instantaneous, was
unanimous, and it was disapproving. Eric Severied said "I will suspect
that the summit, the Moscow Summit will not come off." Charles Colling-
wood said "certainly, the Moscow Summit meeting from which so much has
been expected is now in jeopardy.' Marvin Kalb "one of the casualties
of the President's mining blockade may well be the upcoming summit in
Moscow. = Those who began packing and dreaming up caviar are beginning to
unpack and return to dry cereal. John Chancellor said "the summit is in
jeopardy today, Richard Valeriani said "how can they receive him now?"
Ted Poppin said "I don't see how he can go" and Edgar Stevens said "the
President's announcement will be pretty hard for them to swallow, he
practically killed the prospects of a summit." So they all ended up
ating caviar, none of them ate their words.
It seems that 90 percent of all that is written today, economic
questions are either an implied or a direct attack on capitalsm. It does
not matter that the critics cannot name any time in history in which
people enjoy a high standard of living under any except a free economic
system
the attacked economy.
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cago Fundraiser
In 1828 the German philosopher, Goethe, wrote "truth must be
repeated again and again because error is constantly being preached
round abouts, in the newspapers, the schools and the univ ersities,
everywhere error is dominant
securely and comfortably ensconced in
public opinion." Well today, all too many of our students are receiving
a one-sided exposure of economic and social alternatives. And all of
this has given the political demogogue his field of play.
Earlier this month a young Senator from Massachussetts made a
pilgrimage to Alabama which he says is non-political- and if you believe
that, I have got some Florida real estate I would like to sell you to
prove it. His words were well chosen for the occasion and that particular
audience and they were well received----heck they would have been well
received at the Republican National Convention. But it isn't a speech
he is going to deliver back in Massachussetts or to the Americans for
Democratic Action. The Governor of Alabama must have wondered at times
if they hadn't set the wrong sound track. The Senator, throughout the
north here, wants to guard our health at $65 billion worth of Teddy-Care,
was in the south claiming that the great principle that "no man should
be stripped of the fruits of his labor to benefit another" is now under
the taxes of a Republican Administration. Well if our opponents are
now going to claim our principle and our philosophy in order to solicit
votes---and you had a little experience of that in the Senate race in
Illinois not too. long ago---then this is a good place to start exposing
those political myths. In the first place, the government growth,
the increased spending, the centralization of power in Washington, the
deliberate planned inflation as an economic policy, the redistribution
of earnings through taxation---all of this is and has been part and
parcel of the Democratic philosophy for the last forty years. And for
forty years Republicans have been opposing it. Sure there have been two
Republican presidents in these forty years. But in only one two-year
term did a Republican president have a Republican Congress.
How many Republicans, in this day of false image-making and
political myth-making, are really aware of how dishonest the Massachus-
setts Senator's charge really is. The present administration reformed
the income tax in some minor ways in 1969 in what is now being called
the "Nixon Tax Reform". And as a result 9 million of the lowest income
earners were taken off the income tax rolls entirely.
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Chicago Fundraiser
In the next level of income up, in the middle income brackets,
they received a 70 percent reduction. Those above $50,000 a year, who
are all Republicans according to our opponents had a 7½ percent
increase in the tax; and corporation tax was increased $4,500,000.
Since its inception, the federal income tax has been increased 14 times
13 of those increases by Democrats; it has been reduced 12 times and 8
of those reductions were by Republicans.
And yet right now, ask any average citizen about taxes and he
will express a firm belief that some mysterious "they", affluent special-
interest groups that lobbied over the years in Congress and lobbied
Congress into passing tax shelter loopholes, can help the rich go tax-
free. The average citizens believe this because our opponents have had
this as a party line for a great many years. When are we going to remind
these citizens that if this is true, this lobbying of Congress, a
Democratic Congress could have resisted it and changed the tax structure
any time they wanted to in these last forty years.
In the last campaign we were feeded the "Horror Stories"
"Million Dollar Earners Escaping Tax Free". But how much equal time and
space was given to the Treasury Department figures that were released that
refuted every one of these stories and proved they were not true?
Senator Proxmire of Wisconsin last September declared that our
18 largest oil companies paid only 6.7 percent income tax or federal
taxes on $10 billion in net profits. He said if the public/private tax
reform means anything it means situations like this cannot continue to
exist.
Well, Representative John B. Anderson of Illinois, simply proved
that situations like that did not and do not exist. The 18 companies paid
36½¹/2 percent tax on their net earnings and that was up from 24 percent
before the Nixon Tax Reform.
Closing the loopholes is really being used by these people as an
excuse and a device for getting more money for governments that are alread
etting too much. Never have we heard one of these loophole-closers
state that if he had his way the revenue gained from closing the loopholes
would be used to reduce the tax rates of the working men and women of
America.
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Chicago Fundraiser
No, because they want more money for more government programs,
for more of the same social tinkering we had under the New Deal, the
Fair Deal, the New Frontier and the Great Society. They want tax
increases even to cure inflation and that's like telling a drunk
that another drink will sober him up.
It is time to look at the record. In 1930 the federal budget
was 1/100th of the gross national product. In three years it had become
1/20th of the gross national product and today it is a full one fourth.
One out of five workers are employed by government federal, state and
local. And their pay for the last two years has been increased 51 percent
while the factory workers pay has been increased 37 percent.
If we stop this mushrooming drag on the economy, we can stop
the possibility of this nation and the people of this country going
bankrupt. But to do it in the trend of truth to the people that the
cost of government inevitably falls on them. That loopholes are the
legitimate deductions without which the average citizen would be unable
to pay his income tax. Last year out of $199 billion taken as a total
amount of all the deductions from the paying of income taxes, $1911/2
billion of those were taken by the lower and middle income earners.
The issue is plain and simple government costs too much and
that issue is ours. It is an ideological impossibility for our opponents
to accede to this, or to attempt to do anything about it. First of all
they don't view tax as simply a means of raising revenues. Taxation is
an instrument for directing the people's lives. Clear back in the New
Deal days of Franklin Delano Roosevelt, an assistant secretary of the
treasury, Randolph Hall said, "We need to look at taxes in a more
positive way, as an instrument of social and economic control. They may
be used to penalize particular industries and economic groups." That is
entirely consistent with the most recent drive. The ever-increasing
drive to cancel out the tax exempt status of state and municipal bonds.
They shut off this funding source for local government and made local
government that much more dependent on the federal government. Again
the loophole demogoguery is invoked. But what is the real argument by
those who would close that as a loophole? Well they quoted three points
they are very frank about: 1) They say that to exempt this method of
financing local municipal and state government is a federal subsidy; and
they say 2) the present form is an indirect subsidy which gives the
federal government no control over the use of a subsidy; and 3) they
say that federal subsidies should be directed to purposes of which the
federal government approves in advance. What could be plainer than that?
Chicago Fundraiser
But then why shouldn't millions of our citizens millions of
our citizens who have made it plain they want to continue with local
control over their own school districts and the funds derived from the
sale of school bonds, for example why shouldn't they hate being aware
of this threat to their local control over those schools?
Your own economist here at the University of Chicago, Milton
Friedman, says "that federal government was, until forty years ago,
viewed primarily as a keeper of the peace, an upright. Today we view
it as capable of treating every social and personal ill as the source
from which all blessings flow."
Not even the Office of Management and Budget knows how many
agencies and commissions there are. But the federal revenue people have
said that with all their regulations, it is almost as big as the entire
Encyclopedia Britannica. The Interstate Commerce Commission, in eighty
five years has accumulated 43 trillion railroad rates with no index.
The Federal Communications Act has been amended every year since it was
started in 1934. The Occupational, Safety and Health Administration laid
down 15,000 regulations in its first year and it still had time to order
an employer of one employee to install separate mens and womens washrooms
his one employee was his wife and at home they shared the same bedroom
and bath.
To those who tried, in this great institution of government
this welfare state of ours tried on failure. They ride forth seeking
victims to aid, righting wrong, setting up social reforms, and programs,
that no matter how many they set up, no matter how many are ting,
they will never claim success for it. To do so would put them out of
business. Welfare recipients aren't people to be put back on their feet
made capable of self-support. They are clients, to be permanently served
by professionals whose success is based on increasing their numbers, not
decreasing them. And so government has become the biggest cost item
in the family budget. It takes more from the wage-earners' pay than it
loes for food, clothing and shelter for his entire family.
In 1930 government federal, state and local took 15 cents
total out of each dollar earned in America. By 1950 it was 32 cents.
Today, governments are taking 44.7 cents out of every dollar the citizen
earns. The present rate of increase will pass the 50-50 mark in five
years and reach 60 percent in ten years. If a free economy can survive
government taking more than half the people's earnings, and no society
in history ever has, indeed no society in history has long survived the
tax burden that reached a third of the people's earnings
Chicago Fundraiser
Now I know that some of you are discouraged in these dark days.
You think that our cause is hopeless. Well that's not true. There has
never been a greater opportunity to reverse the trend of the last forty
years than we have right now. The people have given every sign that they
have had it with busy-bodied government interfering with their lives and
confiscating the fruit of their toil. The only thing that we should be
happy about and can be happy about in the whole situation is that we are
not getting all of the government we are paying for. Can you imagine
how miserable we would be if we were?
The truth is on our side and we have to stop communicating
horizontally, telling that truth to each other. We must start talking
vertically, breaking into other groups, other circles, and exposing this
mythology. We are offering the people of this country independence, for
a dependent people are a helpless people who can be managed and controlled.
I have learned in the last few years how important in this task
are the men that you are honoring here tonight. Have you thought about
the direction that this great state of Illinois would be traveling if it
were not for the single vote margin that you have in the House and the
Senate? The bulwark of our freedom is this federation of sovereign states.
The question of whether the leadership of our opposing party subscribes
to that belief, I think ,has been pretty well settled and decided.
Certainly the policy for forty years has led to an erosion of state's
rights, of reducing of the states to mere administrative districts of
the federal government. And that would be their aim if we allowed them
to get away with it.
Faced with an entrenched bureaucracy of unimaginable size and
power in Washington, it is my belief, that rather than trying to turn
back or even go around, our best chance lies with the states and the
state administrations.
Let me talk about my other state for a moment. In 1966 state and
local governments in California were growing in the number of employees at
a rate four times as fast as the increase in population. Between 1961
and 1966 in those five years---state government had grown from 82,000
to 102,000 employees. Local governments have continued that rate of
growth in California. But by putting a freeze on the hiring of the number
of employees in state government, now, these several years later, we have
the same number of employees in state government that we had in 1966.
Many of those departments in state government are handling thirty and
forty percent workload increases, with fewer employees and they are
turning out the work faster than they were.
-10-
Chicago Fundraiser
Two years ago last March the welfare caseload in California was
increasing by 40,000 new cases a month. The increase in costs was 26
percent a year. We decided on a comprehensive welfare reform. We were
up against competition by federal bureaucracy that at times became almost
hysterical. But we launched those reforms two years ago this last March
(1971). Today I am happy to tell you that it not only is not increasing
40,000 a month, there are 315,000 fewer people on welfare, we have
increased the grants of the truly needy who depended on us for help by
30 percent, and we have a one-time surplus in our treasury of $826
million.
Now I tell you this because our case in California is a classic :
showcase of this philosophical difference of which I have been speaking,
between the two parties. I have, as I indicated at the beginning of my
remarks, a Democratic majority. They have already made suggestions for
spending over a billion dollars of that $826 million. We on the other
hand have proposed giving it back. And I might say, when you first
suggest giving $826 million back to the taxpayers from whence it came
that's a little like getting between the hog and the bucket! You get
buffeted about a bit.
One of them said he considered that an unnecessary expenditure
of public funds. Another one said that a tax reduction would interfere
with the redistribution of the people's earnings. Well, to sum it up,
we are faced with a stalemate, so we turned to the people. We first
asked the legislative leadership to put the matter on the ballot and let
the people make the deicision. By that time, incidentally, we knew that
in addition to the one-time rebate of the surplus we were trying to make,
that we were going to be able to offer an ongoing tax cut---an income
tax cut. Our opposing leadership made it plain---they do not trust the
people of California to vote on such a serious matter as what should be
done with their own money.
As a matter of fact in the last election the people of California
oted to reinstitute the death penalty in California. In spite of the
voice of the people, which registered better than 67 percent in that
ballot, the Democratic Speaker of the Assembly has kept the legislation
to implement that act bottled up in a committee and has declared that
when the people are wrong it is his duty to straighten them out.
-11-
Chicago Fundraiser
So in conformity with the California law we have invoked with
the initiative process with regard to this tax refund. We have obtained
almost 800,000 signatures on petitions and I have called a special
election on November 6 for the single purpose of voting on tax reduction.
The people will vote on the rebate of the surplus, on the ongoing
reduction and one additional feature. which may very well be a first in
this nation.
A year ago I appointed a task force to see if there was any way
to halt the ever-increasing cost of government
to interfere with that
upward climb in the:percentage of the people's earnings that government
was taking.
We have tried for six years, program after program, to affect
economy. We have been successful as I have indicated. And yet government
continued to grow.
The task force had the help of some of the most distinguished
economists in the United States, including the beforementioned Milton
Friedman. These men attested to the need for limiting government's cost
to the fact that our economic system cannot survive the present rate of
economic drag let alone the projected increase. These men told us that
in their opinion, they believe this country is on its way to a gigantic
bellyache unless something is done about it very soon.
Well, the problem is no longer one of merely cooling inflation
but the survival of this country. In the decade of 1950-60 the most
stable period in this half-century we also knew it as the time when we
had the only Republican Congress for two years with a Republican President
As a matter of fact in that two-year period is the only time in forty
years that the dollar did not lose one penny in its purchasing power.
But the decade since, the total of debt public and private of the
citizens in our country went from $870 billion to one trillion, eight
hundred and thirty nine billion dollars. Our public debt alone is $87
billion bigger than the combined debt of all the nations of the world.
Our liquid capital the savings of the people that can be
investéd in industry and stocks for creating new jobs---is the lowest
point it has ever been in our history. It has been siphoned into more
government spending by taxation.
Of that 44.7 cents, the governments are taking out of each dollar,
California is taking 8-3/4 cents. The proposal of our task force is to
reduce this 8-3/4 cents to 7 percent of the people's earnings over a 15
year period, adopting a constitutional amendment that will fix at 7 per-
cent of the total income of our citizens as the most that the state can
take without a vote of the people.
-12-
Necessary flexibility has been provided for emergencies,
protection has been given to local government so in the future state
government cannot circumvent the limit by foisting services off on local
government and making them pick up the load. If they do they have to
reduce the limit. Any service that is foisted off on local government
or any new service must be paid for by the state government.
Over this 15 year period
it is a very simple device
the 8-3/4
percent of the people's earnings
total earnings
that state government
is now taking, in the second year of the program would be 8-65/100 the
next year 8-55/100, 8-45/100 and so on down to the 7 percent limitation.
This is the third part of the init iative the people will be voting on
November 6, and we think is one of the most important times the people
had actually voted on preserving their own freedom.
I told you this in the hope that it will increase your determin-
ation to return these Republican Senators to Springfield and to increase
their number. I know what it is like when the tide is the other way.
For a long time I was the only stop-gap with both houses in the
opponents' hands I had to depend totally on the veto. One of the
Democratic legislators stood up the other day in a speech in San 77
Francisco and he said "the governor has defied the legislature and vetoed
167 measures in this session." Now that's that kind of base political
lie we have got to straighten out I vetoed 168.
But this is not simply a Republican victory we are trying for in
a contest between party labels. But because we hav e come to a moment in
history when we are choosing between two widely divergent philosophies,
party labels are unimportant philosophy is all important.
I assure you there are millions of patriotic Democrats who can
no longer follow their party's leadership. They are seeking fiscal
restraint and that has traditionally been our party's position. They
are seeking a party of a leadership that holds that the decentralization
of power holds on faith. that most human social problems can effectively
by solved by the people themselves working under the local leadership
and having direct responsibility from that leadership.
The Democratic Party once held those views. As a matter of fact,
forty years ago, the New Deal candidate of the Democratic Party declared
"we advocate the immediate and drastic reduction of governmental
expenditures by abolishing useless commissions and offices, consolidating
departments and bureaus and eliminating extravagance to accomplish
savings not less than 25 percent of the cost of the federal government."
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Chicago Fundraiser
Three years later he had built up an awesome bureaucracy
designed to control the production, the distribution, prices, wages,
employment and agriculture. When the Supreme Court ruled against him
(Roosevelt) much of this structure that he had built up---he tried to
do it alone unsuccessfully to increase the size of the court from nine
to twelve so that he could have a majority of the justices.
Even though he failed in that, forty years later, we find that
we have inherited a government in which the systems of checks and balances
between the three branches have been distorted. Also, the balance so
carefully engineered by the founding fathers between the levels of
government federal, state and local but most importantly the great
balance between government and the control of government by the people,
has been distorted.
Too many people have lost faith in themselves under this free
economic system. Too many people are asking government for things that
government cannot do without rescrting to force and coercion, and thus
restricting freedom. A recent poll found that 70 percent of the people
are blaming business today for our economic problems. The same 70
percent said they thought that the answer was that government should take
over more complete control over the total business community in our
nation. But only 18 percent of the people in the polls knew the names
of their United States Senators.
It is time that they knew that government caused inflation
deliberately by planing what was called the New Economics. That under
the administration of Lyndon Baines Johnson, government got out of hand
when it tried to give us guns and butter in the war that they started,
that they wouldn't win and they didn't know how to end. A Republican
president ended that war.
It is time that the people knew that they only time the party
of the working man, as qur opponents describe themselves, the only time
that party has provided full employment in this century has been by way
of a war. And at the same time not even then could they be completely
sure, because, in the Kennedy years, unemployment was higher than it was
three years ago in the so-called Nixon recession.
Today the Independent Businessmen's Association of America
claims that its members have 2,900,000 jobs going begging for lack of
workers to fill them even though they are advertising for them. But the
doom criers would still have us believe that unemployment is a major
problem of this day and of this particular administration.
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Chicago Fundraiser
It is time for the people to learn that the only way that taxes can
be reduced is to reduce the size of government. It is time for the people
to learn that the only way you can give someone a larger slice of the
pie is not by reducing someone else's slice but by producing a bigger
pie for everybody.
Earlier in my remarks I said this was not a time for us to be
discouraged. I am sure that many of you recall the name of that tragic
figure of some years ago, Whitaker Chambers. Whitaker Chambers is a true
idealist, he turned to Communism but he did not even find the answer to
his problems there. He soon learned, of course, that Communism had no
offer but was only a false and empty world they had. And so he turned
elsewhere.
He was disillusioned with Communism, but his years with Communism
had left him, I am afraid, less than enthusiastic about our chances to
resist.
He wrote after his conversion back, he said "it is idle to seek to
save the western civilization because western civilization is already a
wreck from within. That is why we can hope to do little more than snatch
a fingernail to the saint from the raft or a handful of ashes from the
packets and bury them secretly in a flowerpot against the day hence when
a few men will begin again to dare to believe that there once was
something else. That something else is sacred and needs some evidence of
what it was and the fortifying knowledge that there were those who when
the great night folds with loving thoughts to preserve, those folds of
hope and truth."
I cannot subscribe to Whitaker Chambers' cynicism or his lack of
faith in humanity. I do not know of anyone who is here tonight or of
anyone among us on our side who believes that our generation is destined
to preside over that great night fold. That this nation, the first in
all man's history to attempt an experiment in individual freedom, has
come to a closing of the book.
I cannot accept this and I know that you cannot. We are even being
called upon in this supposed time of crisis to shed our blood or risk
wounds in battle. All that is necessary for us is to understand how this
system of ours works, this system that our fathers left us. And then to
spread the understanding and the knowledge among those around us and
particularly among our own sons and daughters.
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Chicago Fundraiser
That is a duty we cannot hand off. That duty falls upon each one
of us, just as our neighbors, the people we talk with at lunch, the
people we meet and work beside in our daily work. The duty falls on
each of us, we cannot leave it to educators or professional economists
or to the media.
Each of the myths must be held up to view and exposed and our
weapon is at hand. Our weapon very simply is the truth, and the truth
will truly keep us free.
Nancy and I had a fantastic experience just a few months ago when
our prisoners were returned to us. We entertained all the California
prisoners, some 150 of them, in a series of quiet informal dinners in
our home. We met these men we have heard the story of, the six, seven,
eight and nine years of imprisonment. And I can tell you that a society,
which can produce from its rank and file of its citizens, men with the
courage that these prisoners who were returned to us that short time ago,
that society truly has nothing to fear but fear itself.
######
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8/21/72
EXCERPTS OF REMARKS BY GOVERNOR RONALD REAGAN, TEMPORARY CHAIRMAN
BEFORE THE SECOND SESSION
REPUBLICAN NATIONAL CONVENTION
MIAMI BEACH, FLORIDA
AUGUST 21, 1972
Four years ago we met in this arena to choose a standard bearer
ir our Party. It was a time of ugly violence in our land, when we talked
with dread of hot summers to come, accepted burning cities as routine and
in many of the highest intellectual circles it was fashionable to denounce
as sick, selfish and racist the most generous and compassionate society
ever known to man.
More than 300 young Americans were dying each week in a far off
land, while here at home other young Americans rioted and vandalized our
institutions of higher education.
There has been a remarkable lessening of the violence in these
last three and a half years here at home.
In Vietnam, the last ground combat team has put down its weapons.
Last month, another convention was held in this hall like an echo heard,
once again, of angry voices from the past. Veterans of street violence
.id their uptown friends, in the fashionable cocktail salons of the
Porsche and Pucci set, were riding again.
Perhaps we have not fully realized the enormity of the change
that occurred as the result of that convention a few weeks ago.
Our traditional two-party system has become a three-party
system Republican, McGovern, and Democrat. And, only the first two
parties have a presidential candidate in the coming election.
Millions of patriotic Democrats were disenfranchised in the
takeover of their convention. A former President of the United States
became a non-person. His years in the service of the party and nation
were unmentioned.
The former Vice President, the Democratic standard bearer of
968, was dismissed with arrogant disrespect---unprecedented in American
political history.
As Republicans, we have often opposed Hubert Humphrey as he
campaigned for his beliefs. But we respected him and we knew he would
never put party ahead of country.
Even in the heat of partisan campaigning, no Republican would
ever have stooped to the treatment he received at the McGovern Party
Convention.
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Republican National Convention
The rhetoric was the high sounding phraseology of the "new
politics." But, their tactics were the old politics of bossism and the
smoke-filled rooms although in some of the rooms it was reported that
the smoke smelled a little funny.
Finally, whether by design or accident and there is reason to
support the former in the dark pre-dawn hours while most Americans
slept, the takeover was completed. The McGovern Party named its candi te
but they did not complete the ticket until a few weeks later when they
had time to run through the yellow pages and call central casting. But
the "Prairie Populist" finally had found his man. You could imagine the
high drama of that moment of decision there in Hyannis Port
surrounded
by their families, two men watching the flip of a coin. Sargent Shriver
lost. But, he is a man of the common people. He understands their
language. He learned it from talking to his butler.
We are having a little trouble though understanding what the
McGovern Party's Presidential candidate is saying. Already he has
offered solutions to problems we do not even have anymore.
They had ten platform promises of which nine already have been
carried out or proposed by the present administration.
At the risk of seeming uncharitable, we have to admit we are
not sure just what the candidate's program is. But then he is not sure
he is sure.
A few days ago he announced that his economist would be presentin
a program very shortly to which he would be committed. Now, if that means
he will stand behind it one thousand percent, we will have at least a
week to look it over before he dumps it.
In the meantime, and seriously, he has promised hand-outs of
such lavishness that even he had to offer the reassurance that if his
proposals proved dangerously extravagant, we could count on Congress to
restrain him.
The Budget Bureau has priced out only a partial list of the
promised goodies. They add up to $164 billion a year on top of the
present budget. And, that does not include the 1000 dollars that
everyone is going to get.
However, it does include the socialization of medicine as
proposed by the Junior Senator from Massachusetts who would add to
Medicare and Medicaid $70 billion worth of Teddy-Care.
We are told that all this can be done in a federal budget of
some $400 billion without increasing taxes on the working men and women
Republican National Convention
There is no way this can be done without vastly increasing the
tax burden on every working man and woman. If the Senator does not know
this, he is incredibly naive. If he does know it and persists in this
extravagant utopian promise, then he is guilty of a deliberate deception
on a scale never before know.
But it is not really important for us to determine which if thes.
romises is true. If someone is setting fire to the house, you do not
waste time trying to decide whether he is a deliberate arsonist, or just
a fellow being foolish with matches. You stop him before he burns the
place down.
We can no longer campaign on political platitudes and old-fashioner
appeals to partisan loyalty. The time has come it is indeed long
past
to expose political myths and to talk economic facts to the
people. There always have been those who would have us believe that
someone else can be made to pay the cost of government. But only people
pay taxes.
If we confiscated all the earnings of all the corporations in
America at 100 percent, we would have less than a third of what the
Senator's promises will cost. He has told us that there are billions
, be reised in taxes from those whose earnings are above $22,000 a year.
But only five percent of the people are in that bracket. And if, in
addition to the confiscation of the corporations' earnings we confiscate
all of these individuals' earnings, we still will not have enough to pay
for what the Senator has promised. Finally, of course, we come to that
old faithful of the demagogues loopholes. Plug these and of course we
are surely home free. Well, this demagoguery already has convinced many
of our sons and daughters that ours, indeed, is a venal society, victimiz-
ing some to provide undeserved privileges for others.
Well let them name the loopholes, and they will find that they
are the legitimate deductions without which the working men and women of
this country could not afford to pay their income tax.
So-called loopholes include the property tax on their homes, the
interest on their mortgages, their medical expenses, their contributions
to church and charity. And, of all of these deductions, 75 percent of the
deductions medical expenses, for example are taken by people with
Sixty five percent
earnings of less than $20,000 a year. / of the charitable contributions
are made by people earning less than $20,000 a year.
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Republican National Convention
But weren't there 106 people with incomes in excess of $200,000
who paid no tax last year? Yes, but there were 15,000 who averaged paying
$170,000 a piece.
The tax structure is virtually the same as it has been for many
years loopholes and all. And, if it is so outrageously unfair, why
didn't the Senator in his 14 years in Congress make some effort to change
it?
The fact is, there has been a tax reform, the first one in several
decades. It occurred in 1969, and it was a tax reform asked for by
President Nixon.
As a result of that reform, almost 12 million workers with
incomes below $5,000 have been relieved of paying any income tax. At
$5,000, their taxes have been reduced 66%. At $10,000, it is 26%. And,
at $15,000, the reduction is 20%.
But in those high levels where the McGovernites would have you
believe only the Republicans dwell, the taxes were increased 7½.
Since 1969, as a result of that reform, the individual workers
of America have paid $22 billion less in taxes, and corporations have paid
almost $5 billion more. But still the average American works five months
each year to pay for the cost of government, federal, state and local.
The reforms which Republicans want are ones that will reduce the
size, the power and the cost of government and return the authority to
those levels of government closest to the people.
The McGovern Party candidate declares his mission is to bring
"idealism" to the executive leadership of the country. All of our lives
have been deeply enriched by true idealists. Still, Webster defines the
idealist as one who indulges in flights of fancy. To be practical,
idealism must be accompanied by integrity.
The Senator has said he would go to Hanoi and beg for the release
of our prisoners. And, I assume that in his idealism he believ es that he
would receive compassionate and humane response.
President Nixon has stated repeatedly that our goal in Vietnam
is that the people should have the opportunity to live under whatever form
of government and within whatever society they choose. That. is under-
standable to Americans. It is the dream that brought our own nation into
being.
The Senator has been most vehement in his denunciation of what he
calls the corrupt regime of South Vietnam. He seldom, if ever, expresses
himself, however, about the non-elected military rulers of North Vietnam.
But, he makes it plain that if there is oppression in Vietnam, it is by
the government of the south.
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Republican National Convention
Now, this war has been witnessed by us and by all the people of
the world as no other war in history. It has been brought into our
living rooms on a daily basis by means of television. Over and over
again we have seen the horror, the bloodshed of war. And, we have seen
the agony of that byproduct of war the refugees, hordes of them
clutching their children with their few miserable belongings searching
for a haven of refuge and safety.
In all the tragic years of this war, has anyone ever seen those
refugees fleeing toward the north? Always they flee to the south. In
1956, then Vice President Nixon and Pat Nixon visited some of the more
than a million refugees who had already fled from the north to escape the
Communist regime of Hanoi. The Catholic Bishop of Danang states that
another half million who were not fortunate enough to escape were
executed or starved to death in the north.
The President repeatedly has offered an end to the killing
a
settlement without victory or defeat, and then the help of this nation
in rebuilding both North and South Vietnam.
I submit that is idealism
with integrity.
The President inherited a full-blown war that had gone on almost
Seven years under two presidents. And, never once has he criticized
either of those presidents in their conduct of the war. Nor has he ever
charged them with killing young Americans for personal political ambition.
Idealism with integrity is inheriting runaway inflation and
having the courage to tell us that the cure will hurt. But, cure it he
would. It is inheriting an insanely escalating nuclear arms race and
achieving the first significant treaty of arms limitation in more than
50 years. It is inheriting a country beset by international suspicions,
discord and hostility and moving it away from confrontation, going to
the capitalsof our potential enemies to meet and confer.
One wonders who these adult doom criers are, who have given the
young people who are outside this hall tonight the distorted view they
have of their native land.
Oh, yes, we have made mistakes. But, we have accomplished more
for our people than any other nation that ever existed.
We have done more to advance the dignity of man in other parts
of the world than any other nation in history. With whatever imperfection
in this less than perfect world, the United States takes second to no
nation in its genuine devotion to the principles of good neighborliness,
international generosity and dedication to the pursuit of peaceful
solutions to the problems of the world.
Republican National Convention
A few weeks ago I had the privilege of meeting with leaders of
European nations at the President's request. In meeting after meeting,
I heard the heads of state of these European countries tell me that the
President of the United States, Richard Nixon, was the first American they
had ever known who really understood the world situation and who had
embarked on the long and difficult task toward peace with a realistic
plan that actually held promise of bringing peace to the world.
One of them said to me one day, "For heaven's sake, don't let
him be interrupted in what he is doing. That would be catastrophic for
all the world."
I submit this is true idealism in government. Now, please think
back to that America of 1968. Watch the film record of what has happened
since.
######
(Note: Since Governor Reagan speaks from notes, there may be changes in,
or additions to, the above quotes. However, the governor will
stand by the above quotes).
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1
EXCERPTS OF REMARKS BY GOVERNOR RONALD REAGAN
LOS ANGELES CHAMBER OF COMMERCE BUSINESS OUTLOOK CONFERENCE
November 10, 1972
For many months during the long election campaign just ended, a
major theme of both presidential candidates was a need for national
unity--a clearcut decision on what direction America should take for
the next four years.
The immediate goal of course is to speed up the day when there
will be peace in Vietnam. The result of the election serves notice on
Hanoi, I believe, that nothing can be gained by stalling in the hopes
of getting a better deal from a different administration.
A massive majority of the people reaffirmed the goal that Americans
have always pursued in Vietnam under several presidents--peace with
honor, and not at the cost of betraying an ally. We have negotiated
patiently. The President has placed his cards on the table. And,
now it's time for Hanoi to do the same. The tragedy here is that
there could have been peace at any time in all of these sorry years-
easily and simply--if Hanoi had just gone home.
A great mythology has been created about this war by people who
should have known better. And, a large part of the myth has been the
distortion about our part in the war and our purpose in being there.
I am going to make a prediction of my own. When peace brings an
end to the emotionalism and the return of our American prisoners of war,
it is my own opinion that history will one day sustain the morality of
our position and the naked guilt of the communist aggressors who signed
the Geneva Accords and then violated them before the ink was even dry.
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Chamber of Commerce
I sometimes wonder how many Americans are aware that South
Vietnam and the United States never signed the 1954 Geneva Accords,
because both of them had wanted an undivided Vietnam under international
supervision until such time as elections could be held by the people to
determine their own course.
In one respect, the phase-out of the war in Vietnam will be a little
different than we have known before, because we have been steadily
reducing our forces in Southeast Asia for these past three years.
There won't be just a sudden change from a war-time to peace-time
economy. We have been reducing our armed forces, our civilian defense
department personnel, and our defense workers by more than two million
men and women in this recent period.
The cost of the war has been substantially reduced. The proportion
of spending devoted to defense has been scaled back. As we have been
told in this campaign, the budget for the Department of Health, Education
and Welfare is now larger than the budget for defense. Much of the
adjustment necessary to return to a peace-time economy already has been
made.
We are absorbing two million workers into the nation's labor force.
And this is something of a phenomenon. Never before in my adult lifetime,
nor do I believe in yours, have we reduced unemployment as we ended a war--
instead of as we began one.
You are aware, I know, that inflation is also being reduced. And
in this we all walk a thin line between cooling the economy too fast and
having a depression, or reaching for prosperity too soon and getting back
on the inflation roller coaster. Personally, I think the President is
moving toward a solid recovery and a stable economy based on productivi
and not on the exotic nostrums of the new economics. Those fellows who
prescribe more government spending and increased taxes as an answer to
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Chamber of Commerce
inflation are just about as foolish as the fellow that tells you
another drink is good for a hangover.
America can and must begin paying attention to fiscal problems
that have developed during the past ten years--some as a result of the
war, some as a result of the massive social programs programs enacted
without sufficient concern for their cost or whether they were effective
in really solving the problems of the poor on a permanent basis. As a
matter of fact, sometimes when I look at the professionals in this field,
I think that if we didn't have any poor, they would invent some.
Sir Ernest Ben wrote "whenever a businessman spends money he can
be trusted to get value for it. When a politician spends money, value
leaves the marketplace."
We have a long way to go to restore permanent fiscal stability to
our economy, on all fronts. And, the private sector is going to have to
review its position and its responsibility in the struggle ahead.
New trade agreements and the prospect of peace offer us a great
opportunity to expand our exports and cut down the trade deficits that we
have been experiencing these past few years. If the Congress will give
the President cooperation, we have every reason to be optimistic that
there will be a period of continued economic expansion.
Economists foresee a gross national product of more than one and
a quarter trillion in the next year. The spending by government must be
controlled so that our increased gross national product will represent real
gains in wages and productions and not simply a reflection of inflation
and the loss of value of the dollar. I believe the American people have
given a mandate to carry out a program of restoring economic stability
and reducing the part government plays in virtually every facet of our
lives.
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Chamber of Commerce
I think it has been the one clearest thing that came out of
public discussion in this campaign, that the people--sometimes
inarticulately, sometimes brilliantly--were saying 've had it,
we 've had it with government, with too much government, we would like
a chance at something different." And I think there is an opportunity
to have this.
Unfortunately, there are too many indications that some in the
legislature have not gotten the message. And certainly the vast
bureaucratic permanent structure of government is still imbued with
the belief that it can direct our lives and spend our money better than
we can.
The quality-control people in most of our industries have developed
something they call Zero Defects, a program aimed at eliminating production
defects. We have to aim at a similar goal in the economic area. We must
work toward a day when we will have zero budget deficit and zero trade
deficits. While it may not be possible to do this overnight, we should
also always keep in mind zero inflation as a major national goal.
I would like to talk for a little bit about the future, as I
think it should be, where you are concerned. I think it is time everyone
in business and industry in this country recognize that for the second time
in this century, business and the free enterprise system are under an
assault--an unremitting assault by those who would change this system
quite drastically.
There was a student in North Carolina State University who signed
up for and then cancelled a course in History when he bought the assigned
textbook, the title of which was "Up Against the American Myth." The first
line of the textbook read "Capitalism stinks; We can only solve the
sociál problems by doing away with capitalism and the institutions that
support it. If And the book went on in the same vein for 458 pages. For
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Chamber of Commerce
example, on page 439 it says, "It is only through developing and
expanding socialist rationality that the advanced industrial countries
can hope to overcome the ills of society. 11
When the young professor was asked if he intended assigning
another text that defended capitalism, he looked blank and said he
knew of no such text. Over in Arizona, the State Superintendent of
Education has ruled that every high school student in Arizona must
take a course in free enterprise, an capitalism, and pass an examination
in that course in order to get a diploma.
He went to the three state universities of Arizona and asked the
economic department's forty faculty members if they could help put
together a curriculum in capitalism and free enterprise. Only two of the
forty professors were willing to stand up in front of their colleagues and
say that they believed in free enterprise.
In one of our own great universities of California- I don't know
the score on the others--it just happens they made an inquiry there--
40 percent of the department of economics does not believe in free
enterprise but believes in some form of socialism for America.
For some time the people with the highest and best living standard
in the world and the most freedom, have let political demagogues and
pseudo-intellectuals build a false image of the system that made this
great standard of living possible.
I think its time for business to fight back, and all business
has to do is present the facts--not just to each other in our trade
journals--but to the people, beginning first of all with our own
employees. The facts are so easy and so irrefutable, but they are
so widely unknown, particularly to this younger generation of ours.
For example, in this country of ours, 80 percent of the American
families own automobiles, 98 percent own refrigerators and electric or
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Chamber of Commerce
gas ranges and the various home appliances that we are so familiar
with. Ninety six percent have television sets, 40 percent of them
color. Almost the same number have telephones in their homes. In
the campaign we were told over and over again that our tax structure is ve
dishonest and geared to benefit you above all others, that 40 percent of th
businesses in America last year paid no tax. Well that's absolutely true.
Forty percent of the businesses, well it was actually 38 percent, did
not pay a tax last year. But if they wanted to check a little further,
be a little more honest instead of demagogic, they also could have
explained they could go back any year you want to pick and four out of
ten businesses, roughly, don't pay any tax in this country because every
year in our highly competitive society four out of ten businesses don't
make any profit and they don't have any tax to pay. But this is not
taught in economics or social sciences in our schools today.
Sometimes in our debates on tax reform some of my opponents come
into the office from upstairs to sit down and talk taxes and eventually,
or inevitably, we come to the argument about the method of tax that could
be raised to relieve the unjust burden of the homeowner's tax. When I
suggest the sales tax, they come back with "Oh no!" I ask "What?"
And they say raise taxes on business. And I find myself wanting to say
to them, "Oh come on fellows, not here in my own office where no one can
hear you. 11 Because what they are really saying is that they want a sales
tax too, but they don't want it out where the people can see it and
count it.
There are 116 taxes in the suit of clothes we are wearing, there
are 151 in the bread we just ate, there are 100 in an egg, and the
chicken didn't put them there. They got in some place between her and
the breakfast table.
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Chamber of Commerce
You know better than anyone else, business can not be made to pay
taxes. You can be made to collect taxes, and you're a very efficient
tax collector. But there is a limit beyond which we cannot go in
making you collect taxes or you become noncompetative.
Right now the corporate taxes on American corporations, with
regard to the precentage of the gross national product, are double
what they are in the average countries in the European Common Market.
Japan and France can write off one third of the price of new industrial
machinery in the first year for tax deduction purposes. In West
Germany, they can write off 17 percent. And the President is criticized
because he made it possible for you to get back again to writing off
7 percent. Is it any wonder that the balance of trade for the United
States is the lowest that it has been since 1893.
The public opinion poll reveals that the average American,
including the man working for you in the plant, believes that your
profit margin runs around 28 percent. But the profit margin is 4.3
percent on the average right now under this present administration.
Seventy percent of the income in this country is from wages and
salaries, 8 percent is from business and professional income, 3 percent
is from dividends, and 9 percent is the income from interest. May I
suggest to you gentlemen, that it is high time that business in this
highly regimented society of ours reviewed its own position in relation-
ship to government. To resign yourselves to the supposed inevitability
of evermore spending and government controls may or may not make you
healthy, but it certainly will make you less wealthy and sadly wiser.
Today you are blamed for many things, none of which you have done,
and you are denied credit for those things you have done very well. But
how many people in America know that the venal big business corporations
that they believe are responsible for polluting our streams and our air,
-7-
Chamber of Commerce
also would spend $18 billion in the next three years on pollution
controls in an effort to clean up the environment.
Government and business working together each in its proper
place makes for an irresistible force. One half of the entire economic
activity in the history of the human race has been conducted here in
this country under American auspices. No other system can begin to match
our abundance, but government is too important in your life to just leave
it to politicians.
The time has come to fight back, to begin to emphasize the fact
that some of our classical economists--not the newer type-back around
the turn of the century had made a pretty solid finding, that every time
there was a business slump in this country, it could be tied to business
going beyond a certain point in the percentage of money and income that
it took from the people in the form of taxation and they called it
economic drag.
But now we have reached the point in which the working man in this
country works five months out of the year to pay the cost of government,
federal, state and local. The myth is made up of cliches and we ourselve
repeat them until we come to believe them ourselves. We parrot
conversations about one third of a nation going to bed hungry. Well,
that may be true, but two thirds of them are going to bed hungry because
they're on a diet.
We won't completely cure the question of poverty and there is
poverty yet to be cured. But when I was born, 90 percent of the people
in this country lived below what is considered today the poverty line, an
I'm talking in dollars now. Today it is less than 10 percent. When I wa
born, two thirds of this country lived in substandard housing and tod
it'is less than 10 percent. And who is going to take the credit for all
this? No one unless someone knows about it.
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Chamber of Commerce
Can the doctors be left to themselves to fight today against the
cliche that is accepted by everyone that there is a health crisis in
America? Health crisis in America! If you've got to be sick make
sure you are in America because it is the best place to be sick in all
the world. We have a 20 percent vacancy in our hospital beds in this
country.
It is the one country in the world where 98 percent of the babies
are born in a hospital with a doctor in attendance. And in most of the
countries where they have nationalized health care only a first-born
child can be born in a hospital or if the doctor declares that the mother
is in some kind of danger, then she can go to the hospital, but most are
born at home with midwife in attendance.
I just don't believe that business and industry has to take some
of the heckling and harassment that goes on and the nitpicking that goes
on from government bureaus that have grown up to the place where, as I
have said before, they do take the credit for the prosperity in this
country.
You have worked long hours, long weeks and long months to increase
your margin of profit by a fraction of a cent and then government, with
one illconsidered act, whether it is in taxation or in regulation, can
wipe out all of those gains and some more of your profit along with it.
We have seen some evidence here in our state just recently.
But most of all it begins with you looking around at the power that
is represented in a room of this kind--at the ability that has been
generated by business in America to sell its product while at the same
time experiencing an inability, apparently, to sell our system to our
own people, and particularly to our own sons and daughters.
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Chamber of Commerce
Perhaps, just in closing, some of you have heard me tell this
-
before, but one day I was talking to the presidents of the student hodie
of some of our universities a couple of years ago and one of them was
kind of giving me a bad time. Finally he told me that our generation
could not possibly understand our sons and daughters. And he gave
his rationale. He said, "You did not live and grow up as we have in a
world of instant electronic communications, jet travel, space travel to
moon, nuclear power, cibernetics, computers computing in seconds what it
used to take men months and even years to figure out." And that's true,
we didn't have any of those things when we were their age, we invented
them!
######
-10-
196
VITAL SPEECHES OF THE DAY
Many advocates of an end to free enterprise in the United
of such concentration of power to the fullest possible extent
States are quick to admit that "socialism" in the above named
and the dispersal and distribution by whatever power cannot
ountries has, indeed, failed. This, they argue, is not because
be
eliminated By removing the organization of economic
vernment control of the economy is wrong, but because
activity from the control of political authority, the market
those who have assumed leadership positions-Stalin, Mao,
eliminates this source of coercive power."
Castro, Ho Chi Minh, etc-have "betrayed" the revolution.
Discussing the perspective in which property was held by
When asked how they could guarantee that a government-
the Founders of the Republic, George Roche, in his book, The
controlled American economy would not likewise be
Bewildered Society. writes that, "The Founders realized that
"betrayed" they ask us to "have faith." This is a slender thread
property is the necessary condition of economic freedom. They
indeed upon which to hang our freedom.
knew that a man without control of his property would
The real problem with government control of the economy
inevitably become the tool of those who did exercise that
is not that Stalin, or Mao or Castro have "betrayed" it but that
control, whether the controller was another individual or the
the idea itself is wrong, and leads inevitably to the tyranny we
collectivity. Freedom for the individual was thus thought to be
have witnessed. Free enterprise, it seems clear, is irrevocably
impossible without the individual's control of those extentions
linked with other freedoms.
of personality which constitute property."
If businessmen seek to maintain both freedom and free
In his important volume, Capitalism and Freedom, Professor
Milton Friedman points out, "The kind of economic
enterprise they must abandon the sidelines and enter the
organization that provides economic freedom directly, namely
debate-for they have a powerful case. They must make it
competitive capitalism, also promotes political freedom
clear that if free enterprise ends, all of our other freedoms
because it separates political power from economic power and
would inevitably end at the same time. Is there one country in
in this way enables the one to offset the other."
the world which has eliminated free enterprise and maintained
other important freedoms? The unfortunate fate of millions of
Professor Friedman notes that, "Political freedom means the
men and women shows us clearly that there is not.
absence of coercion of a man by his fellowmen. The
This is the challenge before American business. All those in
fundamental threat to freedom is power to coerce, be it in the
every area of the American society who cherish their own
hands of a monarch, a dictator, an oligarchy, or a momentary
freedom hope that business will rise to meet that challenge—
majority. The preservation of freedom requires the elimination
for the fate of all of us hangs in the balance.
Free Enterprise
ECONOMICS
By RONALD REAGAN, Governor of California
Delivered before the Annual Dinner, 77th Congress of American Industry, National Association of Manufacturers,
New York City, December 8, 1972
I
THANK YOU very much for very briefly honoring me
ball to Alexander," and the quarterback straightened up and
more than I think I deserve. President Gullander,
said, "Alexander says he don't want it."
incoming President Kenna, Chairman Burt Raynes,
Communication is a very important thing today. Someone
distinguished gentlemen here on the board, and you, ladies and
has said we are not worlds apart, we are only words apart, and
gentlemen:
that is true. Words can separate us as well as bring us together.
I am delighted to be here and very honored to express my
The meaning of words-you take the two words "fact" and
concern over the plight of the distinguished minority that you
"faith." It is a fact that I am here addressing you; it is faith
represent.
that makes me think you will listen.
If you are a born worrier, you were born at the right time.
When you come to communicating, Reverend, I hope you
Of course, I am bathed, myself, in the warm glow of
will forgive me-I am not being sacrilegious-bur this story
nostalgia, thanks to our good, kind musicians, who played a
about the need to listen as well as to speak in communicating
great many favorites, winding up with my own alma
was told to me by a clergyman, so I assume it is all right. He
mater-and the fact that Cornell University stole it before we
told me the story of a man named Joseph who lived in a little
got it does not change my love for it.
village near Jerusalem. Joseph was a carpenter, and he had a
This is an honor. I am honored. I am also a little timorous,
wife named Mary, and Joseph and Mary had a little son. And
because collectively you represent so much solid achievement.
one day the son came running in to the father and said,
You are responsible for so much of the material blessings that
"Father, did you call?" and his father said, "No, I just hit my
we call the American standard of living.
thumb with the hammer."
When I think of my own position here in addressing you,
But, you know, in these post-election days, in the news
there is a story that I think would explain my role and how I
media and wherever people gather, there is speculation about
see it better than I could put it into words.
the course the President will take and what the government
There was a football game being played between the teams
will do in the days ahead. Personally, I think the President is
from two little country towns up in the hills, and late in the
moving toward a solid recovery and a stable economy based on
game-and a very bruising game it was-the home team had
productivity and not the exotic nostrums of the new
the ball on the 35-yard line. They went into the huddle, and
economics. But I doubt that he will have very much help from
voice Out of the distance says "Give the ball to Alexander."
Congress or from that great, permanent structure of
quarterback gave the ball to somebody else and he got
government that is so often referred to as the bureaucracy.
elobbered and they carried him off the field. Again the same
They will fight to preserve and continue the massive social
voice said, "Give the ball to Alexander," and they gave it to
programs which were enacted without concern to cost, and
someone else, who lost eleven yards and was roughed up. They
without any regard as to whether they offered any solution to
went into huddle again, and the same voice cried, "Give the
the problems of human misery that prompted their adoption
RONALD REAGAN
197
in the first place. But they did contribute mightily to the fiscal
they are determined to live their own lives, and yet the
problems that have plagued us in this last decade.
mythology is so prevalent today that they pay heed to and
Those individuals today, who prescribe more spending and
follow political demagogues who offer government as the only
higher taxes as an answer to our problem make about as much
proper protection against you.
sense as the fellow that tells you another drink will cure your
Two days ago I attended a Governors conference where
hangover. A noted philosopher once wrote, "Whenever
heard a panel of pollsters and political experts analyze the
businessmen spend money, they can be trusted to get value for
recent campaign, and they were agreed on one thing over-all:
it. When a politician spends money, value leaves the
the fact that American people in overwhelming numbers have
marketplace."
a deep mistrust of America's institutions. And why shouldn't
Everyone is talking about where is the government going.
they? Because for many years prior to this and capped by the
May I ask where are you going?
long months of the campaign, they have heard not so much a
For the second time in this century the idea of free
discussion of policy and philosophy and honest disagreement
enterprise is under attack. You are being blamed on a daily
of the viewpoints, but they have been subjected to an attack
basis for many things you have not done, and you are given
on the integrity of the so-called establishment.
very little credit for things you have done and done very well.
In this last campaign over and over again, we were told that
Under the guise of consumerism or environmental protection
40 per cent of the corporations in America paid no corporate
or just that old bromide "big business and big labor require
income tax last year, and you heard also that there were three
big government," an assortment of activists for one cause or
unnamed individuals in this country who last year managed to
another are attempting to take from you the prerogatives of
earn one million dollars or more each, and they paid no
management without accepting any of the responsibilities that
personal income tax; that the businessman's lunch was tax-free
drive you on occasion to a Milltown. Little Sir Ralph has
and the workingman's was not. Thus they appealed to the envy
become a folk hero taking whacks at you with his wooden
and selfishness that is inherent in all human nature, and this
sword, and all of a sudden in too many minds, you are the
new but shabby populism ended up dividing the people, with
dragon that must be slain. Don't get me wrong-Little Ralph
mistrust and resentment for each other.
isn't really the enemy; he is just a symptom.
Of course, the clear inference was not so much that the
There is an appalling lack of understanding regarding the
individual or the business firm was cheating, but the
workings of the marketplace and the simple business of
government and business and those with affluent earnings had
making something people want and need and getting it to
an unholy alliance whereby the working men and women, by
them at a reasonable price. Typical of this economic and
the very structure of our tax system, are made to bear an
political mythology that exists today is a story that is given
unfair share of the tax burden. They simply were repeating
wide credence-or the mythology is given wide credence by
and adding to the economy mythology which replaced
many people who should know better. The story is one that
understanding of the free enterprise system.
appeared in a newspaper column not too long ago.
Like all myths, however, there is kernel of truth in what
The columnist wrote of a welfare recipient who borrowed a
they said, and truth should be your weapon, because truth will
country ham on the farm where he had part-time work. He
keep you free.
didn't tell the farmer he'd borrowed it. He sold it to a grocer
Forty per cent of America's corporations-actually, it was
for $27, and then the man used 20 of the 27 dollars to buy $80
38 per cent last year-did avoid the payment of any corporate
worth of food stamps for which he was eligible because of his
income tax, for the simple reason that 40 per cent of them did
welfare status. The man then bought $51 worth of groceries
not make any profit and therefore they owed no tax. And if
and bought the ham back for $29 worth of food stamps. He
you want to go back through the last 20 or 25 years, you will
returned the ham to the smokehouse; the grocer made a profit,
find that in every one of those years roughly four Out of ten
the farmer got his ham back, the welfare recipient wound up
corporations in America made no profit.
with $7 in cash and $51 in groceries. And the columnist
Free enterprise is a rough and competitive game. It is a hell
concluded with this line: "with no one being the loser." No
of a lot better than a government monopoly. And, as for those
one-unless you ask who paid for the food stamps.
three who earned a million dollars or more, that too, is true,
Just recently in one of our western states, the state
but why didn't they add that there were 624 people in the
superintendent of education decided wisely that hereafter high
United States last year who earned one million dollars or more
school graduates of that state must have taken a course in free
and that 621 of them paid an average income tax of $935,000?
enterprise and capitalism. He went to their three state
Now, it is asking an awful lot of us to think that the tax
universities, to the economics department, and asked the
structure, if it is so riddled with dishonest loopholes that 60
professors of those departments to help in constructing this
per cent of the most successful businesses and 621 individuals
course in free enterprise, and only two out of forty economics
smart enough to earn one million dollars a year, were all too
professors were willing to say that they believed in free
stupid to avoid finding the loopholes that those other few
enterprise and would help design such a course.
found.
There was a student at a university in one of our Middle
It is time for business to start presenting the facts. because
Atlantic states who cancelled the course in history after he had
the facts are on your side. But, for heaven's sake, don't just
registered for it and bought the textbook. The first line of the
repeat them to each other by way of your trade journals. Tell
textbook, a book entitled "Up Against the America Myth,"
the people, and especially your customers and your employ-
read "Capitalism stinks. We can only solve our social problems
ees-and usually they are one and the same-and tell our sons
by doing away with capitalism and the institutions that
and daughters.
support it." There were 458 pages of that kind of talk. On
Item one of the mythology: Some years ago a poll was
page 439, for example, it said, "It is only through developing
taken. An overwhelming majority of the American people
an expanding socialist rationality that the advanced industrial
revealed that they believe the average rate of margin of profit
countries can hope to overcome the ills of society."
for business is 21 per cent, and they thought that was 100 hi
When the young professor of the course was asked if he
Not too long ago the same pollsters went back to the
intended to assign a second text defining capitalism, he said he
people and took the poll again, and they no longer believe the
knew of no such text.
profit is 21 per cent; they now think it is 28 per cent. So they
Our young people complain of big impersonal government;
were asked what did they think a fair margin of profit would
198
VITAL SPEECHES OF THE DAY
be, and they said they thought that business ought to be happy
regulations of the bureaus, as a result of those statutes, private
with 10 per cent.
industry can build low-cost housing 20 per cent cheaper than
Well. business would be ecstatic, I know, with 10 per cent,
the government can provide it.
because for the last 20 years it has never been higher than 5½
Not many years ago, you will remember that the
per cent and right now it is down to 4.3 per cent.
government was going to save the family farmer in America.
But why not level with the people? Why shouldn't business
They spent a lot of money. Now there are only a third as many
tell the people of this country, who are in danger of being
family farmers as when they set out to save them, but there are
victimized all the time by the demagogues, that business does
three times as many Department of Agriculture employees.
not really pay taxes at all, that business collects taxes for
There's one for every 22 farms in the United States.
government and does it very efficiently, and the taxes become
They tell a story in Washington about one of those bureaus,
part of the cost of production and are passed on in the price of
one of those great big buildings, with the acres and acres of
the product, and if government makes you collect too many
floor space and the rows and rows of desks, and the hundreds
taxes, you price yourself out of the market and a great many
of employees, and one morning one fellow in the corner had
people become unemployed when you have to close your doors.
his head on his desk and was sobbing as if his heart would
Right now one of the greatest threats to the American
break. They finally persuaded him to rell them what was
worker's job comes from the lower-priced foreign imports.
wrong. It was the Bureau of Indian Affairs. He said, "My
The other day in the rush hour in Sacramento I saw a fellow
Indian died."
on his way home from work. He had a bumper sticker that
We spent billions of dollars to keep the wheat farmers some
looked like it was right out of the past on his car, "Buy
time ago and succeeded in cutting the price of wheat in half
America." He was driving a Toyota.
and doubling the price of bread.
Some of the hierarchy of organized labor are demanding
For 50 years the railroads have been getting deeper into
that government provide protection against these foreign
trouble and they have been complaining that their trouble is
imports, but the same hierarchy is also protesting, because
caused by unrealistic and illogical regulations. Finally. their
government a couple of years ago gave you a 7 per cent
situation became so desperate that the government took over
accelerated depreciation allowance on new plant and equip-
the passenger service, and apparently the government is
ment, and they fear foreign competition. In West Germany
running it with great success-and why not? The first thing
they get a 17 per cent accelerated depreciation allowance.
government did was exempt itself from obeying the
Japan and France can deduct a full one-third of the cost of
regulations the railroads have been complaining about for 50
new machinery and equipment in the first year. The nations of
years.
European Common Market average a tax burden that, in
In this land of the free and home of the brave, we are
relation to the gross national product, is less than half of what
getting less free perhaps because we have been less brave.
yours is, and possibly this explains why our balance of trade is
I have told a number of business groups on occasions that
the lowest point it has been since 1893.
some years ago, eight Or ten years ago, you will remember, the
More than 100 years ago, the French economist and
Department of Internal Revenue decided to change the rules
philosopher, Frederic Bastiat, said, "When a nation is
of the game with regard to business tax deductions. It was not
burdened with taxes, nothing is more difficult or impossible
an Act of Congress; it was not brought about by our elected
than to levy them equally. The state can have an abundance of
representatives; the bureaucrats just changed the rules.
money only by taking from everyone, especially the masses."
They decided to get into the business of whether on a
In the economic and political mythology, the sales tax
business trip you could deduct for tax purposes as an expense a
employed by some states is known to be regressive, falling
filet mignon or whether you had to eat in a one-arm joint and
heaviest on those who are least able to pay, and yet those who
get the blue plate special. And then they moved into the area
subscribe to the myth and those who promote the myth
of gifts you could give a customer or to your employees.
invariably advocate as an alternative tax another tax on
The trouble was when this happened business abdicated.
business. What they really are saying is they want the sales tax
Business sat down and negotiated with government whether
but they want it kept invisible, and thus, when they want to
they would be allowed 25 or 35 dollars. Why in heaven's name
raise the tax, the merchant gets the blame for raising the price
didn't business say to government at that point, "As long as we
of the product; it does not fall on government's shoulders.
spend the money with the legitimate expectation of making a
There are 116 taxes in a suit of clothes each one of us is
profit, it is none of your business how much we spend."
wearing, 151 on the bread we had for dinner tonight. There
What has happened since? The same government that
are 100 taxes on an egg and I don't think the chicken put
subsidizes the growing of tobacco has ruled that cigarettes
them there; some place between the hen and the table they
cannot be advertised on television. Here is a product which
crept in.
can be legally sold providing it bears the government's tax
The plain truth is, when they start talking about taxes,
stamp. It can advertise on other media, but not on television.
government costs too much, and most proposals to close
Why is there no protest about this, and what product will be
loopholes, or to shift the cost to someone else, are in reality
next?
efforts by someone in politics to get more money for
Is it any wonder that serious consideration is now being
government, not to equalize the tax burden or correct an
given under the name of consumerism. to allowing what they
inequity.
call counter-advertising, which is a delightful euphemism for
The average citizen works from January 1st into the first
the fact that they will now allow anyone to go on the air and
week of June to pay his taxes, federal, state and local. This is
demand equal time to dispute your advertising claims for the
longer than he has to work to buy food, shelter and clothing
product you manufacture.
for his family. Taxes take 43.1 per cent of the total income of
I know that no one would ever think of putting up
he people in the United States.
Berkeley, California, as an example of good old Main Street
Where is the breaking point beyond which a free economy
America, but, even though it happened in Berkeley, it should
can no longer exist? And you have to ask yourselves at 43.1
be disturbing to all of us that they have under consideration an
per cent-does government's track record jusrify this?
ordinance that would reduce the work week for the municipal
Just recently, Secretary Romney told a Congressional
employees to 30 hours but retain 40 hours' pay, and the same
committee that under the present statutes of Congress and the
rule would be applied to all businesses and industries
199
RONALD REAGAN
employing more than nine people. And an excess business
To those who are impressed today-and there are many
license tax would be applied against business to cover the cost
particularly in some of the salons that are peopled by certain
of increasing the number of municipal employees.
of our intellectual element-the Soviet Union, the workers'
"Profit" is a dirty word only when you use it or when you
paradise, is held in high esteem. I don't think that you should
make it. On the bookshelves tight now in many of our
feel bad about that, because I think if you put your minds to
campuses there is a book which extols a kind of 1984
you could match the Soviet Union's achievements. You woul.
socialism. It condenins the competitive system and attacks the
only have to cut all the paychecks 75 per cent, send 60 million
profit motive. The price of the book is $12.95.
people back to the farm, tear down almost three-fourths of the
So I ask: When are you going to tell your story? And
houses in America, destroy 60 per cent of the steel-making
sometimes, if you will forgive me for being presumptuous, I
capacity, rip up fourteen out of fifteen miles of road, two-
have to wonder, do you know the story that you have to tell?
thirds of the railroad track, junk 85 per cent of the autos, and
For example, I have lived ten years longet than my life
tear out nine out of ten telephones.
expectancy when I was born thanks to medical research
Resist the nitpicking and the harassment by the multitudi-
financed largely by free enterprise profits. Ninety per cent of
nous agencies that interfere with the free rhythm of the
the people at the time of my birth lived below what is now
market place. Repudiate what Cicero called the arrogance of
considered the poverty line; more than two-thirds of us lived
officialdom. I don't mean you should return to some sort of
in substandard housing; today, thanks to free enterprise, both
dog-eat-dog attitude, that might have characterized an earlier
of those figures in our single lifetime are less than 10 per cent.
day in the industrial revolution, nor do I mean that you should
Hardly a week passes without some television program
reject what has become modern-day corporate citizenship,
sponsored by some of you, but what portrays the horrors of
some of the experience that I have just mentioned.
poverty and hunger in the United States-and yet 99 per cent
Government does have legitimate functions, and I think
of the homes in America have electricity and the basic
that government performs a number of those very well when
appliances such as refrigerator and range and 96 per cent of
it sticks to its own last. It does them better when it has
the homes have television and telephones; 80 per cent have
participation by the citizenry. And participation that is more
automobiles.
than just a campaign contribution or the activity of a lobby in
If our sons and daughters, in their very real and sincere
your behalf. The simple fact is that politics is too important to
idealism, say this is proof that we have a materialistic society,
be left to politicians. I am suggesting what in an older world
maybe we should tell them over the next three years you will
the aristocracy recognized as a responsibility which accom-
spend $18 billion on environmental projects, that this
panied the privilege, and that was noblesse oblige. In America
generation of young Americans, a greater number of them will
our aristocracy is not by accident of birth or royal favor but by
go to college and get a higher education in this country than
virtue of accomplishment. And noblesse oblige is not unknown
the young people in all of the rest of the world, because of
to us-we may not have used the term-but in times of
scholarships and college endowments that you support, that
emergency and danger our people have risen to the occasion.
this generation of Americans is bigger and healthier, will live
We have won our wars with citizen soldiers and dollar-a-year
longer and travel more and be exposed to more cultural
men. No government can match or afford the genius and d
refinements than any generation that ever lived, that there are
talent that is available in the private sector, and our natio.
more books published in America and more symphony
cannot afford to have that manpower uninvolved.
orchestras and community theaters and operas maintained by
When democracy in ancient Athens was becoming
voluntary subscription than in all the rest of the world put
"mobocracy," Pericles warned, "The man who takes no interest
together.
in public affairs is not a man who minds his own business; we
Perhaps I have told you this next little experience before.
say he has no business being here at all."
Some of you, I know, but if so, you will have to remember
If you will permit me, I would like to tell you of a personal
that life not only begins at 40 but so does lumbago, arthritis
experience that illustrates what can be done if business and
and a tendency to tell the same story three or four times to the
government work together to help free enterprise stay free.
same people. I was meeting with a group of university student
For more years than I care to count I have been expressing
body presidents in California, back when things were not as
publicly a concern lest government should grow beyond the
quiet as they are now on the campus. Finally, one slouched in
consent of the governed, and I have been, over these years, and
the chair, in sandals and jeans and tee shirt, and challenged me
continue to be rather harsh in my criticism of the permanent
and said, "You have to realize you cannot understand our
structure of government. Then, six years ago, a funny thing
generation; you don't understand your own sons and
happened to me on my way to the theater. I became a part of
daughters." I tried to pass it off and said, "We know more
government myself. And this has not lessened my concern
about being young than being old." He said, "I am serious.
about the way government, in recent decades, has increased its
When you were our age and going to school, you didn't live in
size in cost and power.
a world and grow up in a world that had instant electronic
Dr. Parkinson said, "Government hires a rat catcher, and
communication, jet travel, nuclear power, space travel to the
the first thing you know he has become a rodent control
moon, cybernetics, computers that could compute in seconds
officer, and he has no intention of getting rid of the rats; they
what it used to take months and even years for men to figure
have become his constituency."
out."
Six years ago I came out of the woods an innocent, and
And that is true. When we were growing up we didn't have
inherited a California government that was adding several
those things. We invented them.
thousand employees each year and had been adding that many
More than a half of the economic activity in the entire
for more than a decade. It was increasing its size two and a
history of man has taken place under American auspices, and
half times as fast as our increase in population. Our budget
most of that in this century.
was second only to the Federal budget. We were spending a
Journalists who accompanied the President on his trip to
million dollars a day more than we were taking in. The great
China came home with tales of getting a very tasty lunch in
water project that was being built to supply the southern P
Peking for only 15 cents. They didn't bother to add that the
of the state was underfunded by $300 million and the Rids
average daily wage there is only 27 cents, which is not enough
were burning down the schools. I was shuffling through the
to afford two meals a day.
papers on my desk one day, I thought there had to be a letter
200
VITAL SPEECHES OF THE DAY
of resignation there some place and one of the fellows said,
adding 40,000 people, new people, to the welfare rolls each
"Cheer up, things could be worse." So I cheered up and sure
and every month.
ough things got worse.
And again we turned to the private sector for a task force to
But I had an abiding faith in common-sense business
check the regulations against the original intent of Congress
eractices that you use every day and a belief that they would
when the laws were passed, and to suggest practical ways that
work for government. I also believed that people are eager
we might be responsible to the truly needy at the same time
to help if only someone would give them a chance. And I
that we curbed abuses. We found that the multitude, namely
might tell you that the first time you mention common sense
Federal regulations, made it impossible to prevent people from
in connection with government, you cause something of a
being on welfare several times under several different names.
traumatic shock in the marble halls. But I asked some public-
We found one county that had 600 of its own full-time county
spirited citizens-members of the business and industrial
employees legally drawing welfare. Welfare employees sitting
community in California-to form a committee, not to screen
at adjoining desks where the welfare employee for the
applicants for jobs, but to recruit. I had the kind of men in
recipient at the next desk and they did it for each other.
that committee who know where the bodies and talent were in
We found another county where they were mailing checks
California, and I was interested in the kind of men and women
to people living abroad, one in Russia. When we brought
who were not interested in government careers. I wanted the
before the legislature, they refused to give us the statutory
kind who would be willing to give a year or 2 years or more,
reforms that we were requesting, and again the business
but who would be the first to tell me if their job was
community came to our rescue. They loaned men and women,
unnecessary. Then I asked an additional favor of the business
full time, to form a state-wide movement, a grass-roots people
and industrial leadership of California. I asked them to provide
movement, and they didn't make the legislature see the light,
the best experts and the best talent they could produce in a
but they sure made them feel the heat. And a year ago this last
variety of fields, free of charge, to form task forces based on
October our reforms were fully implemented.
their particular expertise and skill. And that these task forces
The welfare case load in California is no longer increasing
would go into every agency and department of state
at 40,000 a month, and there are, today, 246,000 fewer people
government to see how modern business practices could be
on welfare in our state than there were when we started a year
employed to make government more efficient and more
ago in October.
economical.
We have increased the grants to the truly needy, the aged,
There are men in this room and at this head table who
the blind, and the disabled by 30 per cent and the taxpayers
participated in that task force undertaking in California. Some
are saving $708 million a year. None of what had been done
250 top people in our state gave an average of 117 days, full
could have been accomplished without the practice of noblesse
time, to bring us more than 1,800 recommendations. So far we
oblige by the business and industrial community of
have implemented 1560 of them; 29 boards and commissions
California.
ve been eliminated. The new government buildings that had
I hope that what I have told you in just this experience will
en approved for construction have been canceled, because it
be some encouragement for you to carry on the fight that
found they were unnecessary. We adopted new
should have begun yesterday, but should begin now.
tehousing and purchasing procedures. We built more than
Karl Marx had a theory of inevitability. He was confident
1,000 miles of highway with money that was formerly spent
that you would give up and just feed the crocodile, hoping
on administrative overhead. We have a rehabilitation program
that he would eat you last. If about 90 per cent of the laws
that has enabled us to close half a dozen penal institutions, and
that are passed by Congress and the state legislatures each year
the big house, San Quentin, is being phased out.
were lost on the way to the printer, and if all the people in the
We have a new approach to the treatment of the mentally
bureaus went fishing, I don't think they would be missed for
ill that has reduced the number of patients sentenced to a
quite a while. But realize your strength, because if you did not
hopeless lifetime in our asylums from 26,500 to 7,000. We had
go to work, I am sure the country would feel it and grind to a
a retirement plan with an unfunded liability of $400,000,000
halt in about 24 hours.
that has been put on a sound actuarial basis. We are
Resist the nitpicking and the paper shuffling that adds tens
completing that water program without adding $300 million
of billions of dollars of cost and hence adds to the price of
to make up for the deficit but within the funds that were
your product, but at the same time offer your expertise to ease
available.
the problems of human misery that still plague us. Don't let
Our growth in population has given us a work load increase
the doctors fight socialized medicine by themselves, because
of as much as 30 per cent in many of our departments, but we
you cannot socialize the doctor without socializing the patient.
have fewer employees that we had 6 years ago when we
Don't let the President, in these next four years, stand alone in
started. Our budget is now fourth in the nation, not second. As
his fight against a Congress that has already declared they are
a matter of fact, the budget for our host city here is about $2
not going to let him cancel these great social reforms which
billion bigger than the budget for the whole state of
have been such costly failures. Don't let him fight alone
California, and they have more than four times as many
against the bureaucracy that is going to see executive order
employees as we do. And he did all that while he was a
after executive order, if they have their way, flow like water
Republican; what do you think is going to happen now that
out into the sands and never heard from again.
he is a Democrat?
You can make your weight felt with Congressmen and state
We have returned more than $2 billion qver these 6 years
legislators. You can impress upon them once and for all that
to the taxpayers in rebates of one kind or another, and in
you want something done and that you believe that the
January I intend to ask the legislature for a cut in the income
President's idea of reducing the size and power of government
tax. You will know when I do it because I am sure the wind
and returning freedom to the people is a pretty good idea after
om the West will bring the scream of outrage from the
all. Choose some of the great problems that government thinks
islature.
are so much its own province; come up with a plan of your
But three years ago we realized that all our gains were being
own, a suggestion for their solution.
n up by one thing; one thing that had resisted our every
Take for example the biggest sacred COW in all of the
effort. Welfare was increasing at a cost that was almost 4 times
United States; social security. I have to say that if you couldn't
as much as the annual increase in revenues. California was
come up with a better idea than that, you wouldn't still be in
201
WILLARD M. BRIGHT
business. But above all, tell your story. If you have to on the
find some money for all those fellows unemployed in the
campuses take out ads in the college papers to tell some of the
automobile factories and those fellows in the steel mills, and
to
TILES about tax structure and economics and profit margins,
Firestone and Goodyear with the tires and the fellows when
what free enterprise does.
you go in to have your car serviced-because she has to have a
My daughter came home from her class in college one day
car to drive to school. And she began to get the idea that may-
and she was all thrilled with the idea that if all of us would
be there was something in economics she had not learned
quit buying an automobile for just one year, and everybody
You have a story to tell. Tell your story again and again
would just drive their cars for another year, we would have
don't risk having some day to face your children or your
enough money to build hospitals and schools and take care of
children's children when they ask you where you were and
all the problems. And I agreed with her and said, "That's just
what you were doing on the day that freedom was lost. Thank
great. We would save billions. But we are going to have to
you.
Productivity
KEY TO PROGRESS
By WILLARD M. BRIGHT, President and Chief Executive Officer, The Kendall Company
Delivered before the 77th Congress of American Industry of the National Association of Manufacturers, New York,
New York, December 7, 1972
NDOUBTEDLY, YOU REMEMBER that about six
actual controls. We must soon return to a market place
U
years ago opinion leaders discussed the "technology
economy, unless the government is going to establish a
gap" existing between our country and the rest of the
permanent, massive wage and price control system. We know
world. It was feared that our technical skills were so great that
controls are distasteful, but more importantly the economy, at
America would unfairly dominate the world's economy for
their mercy, becomes unresponsive, sluggish, and degraded. To
years to come.
control the system adequately in the U. S., we need a
Now, of course, that gap has turned into a "gasp" as we
rebalancing of power between organized labor and industry to
witness the remarkable productivity gains of Japan and
permit effective wage and work practices bargaining. The way
Western Europe, and watch the U. S. slip into a negative
to do this is through basic changes in the legislation relating
balance of trade in commodities for the first time in this
to the National Labor Relations Board.
century.
However, such topics, plus the protectionist policies of
What happened? There are any number of questions. Did
organized labor as embodied in the Burke-Hartke bill, are
U.S. technology go flat? Was there such a dramatic change in
more properly the province of others in this room, and
our use of labor and capital that the tables turned-essentially
therefore I shall address myself from here on to the role of
overnight? Or are we seeing the effects of strong, slower
research and development in altering our trade balance
moving, and recognizable forces? And obviously, we ask, can
improving productivity.
we improve our situation for the years ahead?
It is quite obvious that research and development can help
As quick answers to these questions, let me say that I think
increase exports and decrease imports by the following:
U $ technology is still fine, if not superb. And although there
1. Discovering and developing new and improved pro-
have been strong forces at work at home and in other
cesses which will lower costs and selling prices of
countries that have handicapped us, we can, assuredly, take
manufactured products;
action to improve our situation. Now, what is involved?
2. Inventing new products that have unique and useful
It seems to me that among the many causes of our negative
properties;
trade balance, the two most important are the high wage rates
3. Developing new product designs that use less scarce and
for U S. labor and insufficient effective research and
imported materials, particularly scarce metals; and
development directed toward improvements in products and
4. Improving the acceptability of products by better quality
productivity.)
and functionality.
We are all well acquainted with the high wage rates for
There is nothing new in these statements. These are the
U. S. labor that are pricing U. S. products out of export
normal objectives of every R & D program in our industrial
markets-and worse yet out of domestic markets. In many
laboratories. But, today we do need to reemphasize these goals
industries the productivity of U. S. workers is still probably
and apply them to programs that will improve our competitive
the highest in the world, when it is measured by units per
position in international trade.
hour. But when productivity is measured in units per dollar of
The U.S. has been quite successful in doing this in many
wages, the workers in Western Europe, Japan, and a number
areas in the past. Two specific areas have been notable,
of other countries are distinctly better.
particularly because of governmental involvement. The
Wage rates are increasing rapidly in Japan (doubling
development of American agriculture to a highly productive
between 1965 and 1970) and West Germany (up 70 per cent
state is one and commercial jet aircraft is the other. Let us
in that period), while the increase was held to a third in the
examine these high technology areas more closely.
U S But our trading partners all started with much lower
To be sure, agricultural productivity has been brought to its
ware rates, and their worker productivity in units per dollar
high level in the U.S. by a fortunate set of circumstances. The
still greatly exceeds that of U.S. labor and will continue to do
U.S. has a vast, more or less flat, land surface, the largest
XI for years ahead. Clearly, we need to slow down the rate of
favorable climate zone of any continent, and a prosperous
increase in wages in the U.S. until better monetary value in
home market with good distribution services. But just 35
productivity is achieved.
important, the Federal Government and the states have
The Administration placed restraints on wages, as well as
provided funding for many years for research and deve
prices, by the control actions of August, 1971. The drama of
ment and for technology transfer. Excellent interdiscipli
the President's moves probably accomplished more than the
programs have evolved in universities, government experiment