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9/22/76 - Economic Club of Indianapolis
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9/22/76 - Economic Club of Indianapolis
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This file contains material relating to Humphrey - Hawkins Bill.
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Carla A. Hills Speeches
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1976
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The original documents are located in Box 2, folder "9/22/76 - Economic Club of
Indianapolis" of the Carla A. Hills Speeches at the Gerald R. Ford Presidential Library.
Copyright Notice
The copyright law of the United States (Title 17, United States Code) governs the making of
photocopies or other reproductions of copyrighted material. Gerald Ford donated to the United
States of America his copyrights in all of his unpublished writings in National Archives collections.
Works prepared by U.S. Government employees as part of their official duties are in the public
domain. The copyrights to materials written by other individuals or organizations are presumed to
remain with them. If you think any of the information displayed in the PDF is subject to a valid
copyright claim, please contact the Gerald R. Ford Presidential Library.
Digitized from Box 2 of the Carla A. Hills Speeches at the Gerald R. Ford Presidential Library
ECONOMIC CLUB OF INDIANAPOLIS
SEPTEMBER 22, 1976
I AM so PLEASED TO BE HERE IN BEAUTIFUL INDIANAPOLIS,
AND IT IS A PARTICULARLY APPROPRIATE CITY FOR A SECRETARY
OF HOUSING AND URBAN DEVELOPMENT TO VISIT, BECAUSE THIS
GROWING CITY-COUNTY METROPOLIS IS CARRYING OUT ONE FINE
URBAN DEVELOPMENT DEMONSTRATION-IN-PLACE.
YOUR CONCEPT OF "UNIFIED GOVERNMENT" -- MERGING THE
AUTHORITIES OF INDIANAPOLIS AND MARION COUNTY -- HAS BEEN
LIKENED TO THE STRUCTURE OF AN UP-TO-DATE CORPORATION UNDER
OUR SYSTEM OF FREE ENTERPRISE. BUT, IT IS EVEN MORE THAN
A WORKING REAFFIRMATION OF THAT OLDEST AMERICAN PRINCIPLE.
IT IS A TRIBUTE TO THE DEMOCRATIC IDEAL OF SELF-
GOVERNMENT BY SELF-DETERMINATION; OF LOCAL SOLUTIONS TO
LOCAL PROBLEMS,
YOUR SUCCESS IN ACHIEVING WIDE-SWEEPING REFORM IN
LOCAL GOVERNMENT WHICH, HAD BECOME UNWIELDY WITH THE
WEIGHT OF YESTERDAY'S LEGISLATION, IS PERTINENT TO TODAY'S
NATIONAL CONCERN FOR ALL OUR CITIES, AND TO THIS YEAR'S
PARTISAN DEBATE ON THE ROLE OF THE FEDERAL GOVERNMENT IN
THE URGENTLY NEEDED REVITALIZATION OF AMERICA: NEIGHBORHOODS.FORG
GERALD
LIBRARY
- 2 -
CENTRAL TO THAT DEBATE IS THE SAME LAUNDRY LIST OF
ILLS -- MAGNIFIED MANY TIMES OVER -- THAT LED TO YOUR OWN
UNIFICATION.
WASTEFUL OVERLAPPING OF JURISDICTIONS, A CATEGORICAL
APPROACH TO PIECES OF PROBLEMS; THE IMPOSSIBILITY OF
COORDINATED PLANNING; UNEQUAL SERVICE TO CONSTITUENTS;
AND -- THE STAGGERING COST TO THE TAXPAYER FOR DELIVERING
LESS AND LESS,
You KNOW WELL THAT CHANGE DOES NOT COME EASILY WHEN
THERE ARE MANY SPECIAL INTERESTS INVOLVED. THERE IS THE
OPPOSITION OF HABIT -- A MIND-SET THAT PROMPTS TOO MANY
ELECTED OFFICIALS TO SETTLE FOR THE OLD SOLUTIONS EVEN
WHERE IT HAS BEEN PROVED THAT THE OLD SOLUTIONS SIMPLY
DO NOT WORK.
Too OFTEN, THEIR ANSWER TO CRITICISM IS THAT THE ONLY
THING WRONG WITH THE OLD WAY OF DOING THINGS IS THAT THE
SCALE WAS TOO SMALL, THE TIME WAS TOO SHORT, OR THE
BUDGET WAS TOO MEAN.
IN THIS BICENTENNIAL ELECTION YEAR, WE HEAR OUR OPPOSITION
-- WEEK AFTER WEEK -- CALLING FOR MORE OF THE SAME PROGRAMS
OF THE 1960's, THAT GOT THIS NATION IN THE SERIOUS ECONOMIC
STRAIT THAT FINALLY CAUGHT UP WITH US IN THE 1970's.
- 3 -
IN TRUTH, MR. CARTER'S ECONOMIC "WIZARDRY" IS A RE-TUNED
VERSION OF YESTERDAY'S ECONOMIC "SOLUTIONS" so HIGHLY TOUTED
OVER THE PAST YEAR IN OPPOSITION TO PRESIDENT FORD'S
POLICIES, AND THAT COINCIDENCE IS WORTH THINKING ABOUT.
So, LET US BEGIN BY TAKING STOCK.
WHERE WERE WE A YEAR AGO? WHAT HAVE WE DONE ABOUT IT?
WHAT HAVE WE LEARNED THAT SHOULD CAUSE US TO PAY SPECIAL HEED TO
THE ECONOMIC DEBATE IN TODAY'S PRESIDENTIAL CAMPAIGN?
NONE OF US CAN FORGET THAT IN 1975, THE MAJOR QUESTION
MARK WAS WHETHER OUR NATIONAL ECONOMY WOULD SUSTAIN THE
FORWARD MOMENTUM WHICH WAS THEN ON THE CUSP OF A POSITIVE
TURN-AROUND -- FROM THE BLEAK AND DEPRESSING 12-MONTH
PERIOD OF A TERRIFYING RECESSION COMPOUNDED BY UNCEASING
INFLATION,
FOR SURELY, IF AMERICA WAS TO DO ANYTHING TO STEM THE
DETERIORATION OF ITS URBAN CENTERS -- AND COPE, AS WELL, WITH
THE PROBLEMS OF ITS SMALLER COMMUNITIES -- IT FIRST NEEDED A
ROBUST ECONOMY TO SUPPORT THAT EFFORT.
- 4 -
INFLATION STOOD AT 12-14 PERCENT. THE UNEMPLOYMENT
RATE WAS ABOUT 9%.
URBAN REVENUES WERE WAY DOWN, NEW YORK AND OTHER
CITIES WERE ON THE BRINK OF FINANCIAL FAILURE, INDUSTRY
WAS DEPRESSED AND THE HOUSING SECTOR WAS SUFFERING ITS
WORST YEAR IN 3 DECADES.
So, HERE WE ARE -- ONE YEAR LATER.
THE NATION AND ITS ECONOMY SURVIVED -- IN SPITE OF THE
DOOMSAYERS -- AND THE DELICATE HEALTH OF THE ECONOMIC UPTURN,
WHICH WE WATCHED so FRETFULLY A YEAR AGO, HAS BECOME STRONGER
AND STRONGER WITH EACH PASSING MONTH,
IN ONE SHORT YEAR WE HAVE SEEN:
-- PERSONAL INCOME JUMP $83 BILLION; -- OUR GROSS
NATIONAL PRODUCT GROW BY $200 BILLION; RETAIL SALES INCREASE
16 PERCENT; AUTO SALES 38 PERCENT; GENERAL MERCHANDISE
11 PERCENT;- -- NEW FACTORY ORDERS UP $17 BILLION,
TODAY, THERE ARE 3 MILLION MORE AMERICANS WORKING THAN
ONE YEAR AGO -- IN SPITE OF A TREMENDOUS INFLUX OF WOMEN
AND YOUNG PEOPLE INTO THE LABOR MARKET. AND INFLATION HAS
BEEN MORE THAN CUT IN HALF.
- 5 -
AND IN HOUSING -- PERHAPS THE HARDEST HIT SECTOR OF OUR
ENTIRE ECONOMY. -- NEW STARTS ARE UP 22 PERCENT OVER LAST
AUGUST, AND 64 PERCENT OVER THE BEGINNING OF 1975.
WHAT HAVE WE LEARNED THAT SHOULD CAUSE US TO PAY
SPECIAL HEED TO THE ECONOMIC DEBATE IN TODAY'S PRESIDENTIAL
CAMPAIGN?
WE HAVE COME THIS FAR, NOT THROUGH SOME MAGIC OF A
BIG FEDERAL GOVERNMENT "SAVE," BUT THROUGH THE STRONG AND
CONSISTENT GUIDING HAND OF A PRAGMATIC PRESIDENT.
AND OUR PROSPECTS FOR CONTINUED GROWTH AND PROGRESS
DEPEND ON MAINTAINING THE STEADY COURSE PRESIDENT FORD
SET WHEN HE TOOK OFFICE TWO YEARS AGO,
UNDER PRESIDENT FORD, BASED ON HIS RECORD OF UNDERSTATED
PROMISES AND HIS PATTERN OF DELIVERING MORE THAN HE PROMISES
WE CAN COUNT ON THE FACT THAT INFLATION WILL DROP STEADILY
DOWN TO 3 PERCENT BY 1980.
WE CAN COUNT ON THE FACT THAT PERSONAL INCOME WILL
INCREASE BY MORE THAN 10 PERCENT EACH YEAR -- PRODUCING
MORE REAL PURCHASING POWER NOT A MERE COST-OF-LIVING
CATCH-UP,
- 6 -
AND WE CAN COUNT ON THE FACT THAT UNEMPLOYMENT WILL
CONTINUE ITS STEADY DECLINE TO LESS THAN 5 PERCENT BY 1980.
Now, LET US LOOK AT THE CONFUSING AND OFTEN CONTRADICTORY
PROMISES OFFERED BY MR. CARTER.
IN AN EFFORT TO HEDGE THE "SPENDER" IMAGE HE HAS
ACQUIRED FROM SOME SPEECHES TO SOME AUDIENCES HE HAS SAID
IN AT LEAST ONE INTERVIEW THERE WOULD BE NO ADDITIONAL
SOCIAL PROGRAMS IN A CARTER ADMINISTRATION UNTIL THE BUDGET
WAS BALANCED.
THAT CAN ONLY MEAN THAT HE ENDORSES -- AS I DO --
THE COURSE THE PRESIDENT HAS BEEN FOLLOWING, INCLUDING
EACH AND EVERY ONE OF THOSE VETOES WHOSE PRINCIPAL
OBJECTIVE HAS BEEN TO KEEP OUR NATIONAL DEFICITS DOWN,
IF OUR OPPOSITION APPROVES OF PRESIDENT FORD'S STRATEGY
WHICH HAS ACCOMPLISHED so MUCH, THERE IS NO LOGICAL REASON
TO CHANGE LEADERS -- AND THERE IS VERY GOOD REASON TO AVOID
UNNECESSARY DISRUPTION AT THIS CRUCIAL STAGE OF NATIONAL ECONOMIC
RECOVERY.
BUT THE OPPOSITION CANDIDATE'S REPEATED CALL FOR MORE
GOVERNMENT PROGRAMS, LEAVES SCANT LIKELIHOOD THAT HE WOULD
FOLLOW THE PRESIDENT'S WISE PRECEDENT,
- 7 -
IF WE LISTEN TO HIS ENDORSEMENT OF PROPOSALS THAT
WOULD ADD $170 BILLION TO A BUDGET THAT IS ALREADY PRODUCING
A DEFICIT OF OVER $50 BILLION THAN WE MUST CONCLUDE THAT HE
IS PURSUING THE PRESIDENCY WITH THE SAME "SOMETHING FOR
EVERYBODY" PROMISES THAT HAVE BEEN HIS PARTY'S STOCK-IN
TRADE FOR FOUR DECADES.
FOR EXAMPLE, THE FAMILIAR ADHERENCE TO THE DISCREDITED
NOTION THAT AMERICA CAN "BUY ITS WAY" OUT OF ANY PROBLEM IS
FOUND IN HIS SUPPORT OF THE NATIONAL HEALTH INSURANCE
PROGRAM THAT WOULD ADD $70 BILLION AND OF THE HUMPHREY-HAWKINS
EMPLOYMENT BILL WHICH WOULD ADD ANOTHER $50 BILLION TO THE
BUDGET IN ITS FIRST YEAR,
AND THE UNVARNISHED EVIDENCE IS THAT THESE PROGRAMS
WOULD THWART NEEDED BUSINESS EXPANSION BY DRIVING UP COSTS
OF DOING BUSINESS,
THAT HURTS THE VERY PEOPLE THESE PROGRAMS WERE
SUPPOSED TO HELP -- WITH GREATER EXPENSES, EMPLOYMENT
CONTRACTION, LAYOFFS AND STILL ANOTHER ROUND OF UNEMPLOYMENT
CHECKS.
- 8 -
THE HUMPHREY-HAWKINS BILL WOULD "CREATE" MAKE-WORK
FEDERAL EMPLOYMENT ON ONE END WHILE THE MEANINGFULLY-EMPLOYED
IN THE PRIVATE SECTOR WOULD BE SQUEEZED OUT AT THE OTHER.
IN FACT, A CARTER ECONOMIC ADVISOR HAS ESTIMATED THAT THE
HUMPHREY-HAWKINS APPROACH WILL DRIVE-UP INFLATION ANOTHER
15 PERCENT.
SURELY, A CONCERN FOR CATASTROPHIC ILLNESS AND
UNEMPLOYMENT IS NOT THE SOLE PROVINCE OF THE DEMOCRATIC
CANDIDATE. BUT, PRESIDENT FORD'S SOLUTION DOES NOT CALL
FOR A DON QUIXOTE CHARGE OF MASSIVE FEDERAL SPENDING TO
WIPE OUT THESE ANCIENT ENEMIES.
IN HEALTH INSURANCE, THE PRESIDENT PROPOSES NOT TO
FEDERALIZE ALL OF HEALTH CARE, BUT, INSTEAD, TO INSURE
THAT ELDERLY PERSONS WITH MAJOR MEDICAL EXPENSES WILL NOT
BE FINANCIALLY DESTROYED BY THOSE COSTS.
THE PRESIDENT'S CURE FOR UNEMPLOYMENT IS THE BEST
REMEDY KNOWN TO A DEMOCRATIC SOCIETY: TO ESTABLISH A STABLE
ECONOMY IN WHICH EXPANDING BUSINESS AND INDUSTRY, UNDER THE
SYSTEM OF FREE ENTERPRISE, CREATES REAL AND LASTING JOBS
AND A GROWING DEMAND FOR BLUE AND WHITE COLLAR WORKERS AT
EVERY INCOME LEVEL,
- 9 -
SIMILARLY IN THE HOUSING AREA, WHICH IS OF PARTICULAR
CONCERN TO ME, MR. CARTER SAYS THAT WITH HIM AT THE HELM,
THE GOVERNMENT WOULD SUBSIDIZE HOUSING STARTS TO A LEVEL
OF 2.5 MILLION A YEAR.
SUCH A SUBSIDY PROGRAM WOULD GENERATE WASTE OF OUR
EXISTING HOUSING STOCK; TRIGGER ANOTHER WAVE OF OUT-
MIGRATION FROM OUR URBAN CENTERS AND LEAD, INEVITABLY,
TO A SMALLER PRODUCTION CYCLE IN THE NEXT PERIOD -- AND
THUS REINCARNATE THE ECONOMY-SHATTERING SPECTOR OF BooM-
AND-BUST.
AND ALL OF THIS WITHOUT EVEN CONSIDERING THE INFLATIONARY
EFFECT OF THAT GOVERNMENT SPENDING ON THE AMERICAN POCKETBOOK.
THIS ISN'T A "SCARE" STATEMENT. IT IS BASED ON THE
HARD LESSON OF OUR IMMEDIATE PAST -- FOR, PURSUANT TO THE
HOUSING AcT OF 1968, OUR NATION SUBSIDIZED ANNUALLY OVER
2 MILLION STARTS FOR A THREE YEAR PERIOD AND GENERATED A
BURST OF HOUSING OVERPRODUCTION THAT WE ARE STILL TRYING
TO WORK OFF,
- 10 -
AND IN THE COURSE OF THIS PERIOD OF OVERPRODUCTION OUR
NATION ABANDONED HUNDREDS-OF-THOUSANDS OF SOUND,
WELL-DESIGNED HOMES IN OUR CITIES AND UNDERUTILIZED ROADS,
UTILITIES, AND SEWAGE SYSTEMS ALREADY IN PLACE THERE AS
BUYERS HEEDED THE PIED PIPER CALL FOR "NEW IS BETTER," AND
RUSHED TO THE SUBURBS.
AND BECAUSE ALL FACTORS IN AN ECONOMIC EQUATION ARE
RELATED, THE ARTIFICALLY PRODUCED "BOOM" LED TO SHARP CUTBACKS
IN HOUSING PRODUCTION AND MASSIVE LAYOFFS IN THE CONSTRUCTION
INDUSTRY WHICH HIT US HARD ABOUT TWO YEARS AGO.
CERTAINLY PRESIDENT FORD HAS SHOWN HIS BELIEF IN
MAINTAINING REASONABLE LEVELS OF HOUSING PRODUCTION --
AND PROOF IS FOUND IN THE GOVERNMENT'S PURCHASE OF MORTGAGES
BEARING BELOW MARKET INTEREST RATES WHICH HAS BEEN JUDICIOUSLY
AND EFFECTIVELY USED TO NURTURE RECOVERY OF THE HOUSING
INDUSTRY.
HIS HOUSING POLICIES ARE DESIGNED TO ACCOMMODATE
THE LOGICAL CALL FOR REASONABLE LEVELS OF STARTS WHILE
AVOIDING THE DISASTEROUS CYCLES OF ALL OR NOTHING THAT
HAVE CHARACTERIZED THE HOUSING CONSTRUCTION INDUSTRY EVER
SINCE BIG GOVERNMENT GOT INTO THE ACT.
- 11 -
IT IS A CREDIT TO PRESIDENT FORD'S POLICY OF WORKING
WITH -- AND NOT AGAINST -- THE MARKET, THAT HUD HAS
ACHIEVED A 42 YEAR SALES RECORD IN RETURNING HOMES TO
USEFUL OCCUPANCY, AND HAS PREVENTED THE ABANDONMENT OF
OTHERS THROUGH OUR RENTAL SUBSIDY PROGRAM.
RATHER THAN RECREATE MASSIVE SUBSIDY PROGRAMS TO
EXPAND HOMEOWNERSHIP OPPORTUNITIES WHICH TOO OFTEN FORCE
TAXPAYERS TO SUBSIDIZE THEIR ECONOMIC PEERS, THE PRESIDENT
ANNOUNCED IN ANN ARBOR THREE INITIATIVES WHICH HAVE BEEN
UNDER STUDY IN MY DEPARTMENT FOR SEVERAL MONTHS.
THE FIRST IS TO LOWER DOWNPAYMENTS FOR THOSE WHO BUY
HOMES WITH FHA INSURANCE. FOR THE TYPICALLY-PRICED NEW
HOME, THE PRESIDENT'S INITIATIVE WILL CUT THE DOWNPAYMENT
IN HALF, THUS HELPING FAMILIES, PARTICULARLY YOUNG FAMILIES
WHO ARE BUYING THEIR FIRST HOMES, TO GAIN THE PRACTICAL
AND PERSONAL BENEFITS OF HOMEOWNERSHIP.
THE SECOND IS TO EXPAND FHA MORTGAGE LIMITS TO COVER
ABOUT 87% OF SALES.
- 12 -
AND THE THIRD, IS TO PROVIDE A FEDERAL GUARANTEE OF
A GRADUATED PAYMENT MORTGAGE, WHICH ALLOWS YOUNG FAMILIES
TO REDUCE THEIR MONTHLY PAYMENTS IN THE EARLY YEARS WHEN
THEIR INCOMES ARE LIKELY TO BE LOWER. THE PAYMENTS INCREASE
MODERATELY IN LATER YEARS WHEN THEIR INCOMES ARE EXPECTED
TO RISE.
IN THE 1930's AND 40's THE FEDERAL GOVERNMENT,
REVOLUTIONIZED HOME PURCHASING BY INTRODUCING THE 30-YEAR
FULLY-AMORTIZED LOAN. UNDER THE PRESIDENT'S PROGRAM,
WE CAN DO THE SAME, ON A SMALLER SCALE, IN THE 1970's.
THESE PROPOSALS ARE NOT BASED ON SUBSIDIES PAID FOR WITH
TAX DOLLARS -- THEY ARE INNOVATIVE METHODS FOR HELPING
FAMILIES TO PAY FOR THEIR OWN HOMES,
BUT NO AMOUNT OF INNOVATION WILL WORK IF THE AMERICAN
FAMILY DOES NOT HAVE THE SPENDABLE INCOME TO MAKE THE
DOWNPAYMENT AND TO PAY THE MORTGAGE, UTILITIES AND
MAINTENANCE.
THE ONLY SURE PRESCRIPTION FOR THAT IS THE CONTINUATION
OF THE STEADY PROGRESS WHICH PRESIDENT FORD HAS MADE IN
REDUCING INFLATION AND INCREASING EMPLOYMENT THROUGH ARTFUL
STIMULATION OF THE PRIVATE SECTOR.
- 13 -
So, I REPEAT: IT IS A SPECIAL TREAT TO BE HERE IN
INDIANAPOLIS. WHAT YOU HAVE DONE, HERE, TO THROW OFF
THE SELF-DEFEATING HABITS OF GOVERNMENT ATTUNED TO THE
PROBLEMS OF YESTERDAY, IS WORKING PROOF THAT PRESIDENT
FORD'S AGENDA FOR AMERICA IS ON THE RIGHT TRACK,
THE OPPOSITION CANDIDATE MAY FIND IT EXPEDIENT TO
USE OLD SOLUTIONS: TO PROMISE "SOMETHING FOR EVERYBODY."
BUT I AM PROUD OF PRESIDENT FORD BECAUSE HE IS SPARING
IN HIS PROMISES -- AND HE IS PRODUCING RESULTS FOR ALL
AMERICANS.
END