 The day starts out and usually by the end of it, the schedule is getting behind, but I want to welcome you to the White House. I'm aware that to be a member of this organization, you have to become president of a substantial concern before the age of 40. I just missed it by about 30 years. I know for certain that your enterprises are in better financial shape than mine. You don't suppose I could arrange a merger with Bendix, do you? I've always thought there were three kinds of people in the world. Those who make things happen and those who watch things happen and those who ask what happened. All of you, obviously, are in the first category. As you well know that recession today is worldwide, we've had, and I think sometimes we tend to overlook it, we have been living in the longest sustained worldwide period of inflation in the history of man. The inflation rate was in double digits in January 81 when we checked in here. Interest rates had climbed from less than 7 percent in 1976 to 21 and a half if you use the prime rate. Productivity was dropping. The savings rate was dropping. Taxes unfortunately did not drop. They were smothering the incentives of individuals in business and you understand very well the meaning of the word incentive. Taxes actually doubled in those five years of 1976 through 1980. Since we took office, you know, mind inflation has been reduced by 59 percent. Since January it has averaged 5.1 percent in the first eight months of this year. The result has been a 40 percent drop in the prime interest rate. It isn't 21 and a half anymore. It's 13 and a half and bankers trust and maybe some others have followed now recently. It's 13. We've cut taxes and people are saving more for the first time in a long time. But nearly 11 million of our people are out of work and I can't tell you how painful it is to me that each day millions of Americans who want work cannot find it. No one your age will ever quite understand when I say something of this kind how much I mean it because you didn't go out looking for your first jobs in the great depression of the thirties as I did and anyone who ever lived through that period. Unemployment is a horror word. We all wish there was some quick and easy cure for this tragedy, this illness that was so long in the making and I think we've learned that governments economic fine tuning and intervention in the seven previous recessions since World War II resulted in only temporary expedience. Each recession if you look back was followed by another with the next time more unemployment, more taxes, more inflation and more and more economic problems. And each time the to the recovery things of that kind the unemployment rate and inflation rate were a little higher than they'd been before the start of the recession. And I just don't believe that the American people want to return to the scene of the disaster. According to the polls Americans want a balanced budget amendment and their will was thwarted by a minority in the Congress who would probably be afraid that such an amendment might end their big spending and quick fix habits but I just want you to know and because some of you mentioned this on the way through we're going to stay the present course until we have a real economic recovery. So we'll be back in January with another balanced budget amendment. As I said in Virginia the other day to those who are faint hearted and unsure I have one message if you're afraid of the future then get out of the way and stand aside. The people of this country are ready to move again, they're ready to move with a force and vigor that you young presidents can appreciate. And I thank you. And now normally I know what the schedule calls for and I've kept you standing there longer and you should be kept away from that table and everything but I was just wondering whether I should just come out and mingle for the bit of time that's remaining or would you prefer maybe at least for just a few minutes to ask a question or two? Because I remember that when we gathered in Acapulco at the great convention of the young presidents we did Q&A as a matter of fact I remember that you had in the audience a previous speaker the name of Jesse Jackson who did some of the questioning but does anyone have one or yes? Yes. Mr. President what do you see happening losses or gains in your party? Well I'm cautiously optimistic I think that we can hold the Senate and are going to hold our majority there maybe even pick up a few. I know that in the House we're up against a tradition that in the first off year election of a new administration they always lose a considerable number in the House. Now the Democrats are stating a very low figure of gain that they think that they're going to accomplish so that if they stick with tradition and get more than that why then they can claim a great victory and by the same token I'm supposed to be pronouncing that they're going to gain a great many more so that if they gain less than that I can say hey we did better than we were supposed to do but no I think that's a possibility. There's some strange things out there that have happened in some states this is the reapportionment year and in some states the gerrymandering has been devastating to us as a matter of fact in California I think the only Republican district they left us was outside the three mile limit but even so I'm optimistic I've been out as much as I can and have met a number of our candidates here they've come here and I have to tell you I don't think any party has ever fielded a better set of candidates than we have running for office this year so I'm going to be a little optimistic that we won't do as badly as we're supposed to do. Yes. It's a difficult thing to make them see the our goal and our target has been or our target is what we've been aiming at is inflation and I believe in completely that inflation has started the whole cycle that leaves us now that was the number one problem when we started according to the polls everyone said cure inflation now everyone says cure unemployment but if you look back unemployment's been coming on for a number of years and if this recession were cured tomorrow we would find that we have a normal higher unemployment rate than we used to have in the old days because there is a higher percentage of Americans in the employment pool a higher percentage of what what's considered well everyone over 16 is considered part of the employment pool we have a higher percentage today actually employed than we have had in the past when there was no unemployment and yet we have 9.8 percent unemployment rate this means that more people that here before were not in the employment market are now in the employment market and seeking jobs but when I said inflation is the thing and why we're targeting and why we're so pleased with what has happened with that look what happened it was a big zoom in the money supply in the last six months of 1980 and interest rates went up to 21 and a half percent not because of the supply of money but because the market was smart enough to know that that zoom had to be followed by a fall and sure enough in the first half of 1981 as you know they pulled the string on the money market and pulled it way down to below even their normal level so the interest rates but the interest rates have to be based on getting enough interest to make up for the loss of the value of the money you lend through inflation if you're going to lend a dollar and when you get that dollar back 10 years later it's only worth 47 cents you had to get enough interest to not only have a return on your money but to cover that 53% loss and that's what the 1970 dollar was worth in 1980 was 47 cents so when those interest rates had to go that high the automobile industry felt it and the layoff started because of the people that couldn't buy because of the high interest rates on the installments the housing industry because of the high mortgage rates and then it spread to the associated industries to steal and glass and so forth in the automobile industry but in housing to the lumber to the real estate field to the appliances that were not being sold because the houses weren't being built and so forth so we've determined that the answer permanently is not what went on in those other seven recessions of the quick fix temporary costly government make work jobs in jobs with no future on the public payroll that just took more money for government out of the private sector we feel if we continue getting inflation down to the interest rates follow down and people start buying again plus the tax cuts that we implemented that that is going to put more money out there in the investment capital pool from people saving and in the ability to buy particularly if the interest rates come down and as people begin to buy that's going to turn the wheels of industry again and bring more people back into the into employment and when we do that we think that that's going to be a permanent recovery on a solid based economic recovery not the quick fixes that we've we've had before now it is true that you've got to wait until that impact of spending is felt out there in the market and until they need to replenish the inventory and so forth for unemployment to show the answer everyone is waiting for October 8th and what the unemployment figures maybe there's going to be an increase I don't know but I do know this it's a it's a recession in which there are over a hundred million Americans actually employed and there's never been anything like that before in in any previous recessions so we're gonna we're gonna stick to our course for a permanent recovery and we think that next year is going to show a solid and we think we're on the we've bottomed out and we're in that curve where you begin people are saving more for the first time in a long time real personal income has increased where it's been going down for a period of a few years because of inflation and taxes and I have been talking too long I know if there's just well all right Mr. President firstly thank you for receiving us in your home it's a great honor for all of us to be here and we all want to assure you of one thing we've spent the past three days with members of your administration every one of them are dedicated marvelous people who are 100% for the administration to show they want us to help tell the world what you're doing we're with you and as a token of our thanks we have a piece of stew-ben glass which is a picture of the universe this is made in Corning, New York, American made just as a symbol of our dedication to exporting more from America well and thank you thank you very much you can put that on the top of paper and as the government gets smaller and smaller and smaller the pile will get lower yes and we've been working on that too good thank you all right all right I'll put it back in there now I come out I won't mingle for as long but I can mingle for a little well thank you all very much for being