 Thank you. Good to see you. Hello. How are you? Good to see you. Well, come in. Sit down. Why don't you... We understand that. One of two things to do this morning. Thank you. Yes. I was just saying, the record is complete. It never fails. Any time I have a meeting with the congressman, I'm behind schedule for the rest of the day. To say nothing of the national agenda, and it meets with Congress. Thank you. We'll be able to put some fires out on the area. Very concerned about the Central American. Well, this was a pretty supportive group. This included the people that have been down there, and have just returned. And we've got to do a better job of making the American people realize what is it state for, and what's going on. I think you're getting comfortable. I must say that U.S. news cartoon. I don't know if you saw it this week. It's got this little mouse named C.I.A. And Connor's standing up on a chair. And terrified behind the chair. And under is this great big ferocious beast named Red Aid for Central American rebels. I mean, governments. It's a good cartoon. We had mentioned the only thing we wanted to ask you about high tech was the fact. It was Jim Cook's piece on the enforce about the fact that the whole economy, the recession wasn't just a recession. It was a shift in the nature of the economy. Yes. Too high tech. And there's been a lot of talk about whether or not the government should play a part in having a national plan as to our efforts, how are the Japanese. And I was wondering if you were being influenced or have been approached on that kind of approach? Well, no. And I don't think that the Japanese success is particularly due. I know there's been a great deal of talk about it to government relationship with Japan. I think very simply one of their greatest advantages is the much higher personal savings rate of the Japanese people over ours and the pool of capital that's available there can be used for investment in a lot of high tech and improvements in general business. And I think our industrial plan is one that's across the board to stop government from being, as it was for so long, an adversary of the private sector, view, for example, of our tax program to make it easier. I want an extension of the 25% tax credit for research and development for business and industry so that they can plan ahead and know what they can do. There are things government can do in this, but they're aimed at all of industry because not only do we want and know that high tech is going to, well, our own labor department says probably be the biggest provider of new jobs in the future, but technological improvements in the regular industry, basic industry in this country to help them. So some of the things we've done, we've, well, we're asking for a 17% increase in our own federal spending for research and development. I am proposing a plan and incentives to see if we can't lure bright young PhDs into teaching science and engineering instead of going up and down there into the high tech world themselves. We, as I say, want an extension of that tax credit that was in our program, but all of the program was to make it more possible for business to develop and expand. And then, of course, because high technology is where we can be the most competitive in the world market and then everything that we're trying to open up trade and reduce protectionism and so forth, we're continuing on that. So our industrial policy is one of, across the board, helping business and industry have the climate they need in which to go forward. On another matter, Mr. President, I hope some of the people that we've read in the paper are giving you economic advice about the necessity of slowing down the money rate and increasing interest rates so that the recovery doesn't get out of hand. I hope they're not saying the same things to you. No, that's just my attention that's going on and no, that's not my view at all. I don't think we need to worry about the rate of recovery, about snuffing it out because it's getting out of hand. It's a healthy one and it's going to progress. But it's alarming to read that these people around you think that the recovery is out of hand already. Well, those are those usual unnamed sources, white house sources. I don't know whether they even exist. I certainly don't know who they are or they wouldn't be white house sources anymore. But you're not in favor of returning our interest rates. No, and I'm not in favor of the things they're talking in the Hill of wanting additional tax revenues. Right now we've got a recovery going and I can't wait to veto any effort with regard to taxes and will. No, I think you're on the right side of that. Both soundly and also happens to be politically sound, I think, too, which is a happy coincidence. There's noise that way, but I think this one is speaking politics instead of Mr. President. I hope while we all hope and some of us believe you'll run again I hope you won't make any announcement about it until you have to because I think it might have a lot of practical effects that wouldn't all be good. Keep us on tender votes as long as the decision is positive. I'm very much aware of that. Either way, to become a lame duck by saying no would perish the thought. That's right. Would paralyze everything we're trying to do. To say yes would then render everything that I try to do viewed as politically the other side would mobilize against it. So no, besides campaigns are too long. It's just ridiculous. I think this is why fewer and fewer people are voting all the time. I think we've satiated them. They're never free of political campaigns going on. I must say, I think in terms of the Democratic Party, the fact that so many are running so hard so soon will create a certain amount of boredom as it relates to them while the curiosity continues as to when you publicly make the statement we all hope and expect and would be disappointed and didn't. But all I'm saying is I hope you don't get pushed into any early time and the early announcements. I'm in no hurry. Good. As long as the answer's positive, isn't it? Incidentally, I heard from earlier what we were talking about too and about this that part of our trouble is recession but a large part of it also is we're in a transition. In the decade of the 70s, the Labor Department statistics show that out of the new jobs created, 8 out of 10 were in service industries. Do you have plans to propose legislation or take moves to make it easier for the services to compete in export markets or to ease their expansion here? I mean, they don't have the tax advantages. You're going to have the depreciation and so on. The services. Yeah, the services that a heavy manufacturing company has. So that in a sense the investor is skewed in that direction. Well, if I understand you correctly what you're asking about is anything that we're doing with regard to export markets. Well, one thing was of course that a bill that we created for export trading companies so that smaller companies could come together without being any violation of the law and take advantage of export trade where previously they've never done it before. We're doing everything we can to reduce a large part of the talk at Williamsburg. And I must say, all of the heads of state there all agreed that we're all guilty of too much protectionism now and we've got to work further and harder to rid ourselves of it. You certainly came out of that smelling like the Roscoe. I think it was neat that everybody predicted it was going to be either a waste of time or blow up and so forth because when you came out of it there were certainly rational findings and widespread supporters. It was wonderful, I think. Well, you know, the previous things and the two that I had attended before it virtually was that someone had written the communique in advance of the meetings and the meetings therefore had to like a script, match the script. And so people made presentations but there was never any really free-wheeling discussion. So this went just from the very first moment. There was no communique in the first moment. We had into a trade or a subject-like trade and then free-for-all around the table. And we never left a subject until we had a consensus. We'd take a vote and say, well, three descending and four in favor of anything and we worked it out. We already agreed on the things that we could do and I must say all the rest of them were very generous in their labor. People were very impressed that you were not dogmatic about anything. We did all that you valued their thinking. I mean, you've got a consensus which nobody predicted. Speaking of that, Mr. President, do you see any value I propose the script all being written out ahead of time at some point in the months ahead of meeting with Mr. Andrew? I don't see it in this year unless something arises that we can't foresee. Certainly, we're supportive of the idea if there is an agenda where something can be accomplished. The one thing that I think would be very bad and yet some people haven't talked about it is to go ahead and have one just to get acquainted because people's hopes get too high in meeting with that kind and then to walk away with nothing has too much bullet down. Now if in the months ahead, the early part of the year if we can come to some meeting of the minds on practical things to discuss and that offer some possibility of improving the situation, fine. Do you see any inklings as to whether or not anything's going to come out of Afghanistan in a way of withdrawal? President Xi, I certainly seem to be trying hard and effectively he's a good friend to us. He's a good friend in Pakistan as a mediator. Right now there is no indication of any weakening if there's anything, the series of strength in their forces there and that is something that clouds that arise. Now do you sit down and start talking about other issues? Well, this total violation of everything that every nation is pledged to in the charter of the United Nations is being violated and what's going on there and it can't be ignored. Speaking of withdrawals, do you have any indication that Syria's again, these of the Russia's aid is going to even make token evacuations in Lebanon? Well, we're going to work for more than that and we're going to continue to work on that. This country, Syria, they were one of those at the very first that said when everyone withdraws, we'll withdraw, we'll all withdraw and now they're violating that promise on what pretext I don't know but we're not going to give in. We're going to continue working with our friends among the Arab nations who are all on our side on this and opposed to Syria's taking the stand. I feel it's principally because of the Russian aid and the closeness of Syria. I think Russia is pushing hard in there and this is sort of our back door entry to the table. And this is a situation we have to look at as to what the answer is. Since Mr. Andropov took over, the Russians have been stirring up trouble everywhere. They're sweeter subs, Syria, Vietnam, Central America. They're going to be stoking it up in there. When you mention Central America again, you of the media, there is such a story that isn't being told. For example, after my April 27th speech, the polls indicated that a great many Americans did see El Salvador and Central America in a different light. But the constant drumbeat of the opponents to that is such that the polls have gone back practically to where they were. Now, this congressmen that have come back have some fascinating stories to tell. They talked to 16-year-old boys, and listies in the El Salvador army. Why? Why are you doing this? And these kids said to fight for our country. This isn't the thing in which there's a lack of daisical feeling in the part of the people. They feel as strong as they felt when they voted a year ago last March, but they have other stories because they talk to others on the other side. And they had high-ranking leaders of the forces that are backed by the Soviets and the Cuba in this tell them that this revolution is for real and that this revolution is aimed at all of Central America. They stated that. As a matter of fact, one of these men said to some of these congressmen, one of these high-ranking officers said to the congressman, make no mistake about it. We'll be at the Arizona-New Mexico-Mexican border sooner than you think. What do you think it'll take to arouse them? I think more. I think that it is winnable on our side, but not with the grudging penance or pittance that we're getting from Congress, which is just sort of helping them bleed to death down there. What we need is to give them the weapons, the training. There's no question, but the battalions that we trained were the most successful that they had. And we need more of that kind of training. And the bad American people have got to know that this is, to our national interest, if for no other reason, if they don't want to consider hostels being at their border, but look at it one other way, we're talking about if those people succeed, those Cuban and Soviet-backed people can succeed in getting their kind of dictatorships there. You can look for anywhere from 7 to 10 million refugees here in the United States. Do you see signs that the Mexicans are beginning to wake up to the nature of what's happening down there? Yes, I think they are. And I'm hopeful that they can move faster. They can be effective, and they're going to have their own problems. They have them now, economic. Do you get any indications that... Well, the Contradora is trying to get, as they're called, those four countries that are banded together. I will be meeting for too long with some of those people, but we support them in what they're trying to accomplish. But the thing we must recognize is that these are not just some peasants with muskets and battled farmers out there in the hills. These are professionals. These are, as a matter of fact, some of our people down there have met high-ranking officers. They met in other countries under other circumstances who are there now in the so-called Sandinista government, which is nothing more than... I think its mask is dropping more and more. Yes, it's a surrogate problem. The facade is, for the whole time, more and more exposed. The polls may be down, but I think the more and more you see pictures, I mean, four living planes full of arms, the idea that this is a peasant rebellion, you know, it's just, it doesn't work. More Soviet ships, actual Soviet ships have unloaded cargo in Nicaragua so far this year than did in the entire year, in an entire year past, just these few months. I think the public opinion, as before World War II, it's slow to turn after the Vietnam. The analogy doesn't hold, and the proximity creates a whole different matter. But I think that your own steadfastness in regard to it is going to, the public's going to follow behind. And so is media, basically, because it's becoming just more and more apparent. This is not Mr. Big trying to snuff out poor starving peasants who want to be done with dictators. I mean, that scenario is washing less and less as the Cubans and the Russians become more and more open in their support of the scientists. Yes, and we're not talking about us, they keep harping on, we're not talking about American military forces. As a matter of fact, President Magani said he would not ask for them. They can do it, but if we give them the practical help that they need, economic help as well as military, and economic help because they have a negative growth in gross national product because of the assaults of these rebel forces destroying their industries, their power plants and their infrastructure, creating additional unemployment to where they've got people that have to be cared for because their jobs have disappeared. The farmer that can't work is soil, workers' farm because of the gorillas. And they're playing political games. There are some members of the Congress with this thing trying to make it that... They're on the wrong end of the stick, as far as the basic public opinion, as it becomes aware that it isn't a power ploy, it isn't a Vietnam, it's a real confrontation by the Soviets and the Cubans on our facts, and I think that's becoming more and more apparent thanks to the efforts of the administration. As long as you don't let the opposition in Congress make the administration gun-shy and making the points that have to be made, I don't think this fellow gets gun-shy too quickly. My trouble is I go out there and I make a speech to somebody and then I see in the evening news 20 seconds of the speech and nothing of importance in that 20 seconds. Listen, we'd like to be of some help to you by not taking any more of your time as the President, except to tell you that it's a very high-biting average for us that, you know, in the magazine ourselves we couldn't be more supportive. I would say 90% plus. And the minus sides are minute compared to the plus sides of Mr. President. We look forward to your second term and we look forward to your not announcing it until the... So I won't even respond to those words. Right. I hope we covered everything that you wanted. You haven't been. And thank you for your time, Mr. President, and what we can do to be helpful is we intend to because we so thoroughly agree with your thrust and your thinking, your philosophy. It's a very refreshing thing. I think it must be refreshing to you to find out how many more people are. And I think economic recovery that is underway with any blips is, we've said many months ago, is going to be stronger than people anticipated and the fact that it is proving stronger, it shouldn't alarm the people that underpredicted. I'm glad that being tweeted here, I think you're going to be one of your advisers for having underestimated, but they shouldn't get alarmed that it's out of hand. Recovery is not out of hand. No. No. But it's a healthy state, right? Incidentally, with all that unemployment, you know what no one has mentioned? The other day I heard one of the people up on the hill, one of the candidates, I think it was, and sounding off about, well, there's probably 20 million unemployed if we only knew of the people that have gotten discouraged so I wish they'd look, take a look, and see if it's really 10 million because how many of the so-called unemployed are in the underground economy that is avoiding taxes and they are hurting at all. That's a good case for another tax cut rather than what the Democrats want to do. Every possible good wish there, and we, as I say, look forward to equally great progress in the second level. I appreciate all this.