 That went on the malt. That went on the malt. I hope he opens the malt. That's not on the malt, Jim. The malt. The malt's not open, Jim. My name is Jack Galvettine. It's my honor to introduce the host to this meeting. He garble off as the first chairman of the Milliport Corporation. He was recently elected a vice chairman of the American Business Conference. Who is the malt? The national organization limited to the chief executive officer, mid-sized high-growth commercial. In addition, D is the co-founder of the Massachusetts High Technology Council, past chairman of the Health Industry Manufacturers Association, past chairman and the trustee of Johns Hopkins University. In addition, D has been a driving force within the American Business Conference to do nationally what has been done so splendidly in Massachusetts. Mr. President, ladies and gentlemen, it's my honor to introduce our host, D Garble off. Thank you very much, Jack. And Mr. President, we are certainly honored and feel very privileged by your visit to Milliport today. I'm particularly pleased that we can talk off the record. Because we're going to use some fairly technical terms like private sector initiative, free enterprise, and we might even have some good news. Milliport is a company that has pioneered in the field of what we call separations technology. It's really dealing with products and technologies that are critical to advancing the fields of medicine, electronics, we're deeply involved in water purification and biotechnology. We really provide scientists throughout the world with the tools they require to capitalize on the biological revolution this country and the world is going through. We're a company of sales about $270 million, we employ 4,000 people, and even in today's environment, our sales and earnings are going up. America, and there's 200 pages of facts and figures in that book that tells about our problems and our opportunities, and we highly commend it to you for your bedtime reading. Thank you very much. Thank you very much. Thank you very much, Ray. Mr. President, on your right next to Jack Albertine is Roger Wellington, and Roger is President of AUGAD, another high technology company in Massachusetts. He's a member of the American Business Conference, and he's also Director of the American Electronics Association. And Roger will talk a little bit about tax issues at the national level. That's just fine with me. All right, I see you have a couple of camera clubs, though, that dropped in. No, and I've been most interested in some of the things that were said here and because of the problems that you mentioned when you mentioned in education and in the tax structure. You know that we labor under a political climate that has been made popular over the years in which automatically there is a reaction to a suggestion such as you made about capital gains that this is designed solely to benefit the rich, whoever the rich are supposed to be. We do know that every time that we have made alterations downward in the capital gains tax, the government has increased its revenues from that tax by making capital gain investments and sales and so forth more attractive than they are. The same is true of some of the other tax things that we believe and there is a tendency to forget that in the long run it is out of that growing gross national product that every individual and every worker in this country is going to benefit. I know I have some figures not with me here about several years ago. It happened when the taxes and the marginal rates were increased but particularly the capital gains tax and how in the open market, the money markets, Wall Street, the billions of dollars that had been traded and sold to capitalize industries like your own, particularly smaller industries that were getting started, the entrepreneurs and so forth, within a very few years, just a couple of years, at the new higher rates, that had dwindled down to just a few million dollars, 15 million dollars I think, and only a couple of those entrepreneur type companies that had gone to the marketplace for funding. I think one of the challenges facing all of us on all of this is there is a great lack of understanding among otherwise well educated and intelligent people on things of this kind and the marketplace, how it functions and what is required to make it work and much of what remains is prejudice. The educational subject that you brought up there in the higher education, I'm wondering again and how do we get at this problem of whether we're getting all that the dollars invested should buy because with inflation down to 3.9% in 1982, we found there were two areas, one we know of as health care, that was up several times as high in its inflation rate as the national average, second to it was education, which was increasing in cost in 1982 at somewhere in excess, well between 8% and 9%, not at 3.9%, or even holding down there. And here again, I wonder particularly in those tax supported institutions and those that have government help, have we done the same thing there that we've done to some individuals? We've become it's so easy and dependent on government that business practices that would be absolute imperatives in your own businesses are no longer applying, for example, in that field to education. I'm accused of telling anecdotes and so forth but let me just give one example. While I was governor of California, I visited a state supported institution, higher education. It was up in the north of our state and what you would expect that a school of forestry and engineering and so forth would be the principal functions there but having been in the business I'd been in before I was governor, I was proudly shown through their theater arts department they were shown their TV studios, they even had a revolving stage so that they could have movable sets and so forth in the shop for building them and complete theater and I couldn't resist, I finally said to the man in charge who was so proud of this, I said, may I tell you that if any of your graduates ever make it big in show business, Broadway, Hollywood, television, they will never again perform in facilities equal to those that you've given them to learn. But, well, you said questions and you probably would rather do that than just teeing off here on the subject so why don't you begin? Okay. Why don't I just ask for some hands in terms of somebody who'd like to write? Yes, Mil. I'm Milton Greenberg and I'm president of GCA Corporation, Mr. President. Those of us in the high technology industry are very, very worried about the growing sentiment in Congress and amongst our world trading partners about protectionism, the imposition of non-tariff barriers, et cetera, et cetera. And as you know, Mr. President, they wanted a driving forces behind the growth of high technology industries everywhere, including this country, is our ability to export and to sell in a free and open fashion and based mainly on quality and effectiveness to the consumer. How can we be helpful to your administration to ensure that these markets remain free and open and even increase for us? Well, when you put the question as to how you can be helpful, just simply in being supportive of what we're trying to do. We do believe in free trade, but it has to be fair trade also. And we do know that there is a wave of protectionism and there are countries that we deal with today that through various devices, regulations that don't have anything to do with tariffs make it very difficult for our products to enter their market. I think that you're all well aware. I am that the high technology field is one in which while we lead today, we are target for tonight in the phrases of World War II that other countries are zeroing in on this market just as they have previously in other areas. I don't believe that retaliatory protectionism is the answer at all because every time it's ever been employed, it's a two-way street and it just ends. It gets down to lesser trade and less jobs and less prosperity. We have been, it hasn't been widely publicized because I'm a believer in more quiet diplomacy, but we have had our people and our teams from Commerce and Bill Brock, Ambassador Brock's section and other levels virtually in constant negotiations with our allies and our friends, both Japan, Europe, on persuading them to join us in a freer marketplace to get rid of those restrictive regulations that they have. I should think on the tariff basis we should have learned our lesson in the Great Depression and the part that was played in that by the smooth holly tariff bills. So anything that you can do to be supportive of us in resisting, which we're going to have to do, I know in the days ahead, the protectionist wave that is growing in our own Congress will be beneficial because, as I say, while we believe in free trade, we are still going to do our utmost to see that it is fair trade. We don't believe that we can accomplish that by then automatically slamming the gates and joining them in protectionism. Thank you, sir. Do we have time for one more question, Mr. President? Yes. John? John Colony, Colony Database Systems. Mr. President, I was recently asked to chair a committee on behalf of the Mass High Tech Council on Computer Literacy, kindergarten through the 12th grade, and more recently I was asked to chair the advisory committee for Northeastern University's new College of Computer Sciences. So many of us were quite interested in your comments last night about tax incentives or other incentives to parents, the average American in terms of related to cost of education and what could be done in that area. Obviously jobs are important for these children and naturally a high-tech community can benefit from that, and we wonder what your nuances of your program were and what we can do also to help in that particular cause. Well, we are exploring what we can do to make it possible for more families to contribute to the educational costs. If you look back at the history of the college or of the government getting involved in everything from the work fair program to the work study program to student loans to guaranteed loans to the outright Pell grants and so forth, and I know that we've been assailed as trying to cut back on that and in this way we're trying to deprive people otherwise that would otherwise get an education. No, what we were trying to do in whatever cutbacks we made was to see that the money was directed to those people whose family incomes were such that very obviously they could not get higher education without some kind of help. But the truth of the matter is as the government has grown in billions and billions of dollars in the student aid programs the percentage of family help to students has visibly declined and the interest rates were higher than they are now. It wasn't hard to discover that some families who could otherwise afford to send their offspring to college were resorting to loan programs because by borrowing the money at the low interest for a college loan they could then put that money back in treasury notes at the same treasury where they had obtained the loans at a higher rate of interest used their own money to send the young people to school for making a profit out of it. These were the things that we were trying to head off but we are studying right now programs that will make it more possible for the family to help. I mentioned one last night Monday is when we will disclose the budget and what it is that we are proposing but we do have in mind a program, a savings program in which there will be a tax incentive for people to start saving for their children's eventual college education. Try and induce them to do that. That at the same time will of course aid in our amassing of capital because that money will then be available for investment and so forth as it is put into the savings accounts. We want very much to see that happen. We also are resisting a tendency that has even been encouraged in many institutions that the student who gets through school on student loans if they are from the government doesn't need to pay them back. As a matter of fact when I was governor we even found some institutions that were giving instructions as to how they could avoid paying them back at the same time they were helping them process the loan applications. But this is important and it must be done. In connection with this and your remarks about education I note that all of this and the help and the fine help that you've been given is directed toward higher education. Are we ignoring a problem down at basic education that is a part of our problem that we have seen it in our military forces? Well as a mother put it to me one day in a meeting that I had with a group of parents she said to me don't talk about busing my child to a school or anything else she said I want my child kept in the class he's in until he learns what he's supposed to have learned in that class not graduated from that class and pushed into another one because he'd simply come to the end of the term. Now there is a lot of that going on also in education today and then we find that we have to or have had to in the past I think you'll be happy to know that the intelligence level the capability in that regard of our armed forces today is remarkably higher than it has been in the past years but there was a time in which training manuals had to be written down to a reading level that was far down in the elementary grade level and yet high school graduates were doing this and of course the other thing we do know at the college level is is there a university today that doesn't have a bone head English course that freshmen have to take so that they can begin to handle the studies that they're going to get in at that higher level are we as I said last night starting to think that that child who hasn't had the proper amount of math and science by the time he's 16 which is getting up to one year away from high school graduation they're never going to be able to be a scientist or an engineer or hold the jobs that you will one day be advertising for. I recently went through the one-eds in the Los Angeles Times on a Sunday when I was out there in the last trip for the New Year holiday and I was amazed at the in the 45 and a half pages of help wanted ads that how many of those ads were from companies like your own in high technology and they weren't just advertising they had an opening for someone they were begging for people to come in they were offering inducements please come take our job rather than another this problem confronts us now I know that I'm preaching sermons here instead of maybe giving specific answers but we think that we are going to come up with a program that will be helpful in that making it more possible I look back in I feel sorry for some of the young people today because one of the better jobs I ever had in my life was the job I had working my way through college I washed dishes in the girl's dormitory Did I overstayed my welcome? Not a bit, not a bit Mr. President but I do know that your schedule is tight and I know that you're running late and I understand that you have some concluding remarks that you would like to make Well, I want to thank you and tell you how much this entire day has meant to me I have been in a rarefied atmosphere beginning over there at that wonderful institution OIC where I saw those young people learning the computer science and all of these young people who here before had been denied the privileges of such things and their surroundings they told me that they have just graduated 29 of these young people and 12 of them are already placed in jobs four more have just been added to that number and that there are 10 more who are very likely to get jobs soon I've had the privilege of looking into America's future I think today and the future looks good and I know that you're aware I've given a bedrock speech or two about the principles that we must get back to in our country reducing tax rates the growth of federal spending reviving the magic of the market and bringing government closer to the people the trouble is sometimes those principles seem about as popular in Washington as mandating a 14-hour work day on Christmas and I just wish that more people would come here it wasn't too long ago that your state was known as Tax-A-Truces and that social contract that you made resulted in the more than 60,000 jobs for this state and its place now in the high technology field was a result of some changes in that tax policy you had a vision, you took action you turned the situation around this is a living laboratory of progress and proof that the private sector can work with local governments to solve problems and move America forward I'm very impressed that your companies trained or retrained so many people to produce high-tech products you're changing people's lives and that's a wonderful thing to do this country was founded and built by people with great dreams and the courage to take great risks the company that I visited just before this one in the same field of high technology or in a different field but high technology 25 years ago it was started by three men and today it's in a dozen countries around the world it's numbers, it's employees in the more than 60,000 and it does almost $4 billion in sales a year where in the world do things like that happen but I think that pioneer spirit that we've had is still alive only it isn't out on the prairie now it's in institutions such as this I understand that at nearby radio station WFMP and WFGL have launched its own programs to encourage more permanent private sector jobs by offering free advertising to the companies that create those jobs two years ago I asked our citizen to join together in a national crusade to make America great again we faced some awesome problems but we've also made real progress in bringing down the crippling interest rates inflation and the tax rates that were smothering growth our crusade goes forward we will take new steps to rebuild our country we're still the technological leaders in the world and we must not only keep that edge we must increase it so I intend to open a national dialogue on how our private sector can export more goods to compete more jobs at home and abroad to strengthen our firms to compete more effectively we need to better mobilize the tools and resources of science and technology so let me tell you today we will soon create a nonpartisan commission on industrial competitiveness and I'll ask the commission to make specific policy recommendations to me and I'm asking all of you to lend us your experience your wisdom and every bit of energy you can spare now another piece of news for you the budget that I'll be submitting to the Congress next week will reflect two key initiatives to spur research and development we will propose unprecedented increases in fundamental research because it offers essential support for our industries and our defense needs and we will channel this research into the most promising areas those most likely to extend the benefits of our American science expertise to industry as you know research is the wellspring of ideas that lead to new technology such as the transition and the laser it's also the transistor I should say and it's also the key source for the highly trained scientists and engineers that as I've already mentioned we will need to lead us into the next century so I hope you won't mind it if during my travels I become something of an apostle for your success story here to get back to the very beginning and a mention that had to do with the tax structure of our country I realize that there will be a great stirring and I'll probably kick myself for having said this but when are we all going to have the courage to point out that in our tax structure the corporate tax is very hard to justify its existence that why isn't the so called corporate tax simply passed on to the stock holders in which they then based on whatever bracket they're in will pay in individual income tax and won't this do something about that educational map that we saw up there the endowments of institutions I saw how very slim that one up there was for how much those institutions higher education gets from endowment but those are supposed to be tax free institutions and much of their endowment is invested out there in industrial America but if they're tax free aren't they paying a 46% tax rate before they get the results the dividends that they get from the holdings that they have and thus wouldn't it be more fair to them wouldn't it be more fair to the labor union pension funds invested in that same industry if they got as dividends and they wouldn't have to pay tax on it because they are tax free but other individuals it wouldn't be a loss to the government I think there would be a net gain to the government all the way around if we would look at that sticking with what is literally a myth about corporations and what the taxing policy should be I can assure you that your announcement of establishing a commission is very exciting to us and ABC, the growth companies of this country are going to be more than willing to help you Mr. President I thank you so much for accepting my invitation and you were so gracious to be here at Milliport please do be here