by John Dalmas
"Good evening," he said. "I'm speaking to you tonight from the broadcast room in the White House." His voice was mild, quiet but easily heard, the words distinct but casual.
"I'm not going to talk just now about the war in Iran, other than to mention that the Soviet invaders captured Teheran today. Many of you have already heard that. We're not ignoring what's happening there; the Pentagon is following events closely. But just now my attention is on problems at home. And what I'm going to talk to you about this evening is the economy. Or actually, certain important aspects of it."
He strolled to a desk and sat down. "This desk isn't mine, incidentally. Mine has a computer terminal on it, and it isn't usually this tidy.
"First I want to commend the army, and more especially the national guard, for their vital work in seeing that the distribution of food and fuel have continued and been improved. Without their work and your cooperation, this country would go down the tubes regardless of anything I could do.
"Also at this time I'd like to commend President Donnelly and his advisors, operating under martial law, for their emergency slashing of federal salaries and wages, tying them to week by week economic indicators. And I'd like to commend state, county, and municipal governments for their similar actions. With the crash of wages and prices generally, the gross reduction of tax income has meant much less money to pay public employees with.
"The alternative approach, which President Donnelly wisely rejected, was to print and distribute large quantities of money backed by neither goods nor public credit. In other words, worthless money. If he'd done that, we'd have had several hundred percent inflation by now, or worse. And planning, and the recovery steps I'm going to outline for you here, would be much more difficult.
"I'd also like to commend the American people for their wide acceptance of emergency wage slashing and rent slashing in the private sector. It kept a lot of businesses going, and a lot of people employed. And it kept vital goods flowing.
"Incidentally, our latest figures show unemployment at fifty-eight percent. So you can see why the president's been given emergency powers."
He paused, pursed his lips slightly, then continued. "With regard to federal taxes, I have personally talked with the new Commissioner of the Internal Revenue Service, Mr. Fred Buhler. The recent flurry of IRS property seizures has been halted, with property being returned to the people it was taken from. If any more such seizures occur without proper court action, let your nearest FBI office know. They have orders from me, through Director Dirksma, to handle whoever is responsible. Meanwhile, twenty-three IRS personnel have been reprimanded and reduced in grade. Nineteen others, including ex-commissioner Edwin Balthazar, have been fired, and the FBI is looking into possible malfeasance charges against them, which could mean criminal proceedings and jail sentences. I'm sure that no one will be happier to know this than the large majority of IRS employees who've done the best they could and have tried to operate in a sane and ethical manner."
The president's eyes were direct, as if he were looking at his audience through the camera. "None of this means that tax cheating is all right. What it does mean is that the IRS is not above the law. And that its authorizations do not include arrogant, arbitrary, or vindictive behavior. Also, it means that the IRS, like the rest of us, needs to adjust its operations ethically and responsibly to the emergency situation. Right now, top priority goes to salvaging this nation.
"Regarding jobs: The Federal Highway Administration, the Office of Community Planning and Development, and the Labor Department have been putting together a program of public works which will employ several million people within the next couple of weeks. Some of you have seen the first of these public works projects starting up in your communities. To give credit where credit is due, these agencies had begun the planning before I took office, assuming that such programs would be wanted.
"The wages will be low, because the United States Treasury is very low, and because government incomes from taxes have been enormously reduced. But these projects will give a lot of families a wage earner, and the opportunity to buy things they need. And the convenience and dietary variety of getting their food in a local store, instead of having to go, usually on foot, to an emergency food distribution center and stand in line. This program will also provide road and park improvement and new construction that will be greatly appreciated in the future.
"There are several reasons we've been able to actually get these projects underway so quickly. But the central reasons have been martial law and the Emergency Powers Act. These allowed the suspension of a lot of barriers and delays, the slashing of government wages and of payments to government contractors, and the suspension of bond payments, leaving us with something for project funds. These cuts and suspensions have been hard on certain people, but they were necessary adjustments to a critically dangerous situation.
"And that's all I have to say for now about what we might call relief measures. Important as they are, and they are very important—vital—much of my attention is on rebuilding the economy on a solid base.
"Basically, the crash has slammed us back to economic square one. Suspension of contract strictures on wages, prices, interests, etcetera, have allowed the country to make the adjustment without going back even further, to square zero. So the question I've been working on is how do we get up to square two and above.
"I've been given a lot of different advice on the economy in the short time I've been in office. You might not believe how different some of it has been. And almost all of it supported by what sounds like convincing data and logic. But very little of the advice was the kind I could put into action for quick, broad, positive results that were consistent with a return to democracy.
"So I decided that if experts had such different ideas about what was best to do, I was justified in starting from scratch to see where logic would take me.
"Which I did. I wrote it up and gave it to five economists of generally different views. And got it back with their independent critiques."
From one side of his desk, he took a neat stack of paper and held it up before the cameras. On the topmost, penned jottings were conspicuous in the margins and between the double-spaced lines.
"And I've paid attention to them. Because although the study of economics might still be in its adolescence, economists have studied the known phenomena of economics and the theories about them. And the economists I've talked to are very intelligent people, among the best, at the forefront of their still rather crude specialty. Just as some of the doctors of a hundred and fifty years ago were highly intelligent people, who had studied all the medical knowledge of the time and were limited by it.
"The upshot is that I've prepared some new law based on ideas that didn't offend most of those five economists too terribly. It deals with fair wages and salaries. Right now, wages and salaries are whatever an employer can afford. Or what he claims he can afford. This has kept the ship afloat, barely, but it has inevitably resulted in considerable suspicion and resentment, and a certain amount of gouging.
"So we need to establish ground rules on wages and jobs, which will be followed by rules allowing the 'desuspension' of mortgage payments and the reopening of stock markets.
"What we're going to do next—what I am going to tell you about now—will upset some people. It has already upset some of my cabinet, who have the responsibility of seeing that laws, orders, and programs are carried out.
"Because it's different than the way things have been done, and because it'll have to be debugged in use. But you and I know, and they know, what grew out of the way things used to be done. And I'm not changing what doesn't need to be changed.
"What I'm going to outline for you now applies to any and all businesses that do business across state lines or with the federal government, or have done during this calendar year. And it will be in effect until the first of next October, unless Congress or myself sees fit to cancel it."
The president looked around,
scanning the panoply of cameras as if looking at the audience of viewers.
"By a week from next Monday morning at eight o'clock"—He paused for emphasis and repeated deliberately. "By a week from next Monday morning, every such employer, except for governments, every such employer with more than three people working for him, outside his own family or household, is to make the financial records of his business available to his employees. Or to employee representatives. In a form readily understood. And management and employees are to negotiate new wage and salary agreements based on"—he paused for emphasis—"on a sharing of income. Management's share will not come off the top, nor will labor's. They will come after other operating expenses are paid. Expenses such as rent, material, debt payments—things like that. Labor's wages, as always, will come out of the same pot that profits and management's salaries do. But now labor will know what's in that pot. And the negotiations are to determine the proportions—who gets what percentage."
The president cocked his head, hand cupped behind an ear. "I can hear the screaming from here. But let me comment that Duluth Technologies is an employer. Even now it has something like seventy-two hundred employees including sales representatives. So this new law impacts the firm I built, and that I will return to from here. For that reason, if for no other, you might expect me to be fair toward management.
"Meanwhile, all old wage scales and salary contracts, for everyone from sweepers to corporation presidents, are cancelled. Not just suspended, as they have been lately, but cancelled. And this includes those of government employees.
"By the first Sunday in January, each of those employers, and his or her employees or employee-elected representatives, must have negotiated a new agreement, to take effect on that date."
The president steepled his fingers, and his eyes focused elsewhere, as if in thought. When he spoke again, it was more slowly, as if choosing his words carefully.
"So what we're talking about here is what you might call floating salaries and floating wages. When company income goes up, everyone's share goes up. When company income goes down, everyone's share goes down. The sweeper's and the chairman of the board's. Labor will have something to say about management salaries, as well as management having something to say about labor's wages." His brows drew down slightly now, less in a frown than in serious emphasis. "But labor had better recognize the value of good management," he went on, "and the need for profits as a reward for investment and a necessary means for expansion. Labor should not get carried away by their new position and try to cut their own throats.
"I want to stress here that top management carries more responsibility than anyone else for company income, which means everyone's income, and it needs to be rewarded accordingly. But on the other hand, being top management does not justify an unreasonable share of company income. "One of the reasons that our economy foundered—one of the reasons—was the desire of both management and labor, both of them, to have everything they wanted, and right now. Or as close to everything and as close to right now as possible. This was a desire rooted in good old human ambition, and force-fed by advertising.
"Now as far as I can see, there is nothing wrong with wanting to have a lot—or in having it. But first you have to create it." The president's voice rose in emphasis. "Prosperity is not a matter of 'gimme,' of wanting and demanding. It's a matter of production and distribution and sales. Each of us, and that includes you, has to create, has to produce, our own prosperity. We, you, have to produce goods and services, and exchange them with others."
He paused. "And that's an important part of what this new law is about: Seeing that production, and the exchange between supplier and purchasers, comes before salaries and wages. It's fine for the businessman or manager to want a big boat, a diamond bracelet for his wife, a summer home in the mountains, a condo in Florida. And the employee can't be faulted for wanting a second car, a Hawaiian vacation, weekends on the ski slopes or in Las Vegas, and a stock portfolio. Those are all justifiable desires." Once more the president slowed for emphasis. "But the money has to come from somewhere, and if it doesn't come from production and sales, at prices that don't feed inflation, then the ship will finish sinking, and we'll end up with something more or less like the Soviet people struggle with.
"Basically that's the choice. And you're the only ones who can make it.
"And something I almost forgot to mention, related to wages—Both sides should consider bonuses for outstanding individual contributions to company income. That's not part of the new law, but it's a part of good sense."
Haugen leaned forward, both elbows on his desk now, crossing his forearms on it. "And there's more to this law. As of the first Sunday in January—" He enunciated the words almost one by one: "Starting in January, job security is tied to job performance. I'll repeat that: Job security will be tied to job performance. Allowing for sickness and other special cireumstances to be worked out between management and labor. For example, if you're an assembly line worker whose production frequently fails to meet agreed upon—agreed upon—quality and quantity standards, management must have the right to fire you. Fair standards and fair procedures for this are something that management and labor need to work out together as part of the labor-management agreement.
"At the same time, if you are a hired corporate executive whose decisions have been harmful to the company's economy, you can and should be fired. Labor and the stockholders should insist on it, because the inept manager hurts their earnings. The new law gives labor the leverage to get it done. I'll leave the evaluation and firing procedures to be worked out between management and labor.
"Of course, if the manager also owns the business, he can't be fired. But he can go down with the ship."
The president's voice, which had been business-like, changed, taking on a pleasant, genial tone. "Now there may be, out there, an occasional executive who is thinking, I don't need to worry about this new law. We'll find loopholes, or otherwise work our way around this. That's what we hire expensive law firms for."
His eyes hardened, and his voice took an edge. "To this individual I say, don't challenge me on this. You could find yourself working for room and board, making canvas products for Federal Prison Industries. And all the lawyers in New York, not to mention Philadelphia, won't be enough to save your butt."
He paused again, took a breath, and continued. "Now, if management and labor can't get together on what the income shares should be, and the working conditions, and job evaluation and discharge procedures, before the second Sunday in December, they'd better agree on and bring in an arbitrator for binding arbitration. Otherwise the federal government will provide the arbitrator. And we'll charge outrageously for it, which will cost both management and labor dearly until they've finally finished paying. Because we don't want the arbitration job; we want management and labor to take responsibility themselves.
"And all of this holds for nonprofit organizations as well as for those that hope to make a profit. Except that it does not hold for the majority of churches—those that have non-profit status."
The president sat back then. "This is all being published in detail. It will be available in stores within a week. There are people in government who are sweating blood to see that deadlines are met on this; my thanks to them.
"And that's all I have to say for now. Before too long, I expect to report to you on energy, the environment, and taxes. I believe you'll like what I have to say about each of them."
He got up from his chair. "Thank you all for listening. God bless you and good night."
***
When the cameras ceased recording and the microphones were off, Arne Haugen walked slowly into the center hall to an elevator, and rode up to the presidential apartment, where his wife waited. Enroute, he seemed to shrink two inches and age ten years. When he entered the living room, she got up and embraced him.
"You were very good," she said quietly. "I was proud of you."
He smiled ruefully. "Thank you,
my most impartial friend. I feel as if I'd been hammered through a knothole."
She nodded. "I can understand that. But you did do well. Very well."
"The next question," he said, "is what the other 260 million think of it. Will they really try? And if they do, will it work or won't it? If they won't, or if it doesn't, you can forget democracy in America, and probably in the rest of the world."
He sank down in his favorite chair and this time let Lois pour a glass of wine for him; usually he did the pouring. "I think I'll go to bed early tonight," he said, then grinned. "Anyway I've still got my ace in the hole. I know damn well it'll work."
SIXTEEN
Arne Haugen left the presidential apartment after breakfast with his mouth tingling from toothpaste. He was a resilient man; he'd recovered nicely from the previous evening's emotional exhaustion. The two Secret Service agents answered his cheery "good morning, Will; good morning, Frank," with identical replies—"good morning, Mr. President"—and accompanied him as unobtrusively as practical, one to his left, the other behind, as he walked to the head of the grand staircase. He seldom used the elevator, down or up; the physical activity was welcome.
It occurred to him that, except for the Secret Service men and the doormen, he hardly ever saw any of the household staff unless their presence was requested. There were supposed to be sixty of them. Occasionally he'd glimpse one—maybe once or twice a day—but that was all. In his preoccupation, he'd given it no thought.
He thought he knew why this gentle near-invisibility; he'd once asked Gil why the Secret Service men so seldom spoke in his presence, and why they answered so briefly when he spoke to them. "A president's a busy man, sir, with a lot on his mind," Gil had answered. "He needs as much privacy as he can get." Then, opening up a bit: "This is your home, sir," he'd added, stressing the word.