Richard Nixon and Charles W. "Chuck" Colson on 3 July 1971


Transcript

Edited by Ken Hughes, with Patrick J. Garrity, Erin R. Mahan, and Kieran K. Matthews

Angry that economists at the Bureau of Labor Statistics had explained a sharp drop in the June 1971 unemployment rate as a statistical quirk, President Nixon ordered a reorganization of the BLS to force out Harold Goldstein, the assistant commissioner of labor statistics and the bureau’s top expert on the subject. “I don’t want to deny the facts. I don’t want to jimmy the facts. I don’t want to jigger the facts,” the President said.[note 1] For the reorganization plan to force Goldstein out, see Conversation 536-004, 3 July 1971, 8:00–9:55 a.m., Oval Office. For the President’s reaction to press reports on the statistical quirk behind the sudden drop in unemployment, see Conversation 006-011, 2 July 1971, 7:05–7:08 p.m., White House Telephone. Just a few hours later, however, he revealed to White House counsel Charles W. “Chuck” Colson that he did, in fact, want to tinker with the jobless figure in ways that would help him politically.

President Nixon

Yeah.

White House Operator

Mr. [Charles W. "Chuck"] Colson.[note 2] Charles W. "Chuck" Colson was White House special counsel from November 1969 to March 1973.

Charles Colson

Yes, sir, Mr. President.

President Nixon

Chuck, I had another thought with regard to this BLS [Bureau of Labor Statistics] thing.

Colson

Mm-hmm.

President Nixon

It occurs to me that, you know, we might be running into something here that is—could be more than simply accidental aberrations, and so forth and so on. Let me spell it out.

Colson

Mm-hmm.

President Nixon

First of all, let us assume that . . . that they did find that they had been too high, and now they’ve got to get lower. Certainly the best—the most—the best way to adjust that would be on a gradual basis.

Colson

Mm-hmm.

President Nixon

From our standpoint.

Colson

From our standpoint.

President Nixon

So you go down one-tenth one [month], two-tenths another, one-tenth another, two-tenths another. The worst way, from our standpoint, is to drop it like this and then have a lot of doubts raised about it and then start to raise it gradually till you get up to 5.8 or [5.]9, or to whatever they think it is. You see my point?

Colson

Mm-hmm.

President Nixon

In other words, a big drop in any month is not in our interests.

Colson

Yeah.

President Nixon

Small increments is very much in our interest.

Colson

Exactly.

President Nixon

Now, when we know that they—this—it isn’t all that exact a science. It’s quite clear, you know. They fiddle with these figures.[note 3] This, according to the BLS, is not true: “Seasonal adjustment of labor force data is essentially based upon the average experience of the previous 8 years.” See U.S. Department of Labor, “The Unemployment Situation: June 1971,” news release, 2 July 1971, attached to H. R. Haldeman to Colson, “CEA,” 7 July 1971, Haldeman Box 81, White House Special Files/Staff Member and Office Files, Richard Nixon Presidential Library.

Colson

Mm-hmm.

President Nixon

You know, they go up and down.

Three seconds excised by the National Archives and Records Administration as private information.
Colson

In fact, I raised that this morning, Mr.—

President Nixon

Oh, you did? [Colson acknowledges.] Well, then that’s—

Colson

And I said, you know that if somebody were trying to hurt us, they would drop this way down and claim we were trying to fiddle with the figures and then let it come back up the next month, and we’d just look like hell. And the best way for us would have been for them to have adjusted it [President Nixon acknowledges] down just slightly.

President Nixon

Yeah, two points, two-tenths of a point would [Colson acknowledges] [have] been just as good as this.

Colson

You’re quite right that it is not an exact science. [President Nixon acknowledges throughout.] It’s based on a poll, and they did a lot of interpreting from it.

President Nixon

That’s right. That’s right. And somebody sits on high and determines how you’re going to have the numbers come out.

Colson

Well, I’ll tell you this: I wouldn’t put it past any of those fellows. That’s a pretty snaky crowd that we’re dealing with over there.[note 4] Colson’s definition of "snaky" may be tainted by anti-Semitism. “Well, listen, are they all Jews over there?” Nixon asked Colson earlier that day. “Every one of them. Well, a couple of exceptions,” Colson replied. “You know goddamn well they’re out to kill us.” See Conversation 536-004, 3 July 1971, 8:00–9:55 a.m., Oval Office.

President Nixon

Yeah. Yeah. Yeah.

Colson

So, it—to me, it just . . .

President Nixon

Well, we’ve got to get control of it, and as I say—and around Labor Day, we’ll just have to get control of it.

Twenty-five seconds excised by the National Archives and Records Administration as private information.
Colson

I think there’s some time urgency, in my opinion, because we want to do it before the . . . before it begins to look like we’re going into a political year.

President Nixon

That’s right. That’s right. That’s why it’s got to be—

Colson

During the quiet summer months—

President Nixon

Yeah.

Colson

—into the fall—

President Nixon

It’s a good time to make a change.

Colson

And I think if we had one guy in there with some—if we had a guy in there at the top with some political moxie, what he would’ve done is said, “Look, this is too big a drop.”

President Nixon

Yeah.

Colson

“And it’s going to create—”

President Nixon

We’re going look bad. Yeah.

Colson

So—

President Nixon

He could say the statisticians are going to look bad and foolish, and so forth.

Colson

As one of the men that we called last night under the pretext of Time magazine said, “We’re never sure within one-tenth of one percent either way.”

President Nixon

Yeah. One thing that I was going to say is this: that you could . . . also—

Eight seconds excised by the National Archives and Records Administration as private information.
President Nixon

See my point?

Colson

Mm-hmm, mm-hmm.

President Nixon

The idea that raising question[s] about his competence in view of this thing, this—sort of this . . . . Now, look . . . have you got some ballsy guy that can . . . you see, this is the time to do it, attack him when it’s going down, rather than up.

Colson

Well, a guy like [W.] Allen Wallis, even, who might help us in this area.[note 5] W. Allen Wallis was an economist; chancellor and chief executive of the University of Rochester from 1970 to 1975; and chair of the President's Commission on Federal Statistics from August 1970 to December 1971. Been a lot of people who’ve been disturbed over the BLS [President Nixon acknowledges] on the outside.

President Nixon

Well, Allen Wallis could do it if he would. If—I don’t know—think—I don't know as he would step up to something like that. But if he wouldn’t or—he’d be good or—but don’t tell George [P. Shultz] or anybody else, but just [Colson acknowledges] have a—or maybe a congressman or, I mean, a senator.[note 6] George P. Shultz was U.S. secretary of labor from January 1969 to July 1970; director of the Office of Management and Budget from June 1970 to May 1972; and U.S. secretary of the treasury from May 1972 to May 1974.

Colson

Well, someone—

President Nixon

Yeah. Like [Charles H.] Chuck Percy.[note 7] Charles H. Percy was a U.S. senator [R–Illinois] from January 1967 to January 1985. No, he won’t do it.

Colson

Yeah, he might. He’s on—

President Nixon

Chuck Percy?

Colson

And—

President Nixon

And he could just simply say that I just question this. Just take him in on the game and say, "Chuck, here’s what they’re doing to us."

Colson

I’ll tell you who would do it is Jack Miller of Iowa, who’s on that committee and who’s an accountant.[note 8] Jack Miller was a U.S. senator [R–Iowa] from January 1961 to January 1973. Miller sat on the Joint Economic Committee during the Nixon administration.

President Nixon

All right, get—

Colson

And is himself something of a statistician.

President Nixon

Get Jack to do it, but [chuckles] he does it on his own. I don’t want to know anything about it, you know what I mean?

Colson

No, this would just—

President Nixon

He says that he believes there ought to be a shake-up in the Bureau or something like that, that they’ve raised doubts in their . . . I don’t—it’s sort of a tough one to handle. We don’t want to create too many doubts [slight chuckle] about . . . you see, about our own figure, I mean, about the good side of it. But he can just say that . . . I don’t know. It’s worth getting the guy out, though. And maybe it isn’t necessary to do that to get him out. I don’t know.

Colson

Well, I think a little back pressure would help. I can, through [William J.] Bill Baroody [Sr.], who has a lot of good academic contacts—[note 9] William J. Baroody Sr. was president of the American Enterprise Institute from 1962 to 1978.

President Nixon

Yeah.

Colson

I can get a little pressure going that will . . . it’ll have a—

President Nixon

In other words, that the kind of attack you need really doesn't have to be public so much as it is the kind that will get to him.

Colson

Mm-hmm.

President Nixon

A column, for example. A column would really irritate—they always irritate—these intellectuals all read them, you see.

Colson

That’s right. A good economist [President Nixon acknowledges throughout] questioning that—the whole system, saying maybe it’s out of date.

President Nixon

Maybe a Milton Friedman could question it.[note 10] Milton Friedman was an economist at the University of Chicago.

Colson

Yeah. That’d be a dandy.

President Nixon

He'd be a dandy, wouldn't he?

Colson

Yeah. He’s easy for me to get to ’cause he’s—

President Nixon

Yeah.

Colson

—Baroody’s closest friend.

President Nixon

Well, just tell Baroody to call for him and say, “Look, what the heck? This sounds like a”—and just the comedy of errors, the whole thing.

Colson

Yeah. Well, that’s—

President Nixon

Anyway, the whole proposition is this: that, on the encouraging side, I mean, Shultz, who’s a totally honest man, says, well, in any event, while he doesn’t think it was—first of all, he doesn’t think it was high as it was and it isn’t as low as it is—it wasn’t this much of a drop, but it did move in the right direction from January.

Colson

Oh, yes, and very significantly, Mr. President. He has a chart, which . . .

President Nixon

Yeah, I saw that chart.

Colson

—which is damn good.

President Nixon

Shows how they go and then maybe that—maybe—but, as I say—

Colson

I thought I would—

President Nixon

It’s the upward creep this summer. We’ll have to take that, and it’ll be tough, but—

Colson

Well, but that chart adjusts for it. You see, the—I thought I might get that to some of the economic writers who are honest, and there are some.

President Nixon

Yeah. Oh, sure, there are. A lot of them pride [Colson acknowledges] themselves on honesty.

Colson

Because we can—I mean, it’s pretty good evidence that the downward trend is there.

President Nixon

You see, I don’t know. It may be that some of this, I don’t know, you did—it certainly was a—it certainly, on balance, on television was more positive than negative from what I hear.

Colson

Oh, yes.

President Nixon

The real question is whether it had the zing that we wanted, in other words, to get people—just change people’s attitudes, but—

Colson

Well, if that press release were written as just a straight release, it would have led all the networks.

President Nixon

Yeah.

Colson

It would’ve been a big story.

President Nixon

Yeah.

Colson

The Democrats would’ve questioned it, but that would come afterwards.

President Nixon

Yeah.

Colson

But the way the damn thing was written, it—

President Nixon

Didn’t lead the networks.

Colson

No, it did—oh, no, it just had a built-in discount. [President Nixon acknowledges throughout.] I mean, even George Shultz, who tried to defend—I mean that, after all, used to be his agency. And he tried a little bit to defend it. When he read that release this morning, he said, "Hell, if I were trying to destroy this announcement, I couldn’t have done it better than this press release." [Slight chuckle.] And he . . . very bad jab, which is why the deliberate idea may be not too far off.

Four seconds excised by the National Archives and Records Administration as private information.
Colson

That’s right.

President Nixon

And from his public statements and the rest and—

Colson

So, it may be his way of getting back at us. He's clearly on the other side.

President Nixon

Oh, God, yes. [speaking over Colson] He’s a clever bastard, too.

Colson

I really—see, I’m going to keep the heat on getting him the hell out of there, and we might—I think this idea of getting some subtle pressures that—

President Nixon

Yeah.

Four seconds excised by the National Archives and Records Administration as private information.
Colson

Yeah, you can’t tell him anything. He knows it all. But if a few people, the Friedman types, were to challenge how well that place is being run . . .

President Nixon

Yeah. See, it affects on this another way, too. They also get the CPI [Consumer Price Index] figures.

Colson

Oh, yes.

President Nixon

And those things can be jimmied like hell.

Colson

Yep, both of those. [President Nixon acknowledges.] They get the two most—

President Nixon

And the other thing, too, is that we just want those things under control when we get into Sep—frankly, August, September, and October. Those are the months.

Colson

Mm-hmm.

President Nixon

And it doesn’t make any difference how high it is at the time. It’s got to be sure that it doesn’t go up or down, and so forth.

Colson

Well, that’s right. That’s when we need—

President Nixon

We need a couple of good bounces in that period.

Colson

That’s right.

President Nixon

And the . . . well, a lot of other things will happen by then, but we shall see, and . . .

Colson

Well, there’s no question, Mr. President, of all the agencies, this probably—as you pointed out to [James D.] Hodgson—this has more political muscle behind it than probably everything else the Labor Department does.[note 11] James D. Hodgson was U.S. secretary of labor from July 1970 to February 1973. [President Nixon acknowledges.] I mean, this—every month this creates a major news impact, good or bad. So far [chuckling] they've managed to hurt the good ones.

President Nixon

Yeah. Yeah. Well, it’ll be very interesting to see what we can do on it. Well, that’s—I guess everything—you got everything in mind we can do and then—

Colson

Well, I’ll stay with it, you can be sure.

President Nixon

Yeah, I know that. I know.

Colson

It’s important, and I’ll work some quiet ways to keep it going in the right direction.

President Nixon

Yep. [Colson attempts to interject.] And we’ll face up to it in August.[note 12] The reorganization took place in September and ousted two other BLS employees besides Goldstein from their positions. “The BLS will be organized with 6 out of 9 existing offices being combined into a newly created Office of Data Analysis headed by a second deputy commissioner. This new office contains all the sensitive analytical and interpretive responsibilities of the bureau,” wrote White House personnel director Frederic V. Malek. “A politically sensitive, loyal Republican economist will be selected for the new deputy post.” Goldstein would be replaced by a Republican loyalist. “Harold Goldstein will be moved to a routine, non-sensitive post in another part of BLS. He has been told of this and will move quietly when the reorganization is announced,” Malek wrote. “A sensitive and loyal Republican is also being recruited for the employment analysis function being vacated by Goldstein. Peter Henle, associate commissioner for Economic and Social Research, and Leon Greenberg, associate commissioner for Statistical Standards and Operations, will be transferred when the reorganization is announced.” Malek to Haldeman, “Bureau of Labor Statistics,” 8 September 1971, “Haldeman, Alpha Name Files, Fred Malek, September 1971, Box #85” folder, Haldeman Contested Folder [Box] 8, Richard Nixon Presidential Library. Haldeman, carrying out Nixon’s orders, had instructed Malek to find out how many Jews worked at BLS. Malek complied: “13 out of 35 fit the other demographic criterion that was discussed.” Malek to Haldeman, “Bureau of Labor Statistics,” 27 July 1971, Haldeman Box 82, White House Special Files/Staff Member and Office Files, Richard Nixon Presidential Library. OK.

Colson

Thank you, Mr. President, sir.

Cite as

“Richard Nixon and Charles W. "Chuck" Colson on 3 July 1971,” Conversation 006-129, Presidential Recordings Digital Edition [Nixon Telephone Tapes 1971, ed. Ken Hughes] (Charlottesville: University of Virginia Press, 2014–). URL: http://prde.upress.virginia.edu/conversations/4002173