White House Counsel Charles W. “Chuck” Colson ushered Office of Management and Budget Director George P. Shultz and Labor Secretary James D. Hodgson into the Oval Office for a discussion of the administration’s response to a Bureau of Labor Statistics statement attributing a sharp drop in the unemployment rate to a statistical quirk.
The thing that I think that is inexcusable here is that . . . we all know about statistical aberrations. But if you fellows are, unless you’re politically naïve, why is it that when it was 6.—when it went to 6.1, 6.2, why didn’t they say that was a statistical aberration? Are they saying this figure is wrong? You see my point? They can’t say on the one hand that this drop is wrong, and the others were too high. We have never said to Herb Stein, all these people who have written memoranda on it, but the—you see the point?[note 1] Herbert Stein was chairman of the Council of Economic Advisors. It cuts both ways. Either—are they admitting this figure is wrong? No. [Unclear] I would say that I have never seen a more deliberate job done on anything. It doesn’t make any difference what happens. Unemployment can come down, they’re not going to give you any credit for it.
Now, I know these little bastards. And you fellows have got to understand. I’ve said they’re—you were there in the room when I said it: We have a bunch of people in the bureaucracy who are out to screw us. That’s what they’re doing. This proved it. Now, if you’ve got something to say about it, fine. [Unclear.] [Unclear] there’s nothing we can do about it. Here [James D.] Jim Hodgson goes out and does a brilliant job, [unclear] presenting it. They just—they screw him, too. Make him look like a goddamn fool, as if he were doing it for political reasons. Now, what are we going to do? You’re going to say, “Well, here’s Moore.” He’s an ass! The little bastard that we got from Arthur [F. Burns], and is totally, totally dedicated to the bureaucracy with no dedication to this administration.[note 2] Arthur F. Burns was counselor to the president from January 1969 to January 1970, and chairman of the Board of Governors of the Federal Reserve System from January 1970 to March 1978. None. [Harold] Goldstein, as you know, has been an enemy of this administration, and of [Dwight D.] Eisenhower’s administration, for 25 years to my knowledge.[note 3] Harold Goldstein was assistant commissioner of labor statistics. Dwight D. Eisenhower was president of the United States from January 1953 to January 1961. [Unidentified speaker acknowledges.] You say, “But he’s an economist. He’s a scholar.” So’s [Daniel] Ellsberg.[note 4] Daniel Ellsberg was a defense analyst who leaked the Pentagon Papers.
Now, I want to know what in the hell has anybody suggested on this. That’s all. You understand? You two guys, you've been—you've handled it, you’ve taken the heat, you do the jobs, you go out and defend them, you go—I mean, you have to go out and defend figures, but goddamn it, how the devil can you expect Jim to go out and, you know, take all these brickbats from the press, then have these guys just cut him to pieces with their releases? That’s not right. You can’t have a Cabinet officer in that position. And so we just have to determine what we’re going to do about it. That’s all. We got to have a plan.
Now, I know all the answers. We mustn’t do anything because it'll be repressive. And so, well, maybe we can reorganize it, maybe after 1975, or this and that. I don’t want to hear anything like that. But I want to know, what do we do about it now? [thumping the table throughout] What can we do now so that we get a decent, even shake? Why didn’t they say in April or even in this release that the figures in April and May were too high? ’Cause, you see, they say flatly—I’m bright enough to know—the figure dropped from 6.2 to 5.6. Fine. It probably didn’t have a six-point drop. That was your point that you made to me. It was probably only 5.9 before. Or 5.8. Why the hell didn’t they say so? We took all the rap of that from—we just knocked our brains out when it went up. No, all they say, "Well, this was a statistical aberration." And that’s all they carry. James, don’t you hear that son of a bitch? Cut you to pieces. He had a right to. He’s against us. You give him anything to do it with and he does it. [Unclear exchange.]
We’ve all agreed, Mr. President, that the newsmen—we can’t blame this one on the newsmen. George says that this [unclear]—
[speaking over the group] No, you can’t blame the newsmen. You never blame the newsmen, anyway. They’re against us. And they’re going to write it that way. Take a fellow like [unclear] is an honest reporter, not particularly against us. But he had to write it that way because we gave him the ammunition. They’ve got to shoot you when you put it—give it to them. You can’t give a fellow stuff like that and say, “Look, we don’t want you to write it, fellows, because you’re our friend.” Now, that’s my point. But it does show you that we have—where we have a hell of a time, though, if we can’t get—when I’ve raised this subject two years ago and this fellow—I know [unclear] Goldstein. I think Moore [unclear] . And the whole point is—I know—I’m not denying. I don’t want to deny the facts. I don’t want to jimmy the facts. I don’t want to jigger the facts. But I want them to screw us . . . whenever we’re wrong, but I want them to do it even-handed. And they’re not doing it that way. They are not doing it that way. Every release has been loaded against us. And deliberately! But Moore isn’t smart enough to know how Goldstein writes it. Moore’s not very bright, you know. IQ of about 35. But he’s totally loyal to the bureaucracy. How did we get such a pipsqueak like that? Who the hell recommended him? Arthur [unclear]—[Unclear exchange.] He came from Arthur’s outfit, I know.
There was a black book that was prepared by—
—Peter Flanigan’s group and under the bureau—
So they put him in.
—Arthur Burns had written, “There is only one man.”[note 5] Peter M. Flanigan was consultant to the president on administration staffing from January 1969 to April 1969, assistant to the president from April 1969 to 1973, assistant to the president for international economic affairs from January 1972 to 1974, and executive director of the Council on International Economic Policy at the Executive Office of the President from February 1972 to 1974.
Well, there’s nobody to blame for that, George, for crying out loud. We got the guy, and that’s all. And he’s there to defend the bureaucracy and to cut us up, including Jim. I’m not going to have the secretary of labor go out. I’m not going to have Flanigan go out and face a hostile press and then have bureaucrats cut him down. That’s what I’m talking about. I’m not going to have it any more. And whenever a bureaucrat does it, we’ve got to do something about it. Now, got a plan finally? Reorganize it? Do anything? But you’ve got to have some plan, George.
Well, I think the only kind of organization that would be sensible under these circumstances is a reorganization that separates Goldstein from the employment and unemployment figures and gets him into something else entirely.
I don’t think the President would ever have any confidence in any other arrangement. [Laughter.]
“Richard Nixon, Charles W. ‘Chuck’ Colson, James D. Hodgson, and George P. Shultz on 3 July 1971,” Conversation 536-004 (PRDE Excerpt B), Presidential Recordings Digital Edition [Chasing Shadows, ed. Ken Hughes] (Charlottesville: University of Virginia Press, 2014–). URL: http://prde.upress.virginia.edu/conversations/4006743