The President: We find the same problem, especially in dealing with energy. We have been trying for years to alert people to the fact that an energy problem does exist. It hasn't really hit home that prices and our vulnerability will go up and up. Only during the embargo were we able to make our point.
Thatcher: That's right. We are never able to make our points the way the Communist societies do.
The President: We go about it differently. [Laughs].
Thatcher: But they also use good techniques -- publicity, repetition, etcetera.
The President: Our inflation is now down to 6-7% and unemployment is 8.4%. But the polls show that inflation is a bigger problem than employment.
Thatcher: That is a wholesome thing.
The President: It is. It lets us avoid doing things which would contribute to inflation in order to deal with employment. There hasn't been the pressure -- the marches, etc. -- about unemployment. We do have an automatic increase in the transfer payments because of unemployment but we are not being forced to take extraordinary measures. But we also have to get transfer payments under control.
Ramsbotham: When people run out of compensation, will this change?
The President: My theory is that the uncertainty about more people losing their job is a real problem -- and this caused the Republican clobbering in 1974. Next year we think unemployment will gradually decline. We will still have the problem of heavy unemployment, but the ones with jobs will feel more job security. That should translate into votes.
Thatcher: I think also other countries -- France and Germany -- are aware of the problems of inflation. It is good for the world economy that we aren't rushing for solutions. I am very strong on this.
The President: Yes. I have been accused of Hooverism and Coolidgeism, but the American people are beginning to learn that these quick fixes aren't really the answer.
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