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r'y A€)M I MI'S-TRAT XV-E~LY ^\0HL{ 27 £U}'jp£.d~fki'j.|<,f-l_e_ T ___ 13ai' i '7 o W is THE WHITE 4 (^OVic: . *.oto HOUSE W A S H I N G T O N r~ e. - - e .r r " « u \, -(-2? k ‘\ + z u ~ H v ) t < m i* 4<S U/HW ^rop»>r».j M E M O R A N D U M FOR: THE P R E S I D E N T A u g u s t 30, 1974 TV; ,-f*-cjv-H*. H o f" l^^c.^Os*c>Lat-n'l FROM: VIA: SUBJECT: IN F L A T I O N FIGH T E R P R O G R A M Since no one has yet come up with an econo mic soluti on to the p r o b l e m of inf lat ion , here is one whi c h is so simple, it just mi g h t work. I suggest: 1. That you go on n a t i o n w i d e radio and t e l e v i s i o n next wee k to anno u n c e the e s t a b l i s h m e n t of the " I n f l a t i o n F i g h t e r ” program. U n der this program, each com pa ny w h i c h signs a pled ge not to raise prices on its pro duc ts for one year wou ld be award ed an "IF" pennant to fly over its plant (similar to the A r m y - N a v y "E" flags p r e s e n t e d to c ompan ies for their p r o d u c t i o n effor ts in World War II). At first, you should visit a nu m b e r of these p a r t i c i p a t i n g pla nt s to p ers o n a l l y p r e sent flags. Later, letters or tele gr ams of c o m m e n d a t i o n could go out over your name to p a r t i c i p a t i n g firms. W o r ker s at these plants could be pr e s e n t e d with "IF" bu tton s to wea r in their lapels. 2. The use of the "IF" symbo ls wo uld not be limited to m a n u f a c t u r i n g plants. Retail stores, gas stations, se rvice companies, etc., w hich sign a p l edge to hold their prices intact for one year w o u l d r e c eiv e a decal to paste on the store window, i n d i c a t i n g this is an I n f l a t i o n Figh t e r shop. The decal could con sist of a large "IF" in the cent er and a slogan or motto around it statin g s o m e t h i n g like this: "IF you want a better America, p a t r o n i z e stores w h i c h displa y this emblem." 3. As firms sign up, the W h ite House wou ld release to the news med i a their names and l oc ations along with a message of a p p r e c i a t i o n from you, g e n e r a t i n g p u b l i c i t y in their own loc alities for their action. A spec ial p r e s i d e n t i a l mess age of c o m m e n d a t i o n sh ould be sent to each cooperati^§-^f i r m . 4. Labo r unions w h i c h sign a pled g e to hold t h ^ line on w a g e s should be ac c o r d e d si milar recogn i t i o n . lifter all, a halt to the p r e s e n t i n f l a t i o n rate of twelve to four tee n pe r c e n t a year w o u l d be tant a m o u n t to a pay boo%s ^ of the same amount. 5. The pr o g r a m could be b r o a d e n e d to get e v e r y b o d y into the act. C o n g r e s s m e n who vo te to hold the line on s p ending could be p r e s e n t e d with f,I F ff lapel pins by you. C o n s u m e r s could di s p l a y small "IF" flags or decals in their window s, p r o c l a i m i n g they have sig ned up as i n f l a t i o n fight ers and wil l refu se to p a t r o n i z e stores w h i c h fail to d isp lay the "IF" emblem. - :; 6. As part of your telev ise d a n n o u n c e m e n t of this program, you w o u l d call on c o n s umers and h o u s e w i v e s and all A m e r i c a n s to p u r c h a s e prod u c t s only from co mpani es w h i c h ple dge to hold the price line or from retail stores d i s p l a y i n g the f,I F ,! emblem. You could ann ounce that you are d i r e c t i n g the Federal g o v e r n m e n t itself, w h i c h is the single b i g g e s t buy er in the country, to p u r c h a s e only from participating f i r m s . 7. The econ o m i c p r e - s u m m i t and summit m e e t i n g s could be used to e xplore further ways to co mbat in fla tion , including tax bene f i t s for firms w h i c h sign the pr i c e pledge. For example, p a r t i c i p a t i n g c ompanie s could be p r o v i d e d with tax a d v a n t a g e s s u f f i c i e n t to give their e m p l o y e e s a pay incr eas e at the end of the year. To s t i m u l a t e p r o d u c t i v i t y , com panies w h i c h p a r t i c i p a t e could be give n rapid tax d e p r e c i a t i o n a l l o w a n c e s on new plan ts they buil d and on expan ded p r o d u c t i o n facili tie s. In sum, the i n c e n t i v e s to p a r t i c i p a t e in this p r o g r a m cut across America: For the c o n s u m e r - l o w e r prices. For the m a n u f a c t u r e r — i n c r e a s e d s a l a b i l i t y of his product and a c c e p t a n c e of his c o mpany as a c o m b a t a n t in the war on inf lation — not to m e n t i o n p o s s i b l e tax b e n e f i t s bec ause of his parti c i p a t i o n . For the w o r k e r - - l o w e r prices at the m a r k e t p l a c e (which is a n o ther pay increase) and the p o s s i b i l i t y of a real pay incre ase at the end of the first year. One final point: This p r o g r a m wou l d not requ i r e a vast ne w F e d e r a l B u r e a u c r a c y to admini s t e r . In fact, it could be done w i t h e x isting per son nel. The A m e r i c a n p e ople wo uld serve as p o l i c e m e n to m a k e sure the p r o g r a m works. A tollfree "hot line" could be i n s t a l l e d at the Whi t e H o u s e to _ receive reports of v i o l a t i o n s of the pledge. An invest^gafcion could then be made and if the firm is p r o v e n guilty, i/Cfc‘ "IF" ra ting w o u l d be lift ed amid w i d e s p r e a d p u b l i c i t y .(2 If p r operly promo ted , w i t h ample g r o u n d w o r k laid b e f o r e the a n n o u n c e m e n t by you, the "IF" p r o g r a m could ca p t u r e the im a g i n a t i o n of the A m e r i c a n p eople and; halt i n f l a t i o n in its tracks. # # #