Blumenthal on the Record

In interviews last week and in recent months with TIME Correspondent Edwin Reingold, W. Michael Blumenthal provided some glimpses of the policies he will pursue after he becomes Treasury Secretary.

MANAGING THE ECONOMY: "Economic indicators seem to show that some kind of stimulative action will be required soon. What form that should take and what size it should be, whether it should be action on the tax front or job-creating measures, will have to be worked out in coming weeks. The real job is to put the economy on a sound upward path, which provides more jobs and protects us from inflation by producing more goods and services. This, in turn, will generate more revenues, which will bring us closer to a balanced budget." Is a balanced budget conceivable? Not in one year, says he, but "it certainly can be done within the first four years and hopefully less."

WAGE AND PRICE GUIDELINES: "I am opposed to controls. I am opposed to any action on that front because I think it's a bureaucratic nightmare that does more harm than good, and interferes in the free-market mechanism. I do believe some general goals of where we would like to see the economy go are a desirable thing."

INTERNATIONAL MONETARY POLICY:

"Problems of inflation, devaluation and petrodollars intimately bind our economy and that of other nations into a common system. We are very much, all of us, involved in these problems and have to work on them together. When a country devalues its currency purely to solve a domestic economic problem, it's another way of practicing protectionism. One country follows another, and pretty soon we are all in the soup."

THE U.S. POSTURE ABROAD: "I do not believe the U.S. is well served if we go around the world waving a big stick. I think we need to protect our interests, but we need to do it calmly, sensibly and in a spirit of cooperation ... When "Big John" Connally moved into Treasury, he briefly installed the notion that we weren't tough enough, that we needed to teach these people a few lessons and to flex our muscles a little and, by God, they have been dependent on us so long they had better understand that we are not to be played around with." For some time, Blumenthal says, "there has been a feeling in Europe and Japan that it's difficult to do business with the U.S. That's why, among other things, the trade negotiations in Geneva, which were started three years ago, are stalled."

Part of the problem, he argues, was Henry Kissinger, "who still doesn't know very much about foreign economic policy. I think he feels the way General De Gaulle did: this is something to be left to the quartermasters. Foreign economic policy has been a kind of stepchild in Washington to be kicked around. There has been no leadership."

TRADE WITH MOSCOW: "I think the Soviets need and want access to Western markets and our technology. We can build on all of that, but I think we ought to reassess a little what we're asking in return. I believe we might be able to get more than we've been asking for without blowing up the mutual effort to find common ground. Some say Kissinger didn't have enough fire in his belly to do this."

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