>> From the Library of Congress, in Washington, DC. ^M00:00:04 [ Silence ] ^M00:00:27 >> Carolyn Brown: Well good afternoon everyone. I am Carolyn Brown, I direct the Office of Scholarly Programs in the John W. Kluge Center here at the library. And it gives me great pleasure to welcome you all here to this program -- a lecture by Doctor Klaus Larres, who is currently distinguished visiting scholar at the Kluge Center. And in earlier years -- it's actually been quite a while now -- 2000 and I guess 2 to 2003 he was the Henry Kissinger Chair in the Kluge Center. His subject this afternoon is imperial and financial overstretch, the politics of -- oh it's right here, the politics of Nixon and Obama, lessons to be learned, with a question mark. I also want to specially welcome Ambassador Christian Prosl of Austria, who is joining us not just as a special guest, but we're going to be putting him to work. He will be doing the introduction for Doctor Larres. But before all that happens, if you have a cell phone or anything else that might beep or bonk, or interrupt the speaker or interrupt the recording, please do turn it off. Let me just say a word about the Kluge Center for those of you who don't know us. We were very fortunate to be the result of a generous gift by John W. Kluge in the year 2000. With his -- his vision that shared -- he shared with the librarian that there should be a place here in the library where the world of scholarship and the world of politics could come together -- the world of affairs, where scholars and -- and legislators would have an opportunity for informal conversation. We know about the formal conversations -- I think many of us may be sometimes disappointed with those. But when there are opportunities for private informal conversations, very often rare and wonderful things can happen. And that was the dream behind Doctor -- Mister Kluge's gift. In addition, the center also [inaudible] bring together the very best of the world's senior scholars, and the most promising junior fellows. So it's a wonderful community -- a multigenerational community, multidisciplinary community, all here to use the collections of the library, and to enjoy the -- the expertise of the curators, and the other library specialists, and to talk with one another. Wonderful things can happen from those conversations. Doctor Larres has been participant from time to time, and it's really been great -- a great pleasure to have him back with us. To introduce him, perfect introducer. We are really honored to have Ambassador Christian Prosl from Austria just say a word about his own background, and you'll see why we're particularly pleased to have him here. He has been Ambassador from -- of Austria to the US since May, 2009, and formerly Ambassador of Austria to Germany. But he's well-known in Washington circles, having been here in several very important positions in the embassy in the 1980s. He's also had a career within the Austrian Ministry of Foreign Affairs, sort of like -- both at home and abroad you might say -- as Deputy Secretary General for Foreign Affairs, head of the Department on Western and Northern Europe, and then earlier the Section on Legal and Council Affairs, and also spent some time in the 70s working with United States develop -- United Nations Development Program in Vercano Fossa [phonetic] and Rwanda. So this is a man of great and broad experience, who's also been interested over his career in some of the very subjects that Doctor Larres has been interested in. So with knowing that the -- the -- his wide knowledge of foreign policy and international relations -- and I guess you're really gonna witness many of these events of the last several decades. We're really honored and pleased to have you with us -- have you take this much time out of your undoubtedly busy and intense schedule to join us. So everyone, please welcome Ambassador Prosl. ^M00:05:26 [ Applause ] ^M00:05:34 >> Ambassador Prosl: Thank you very much. You might wonder how an Austrian Ambassador is able to introduce a German scholar. I met Professor Larres immediately when we arrived, and we had established a very good rapport, and a friendship. So when he approached me, I gladly accepted. And it's an honor and a pleasure for me to introduce him. Professor Larres is not only an expert in transatlantic relations, but he is -- have rarely seen a professor having been at so many special assignments. He is now here, but he's at the same time visiting professor at [inaudible]. Then also in the spring this year he was -- he was the history partner of -- at Yale. And actually he's a professor of history and international affairs at the University of Oxford [phonetic] in the UK. Before that he was at the University of London, and a [inaudible] professor at Queens University in Belfast. Then he has -- he has been already -- he has the [inaudible] chair on foreign policy and international relations in the Library of Congress in 2002 and 3, and as of next year I understand he will give lectures at the University of [inaudible] at Chapel Hill. So I think this is a wonderful career. And if I were not Ambassador, I would envy you. [ Laughter ] >> Ambassador Prosl: Professor Larres is also -- he has a -- a focused on globalization -- the effects of globalization. And I think this is a very interesting subject, and of course post-Cold War developments. And as a very good European, he focused also on the European integration. I just wanted to mention two or three of his recent books, because I think they are all interesting. The first one is Churchill's Cold War - the Politics of Personal Diplomacy. And it happens that I also believe that the impact of diplomatic [inaudible] larger -- the personality of the diplomats, and their impact is larger than one would believe, because we always think about strategic and the structures. But the personality plays a -- a very important role, as we all know, on this side of the Atlantic. Another book that I would like to mention is US Secretaries of State and Transatlantic Relations. Other different various Secretaries of State saw and promoted the transatlantic relations, I think it's a very interesting one. And finally, his book coming up with only 2013 -- professor, you have to work harder -- The United States and the Unity of Europe. And this is, of course, most timely, as we all know, with our present crisis that we I'm sure will overcome. Without further ado, I hand over the chair to Professor Larres. Thank you very much. ^M00:08:43 [ Applause ] ^M00:08:52 >> Doctor Larres: Good afternoon. You know, the distractions of Washington are so great, it's very difficult to work all the time, I must say. But I'll try my best. Thank you, Ambassador Prosl. Thank you very much for your kind words. Thank you, Carolyn, for your nice introduction as well. I'm deeply grateful to all the staff of the Kluge Center here at the Library of Congress for having supported my stay with such tremendous energy and helpfulness. I have enjoyed every minute of my stay here, and it has been a tremendous experience once again [inaudible] both the primary and the secondary resources available here at the Library of Congress. I've had a great and very productive time here, and it -- it has been quite a pleasure to cooperate with both the Senior Fellows and the Junior Fellows here at the Kluge Center. And of course I'm particularly grateful to Doctor Carolyn Brown for actually having made my visit possible in the first place. I'd also like to thank in particular, Marylou Ricker [phonetic], the good soul of the Kluge Center, Joanne Kitchen [phonetic], Yvonne French [phonetic], Lonnis Prye [phonetic], Alicia Robinson [phonetic], Denise Robinson [phonetic], and all the other people here at the Kluge Center. ^M00:10:03 >> Doctor Larres: And thank you very much for having come to my talk here today. I see quite a few friends and colleagues in the audience. And thanks for the occasional [inaudible] enjoyed and shared in the recent past. Today I would like to talk about whether or not there are any lessons to be learned from the turmoil and upheaval of the 1970s for our own equally tumultuous times. Winston Churchill once pronounced authoritatively that one can actually learn something from history. He [inaudible] that those that fail to learn from history are doomed to repeat it. However, the 19th century German Philosopher [inaudible] famously wrote that we learn from history that we never learn anything from history. [ Laughter ] >> Doctor Larres: Well today I would like to side with Churchill, and I hope to disprove [inaudible] saying by demonstrating that there are indeed lessons that we can draw from the crisis years of the 1970s. The latest [inaudible] has referred to the early 1970s as a highly important moment in the international and national history of our times. He also mentioned the fact that -- that the Nixon presidency coincided with such an important turning point in world affairs. In fact, an increasing number of historians view the 1970s as a crucial period of transition in recent world history. The 1970s may actually be viewed as a soft turning point in 20th century history. It was a turning point that did not occur due to the beginning or end of wars, or because of the traumatic breakdown of empires. Instead, the 1970s were a turning point that was characterized by rapid economic changes, and by cultural upheavals. Richard Nixon himself considered the year 1971 as a watershed year, due to the achievement of greatly improved relations with China and the Soviet Union, and from Nixon's point of view, also with Japan and Europe. Although it is somewhat early to judge, but our own time -- the Obama years if you like -- can also be seen as a crucial period of time in recent history. The fight against international terrorism and the great recession, to name but two, are unique and crucial phenomena that will be of lasting importance, if I'm not entirely mistaken. Most of the 1970s and our own times are characterized by such a plethora of external and internal problems with the United States, but also many other countries, not least in Europe, appear to be greatly overstretched. President Richard Nixon seemed to recognize this when during a press conference on July 24, 1969, on the island of Guam, he said that he wanted to be sure that our policies in the future all over the world -- in Asia, Latin America, Africa, and the rest reduce American involvement. One of assistance, yes -- assistance in helping them solve their own problems by not going on -- by not going in and just doing the job ourselves. Still in the end, the Nixon Doctrine as it became to be called -- the Nixon Doctrine of American withdrawal from some of the country's global commitments had very few, if any, practical consequences. The Nixon administration never -- never overcame the dilemma of how to commence the desired partial retrenchment of American power, without endangering Washington's global hedge money [phonetic]. Thus [phonetic] in the end hardly any retrenchment occurred. Similarly today, it appears to be almost beyond the capacity of the United States to cope with the numerous challenges of the post-911 world -- foreign policy challenges, as well as external and internal financial challenges for example. While the Nixon administration kept calling on the European allies to share the burden of world leadership with Washington without, however, offering the Europeans any real participation in decision-making, this has changed today. For instance, in the recent war in Libya, the Obama administration insisted on taking a back seat, while leaving the initiative and main responsibility to the British and the French, and subsequently formally to NATO. Still it became clear that without American material and -- and reconnaissance support, the two European countries would have been unable to make much of a difference to the success of the so-called rebels against the Khadafy regime in the midst of a severe domestic austerity program. At least the British found it very difficult to sustain a prolonged air campaign in Libya. US aid proved to be vital. Thus, similar to the 1970s, the US still seems to be the indispensable power, as Madeleine Albright phrased it some time ago. In the following I would like to look at two of the most important challenges -- war and the economy -- the two most important challenges that have made life difficult for the Nixon administration, and also for the current Obama administration. But before I do this, I would like to give you some background information on [inaudible] Nixon and his team. While we are quite familiar, I believe, with the administration currently in power, it has been, after all, more than 40 years that Nixon and his alter-ego, Henry Kissinger, were in power. But let me start off by asking you a question. What do Nixon and Obama have in common actually? Any suggestions? Well, this seems to be [inaudible] sort of difficult. Perhaps I should first point out some of the differences. Obviously, both men came from very different backgrounds, and they also well, look kind of differently I guess. Nixon was from a Quaker background in California, and he always had a chip on his shoulder about not being taken seriously at the east coast establishment. He had a quick and flexible mind, and at times tended to be quite open to novel ideas. However, he also was a shy, weak, [inaudible] insecure, and frequently quite vindictive man, who was highly suspicious of friends and foes alike. In a way, Nixon was an -- an anomaly in the world of politics dominated by extroverts. By contrast, Obama is a very opposite of a shy and withdrawn politician. Obama lusts [phonetic] to engage and mingle, and very much unlike Nixon, Obama is a highly articulate and fluent public speaker. Born on American soil, I believe, in Hawaii, but with many of his family originating from Kenya, Obama grew up politically in Chicago. And as a young Senator, Obama was certainly part of the country's vigorous intellectual establishment. Obama's sort of generally regarded as an arch liberal, with his broad European style of policy-making to the United States, in particular in foreign policy, but also with regard to some of his social legislation. Among tea party activists, and moreover, Obama is suspected of socialist tendencies, and of the intention to radically change American society, and the country's way of life by for example, relying on deficit spending and stimulus programs to overcome the recession, and by attempting to give the United States universal healthcare, which to me as a European doesn't sound too bad, I must admit. [ Laughter ] >> Doctor Larres: Nixon by contrast could hardly be accused of having been a champagne socialist. Nixon made his name as a republican and a communist congressman, who exposed establishment figure and former state department official [inaudible] as a communist type. In the mid-term elections of 1950, Nixon formed [phonetic] a highly controversial campaign to unseat liberal democrat Senator Helen Ductis [phonetic]. He accused her of being pink right down to her underwear, and smeared her as a communist sympathizer wherever he could. And the foundation of Nixon's formidable foreign policy expertise was laid during Nixon's time as Eisenhower's Vice President from 1953 to 1961. He further deepened his knowledge in the cause of the 1960s, after he had narrowly lost both the election against JFK in 1960 and his bid for becoming Governor of California two years later. Then in 1968, Nixon very narrowly won the Presidential election against the sitting Vice President Hubert Humphrey, who gained the democratic nomination in the wake of the traumatic assassination of Robert Kennedy. By this stage, the highly intelligent Richard Nixon had possibly developed a deeper knowledge of foreign affairs, in particular European and Asian affairs, than any other man who ever occupied the White House. Moreover, Nixon elected an equally astute foreign policy expert as National Security Advisor -- Henry Kissinger, the young Harvard professor, who in the [inaudible] of the 1960s had been an informal advisory to both Kennedy and Johnson. Time Magazine spoke of Richard Nixon's most astute appointment. And in fact, one could perhaps say that like John Lennon and Paul McCartney of the Beatles, or like Laurel and Hardy, Nixon and Kissinger functioned very well together, perhaps much better than they did individually. Kissinger's prolific writings were very much to Nixon's liking, after all, Kissinger came across as a firm believer in [inaudible] politic, as a believer in the primacy of geopolitics, and the balance of power. That is Henry calling up, I think. [ Laughter ] >> Doctor Larres: In his doctoral work, Kissinger also emphasized the responsibility of the individual statesmen to influence events to maintain and restore international order. Kissinger would come to the US at the age of 15 as a Jewish refugee from the Nazis, would however always retain his strong German accent, which almost became a sort of trademark for him. And initially, Nixon refused to let him talk to the press because of it. Incidentally, when Kissinger's brother Walter was once asked why he had an American accent rather than a strong German accent like his brother Henry, Walter explained, well, he said, I have learned to listen. [ Laughter ] ^M00:20:12 >> Doctor Larres: Incidentally, Kissinger also quickly developed a reputation as a highly sensitive and short-term [inaudible] intellectual who was also a little full of himself, to put it mildly. Kissinger was not pleased for instance when he noted early in his career that a speech he had drafted for New York Governor Nelson Rockefeller was reviewed by three of the Governor's speech writers. Feeling offended, he complained that if Rockefeller had a Picasso, he wouldn't call in three house painters to touch it up. [ Laughter ] >> Doctor Larres: Well, all this still does not answer my initial question. What, if anything, do Nixon and Obama have in common? There are two things above all, and in the following I would like to briefly talk about each point before making some concluding remarks. First of all, both men were elected -- both men were elected President as a reaction to highly unpopular wars the country was involved in. During the election campaign of 1968, Nixon indicated that he had a secret plan for quickly terminating the Vietnam War. More than 40 years later, in 2008/2009, the wars in Iraq and Afghanistan -- both of course were not started by Obama, but by Obama's predecessor George W. Bush -- but -- but by 2008 the wars in Iraq and Afghanistan were so unpopular that Obama's severe criticism of Bush foreign policy raised the expectation among most of those who voted for Obama that the wars would be quickly ended if Obama were to be elected President. As we now know, Nixon and Kissinger attempted to end the Vietnam War by escalating it. The secret invasion of Cambodia and Laos, the mining of [inaudible] Harbor, the Christmas bombing of 1972, and many other unfortunate stages of escalation occurred. That way, Nixon and Kissinger hoped to put pressure on the North Vietnamese, and obtain the better negotiating position for a cease fire. At the same time, they still had to show some restraint in order not to provoke China for example to enter the war directly. In fact, Kissinger's and Nixon's famed foreign policy expertise, powers of analysis, and imaginative thinking deserted them when it came to Vietnam. But those Nixon and Kissinger in my view must be given a lot of credit for the opening to China in 1971, '72, and for the policy of detaunt [phonetic] with the Soviet Union. As far as Vietnam was concerned, the balance -- the balance sheet looks very differently. Kissinger and Nixon's thinking about Vietnam was but all muddled by an obsession with maintaining American credibility. The old domino theory was also very much alive and kicking in Kissinger's mind. Already in an August, 1966, article for Look Magazine, Kissinger had written that if the US were to withdraw unilateral from Southeast Asia, this would greatly affect the stability of areas geographically far removed from Vietnam. America, he outlined, America was no longer fighting in Vietnam, only for the Vietnamese, but we are also fighting for ourselves, and for international stability. What both Kissinger and Nixon overlooked was the extent -- to quote Robert Dalic [phonetic] -- was the extent to which international opinion would have seen a pullback from a failing action as an act of courageous realism that made America a more sensible ally, and an adversary that would make better future use of its power. The Nixon administration, however, would never entirely grasp this reasoning while in office. In fact, even when French President deGould [phonetic], whom both -- whom both Nixon and Kissinger greatly admired -- made the same point during a conversation in the course of Nixon's first trip to Europe as President in early 1969, Kissinger remained unimpressed. The French President, drawing on France's own withdrawal from Indo China as it was called in 1954, and then subsequently from Algeria in 1967, the French President proposed a fast American withdrawal from Vietnam. He dismissed Kissinger's emphasis of the importance of American credibility for staying in Southeast Asia as a rather peculiar line of thought. And Kissinger replied that he feared American credibility might suffer in the Middle East in particular, the general said how very odd. I thought it was precisely in the Middle East where your enemies, the Soviet Union, were having the credibility problem. And of course [inaudible] was right. By 1972, all Soviet advisors had been thrown out Egypt. And the domino theory turned out not to be a proper theory at all, but simply some fanciful syncing -- speculative thinking. The goal made a similar point in conversation with Nixon himself. The US President kept talking about ending the Vietnam War in a responsible way, by not rushing out in a panic, as otherwise the credibility of the US and the world would suffer badly. Once again, the goal was not convinced. He believed that a settlement of the war could be achieved, as American power and wealth was so great that it could do this with dignity. The goal set, it would be better to let go than to try and stay. But neither Nixon nor Kissinger were [inaudible] by this line of thinking, until of course it was too late, and the [inaudible] was on the way to wholesale [phonetic] defeat in Vietnam. At the present time, without the benefit of hindsight, it is of course much more difficult to pass judgment on Obama's policy with regard to the wars in Iraq and Afghanistan. What has become obvious in the meantime, however, is that Bush's wars have clearly become Obama's wars. The current American President has become closely connected to America's war efforts in Iraq and Afghanistan, and indeed in the more or less secret war of the drones in Pakistan and Yeoman, and some other places. While Obama has done his best to wind down the war in Iraq, it is also clear that a sizeable number of American troops and military advisors will remain in the country. The position in Afghanistan is even more complex, and -- and will, as far as I can see, linger on even longer. No real end of war is in sight in Afghanistan, despite the intention to withdraw all American and allied troops in the near future. The date mentioned is normally 2015. While security and indeed civilian conditions in the country have improved greatly during the last 18 months, military experts are also agreed, however, that a withdrawal of all US and other foreign troops from Afghanistan -- allied troops I mean -- would lead to a quick reversal of the successes, and perhaps to the quick collapse of the government in Kabul. The question has to be asked, however, whether or not the war embarked upon in the aftermath of 9-11 hasn't actually been won already. After all, much of Al Qaeda seems to have disintegrated, and Osama Bin Laden, as you know, was killed recently. What was the objective of the Afghanistan war? Wasn't it the objective to protect America and the world from the threat of Al Qaeda terrorism, and from further attacks? And is the global threat to the country and -- the country and the world faced in the aftermath of -- of 9-11 still there? I wonder. With hindsight it is clear that the Vietnam War never could be won. It was an unwinnable nationalist conflict. It was not a war against the threat of communism, where American credibility was at stake, as frequently believed at the time. Can the war in Afghanistan ever be clearly and decisively won? Does it need to be won? And should the Taliban be crushed and eliminated now that Al Qaeda has been decisively weakened? Based on the lessons of Vietnam, a negotiated solution with the local forces -- essentially the Taliban -- ends the continuation of the anticipated gradual withdrawal of US and allied troops might actually be the best option. Of course it will be undesirable to leave the Taliban in charge of Afghanistan, but what are the other options? And one thing is for sure. Both Nixon and Obama quickly became war Presidents once they had assumed office, and they both became much more deeply drawn into energetic warfare activities than either of them had ever anticipated, or indeed had ever wished for. That is certainly one thing both Presidents have in common. This leads me to the second point, and to second and last issue of what Nixon and Obama have in common. Both Presidents had to deal -- and still have to deal with serious financial and monetary turmoil in an increasingly difficult economic climate, including rising unemployment figures and growing deficits. Among those who voted for Nixon and Obama, there clearly was the expectation that they would sort out the economic difficulties of their times. While we are all very familiar with the financial upheavals and economic predicaments of the great recession of the present, the equally unsettling and deep economic and financial crisis of the early 1970s have largely been forgotten. Let me say a few words about that before at the end, than trying to link up the Nixon term, or the Nixon economic problems and the Obama economic problems. Until 1971, the post-war monetary system was dominated by the so-called Brighton Woods [phonetic] system as it had been hammered out by above all, John Maynard Cains [phonetic] and Assistant Secretary of the Treasury, Harry Dexter White [phonetic] at the 1944 Brighton Woods Conference in New Hampshire. The Brighton Woods agreement briefly were meant to stabilize international monetary relations, and improve international trade relations. The Brighton Woods System achieved monetary stability by creating fixed exchange rates among currencies with an acceptable margin of only 1%. The new IMF -- the International Monetary Fund -- was meant to prevent protectionism, and deliberate currency depreciation, or competitive devaluation, as had frequently occurred in the inter-war years. ^M00:30:20 >> Doctor Larres: The new Brighton Woods System was characterized by a large degree of predictability, which infused both governments and businesses with a healthy confidence in the lasting rational and stable nature of the new system. All this created the conditions for mind-boggling expansion of trade in the first post-war decades, as one also has called it. The Brighton Woods System was soon generally considered to be engraved in stone. It therefore was a profound shock when the system began to unravel in the late 1960s and early 1970s. Between 1965 and 1969, the US developed a serious inflation problem, and an annual balance of payment deficits to the tune of 3 billion dollars. During the previous 5 years, the country had only recorded an annual payments deficit of under 750 million. Inflation grew from 1.9% in 1965 to 5% in 1969. It reached 6% in 1973, and more than 10% in 1974-'75. It was obvious that the course of the worsening balance of payment deficit related to a relative decline of American economic power. More specifically, there were two main reasons for this. First, the US was faced with increasing economic competition from Japan and Western Europe. The allies changed -- or the allies challenged American supremacy, in particular in the world markets for cash, steel, and machinery. And the United States, as you will know, had even partially brought this up out themselves. After all, the United States -- after all, American investment abroad since the Marshall Plan had helped to rejuvenate European industry, and had gradually eroded whatever advantage American technology and management enjoyed after the war. Nixon viewed America's deteriorating [phonetic] trait and monetary position with great concern. He was not shy to accuse the European community of unfair trade practices, and demanded that the Europeans should lower the tariffs, and allow more American goods to enter the common market. In particular, his administration made the ECs protect -- protectioners [phonetic] common agricultural policy -- the cap -- responsible for America's trade deficit. Second thing, the Vietnam War proved to be rather expensive. Essentially, the war was unaffordable, even for as rich a country as the United States. Washington's declining trade surplus made it increasingly difficult to finance military spending abroad. In the second half of the 1960s, the US overall trade surplus declined from 9 billion in 1964 to 3.4 billion in 1969. And America's first substantial trade deficit occurred two years later in 1971. It was America's first trade deficit for almost 100 years. The Vietnam War did indeed deal the Brighton Woods System a blow from which it never recovered. I don't want to test your patience with even more numbers and figures -- that's a little tough I guess. But let me just say what the main problem was in -- in a nutshell, and then we move on. In a nutshell, the main problem was that by 1971, America's increasing balance of payments deficit had led to a formidable accumulation of unwanted dollars by several European central banks. This unbalanced Brighton Woods monetary system -- so United States was living well beyond its means, but due to the dollar being the global reserve currency, Washington was able to resort to the printing press conveniently, and offload American consumer debts, as well as the economic burden of fighting the Vietnam War onto the central banks in Western Europe and Japan. This, understandably, caused a lot of resentment in Europe, not least in France and West Germany. After all, it gave the United States the capacity -- as a paper written in the State Department in 1969 outlined, it gave the United States a capacity to pursue its international, political, and economic objectives, without regard to the wishes of its allies while they are nonetheless expected to finance these objectives by accepting and holding dollars in unlimited amounts. Above all, the US balance of payments deficit and the higher interest rates in Europe encouraged speculators to invest their money in Europe, rather than in the United States. After all, a downward devaluation of the dollar, and an upward revaluation of the deutsche mark was generally expected. So no one knew of course when this -- when this would occur. The US, however, was not happy with this situation either. Still, the Nixon administration did not know -- really know what to do, and largely pursued a policy of so-called benign neglect, meaning they did nothing. European leaders kept urging Washington to do something about the problem, but to no avail. The dollar is your currency, new Treasury Secretary John Connolly [phonetic] told the visiting European delegation was a broad grim [phonetic], but it's your problem. Both -- let me just -- both the President and his treasury secretary were well aware that the US had reached an economic threshold. Nixon's statement in his inaugural address said we have learned at last to manage the modern economy to assure its continued growth proved to be mere wishful thinking. Instead, just over two years later in 1971, Treasury Secretary John Connolly kept reiterating that the labor unions and the business world needed to readdress the decline in our competitive position, and improve our economic position in foreign markets. Nixon chimed in. It was essential he proclaimed to the nation's newspaper editors that the American people would regain their competitive spirit and moral strength, and stay ahead in the race for world leadership. In fact, the country's economic problems went much deeper, and much were -- were much more profound than the Nixon administration cared to admit, and could hope to overcome with an imaginative or arithmetic, or similar political devices. Arthur Burns [phonetic], the Austrian-born chairman of -- of the Federal Reserve board -- and here we have another Austrian I just noticed -- he recognized that what the boys swarming around the White House have to see, he declared, is that the country now faces an entirely new problem, namely a sizeable inflation in the midst of recession, something which soon came to be called stackflation [phonetic]. Until a short while ago, this had been regarded as impossible. Inflation seemed always to occur in connection with a flourishing economy. Burns believed that a new medicine was needed to the new illness. To rely merely on a more rapid expansion of the money supply, essentially on printing new money, and thus on inflating the US currency cannot be the answer, he said. The [inaudible] however, was exactly the policy Nixon came to pursue initially to obtain re-election in 1972. And that was what it was all about. Nixon was greatly obsessed with obtaining re-election. After all, he had narrowly lost against JFK in 1960, yet only narrowly won against Humphrey in 1968,and he fully expected another narrow election result in 1972. And he believed he had to do absolutely everything in his power to swing marginal votes his way. Burns, however, reasoned that above all confidence needs to be restored, through both fiscal reforms, and the introduction of an active incomes policy, which largely meant a wage and price freeze. Above all, it was fairly obvious that by 1971, the United States government and the US consumers had to become accustomed again to leaving within realistic means, both domestically, and regarding US spending on its military and foreign affairs. Yet no President could expect to increase its popularity, and -- and be re-elected on the basis of a dire domestic austerity message. The [inaudible] Nixon was fully aware of this. What did the Nixon administration do? Nixon and his Treasury Secretary Connolly took decisive and radical action in mid-August, 1971. They assembled -- sorry. They assembled a top secret meeting of all of Nixon's economic advisors at Camp David at a weekend in mid-August, 1971. Although Nixon feared that Little Jose and Horse Cartwright, and the highly popular television series Bonanza would steal him the show, in his TV address from the Oval Office on August 15, Nixon proclaimed that he was shutting the gold window by severing the link between gold and the dollar. He thus [inaudible] the pledge of the 1944 Brighton Woods Conference to convert dollars into gold at the rate of 35 dollars per ounce, whenever a foreign government asked for it. This, however, took a certain fact of stability out of the system, and introduced an inclination to rely on easy money and the printing presses. Nixon also announced a position of a temporary 10% fee on imports into the US, and to make -- to make these goods less in -- less attractive to the American consumer, which in turn he expected would give US wares a shot in the arm. In the addition, the President proclaimed a comprehensive package of wage and price controls. ^M00:40:09 >> Doctor Larres: For electoral reasons, Nixon had swallowed his great dislike of such a socialist policy. And at home, Nixon's policy was highly popular. The American voters were impressed by Nixon's firm and decisive way to bring the US economy out of recession, and to protect it against the onslaught from those foreigners in Europe and Japan. In fact, Nixon's new economic policy, as it was called, symbolized the beginning of the end of America's global economic hedge money [phonetic]. Incidentally, the existence of Soviet leader Lenin's 1921 policy of the same name was only belatedly noticed by the Nixon administration, and not without a degree of embarrassment when someone pointed out that the new economic policy had also already been Lenin's policy. The Nixon [inaudible] paved the way for a major devaluation of the US currency -- the first one in its modern history. This was eventually agreed in transatlantic negotiations towards the end of 1971, that was the Smithsonian Agreement. While at the time going down the pencil road [phonetic] of devaluation was regarded as a major political defeat, which [inaudible] led to a time of introspection and humility, the brilliance of the Nixon shocks [phonetic] if you like consisted however, of a turn -- of turning additional defeat into a rhetorical triumph. The stock market on Wall Street rose immediately after Nixon's address, and the President emerged as a champion of the little man, who was ready to take on the fight against inflation, and those greedy businessmen who kept increasing their prices. The 3-month freeze of prices and wages was highly popular. Domestically, Nixon's new economic pause [phonetic] proved a considerable success, and it clearly contributed to his impressive election victory in November, 1972. Externally however, Nixon's policy was much more controversial. And of course, foreigners had to take the brunt of Nixon's recipe. The 10% fee on imports into the United States had to be taken by foreign exporters. Also, what Nixon had in mind was that the dollar would be hugely devaluated. And that meant that in the end, that would -- that -- that -- Nixon hoped that the devaluation of the dollar would result in an increase of US export at the expense of European exports. That way the annual American payments deficit of 9 billion was meant to be turned into an annual surplus of 4 billion. Thus the US hoped to actually turn around the economy by roundabout 13 billion. And this -- and the burden of that had to be taken by European and Japanese foreigners. ^M00:43:05 [ Silence ] ^M00:43:14 >> Doctor Larres: In the end, however, while Nixon's new economic policy was a huge success domestically, and Nixon won re-election with a -- a -- by a landslide in November, 1972, externally it didn't work. Transatlantic negotiations commenced after August, 1971, in order to set up a new Brighton Woods regime -- a new currency regime, and that led first to the Smithsonian agreement of 1971 -- December, 1971. But the new rates which were negotiated weren't really observed, because observing these new rates would have demanded domestic austerity programs, and none of the governments involved in Western Europe, in Japan, and neither the United States were interested in carrying that through. Therefore, throughout 1972, first our negotiations took place, and the Europeans made some efforts to set up a separate European success such as a Brighton Woods Conference system, like for example the European snake in the tunnel of April, 1972. But it all didn't work. By March, 1973, the free-floating of all international currencies was agreed upon. While this did lead to an improvement of the situation as it calmed the markets a little bit, the strong stability of the old -- of the old Brighton Woods System would however, never return. Moreover, the United States continued to be burdened with a serious inflationary problem. Only new Federal Reserve Chairman Paul Volkas' [phonetic] tight monetary austerity policy of the late 1970s and early 1980s brought down inflation -- essentially the inflation stoked [phonetic] by both Johnson and then [inaudible] by the Nixon administration. And bringing down inflation in the late 1970s and early 1980s had a huge cost. It cause a serious recession, and high rates of unemployment, almost a rule in the late 70s and early 1980s. Therefore, on the whole, determination of the Brighton Woods System, and the free-floating of international currencies in March, 1973, led to an entirely new financial and monetary phase in world policy. Internationally it was quickly realized that a completely new climate -- a new era had been inaugurated. It was the end of the system of fixed currency rates. To most economic experts in Europe, such as West German Finance Minister Helmut Schmidt [phonetic], it appeared obvious that Washington's global leadership position had been compromised. By no longer accepting the restrictions on its own monetary policies, by adhering to a fixed exchange rate system, the United States, Schmidt wrote -- the United States surrendered the leadership of monetary policy, and thus [inaudible] some of its de facto leadership of the west. Nixon recognizes as well. While he continued to doubt that the Europeans were able to act as an economic block, he fully realized that a major shift in the world balance of power was taking place -- particularly among ourselves, the Russians, the Chinese, and the Japanese. Thus, Nixon's economic policy had only been successful insofar as initially it had led to a booming of the US economy in 1972, and had therefore contributed to Nixon's overwhelming election victory in November of 1972. In the long run, it was in regard to both the American and the global economy, Nixon's economic policy had only prolonged the serious economic problems of the early 1970s, which as we know, only became worse with the first oil crisis of October, 1973, and then the second oil crisis of the late 1970s. Higher rates of unemployment and inflation, and serious US trade and balance of payments deficits continued long into the 1980s. Are there any lessons we can draw from all this to help us in our current economic predicament? Is there anything we can suggest to Obama to check out, and maybe think about, based on the experiences of the 1970s. Let me make five brief points, and I'm sure you will have -- you will all be able to make five additional much more exciting points in the discussion afterwards. First, one of the main reasons the US got into economic and monetary trouble during the Johnson and Nixon years was the cost of the Vietnam War. The lesson clear -- clearly seems to be that US military spending in Afghanistan, Iraq, and elsewhere, and the cost of the sprawling Pentagon bureaucracy needs to be seriously curtailed to bring expenditure under control. This, I believe, is a task the Obama administration ought to address as a matter of urgency. It clearly seems to be one of the lessons of the economic troubles of the 1970s. Second, one other reason for US economic difficulties of the 1970s was the international uncompetitiveness of American industries and businesses. And this was not only due to the overvaluation of the dollar, though this did play an important part. Still, while the US was resting on its laurels largely in the 1960s and 1970s, or focusing on its military industrial complex, Japan and the leading European countries were not attempting to compete with the wage levels of low-cost countries mostly. Instead, they were busily building up quality niche products, such as luxury cars, high-end household utilities, and high quality industrial machinery, for instance. The US at the same time exported much of its economic expertise abroad, and set up factories abroad, which benefitted the US economy only marginally, and the creation of expertise in the United States suffered greatly. There are clearly lessons to be drawn from this for our situation today. Three, or third, we all know that any US President has only limited means to create jobs. However, he -- or in the future, she -- can influence the conditions which lead to the creation of jobs. And Nixon managed quite successfully to manipulate the American people's confidence in the US economy. He managed to create a more optimistic economic climate at home. In early 1971 for -- for instance, he sacked [phonetic] his economic team, which had served him for the first two years without ever having turned around the economy. After the congressional elections of November, 1970, which the republicans lost, and in view of the looming election of November, 1972, Nixon was prepared to adopt very radical measures. In a way, Nixon panicked you can say. He wanted to do -- to have something done as far as the economy was concerned. Although one could say economically challenged, the Treasury post [phonetic] went to John Connelly in early 1971 -- and not for his economic and monetary expertise, because he didn't have any, but for his strong personality. ^M00:50:19 >> Doctor Larres: And Connolly was at that time a rising star who was talked about as a future American President, definitely Vice President. He was a former Governor of Texas, and he was a strong personality in both the democratic and the republican party. And Nixon picked him because of his links to Texas, and because of his really very ebullient, strong personality. And Connolly talked up America's economic performance, and what it needed to overcome the crisis. And he talked rather straight and aggressively to America's competitors. And the US voter just loved it. As Arthur Burns had recommended, the administration had to create new confidence, and Connolly did just that, albeit a kind of fairly unsettled -- uncivilized means and talk. One wonders if Obama, for example, should not also sack his economic team dramatically, and appoint a radically new one than abuse the country's economic -- economy with new confidence and optimism. I understand that Treasury Secretary Guidner [phonetic] is keen on leaving anyway. After all, what appears to be required when the economy is languishing seems to be strong leadership, or at least the perception of strong leadership. And this is what Nixon tried to give the nation with his dramatic pronouncements on August 15, 1971, and with the help of John Connolly. Fourthly, Nixon's temporary incomes policy had the advantage -- had the advantage that it benefitted the consumer with stable prices. It thus curtails the profiteering of the businessman, and this was very much the impression created, and the US consumer appreciated it. Nixon gave the impression of caring about the man and woman in the street, of being considerate and fair to the average family. Something like this would go a long way to create new confidence in the economy and the administration today, I believe. Some way, I believe, has to be found of making not just the taxpayer, but also the banks and the bankers pay for the huge damage created and done. Too big to fail is a rather unfortunate impression about the attitude of the administration, which has done great damage, I believe. Nixon's temporary incomes policy conveyed a very different message. In a way it is quite ironic. While Obama is personally a great communicator, his administration suffers from a lack of communication about its attempts to get the economy going. Nixon was personally a rather poor communicator, but his administration was much more successful in convincing the American voter of the great efforts his government undertook on behalf of the American consumer to create new jobs, and make the economy boom, and did it so successful, at least temporarily. Fifthly, Nixon's unilateral monetary policy, and the multilateral monetary negotiations in 1971, and particularly in 1972 and 1973 however were clearly a disaster. Obama's much more multilateral approach towards both the transatlantic alliance, and -- and countries such as China appears to be much more promising. In that respect, I would not recommend drawing any lessons from Nixon, because he simply was much too unilateral, much too aggressive in his international dealings. Perhaps he panicked too much. In conclusion, based on an -- on an analysis of the Nixon administration's attempts to overcome the economic predicaments, it found itself in the lessons seemed not to be too difficult to draw. The lessons would be get out of fighting so many wars, and create new economic confidence with the help of a new economic leadership team, and strenuous practical efforts in the real economy. There's another hopeful lesson, however. I think in the end all crisis end. That was the case in the 1970s, and this will definitely be the case again, some time in the hopefully not too distant future. Thanks very much indeed. ^M00:54:23 [ Applause ] ^M00:54:36 >> Doctor Larres: Thanks very much. Thanks very much. I'm happy to take any questions if people have questions. I would only ask people to ask questions rather than make a counter lecture, or give a counter lecture. Thank you. Yes, please. >> What authority did Nixon have to take us off the gold standard, and install wage and price controls? Could he do that without the Congress? >> Doctor Larres: He had to go to Congress in the end, but he could do that. And he did go to Congress in the end, but he could initially do that -- at least announce the decision that he intended to do so. And the -- the devaluation of the dollar did not occur immediately the way he had hoped that would be the case, but that only occurred later, basically by means of the Smithsonian agreement. Before that he actually agreed with French President Pompideu [phonetic] at -- at the meeting on the [inaudible] in early December, '71, about a new realignment of international currencies. And then there was a big meeting here on the mall -- the Smithsonian Institute, where all the major players -- economic players in the world assembled, and new currency rates were agreed upon, including a devaluation of -- of the dollar. But he had to go to Congress in the end, yes. ^M00:56:07 [ Silence ] ^M00:56:13 >> You mentioned how Nixon was able to kind of wax over a very serious economic crisis, and saw optimism in the face of it. Reconnecting that with the Vietnam War, the 1973 withdrawal, was he able to kind of do the same thing there and -- and make it look like a more optimistic end of engagement before the really [inaudible] a few years later? Or was there a little bit of public melancholy there too? >> Yes. The question is whether he -- that economic optimism, whether that could be translated into optimism about withdrawing from Vietnam. To some extent, I think he was able to do that. And as you will know, Kissinger received a Noble Peace Prize for negotiating the end of the war in Vietnam, and that of course indicated that the -- or indicated to the average American, the average TV viewer that the American government had made this very strenuous effort to get the country out of Vietnam by negotiations. And of course the South Vietnam government was supposed to continue to function, so there was not a collapse to be foreseen. And as we now know, the Nixon administration was desperate to prevent the collapse of South Vietnam too soon after the -- the piece had been organized. They hoped that at least for the next two years South Vietnam would continue to function in order to be able to take America out of the responsibility for the collapse of South Vietnam. It was all a [inaudible] policy, and the Nixon administration had clear indications that South Vietnam would not last for another two -- two years, as it didn't. But they hoped in the end that it would. So the impression was so -- the American voter, or the American viewer that the American government had made a strenuous effort to negotiate a fair deal so that America could leave Vietnam with honor. And that was the ambition of the Nixon administration, so that no blade would really stuck to their policy. Yes, please. Carol [phonetic]. ^M00:58:20 [ Silence ] ^M00:58:27 >> How important is honor as political capitol [inaudible]? >> Doctor Larres: Yeah, that's a very good question. How important is honor in international affairs -- in politics perhaps in general. I think if you interpret honor a little bit more widely, then I think it is very important. Because America's policy -- or Nixon's policy to put it more precisely -- of credibility, of being so sensitive about American credibility that was almost the same as honor, and it was taken very, very seriously. So no blame -- no lasting fundamental blame should be attached to American foreign policy. You had to leave a situation in a fair way so that no one could accuse you of having done -- pursued a disastrous policy. In that respect I think it was of overwhelming importance, particularly as far as Vietnam was concerned. But also today, I think to some extent it still is important, perhaps less so than in the past. And of course Nixon and Kissinger hugely overestimated the memory of the Americans -- that they would not quickly forget what was happening in Vietnam. Within a few years they'd almost forgotten who was responsible for Vietnam, what was actually happening in Vietnam. They overestimated then, they couldn't imagine that the memory was so short. And I think today's politicians have a more realistic grasp that within a couple of years hardly anyone will remember what actually happened in Libya, and that the United States was actually involved, even behind the scenes. But it was involved. And I think though in a way today's politicians are perhaps a little bit even more cynical than in the past, if that is possible. ^M01:00:12 [ Silence ] ^M01:00:22 >> Just a follow on -- on that last line. As a member of the US military in Vietnam in '70 and '71, it was -- it was a -- a -- a big difference I think in -- in the impact on the administrations of Nixon and versus Obama. And that was the makeup of the military >> Doctor Larres: Yes. >> And the military at that time was -- was a draft military that was very independent in its -- in its observations, in its formulations of -- or -- or impressions of policy. And the military today is a volunteer, much less independent of the -- of the government. An it -- in both instances we had cases where the military knew that the government was lying to the people, and in -- in the Nixon time, the -- the military was -- was willing to -- to go out on limbs to tell the American people that they were being lied to. And today we don't see that nearly as much, and the people aren't hearing a different perspective, other than the official government line because of the voluntary. And that has made a big difference in the public reaction to the actions in Vietnam versus today. >> Doctor Larres: Yeah, thank you very much. I think you made a very important point. And indeed, during Vietnam it was of course an army which lasted -- largely rested on people who got drafted into the American military. That old -- and why that is not the case any more today, today we have a professional army. And I think that explains to a large extent why there's not more opposition to the wars in the -- the United States fights at the moment. Professionals are supposed to do -- to fight as the government decrees, because that is their job, that is what they signed up for, that is what they all always knew they would let themselves into. That was very different with reservists, which got -- got called -- or volunteers which got called or drafted in. And that explains that there was much more unrest within the military during the Vietnam War. [Inaudible] problem of course was a serious problem. That is much less of a problem today as far as I can see. You made a second very important point that is about information policy. When the Pentagon papers were leaked by Daniel Ellsburg [phonetic], there was a huge outcry in the Nixon and Kissinger administration, because it was unheard of that top secret confidential American military documents were simply made available to the New York Times and other newspapers. Today we have WikiLeaks, we have so many other almost daily leaks, they create still a bit of a fuss, but you can't compare it to the fuss created by the Pentagon papers. And I think people have become used to the fact that in our times where we have an information avalanche, people are actually not paying all that much attention to information any more, that leaks often get noticed and then forget -- forgotten about, no one really seems to have an overview of what is in the public domain, what isn't, while in the past it was very different. The few bits of top secret information which we were able to get hold of, they were heavily discussed, they were -- everyone knew about them, and that doesn't seem to be the case any more today. So in a way you can say that the lack of information in the past led to a much greater interest in information and what the government was up to while our information overload has actually led to the opposite, that no one seems to -- or very few people seem to be really interested in reading that information. Yes. Yeah. >> Would you mind clarifying again whether it was domestic economy or our balance of payments situation that was a primary driver to get off the gold standard, and whether or not -- or what that says by way of the relative position of the balance of payments problem we face today, as opposed to what it was in Nixon's time. >> Doctor Larres: No, the -- the -- the gold standard had something to do with the -- with the trade deficit and the balance of payments with the outside world. And Nixon decided to go off the gold standard, because any foreign government could basically request gold for dollars. You know, there were lots of dollars which had accumulated, for example in Frankfurt, in Paris, in London. And if these -- all these governments had turned to the US Treasury and said we would like to exchange these dollars for gold, Fort Knox would have been empty. And that is what Nixon meant when he said at one meeting anyone can challenge us and topple us. We will be broke tomorrow if these foreigners all came requesting gold for their huge stacks of dollars they had accumulated. And that really was essentially why the gold window was closed. Domestically, what Nixon was most concerned about was the recession which seemed to be on the horizon, high rates of inflation, and high rates of unemployment which directly affected of course the American consumer. That was of course linked to -- to a lack of a good export industry. If the export industry had done better, that would have had repercussions -- positive repercussions on the domestic economy. But that was -- there clearly was a link, but the gold standard was really done for external relations -- for -- for external economic relations, less so for domestic relations. So there was link. Does that clarify it a little bit? ^M01:06:31 [Inaudible] ^M01:06:42 >> Doctor Larres: It was more important to Nixon? >> The balance -- excuse me. The balance of payments, the balance of trade problem was more important to Nixon than the balance or trade we have now is to the Obama administration [inaudible]. >> Doctor Larres: Yes, in a way, yes. Because it was a new situation, and now people have got used to that. And also subsequent governments after Nixon realized that a huge accumulation of dollars and Frankfurt, and Paris and London, whoever else doesn't -- didn't really matter so much. You know, it could continue like that for a long period of time. But the Nixon administration feared it couldn't continue for long, and there also was still the idea about a balanced budget, that you should really have a trade surplus, or at least a balanced budget, and you should also have an internal surplus -- at least no huge budget deficit domestically. And these were all more traditional notions which still strongly influenced the Nixon administration. And no wonder. If you had a trade surplus, until almost 1971, and some day you went into deficit, then your first ambition was of course to reverse that again, because it was something unheard of, and it seemed to be bad. But the longer that continued, into the Reagan years, and people seemed to be live -- live just fine with it, the better you got used to it, and we thought well, if it doesn't have any negative repercussions at -- initially, why not just continue with it if you can't help it. And that was still not the impression of the Nixon administration, because it was something new which they first had to get used to, and the consequences as well. And that way the Nixon economic policy was a much more conventional, much more traditional economic policy, very much orientated along good housekeeping rules of the past if you like. All these fanciful financial transaction devices, the hedge funds and so on which caused the current crisis to a large extent, all that was still far in the distance during the Nixon years. ^M01:08:46 [ Silence ] ^M01:08:52 >> Any -- oh yeah. Marylou [phonetic]. >> I just wanted to bring you back to the point you said about short memories. I have always been under the impression that neither the military nor the population in general in the US had really a short memory about Vietnam. I mean the -- the military obviously went from allowing reporters to just kind of free range report, to making sure with these wars that they're embedded very carefully. And also the whole issue of bringing bodies back, and allowing the American public to see that process -- those were so instrumental in turning the tide of public opinion in the Vietnam era, and now they're prohibited. And secondly -- and secondly with children these days are being taught an awful lot about the Vietnam War in school, and I've seen that in the curriculum. >> Doctor Larres: Yeah. I'm not saying that the Vietnam War has been forgotten as such. Of course it still has a huge impact on the American psyche. And when you go back to George Bush Senior with the first Gulf War, he actually proclaimed now the Vietnam Syndrome has been overcome, because we successfully won against Saddam Hussein in the Gulf War. And I think Bush Junior also said something similar about Iraq, that now Vietnam has laid to rest. So in a way they're still occupied by Vietnam. But what I meant to say is that the importance of leaks, which really drove the Nixon and Kissinger administration crazy, and they went to extraordinary lengths to prevent leaks. They -- as you know, they revised the taping system which Johnson also had in the White House, but they really used it very extensively, and not just in the Oval Office, but also in the executive offices and other offices in the White House, and in other governmental buildings. So every conversation was taped, because they feared if there is another leak, we can then pinpoint who actually leaked. And I think that has reduced -- of course every government is sensitive about leaks. No one likes it, and they always try to find out who did the leaking. But I think they don't go to quite the same length any more. Of course, because of Watergate, lessons have been learned. Sometimes I think I agree with Churchill, you can learn from history occasionally, and governments do that as well. But also they realize we -- we do forget. As newspaper readers, we do forget more quickly. You know, we read about a leak today, and next week we can hardly remember what the leak actually said, unless it is a real big story which is in the -- in the headlines for the next two weeks. And I think Nixon and Kissinger didn't realize that. Maybe it was differently -- still in the '60 and '70s, but they took the leaks as much more important, as much more possibly undermining their policy as actually was the case. Maybe that also had some -- had to do something with the personalities of these two politicians. They were highly suspicious, you -- unusually suspicious, and they hacked [phonetic] on each other. I mean I talked about the Beatles, you know, Lennon and McCartney, and Laurel and Hardy. In a way they did feed on each other, and -- and that was unusual in politics. I can't say that Hillary Clinton and Barack Obama have the same [inaudible] of kind of feeding policy on each other. They seem to be both much more cooler, much more independent personalities in that respect. And I don't think they get -- get quite as worked up about leaks. Oh they all got worked up about WikiLeaks of course, but it died after a few weeks. Well the Pentagon papers, you know, they -- Nixon and Kissinger, I think they talked for years about that. ^M01:12:48 [ Silence ] ^M01:12:55 >> Last question? >> Last one, thank you. Doctor Larres, your topic was fascinating, juxtaposing these two very different Presidents. When you think back to Nixon, you're always reminded it took a conservative to make the opening to China, it took a conservative to do -- to stop the war, etcetera. And he -- he -- he was the beneficiary of a government that allowed bipartisan action. President Obama doesn't have that luxury. And how much of President Obama's current challenge -- the situation of the -- of the -- of the government being as polarized as it is, is in fact a direct result do you think of some of the things that President Nixon did during her -- his time, as part of his southern strategy? >> Doctor Larres: Well, that's a very difficult question to answer. But you're perfectly right. While Nixon was faced with a democratic Congress, you know, not his own party was in charge of Congress, or -- and including the Senate and the House of Representatives -- Representatives than the opposition party. But I think foreign policy still was character -- particularly foreign policy was characterized more by bilateral approach, by something which was seen not as a republican or democratic policy, but more like a policy of the United States government. And that has changed. And I think that has changed, not during the Obama years, but probably towards -- since the end of the Cold War. Maybe it started under Reagan and then has continued. And of course under Bush with the Iraq invasion that has become quite strong, and Obama also suffers from that. Nixon put -- you're quite right -- put rest on his anti-communist profile. He was such a convinced anti-communist, he came so strongly across as hating communism, you know, even -- even when he opened up to China, you still could not accuse him of being a pro communism sympathizer. It was still difficult, despite some grumblings on the right of the political spectrum. And I think Obama hasn't really got that sort of solid foundation in whatever camp. So he is more prone to being accused of having changed his mind, of wanting to sell the country down whatever road they can just think of. And -- and that way he is in a weaker position I think. And times have also changed. I think there's less if you like foreign policy patriotism around than there used to be, so that there's much, much less of a common camp of -- of people pulling together in an emergency crisis than that was more the case years ago -- decades ago than there is today. And of course, you know, there's also other factors, like when people talk about whether Obama was actually born in the United States. You know, there are these kind of unsavory factors, and that would never have come up during Nixon's time. You know, people hated Nixon as well, but they wouldn't have gone that far. You know? So I think times have changed too, to quite a large extent in that respect. And maybe they will also change back again. I'm not saying that we'll continue that way, but at the moment we are. Of course in a very unfortunate divided position, and the culture wars of the 1980s have certainly contributed to that. But as I said, at the end of my talk, crisis eventually always will be overcome, and maybe divisions will also be overcome eventually. Let's hope for the best. ^M01:16:32 [ Applause ] ^M01:16:40 >> Our thanks to Doctor Larres -- Klaus here, and let's continue the discussion. Please join us at a reception in the back. Thank you. >> This has been a presentation of the Library of Congress. Visit us at loc.gov.