Foreign Relations of the United States, 1977–1980, Volume I, Foundations of Foreign Policy

128. Memorandum From the Special Representative for Economic Summits (Owen) to President Carter¹

Washington, September 24, 1979

SUBJECT

• A Proposal (U)

In the next fifteen months Americans will be primarily concerned with two inter-related problems: the US economy, and the US world role. This memorandum suggests that the time is ripe for major and mutually reenforcing initiatives which will set the tone for the Administration’s handling of both these issues during the coming year. (C)

[Omitted here is information about the U.S. economy.]

II. US World Role

Since the late 1940s most Americans have believed that a strong US world role was essential to a peaceful world. And they have seen holding our own in competition with the USSR as an essential element of that role. I doubt most people are unduly excited about a few thousand Soviet soldiers in Cuba. But they are excited about what they see as a continuing Soviet attempt to exploit change in Third World areas; Cuba is only the latest example.² (C)

There is some analogy here to inflation: No one expects Soviet pressure in third areas to fade away quickly. But people do want some evidence that we are mounting a comprehensive effort to meet the Soviet challenge. As on the economic front, they want to see some light at the end of the tunnel. (C)

What is needed to meet this need is less specific immediate actions (which might look like gimmicks) than a basic change in emphasis, which will be reflected in a variety of actions over time. The Cuban problem could be the occasion for a speech spelling out that shift. You might recall that your Annapolis speech had said that the US was ready to respond to either competition or cooperation, depending on Soviet actions;³ after pointing out that the Soviets’ actions since then have made clear that their main emphasis is on competition,⁴ you could indicate that we are ready to respond in kind: While we are still anxious to join in cooperation (SALT), where this serves both sides’ interests, our main effort must be to make clear to the USSR that the competition they are forcing on us will be unrewarding. This means:

—Responding directly to Soviet pressures in Third World areas, e.g., by military aid to intended victims and, if requested by countries of the region concerned, by interdicting the movement of outside forces across national frontiers to intervene in local hostilities.⁵ (C)

—Trying to mitigate turbulence that lends itself to exploitation by the USSR and its proxies—e.g., by intensified efforts to reach a settlement in the Middle East and by providing effective aid (which doesn’t necessarily mean more money) for economic development in troubled areas of the developing world. (C)

—Pushing ahead with the 3% real increase in defense expenditures.⁶ (C)

It also means (though you may not want to say this in your speech) counter-pressures on the USSR—e.g., not being deterred by Soviet concerns from feasible improvement in our relations with China. (C)

What is important, I repeat, is less specific measures, which will no doubt be modified or discarded as events evolve, but a general shift in emphasis: not a return to the cold war, but an adjustment of the balance between competition and cooperation in response to recent Soviet behavior. You would be signalling that we have read the Soviets’ signal and are sending an equally clear one in return. We hope that it will be read; to the extent that the Soviets respond by shifting away from competition toward cooperation, we will be only too glad to do the same. (C)

All this will not get Soviet troops out of Cuba; I doubt anything will. But it will show the American people that we have drawn the proper conclusions from these troops’ presence and other Soviet actions, and are taking steps to reflect these conclusions in the conduct of US-Soviet relations. (C)

Such a speech would be welcomed abroad. Last week in Paris, Art Hartman told me that the French are worried less about Cuba than by what they see as a generally assertive Soviet policy in Third World areas. They would welcome a firmer US response—a clear indication that we realize what the Soviets are up to and will act accordingly. (C)

III. Conclusion

These two initiatives should be seen as mutually reinforcing elements of a coherent program to strengthen the⁷ US and its position in the world: Pushing for higher productivity will strengthen the US at home; responding effectively to Soviet competition will strengthen it abroad. Neither initiative will yield early results. But both will strengthen the Administration’s standing, at home and abroad—indicating that we have longer-term programs to help meet the problems that worry Americans most. (C)

If you make the Soviet speech first, because of Cuba, you could indicate that a second speech would soon follow, foreshadowing the domestic economic programs that are also needed to maintain our national and international strength. (C)

The second speech could not only announce your new campaign to boost investment and productivity, but also rehearse the other elements of our anti-inflationary strategy, emphasizing that prolonged fiscal and monetary restraint is the key to success. This may not be a popular message, but the leaders who have done best politically in the industrial countries (Schmidt, Giscard, LDP leaders in Japan) are those who have proposed hard measures to beat inflation, while those who have done poorly (Trudeau, Callaghan) have given the impression of trying to please everyone.⁸ A President who tells it like it is, and thus is seen to put the country’s interest over personal and political advantage, will make anyone who argues for painless approaches to inflation look second-rate. (C)

Once made, these two speeches should set the theme for the Administration’s posture during the remainder of your first term. You should come back to this theme at every occasion—stressing the need to strengthen our country, and underlining the steps to improve productivity and restrain Soviet competition that are needed to fulfill this task. You will be seen to be looking beyond specific problems to a broad vision of the country’s future and the policies that are needed to achieve it. This is what the much-abused term “leadership” means. (C)

If this approach makes sense, I’m sure Bill Miller could offer more detailed suggestions as the specific content of the economic speech I have in mind.

After writing this memo, I read an article in the Sunday Star,⁹ quoting a recent piece by the British observer, Henry Fairlie. One sentence caught my eye: “If Carter understood that the question of American power is what is really nagging at the American people, he would occupy the main ground of this election, which is still vacant, and in which the President’s authority can be overwhelming.”¹⁰ I believe you do understand it. Which is why I am offering these suggestions on how to translate that understanding into action. (C)

1. Source: Carter Library, National Security Affairs, Brzezinski Material, Subject File, Box 16, Economic Assistance Strategy 6/78–9/79. Confidential. Sent for information. The President initialed the top right-hand corner of the memorandum. An attached note reads: “Donna—I guess ZB hand carried the attached package???!!? pb 9/25/79.”
2. The President underlined the portion of the sentence beginning with “a” and ending with “areas.”
3. See Document 87.
4. The President underlined the portion of this sentence beginning with “main” and ending with “competition.”
5. The President underlined “by military aid to intended victims,” “if requested,” and “interdicting.” In the left-hand margin next to this point, he wrote “war?”
6. The President placed a checkmark in the left-hand margin next to this point.
7. The President underlined “strengthen the.”
8. The President placed a vertical line in the left-hand margin next to this sentence.
9. Reference is to the September 23 issue of The Washington Star.
10. The President underlined the phrase “question of American power.”