Guest Contribution: “Remembering George Schultz & a 1983 Reagan cabinet meeting”

Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy  School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared at Jeff Frankel’s Blog.

In early November 1983, President Ronald Reagan was meeting with his entire cabinet, as Secretary of State George Schulz walked him through each step of an upcoming visit to Japan and Korea.  I was there as the “plus one” staff aide to Martin Feldstein, Reagan’s top economic adviser.

On the occasion of Schultz’s passing away February 6, at age 100, I offer two remembered anecdotes from this meeting.

Reagan and Whales

Reagan said very little during the lengthy briefing and it wasn’t clear whether he was taking it all in.  At one point, Schultz was talking about the disagreement between the US and Japan over whaling.

“And whaling is a very big industry in Japan, Mr. President.”   The Secretary of State looked over at Reagan.  Was he asleep?

“And whales are very big animals!” Schultz said, unexpectedly.  Reagan looked over, raising an eyebrow questioningly.

“I just wanted to see if you were still paying attention,” Schultz explained.  I wondered how many other members of Reagan’s cabinet could have gotten away with that.

Human Rights in South Korea

The President was to visit South Korea for two days, after Japan.  This was an important trip at a critical time.  Korean President Chun Doo Hwan had come to power as an unelected military strongman.

Schultz reminded Reagan that he would in public be assuring the South Korean leader of unwavering US support, particularly against a belligerent North Korea.  But he also told Reagan, regarding the private meeting he was to have with Chun, that this was the right time and place to bring up the sensitive topic of human rights.  (Less than three years earlier, an estimated 2,000 Koreans had been killed in Gwang-ju, while demonstrating against martial law.)

General John Vessey, Chairman of the Joint Chiefs of Staff broke in. “No, don’t do that!” he remonstrated.  “They hate that ‘human rights’ talk!”  Schultz calmly paused a moment, before replying, “Well, nevertheless.”

George Shultz was a very fine civil servant.  He even had an economics Ph.D. from MIT.


This post written by Jeffrey Frankel.

30 thoughts on “Guest Contribution: “Remembering George Schultz & a 1983 Reagan cabinet meeting”

  1. Moses Herzog

    Not a fan of George Schultz. Because it is considered bad taste to speak poorly of the recently deceased, I will refrain. If you read about Theranos and his relationship with his grandson, you may come away with a different impression of the man, Not only being on the board of Theranos during the crimes, but the way he treated his grandson after the crimes became public. Because you see, the one is enough, the two things together say something about Schultz.

    My thoughts are not intended as a criticism of Professor Frankel (who I have a great deal of respect for and hold in high regard) or this post. If Professor Frankel can see the best in people, that is a trait to be admired. I’m sorry my general cynical nature doesn’t allow as much for that outlook. My near hate of Ronald Reagan, and his policies which I believe hurt my father and our family when I was a young boy, may also bias my views on Schultz.

    1. pgl

      Ever heard of the Philadelphia Plan? As Nixon’s Labor Sec. George Schulz got this requirement that construction workers to actually hire minorities through. As Nixon’s Treas. Sec. he helped end the gold standard. Not that I’m a fan of Nixon but Schulz did a few good things. And I’m sure we could find notable successes from Reagan’s Sec. of State – not that I’m a fan of St. Reagan either.

      1. Moses Herzog

        Krugman has another blog post up, posted about 90 minutes ago. If the 2nd one is as good as the first his new blog is going to be a BLAST

      2. JohnH

        Why am I not surprised that pgl— our dear progressive growth liberal—would get all teary-eyed at the demise of George Shultz who was intimately associated with Reagan and the Hoover Institute—the antitheses of all things progressive and liberal. Of course, pgl never had a kind word for Mariner Eccles either, though Eccles promoted fiscal stimulus well before Keynes had written his General Theory.

        It reminds me of a “liberal” talk show host out here. His primary cause was to privatize the Post Office. Though it might cost $1 to mail a letter, it was the right thing to do, according that “liberal.”

        1. Moses Herzog

          @ JohnH
          The part that bugs me is, some people want their cake and eat it too. We have apologists for him overseeing crimes committed at Theranos, hinting because of his age “well he just missed it, ‘poor’ old guy”. They want it both ways. Does it dawn on them that if he was willing to accept payment for a board seat, that he was in essence absentee for, that taking a 6-figure check at his age was highly unethical?? That’s if we’re keeping the morality out of it and just looking at it from a professionalism perspective. If we get into the morality then it makes it even worse. And isn’t it “amazing” that Schultz was still “mentally with it” enough to treat his grandson like s piece of crap, after his grandson let the public and law officials know what was happening at Theranos. Well, Schultz “just happened to” shake off his geriatric cobwebs THEN didn’t he?? “Holy Jesus!!! It’s a snob-set miracle!!!!” But see, “we can’t do that”, because Schultz was from the snobbish circles and worked with the Chicago Uni boys, so “none of that counts, it ‘just happened’ ” and we all “need to move on now” “he was a ‘good’ guy, really he was”.

          The truth is, if Schultz was “from another walk of life” (socio-economic that is) people (we know who they are on this blog) would be trashing Schultz for taking a 6-figure annual for doing nothing. Imagine some guy with a Union job doing that?? They’d be labeling him “scum” in this same thread.

          1. pgl

            I get you need a new BFF but encouraging this clown is not a wise thing to do. No – he truly is an idiot with deep emotional issues.

          2. JohnH

            I mostly remember Schultz as the Secretary of State from Bechtel at a time when OPEC producers were granting massive contracts to international construction firms like Bechtel—-no conflict of interest or revolving door there!!! Not that anyone here noticed! Next people will start genuflecting to Rumsfeld and Cheney, who received deferred compensation from Halliburton while it made billions from “reconstruction” of Iraq?

          3. Moses Herzog

            @ pgl
            If JohnH is getting the gist of the story correct, that there is corruption and self-dealing that Schultz was involved in, getting the exact timeline wrong tells me what?? If you F’ed around with another woman on your wife, when she busts you for cheating on her, you’re going to tell her “she’s wrong” you F’ed her at the cheap motel on Tuesday, not Friday??

          4. pgl

            “If JohnH is getting the gist of the story correct”

            Moses – forgot your usual rabblings and think about this conditional. JohnH never gets the gist of any story correct. But I provided you a link to a thorough account of this period which of course your lying BFF did not provide. Now run along and read it for yourself.

        2. pgl

          Seriously? I would have thought by now that your mom would have demanded that you stop embarrassing her family with such stupidity. Hey we have one President at a time and if competent people did not work for him – then we get Trump. I guess that is the government you want.

          BTW stupid – after Reagan’s first economic team screwed our economy to hell, Martin Feldstein became the head of CEA hiring Krugman and Summers to help him straighten out the mess. So they worked under Reagan and we are lucky they did.

          Dude – you have serious emotional issues. Please seek professional help.

        3. pgl

          Marriner Eccles was the chair of the Federal Reserve under FDR. Yes I have many times praised monetary policy during FDR’s first term. Which BTW moron is not fiscal policy. Now had you ever bothered to read the 1954 AER classic by E. Cary Brown (a great Keynesian) you would not fiscal stimulus was not all that powerful during FDR’s first term and then we had that 1937 attempt to balance the budget.

          But of course I’m giving a history lesson to a moron who does not know the difference between fiscal and monetary policy.

        4. pgl

          How the Federal Reserve honors Marriner S. Eccles (as opposed to JohnH who cannot even spell his first name correctly):

          He was a great FED chair but maybe not perfect. This tribute fails to note maybe the most important part of monetary policy when FDR took office – getting off the damn gold standard (did you know JohnH thinks the gold standard was GREAT) which not only allowed the FED to lower interest rates but allowed for dollar depreciation which increased net export demand (I’m sorry JohnH – you do not get any of this).

          But yea Eccles helped bring back fixed exchange rates after WWII. Schultz convinced Nixon to drop fixed exchange rate in 1973, which most economists would argue was a good move. Even if I have to apologize again to JohnH for talking about things he does not understand.

  2. Barkley Rosser

    I am mostly a fan of Schultz’s, while recognizing that he did some things not so admirable. He was only the second American ever (after Elliott Richardson) to hold four different cabinet level posts: State, Treasury, Labor, and OMB, and generally did well in them, especially given that in all of those he was serving GOP presidents. He generally moved them in a more progressive direction.

    I think the most important thing he did was helping to bring an end to the Cold War under Reagan while at State. He played a crucial role in the nuclear arms agreements and summits of that period. One of his (and Reagan’s) great achievements was the Intermediate Forces Agreement gotten in 1987. In the show “The Americans,” getting that agreement was the culmination of that series, for what that is worth, and it did play an important role in bringing the Cold War to an end more generally. As it is, Trump withdrew from it, to much unhappiness by US allies in Europe, although, of course, he did not care about their views at all.

    The Theranos matter is one where he does not look good, but then that is something that went on in the last few years when he was in his upper 90s, not necessarily a time for the best judgment on such matters. However, the column he wrote for WaPo on his 100th birthday in December was very wise and thoughtful.

    Another matter where he can be taken to task is something that Burce Bartlett, a former econ adviser of GOP prresidents, has dumped on him big time on Facebook in the last few days. Apparently when he was serving ad Dean of the Grad School of Business at Chicago around 1970, he let Arthur Laffer get tenure even though he did not have PhD. And then he brought him to the White House under Nixon when Schultz went to become Labor Secretary and supported his forecasts, although that was before he came up with his wacky curve.

    1. pgl

      Tenure teaching MBAs is not the same thing as teaching graduate classes in a Ph.D. program. I ran into Laffer at some 1983 conference discussing the macroeconomic disaster known as Reagan’s first two years. Laffer showed himself as the two faced snake oil sales person that dominated his career. I hear that at one conference where Laffer was pretending to have a Ph.D., Paul Samuelson dressed down his presentation with lots of references to Mister Laffer. People took notice as Samuelson was meticulous on such details and yes – he did not have that Ph.D.

    2. 2slugbaits

      Schultz left the Chicago area in 1969, so his involvement with Laffer must have been before 1970. Back when I was growing up George Schultz lived nearby in our little village outside Chicago, but his kids were older than me and I didn’t know him from Adam. A lot of Chicago economists lived in that village back then, including George Stigler and Beryl Sprinkel.

    3. pgl

      “He played a crucial role in the nuclear arms agreements and summits of that period.”

      JohnH tried to smear Schultz by noting he worked for Bechtel at some point in time (which point in time JohnH does not know). The Bechtel issue involves them trying to sell plutonium to Brazil when Carter was President – something that Schultz ended up stopping. Yea some were concerned that Reagan hired a few Bechtel ex employees but as you note – the nuclear arms race was brought under control in the 1980’s.

  3. ltr

    February 8, 2021

    He Helped End the Cold War With Kindness
    The human touch was at the heart of everything achieved by George Shultz, the former secretary of state who died on Saturday.
    By Philip Taubman

    George Shultz, a long-serving secretary of state under President Ronald Reagan, died on Saturday at age 100. A man of many achievements — he also held three cabinet posts under President Richard Nixon — there’s one for which he never received full credit: winding down the Cold War.

    Without Mr. Shultz’s steady guidance, Reagan could not have capitalized on the opportunity presented when Mikhail Gorbachev became the leader of the Soviet Union in 1985. “Without Reagan the Cold War would not have ended,” Mr. Gorbachev himself said a few years ago. “But without Shultz, Reagan would not have ended the Cold War.”

    It was the way in which he found success that made Mr. Shultz exceptional. He could be coldblooded, obdurate and inscrutable, but whenever the opportunity arose to connect with someone on a personal level, he embraced it. The human touch was at the heart of all Mr. Shultz did. His gestures of kindness and respect seem almost quaint now, a throwback to a gentler age when venom was not the elixir of public discourse.

    Take the time he brought James Goodby, a senior Reagan administration arms control negotiator, to the Oval Office for a meeting with Reagan. Mr. Shultz guided Mr. Goodby to the wingback chair next to the president, the seat reserved for the highest ranking guest. Mr. Shultz sat on the sofa. Mr. Goodby never forgot the gesture.

    Or consider Mr. Shultz’s first meeting with Eduard Shevardnadze in 1985. The newly appointed Soviet foreign minister was making his global debut at an international conference in Helsinki, Finland. “We’re going to have plenty of arguments with this guy, but let’s make friends with him,” Mr. Shultz told his wife. “We don’t have to have personal animosity. Let’s try to fix it so we don’t have that problem.”

    With some 30 national delegations gathered in Finlandia Hall, Mr. Shultz placed his papers at the American table at the bottom of the amphitheater and slowly climbed the steps to the Soviet delegation near the last row to welcome Mr. Shevardnadze. The buzz of dozens of conversations stopped as he approached Shevardnadze and extended his hand. After years of frigid American dealings with Andrei Gromyko, Mr. Shevardnadze’s predecessor, the moment was electrifying. It helped set the foundation for a remarkably constructive working relationship between Mr. Shultz and Mr. Shevardnadze….

    1. Moses Herzog

      Gorbachev was the true unsung hero of the whole thing. And everyone else was just along for the ride. Hopefully history will properly record who was taking all of the risk and danger. But something tells me Gorbachev doesn’t care how history records the credit, because that’s not why he did it.

  4. ltr

    October 25, 2018

    We Must Preserve This Nuclear Treaty
    This is the time to expand, not abandon, an important nuclear weapons agreement with Russia.
    By George P. Shultz

    Nuclear weapons are a threat to the world. Any large-scale nuclear exchange would have globally catastrophic consequences. Conscious of this reality, President Ronald Reagan and Mikhail Gorbachev, the leader of the Soviet Union, worked in the 1980s to reduce the number of nuclear weapons, with the ultimate goal of getting rid of them.

    The Intermediate-Range Nuclear Forces Treaty, signed in 1987, was a major step toward this goal, eliminating a large class of nuclear weapons that were viewed as particularly destabilizing. The treaty is still in force, although both the Obama and Trump administrations have said that Russia is in violation. Whatever the case, we need to preserve the agreement rather than abandon it, as President Trump has threatened to do.

    Indeed, we should invite other countries to join the treaty and resist the temptation ourselves to develop new classes of these deadly weapons. The first step would be to convene a meeting between American and Russian experts to discuss possible violations of the treaty.

    The treaty included many special features, not the least of which were provisions for extensive on-site inspections to verify that all prohibited missiles had been eliminated. Many doubted that such inspections would ever actually take place, but they did. By 1992, nearly 2,700 missiles had been destroyed. The inspection provisions expired in 2001, but the United States and Russia could agree to revive them to help resolve the worries about compliance.

    Determined leaders like Mr. Reagan and Mr. Gorbachev could see the need to limit the threat of nuclear weapons, and they acted on it. In their first meeting, they agreed that a nuclear war could never be won and must never be fought. Today, we need leaders who understand the destructive power of nuclear weapons and are willing to work against them.

    On Oct. 19, 2017, President Vladimir V. Putin of Russia said: “If you ask me whether nuclear disarmament is possible or not, I would say, yes, it is possible. Does Russia want universal nuclear disarmament or not? The answer is also yes — yes, Russia wants that and will work for it.” …

      1. Moses Herzog

        Although this criticism is fair to a degree, it is also unfair criticism in part. Yes more than half of the electoral college vote went to donald trump back in 2016. And Americans have to face the reality of that poor decision. But the trump “presidency” was very much an anomaly. So judging America’s commitment to keeping its promises to other countries and holding to its commitments and agreements based on one bad presidency is not a good barometer. Especially considering China and Russia have rarely kept their promises to America, both as regards to trade (I’m mostly thinking China on trade) and ballistic weapons agreements (I’m thinking mostly Russia on ballistic missile LIES). America is guilty of many sins in foreign policy, including some lies. But when judged in totality vs other countries, America is relatively consistent.

        This reminds me of an “argument” I had with one of my mainland China friend’s family members (ironically, my friend, not the family member, one of the most well-versed Chinese on world affairs and one of the sharpest men I have ever met in my life) at the dinner table, where I easily conceded that “W” Bush was a poor leader, and happily conceded that the Iraq war was a huge mistake (We should have invaded Afghanistan first and had strong economic sanctions against Saudi Arabia). And he sat there for what felt like the next two hours arguing with me, about a point I had already conceded to him at least 5 separate times.

  5. macroduck

    I worked under Schultz for a time. Never had direct contact. I remember the day the White House ordered that everyone with a security clearance would be required to take a drug test. Don’t know whether Nancy or Ed Meese was behind the idea. Either way, Schultz was quoted in the press the very same day saying he would not be taking the test. As a result, none of us did, either. This is just a tiny example of his extraordinary skill at judging situations ad getting things done. Albright and Christopher had similar skills, maybe not to the extent Schultz had. Leon Panetta is the only person I know of who was clearly in Schultz’s league, though he was never at State. Baker, by reputation, was as good as Schultz, but I’m not in a position to know much about Baker.

    1. Moses Herzog

      My question would be (and this is an earnest question, not being a smart-A), did Schultz do that because he thought no one in the dept was taking drugs and therefor the tests were useless, or that he viewed himself as “above” taking such tests?? I mean I’m willing to listen to your thoughts here, but I’m leaning towards the notion that he could have cared less whether macroduck and his neighboring deskmates had to take the test, but rather he himselfwas in “the special group” which should “never be asked to do such ‘undignified’ things”.

    2. pgl

      You worked for him? I’m impressed. I never worked for it but our Village Carnival Barker named JohnH just had to attack me but not you. Go figure!

  6. baffling

    others may have better memories. but my memories of the reagan years, and thus the schultz years, are not really pleasant memories. for my own hometown and my own family, the reagan years were a disaster. steel mill towns shutting down. half the school moving away over the summer. those remaining taking on minimum wage jobs with no benefits or job security. lots of unemployment. reagan broke america’s back, from my experience. if schultz enabled him, that is not what i would describe as a great quality in a person.

    1. pgl

      Schultz did not give us that messed up fiscal stimulus and tight money that so massively appreciated the currency. Yea Reagan was a disaster but what was on Schultz’s portfolio. Certainly not that macroeconomic mess.

  7. Erik Poole

    Interesting anecdote.

    It illustrates to what extent Americans are still mindless agents in social dilemmas, and still very much dependent on Dark Ages moralistic thinking to resolve problems such as excessive, inefficient harvesting of renewable resources.

    Why manage the commons with harvestable quotas when simply banning the activity outright is so much more satisfying and politically popular?

    Why is overcoming social dilemmas so difficult? Is it a lack of basic numeracy skills? Or is that the fact that open access settlement was an important instrument in the colonial tool box for taking land and resources from indigenous peoples?

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