October 18, 2003


Who Is Governor Arnold? George Shultz's Hunch (Andrew Ferguson, Oct. 14, 2003, Bloomberg)

Former U.S. Treasury Secretary George Shultz, sitting in serene retirement in his office on the campus of Stanford University, likes to tell this story about Arnold Schwarzenegger.

"Buffett and I'' -- that would be billionaire investor Warren Buffett, who with Shultz heads the soon-to-be-governor's team of informal economic advisers -- "were doing a conference call with Arnold back in September. A number of businessmen had joined us. And one of them, a Latino restaurant owner, starts to push this driver's license thing.''

That would be the new California law, signed by a desperate Governor Gray Davis shortly before last Tuesday's recall election, allowing illegal
immigrants to obtain drivers licenses.

"This fellow says, `Arnold, all my employees are for it. All my customers are for it. You support this thing and I can guarantee you a lot of votes.'

"There was a long silence. Finally Arnold says, `But I don't support it.'

"And this businessman says, `But it would be very good for you,' and so on and so on.

"Another long silence.

"Finally, Arnold says, `I'm sorry, I can't. What kind of governor would I be if I started supporting things I don't believe in?'

"Remember, this was not a public event for public consumption. This wasn't some kind of grandstanding. I just thought, Wow. Bam. What an answer. This guy's got it. This guy's the real thing." [...]

"You people in the press got Ronald Reagan wrong, too,'' says Shultz, who served as Reagan's secretary of state after heading Treasury in the Nixonand Ford administrations. "Everybody said, `Oh, he's just an actor, he's vague, intellectually he's not up to snuff.'

"Reagan didn't mind. I don't think Arnold does either. Reagan even cultivated that image -- he wanted to be underestimated. And while everybody was sort of laughing at him, he just blew right by them and walked off with all the prizes. I think Arnold might do the same."

During the Reykjavik Summit, when Ronald Reagan and Mikhail Gorbachev came close to a sweeping deal calling for the elimination of entire categories of nuclear weapons, the stcking point was the Soviet demand that we give up our pursuit of the Strategic Defense Initiative (Star Wars). Reagan refused, though he vowed that when we had a workable missile defense we'd share the technology with them--his vision being to make the world safe from the threat of mutual assured destruction, which he abhorred. Gorbachev well understood by then that the Soviets had no prayer of matching us in any kind of technological race and that merely to try and compete would in and of itself destroy what remained of the decrepit Soviet economy. In fact, Mr. Reagan had already exposed the USSR as the paper tiger that Aleksandr Solzhenitsyn had predicted. So Gorbachev hammered away at Reagan, pleading for the U.S. to just give up this one more weapon.

Finally, President Reagan, who steadfastly refused to surrender a defensive program, slid a note to George Schultz which asked: "Am I doing the right thing?"

Schultz wrote back" "Yes."

The tale is told, presumably apocryphal, of how Gorbachev, when he was riding to the airport with Iceland's prime minister after the talks collapsed, said: "The Cold War ended here."

Posted by Orrin Judd at October 18, 2003 5:48 AM
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