Nancy and I are happy to be a part of this magnificent gathering tonight. And let me begin by saying that we Republicans not only think New York is a top priority State; we Republicans are going to carry New York this fall. The Republican victory here in 1980 was no aberration. It marked a turning point in New York politics, and we're going to prove that in 1984.

This city and this State represent the hub of America's commercial and financial activity, and it's good to see labor also recognized or represented here tonight. And as one who was head of a union for six terms and is, I think, the first one in this job that's ever been able to say a lifetime member of an AFL - CIO union, I know that union and management have the same stake in a strong economy.

And believe me, all of us remember that those now asking for our trust are part of the same liberal crew that dominated the Presidency, all the departments and agencies, as well as both Houses of Congress. They had absolute control of our government. And whether from the Senate or from the executive branch or the House, their policies gave us runaway inflation, record interest rates, huge tax increases, economic stagnation, military weakness, and phony talk about a national ``malaise.''

Well, we've got some mighty important items to discuss this year. The American people deserve a chance to hear the issues, and as -- God bless him -- Al Smith used to say, ``Let's look at the record.''

As for the record, I think the Republicans shouldn't hesitate to ask loud and clear and over and over again this year whether the American people believe they are better off now than they were 4 years ago.

Let me ask you: Does anyone want to go back to that double-digit inflation nightmare of 4 years ago?

Audience. No!

The President. Does anyone want to go back to the stumbling, sputtering economic failure of 4 years ago?

Audience. No!

The President. And does anyone want to go back to that ``your-money-belongs-to-Washington'' era of 4 years ago?

Audience. No!

The President. I want to interrupt and just remind you of something here. In 1976 our opponents cooked up a thing they called the misery index. And that was that you added the rate of unemployment and you added the rate of inflation and that was the misery index. And then in 1976 they said of our President Ford, ``He shouldn't even be allowed to run for reelection because his misery index was 12\1/2\ percent.'' Well, in 1980 they were running, and the misery index was just a fraction of a point under 20. Well, we're running again now, and the misery index is less than 12.

And as much as our opponents would like us to believe that the murderous inflation, the economic stagnation, and the crisis of confidence we suffered 4 years ago were part of a mysterious cycle or the result of my predecessor's personality, it doesn't wash. The economy is improving, America is growing stronger, moving forward, for one simple reason: We Republicans reversed the liberal policies of tax, spend, and inflate and put you, the American people, back in charge. It took time to put our program in place, and it's taken time for it to take effect. My goodness, aren't we happy we stuck to our guns?

We're in the first phase of a recovery that has already astounded the experts. The gross national product grew at a firm 6.2 percent last year. And January's hefty jump in the index of leading economic indicators suggests a healthy growth rate will continue. Employment is at the highest level in history, with unemployment dropping sharply. We have more people working today than we've ever had before in our history. Housing starts and auto sales are heavy. Housing starts -- you probably saw the announcement a few days ago, and the way it was carried, that the sale of new houses in the month of January was 9 percent below the rate in December. And that's the way it was presented. Well, let me tell you the rest of the story. That's right; it was 9 percent below December. But that was because December just happened to be a little bigger than January. The January rate was also the highest rate of sales of new homes in the United States since 1979. They didn't put it that way when they told you about it.

Productivity, after falling in the 2 years before we took office, rose 3\1/2\ percent last year. Real take-home pay, thanks to our tax cuts and the progress we've made in controlling inflation, is rising. And a sign that even better days are ahead -- venture capital rose $4 billion last year, and that's four times what it was in 1980.

Now that we've rebuilt America's confidence and got her back on the road to robust growth, no way are we turning back. The recovery now surging through this land will benefit each and every American. There's a lot of talk from our opponents that our program is somehow not fair or compassionate. Well, those who brutalized our people with inflation and stagnation, undercutting everyone's chance to improve their lot, should not be pointing fingers and preaching sermonettes about compassion. There was one thing fair, I will admit, about their policies. They didn't discriminate; they made everybody miserable. [Laughter]

Of course, it wasn't just our economy that seemed to be going haywire 4 years ago. The images of American hostages and burning American flags will not be forgotten. Our friends and adversaries alike seemed to be counting us out. And, this too, was not a result of some uncontrollable cycle. We were not, as some suggested, a nation in decline; instead, we were being led by a team with good intentions and bad ideas -- people with all the common sense of Huey, Dewey, and Louie. [Laughter]

Real defense spending -- and this was no accident -- was permitted to erode by 20 percent in the last decade. Weapons systems like the B - 1 bomber were unilaterally canceled. Members of left-to-liberal think tanks might have been impressed, but those who run the Kremlin weren't. As our level of power dropped, so did our influence. We were less secure and less respected.

In 1981 we went to work repairing the damage done by those who believe that a weaker America is a safer America. We continue to strive for realistic arms reduction negotiations with the Soviet Union. But, to be taken seriously, the Soviets must know that we're not going to simply give them what they want without concessions in return. Make no mistake, those who call for gutting the defense budget are undercutting our chances for arms reduction agreements with the Soviets. Those who condemn the United States any time a stand is taken against aggression are flirting with disaster.

In the coming campaign, Republicans should have no hesitation about bringing the issue of peace and security to the American people. There are many patriotic Democrats who will join us in supporting our efforts to rebuild our country's defenses, and we must reach out to them. They know that wearing love beads and touting our sincerity will not make for a safer world. Peace through strength is not a slogan, it's a fact of life. Four wars in my lifetime, and none of them came about because the United States was too strong.

I have to tell you, Nancy and I had -- a few months ago -- a unique reunion on the White House lawn. We brought together members of the Armed Forces, of the branches that had served in Grenada, representatives from each group, and hundreds of the American medical students that they had rescued there. It was a moment we'll always remember, especially those scenes when the students -- and they were all about the same age, the students and the military -- to see those students, some of them openly confessing that they had, once had a viewpoint where they did not respect the uniform -- they couldn't keep their hands off those marines and soldiers and seamen and airmen. They were throwing their arms around them. They were telling them, ``You saved our lives. You rescued us.'' And that heartwarming scene reconfirmed for me that Americans are still a great people who can accomplish great things. They'll accomplish great things if you, the people of this country, have a government that believes in you. And this government does.

I have to interrupt again and tell a little incident about Grenada. Some weeks after Grenada -- and some of our troops that had gone there came home -- I received a message from a marine lieutenant who flew a Cobra. He was at Grenada and then had gone on to Beirut. And the message that he sent back was to the Armed Forces Journal in the Pentagon. He said that in Grenada he realized that every news story spelled out, in some place in the story, that Grenada produced more nutmeg than any other place in the world. And he finally decided the regularity of this must have been a code, and he was going to break the code. So, he sent me the message that in six points he had broken the code. Number one: Grenada produces more nutmeg than any other spot on Earth. Number two: The Soviets and the Cubans are trying to take Grenada. Number three: You cannot make good eggnog without nutmeg. [Laughter] Number four: You cannot have Christmas without eggnog. [Laughter] Number five: The Soviets and the Cubans were trying to steal Christmas. [Laughter] And number six: We stopped them. [Laughter]

If I could just impose something on you. I'm so proud of what's happened in these few years and these men and women of ours in uniform. When you see one of them on the street, kind of remember the wartime thing and say hello to them, with a smile, and tell them you're kind of grateful for what they're doing. They're wonderful young people. We can all be proud.

Our people want us to be a force for good in the world. We'll stand by our friends and protect our national interests. In Lebanon we were not a part of a military mission, but members of an international peacekeeping force. And while time and events -- longstanding hatreds and mistrust -- prevented the restoration of order, it was not from lack of trying or an absence of responsibility on our part. We have every reason to be proud that our marines, along with other members of the multinational force, attempted to bring peace and stability to that troubled country. It was a worthwhile mission. And furthermore, we remain near and ready to help if our efforts can serve the cause of peace.

During the latter half of the last decade, our country was paralyzed by its declining military power and a crisis of confidence. We were represented in bodies like the United Nations by people who seemed to spend more time apologizing than representing our interests. Well, we've turned this around, too. All Americans can be proud that we now have a person with courage and dignity representing us in the United Nations, a brilliant individual whose strength of character reflects the values of our great country. I think Jeane Kirkpatrick is a 10, and I'm mighty grateful for the magnificent job that she does every day.

After she'd been there awhile, I asked Jeane what was the biggest difference between things now and what they had been. And she told me, she said, ``Mr. President, we've taken off our `Kick me' sign.'' [Laughter]

Sometimes democratic countries are singled out for abuse in the United Nations. Well, America will stand by her friends. And this is especially true concerning our commitment to the one Western-style democracy in the Middle East, the state of Israel. There have been moves afoot to kick Israel out of the United Nations. And let me say just one thing and make it very plain: If Israel is ever forced to leave the United Nations, we'll leave together.

The security of our country and its people is the paramount responsibility of American government at every level. Unfortunately, too many of our citizens are not even secure on the streets of their community or in their own homes. The epidemic of crime and violence that we experienced in the last two decades has been a national disgrace. You in New York know what a nightmare crime can be. What we suffered -- the assaults, the murders, the rapes -- was the manifestation of policies which bent over backward to defend the rights of thugs, but which had too little concern about the innocent people victimized by the criminals. Well, the Republican Party reaffirms that the purpose of the law is to protect the innocent.

The Republican Senate has passed a package of criminal justice reforms, reforms aimed at making the system more efficient and more capable of getting career criminals off our streets. As of yet we're waiting for the Democrat-controlled House to move on this vital legislation. If the leadership of the House refuses to act and continues jeopardizing the safety of the American people, it's time that we replace those liberal opponents of ours with some good, old-fashioned law-and-order Republicans. Some of the provisions of that program of ours were authored by your Senator D'Amato.

In these last 3 years, I've been grateful to New York for the fine Republican delegation that it has in Washington. Senator D'Amato has been a real plus in the Senate. Your 14 Republican Representatives have been a source of support vital to our efforts to get control of Federal spending and taxing and to reinvigorate the economy. All I ask is that on election day, don't just vote for them, get all your friends and neighbors out to vote for them, too. And, yes, if you could, send us more just like them. We'd be able to put them to good use.

One member of your delegation of whom all of you can be rightfully proud is retiring after 20 years of frontline service. And even though Congressman Barber Conable couldn't be here tonight, I wanted to take this opportunity to thank him for all he's done for our country and for the Republican Party.

Real progress in this country can be traced to the work of conscientious and hard-working individuals like Congressman Conable. One such person is John Mariotta, who's providing jobs and training for the hardcore unemployed of the South Bronx. Born of Puerto Rican immigrants, and having served in the United States Army, Mr. Mariotta has had all the ups and downs associated with entrepreneurship. And today, through Wed-Tech, he not only has built a successful corporation, he's helping hundreds of people who would otherwise be condemned to menial jobs or a life on the dole. And what gave Mr. Mariotta the courage to keep going when others quit? He tells us it was his faith in God. Now his faith has moved mountains, helping hundreds of people who'd almost given up hope. People like John Mariotta are heroes for the eighties.

The future of our country, the direction that we go as a people, whether we move ahead to meet the challenges of the future or slide back into the irresponsible policies of the past, will be determined by those who get involved. By being here tonight, you're proving that you are willing to do your part. Together, with the other good and decent people of this country, we can make certain that America is the kind of place, the shining light of opportunity and freedom, that God intended it to be.

Thank you all, and God bless all of you.

Note: The President spoke at 8:38 p.m. in the Grand Ballroom at the Waldorf Astoria Hotel. He was introduced by George L. Clark, Jr., chairman, New York State Republican Party.

In his opening remarks, the President referred to Charles Gargano, chairman of the dinner, Senator Alfonse M. D'Amato, and Secretary of Housing and Urban Development Samuel R. Pierce, Jr.

Prior to the dinner, the President attended a reception for New York State Republican leaders at the hotel. Following the dinner, he returned to Washington, DC.