Vice President Mondale made his first visit to Australia this week and got a lecture from the prime minister on what's wrong with President Carter's economics.
It was not the happiest meeting of Australian and American leaders when Mondale spent Monday talking in Canberra with Australian Prime Minister Malcolm Fraser.
Officials of both sides said that the meeting was the tensest since Labor Party Prime Minister Gough Whitlam briefly met President Nixon in 1973, after Whitlam had publicly criticized. Nixon for the massive bombing campaign against Hanoi and Haiphong in 1972.
This time, according to officials, things went smoothly at the start.
Mondale and Fraser agreed that their two countries were doing more than any other nations to help resettle Vietnamese refugees - and endorsed a plan to urge other nations to give more help.
They criticized Soviet and Cuban intervention in the Horn of Africa.
Mondale announced that the U.S. and Australian navies and air forces would soon carry out a joint military exercise in the Indian Ocean. The vice president said this was by way of reaffirming the U.S. commitment to its allies in this part of the world.
This was just what Fraser had wanted to hear. Since his election in 1975, the conservative Australian prime minister has consistently warned that the Soviet Union was building up a threat in the Indian Ocean.
The atmosphere rapidly became chilled, however, when Fraser turned to his criticism of U.S. economic policy.
Fraser has made it a practice to lecture other national leaders on their financial policies. Among those personalities who have recently heard directly from Fraser on this subject are Prime Minister Takeo Fukuda of Japan, Prime Minister Morarji Desai of India, Prime Minister Lee Kuan Yew of Singapore and several other Asian leaders.
According to officials on both sides, the remaining conversation between Mondale and Fraser went like this:
Fraser told the vice president that developed nations, including the United States, had to do more for the Third World to get global trade moving again. He specifically called for the United States to back plans for a common fund support prices of the basic commodities produced by the Third World.
Mondale sharply told Fraser that there was "no chance" that the United States would support the idea.
Then Fraser said that current American economic polices were wrong and suggested that President Carter could learn a lesson or two from the Fraser's policy of attacking inflation first and foremost and forgetting for a while about any form of stimulus.
In 2 1/2 years Fraser has brought Australian inflation down from an annual rate of 17 percent to just over 9 percent.
His approach has also increased unemployment from about 4 percent to just over 7 percent and Australia's economy is currently shrinking slightly.
Mondale said that the United States was achieving moderate growth and had inflation in hand.
He asserted that the United States was following "prudent, responsible policies" and said the decline of the American dollar had already stopped and had actually stabilized against the Japanese yen two weeks ago.
In what the sources said amounted to a lecture of his own, Mondale said that nation did not have to choose between inflation and unemployment.
"Our commitment - and President Carter's as well - is that we do not intend to solve the problems of inflation by massive unemployment.
"That is poor economics and poor social policy and I speak from the heart," he told a stony-faced Fraser.