Prior discussion:
speaker: MR. HELLER.
text: Overall, I think it is a very satisfactory performance with fewer imbalances than we have had in the past. 
speaker: CHAIRMAN VOLCKER.
text: I don't know about those wage increases; those wage increases are low but so is productivity. 
speaker: MR. ANGELL.
text: Productivity in the service sector is low but I don't think we know how to measure it. Productivity in the goods producing sector remains right at the 3.2 percent level that it has been at for some time. 
speaker: CHAIRMAN VOLCKER.
text: Governor Seger. 

MS. SEGER. "I think the give-back will show up, particularly in the first quarter."

Full utterance: I have just a couple of comments since I have heard just about everything said that I was going to say. In general, I am probably a hair more pessimistic than the staff, primarily because when I look at the auto industry I just have a feeling that we are going to give back more next year than the staff is assuming. I am impressed with the current sales level--no doubt about that--which, I guess, shows what low interest rates will do and how inattentive a lot of consumers are. But I think that this is not all a net gain. I think the give-back will show up, particularly in the first quarter. Also, I am just very nervous about the impact of tax reform on a whole lot of things, but particularly on business spending on new plant and equipment and on office buildings which, of course, are already under the gun. I think that is just going to provide one more discouraging influence. We have been talking about this trade turnaround for a number of months and expecting that to provide quite a bit of support for the economy, and I certainly hope that happens. But Senator Riegle sent me a little story which, with your permission I would like to tell, because I think it demonstrates how difficult it is to turn off the import competition. This involves one of his constituent companies out in Michigan; they produce Being non-mechanical, I have no idea what those are, by the way, but apparently they are very important in the production of engines. The company supplies parts for about three-fourths of the engines produced in this country and the Japanese had been their primary competition. They have revamped their entire operation, they have spent heavily on R&D and on new equipment, etc., they have gotten wage concessions, and they have tried to imitate the Japanese in the labor-management relationship. They have done remarkably well in dealing with the Japanese [competition] and they are now selling their main part for $5.50. Now, all of a sudden, the Koreans are calling on their major customers in this country and are offering them very similar products at $3.50. This isn't something I picked up; it came from Don Riegle. But I think it is very indicative of how tough this job is going to be, particularly when we haven't seen the dollar deteriorate vis-a-vis the Korean currency. I just hope and pray that we can get some movement in the currencies of these newly industrialized countries, particularly in the Far East, or I don't think we are going to see this big turnaround that we are counting on. Thank you.

Opinion: yes
About monetary policy: no