CABINET COUNCIL MINUTES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP84T00109R000100050020-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 5
• Document Creation Date: December 20, 2016
• Document Release Date: July 12, 2007
• Sequence Number: 20
• Publication Date: June 9, 1982
• Content Type: MEMO

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EXECUTIVE SECRETARIAT
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THE WHITE HOUSE
WASHINGTON
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CABINET AFFAIRS STAFFING MFMMO UM .
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DATIE: June 9, 1982 NUMBER: 077307CA
SUBJECT: Cabinet Council Minutes
DUE BY:
ACTION FYI
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RE1\[ARKS: Attached for your information are minutes from the
Cabinet Council meetings:
Cabinet Council on Economic Affairs - May 27, June
Cabinet Council on Commerce and Trade - June 3
REI URN TO: ^ Craig L. Fuller Becky Norton Dunlop
Assistant to the President Director, Office of
for Cabinet Affairs Cabinet Affairs
456-2823 456-2800
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following
1, and June 8.
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MINUTES
CABINET COUNCIL ON ECONOMIC AFFAIRS
June 8, 1982
8:45 a.m.
Roosevelt Room
Attendees: The Vice President, Messrs. Regan, Donovan,
Schweiker, Lewis, Edwards, Weidenbaum, Harper,
Porter, Eagleburger, McNamar, Lyng, Macdonald,
Knapp, Dederick, Kudlow, Sprinkel, Cribb, Denend,
Garrett, Carliner, Thompson, Nau, and Ernst,
Ms. Small and Ms. Dyke.
1. Report on the Versailles Summit
The Council reviewed a paper, prepared by Mr. Sprinkel, on
the macroeconomic, money, credit and investment issues
discussed at the Versailles Economic Summit.
Mr. Sprinkel reported that the U.S. had achieved most of its
summit objectives including the following:
1. The Summit declaration indicated that economic growth and
employment must be increased and that we will be more
likely to achieve both if inflation is contained.
2. The declaration stated that in order to achieve lower
real interest rates, we must pursue prudent monetary
policies and gain greater control of budgetary deficits.
3. As a direct result of a U.S. initiative, the Declaration
contains a Statement of Monetary Understanding which:
reduces pressure for intervention, focuses attention on
the need for the convergence of basic policies to achieve
low interest rates and exchange rate stability, and
responds to European concerns about inadequate cooper-
ation.
4. The Summit partners agreed to a U.S. proposed study of
exchange rate intervention. This initiative addresses
European concerns about exchange rate stability and
should offer a learning experience for those dedicated to
intervention.
5. The Summit partners agreed for the first time to a state-
ment which will serve to limit financial relations with
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Minutes
Cabinet Council on Economic Affairs
June 8, 1982
Page Two
the USSR and the other Eastern European countries,
establishing economic criteria as the basis for such
relations.
6. The Declaration contains a strong statement on encour-
aging private capital flows, including "international
arrangements for private investments."
Secretary Regan provided an overview of the Summit process
and arrangements, the procedures followed at the meetings,
and the discussions by finance ministers and foreign minis-
ters. He noted that the trade ministers from France, the
Federal Republic of Germany, and Japan accompanied their
finance ministers to the sessions held by the finance
ministers and that there was a need to clarify the ground-
rules governing attendance at such meetings at future
summits. He also reviewed much of the language in the
communique pointing out the careful drafting of several
passages.
The Council's discussion focused on how closely the Summit
communique fulfilled U.S. objectives, the agreement on four
substantive amendments with respect to the G-77 paper on
Global Negotiations, the discussions of steel and agricul-
ture, and the followup work necessary to implement the
studies agreed to at the Summit.
The Council requested that Mr. Nau prepare a paper outlining
the specific agreements and understandings on issues relating
to North-South economic relations in general and global
negotiations specifically. The Council will consider this
issue at its Tuesday, June 15 meeting.
2. Wage Developments
The Council reviewed a paper, prepared by the Council of
Economic Advisors, on trends in wage developments.
Mr. Weidenbaum noted that much popular reporting of wage
developments has focused on unions agreeing to give up
previously negotiated benefits and accepting negative wage
settlements. He noted that the data suggest there has been
some moderation in wage demands for the labor force in
general during this recession, much like the 1974-75
recession.
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Minutes
Cabinet Council on Economic Affairs
June 8, 1982
Page Three
He stated that the wage negotiations which will take place
during the remainder of this year may result in higher
settlements than those recently concluded, which involved for
the most part industries hit especially hard by the recession
and foreign competition.
He concluded by noting that there are two views about what is
likely to occur over the next twelve months. The first holds
that the reduced wage settlements are related directly to the
recession. If the economy rebounds sharply, wage increases
will also accelerate. The second view holds that these more
modest settlements are the result of real structural change
in the economy. If the recovery is accompanied by moderate
fiscal and monetary policies, we should not expect the return
of high wage settlements.
The Council's discussion brought out additional information
on recent wage experience, and, highlighted the desire on the
part of the Council to remain current as new information on
this issue becomes available.
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