"Disturbed"

Marshall jawbones Meany

Big deal: inflation may turn out to be no worse than expected this year. That about sums up the import of the news last week of a slowdown in wholesale-price increases in July. The month's annual rate of 6.2% was about a third less than the rises in May and June, and the smallest jump in four months.

But there was less to the good news than met the eye. Food prices, which rocketed during the winter and spring, dipped 0.3% at wholesale in July, promising some relief at the supermarket checkout in coming months. The dip had been expected, however. Indeed, if it had not occurred, the U.S. would have been in a desperate inflationary jam: wholesale prices of other finished goods continued to jump at double-digit rates. At best, chances have only improved for holding consumer-price increases for the year to no more than the 7.2% that the Administration forecast. Says Alan Greenspan, a member of the TIME Board of Economists: "I think that the rate of inflation is slowing down from disastrous to merely terrible."

Unfortunately, the Administration seems bereft of new ideas for bringing the rate down. Last week it even silenced one of its anti-inflationary guns: Barry Bosworth, head of the Council on Wage and Price Stability, who had riled union leaders by assailing big wage boosts, was ordered to shut up. Labor Secretary Ray Marshall told an A.F.L.-C.I.O. executive council meeting in Chicago that henceforth any Administration comments on labor negotiations will be coordinated by a five-man committee on which Bosworth will have only one voice. Translation: less, and softer, jawboning. As a substitute, Marshall is talking up Government-labor-management committees that would study ways of taming costs and prices in specific industries.

If Jimmy Carter thought that that would soothe A.F.L.-C.I.O. President George Meany, he was mistaken. Meany grumbled that the 6 1/2% postal workers' settlement, rightly hailed by the Administration as an example of wage moderation, had been too low--and on hearing that, Carter flew into a rare rage. At a press conference, Marshall said that Meany's remarks had "personally disturbed" the President and that his stand could lead to "more inflationary demands." Meany's response was immediate: "I've called it as I saw it. I don't intend to change."

This file is automatically generated by a robot program, so viewer discretion is required.