CARTER ADMINISTRATION officials finally have broken down and admitted that the "underlying" 6 percent inflation rate they have been peddling for so long is really closer to 7 percent, which accounts for the increased stridency in their "jawboning" efforts.
For the first three months of the year, the consumer price index rose at an annual rate of more than 9 percent. In April, the wholesale price index rose at a stunning annual (compounded) rate of 16.8 percent, and while this index is erratic, it could foreshadow a return to double-digit consumer inflation before long.
Chief jawboner Robert Strauss told the Chamber of Commerce in Washington last week that "we have to deal with this terrible cancer called inflation, not with formal wage and price controls, and not with something totally voluntary, but something in between."
What must be tried, Strauss said, is "hard jawboning. We're not going to cure this overnight. But we can get this curve to peak out, if we can get rid of the psychology, 'Let me get mine and run.'"
For the first time, the administration is slipping into the pattern of suggesting a specific wage guideline - a 5 percent increase for executives at the top level.
This was evolved on Council on Wage and Price Stability Director Barry Bosworth's own initiative, and wasn't discussed directly in advance with President Carter. But Carter has indicated no objections to Bosworth's idea, which the offered in the belief that unions couldn't be asked to hold back if top corporate salaries continue to soar.
Ture, it's a far cry from a 5 percent wage guidepost for the country.But the administration must be willing to edge toward numerical guideposts - not necessarily a uniform figure. The fact that Bosworth dangled COWPS subpoena power before a publisher's audience in Atlanta shows that the administration may prove to be more venturesome than first suspected.
Predicatably, all of this has given the Wall Street Jornal a case of the jitters. To its (editorial) readership of corporate presidents and vice-presidents, the Journal suggests: "Ask for that raise now."
IT'S CLEAR that if the administration's anti-inflation program is to have any meaning, it will have to start pinching somebody, and overpaid corporate executives (who the Wall Street Journal fears will be taking a cut in their living standards) are as good as any group to start with.
What Wall Street Journal editors should really be concerned about is the clear upward push to interest rates fostered by the Fed in
A credit crunch, higher interest rates, and a flow a money out of the savings institutions (disintermediation) is what could follow.
What the administration is really after is a slowdown in the next round of wage and fringe increases below what seems to be a pattern of about 8.5 percent.
What the administration would really like to achieve - but doesn't know how to - is about thw same percentage cut in private wage increases that it is enforcing on civil service workers, from 7 percent to 5.5 percent.
That's 20 percent reduction, and an equivalent cut from an 8.5 percent round in the private sector would bring average wage increases down to just under 7 percent. Subtract 2 percent productivity, and you'd have a more acceptable inflation rate of 5 percent.
But there can be no such steep deceleration on a voluntary basis, and no one knows it better than Economic Council Chairman Charles Schultze, Bosworth, and Strauss. They can only hope to keep things from getting worse.
But they will get worse if the 1979 round of wage negotiations by the big unions - trucking, rubber, electrical, and autos - approaches the three-year, 30 percent settlements in some big industrial contracts.
THERE IS A TENDENCY here and there to snicker at the Carter anti-inflation effort as toothless. It is certainly true that the program has no legislative clout and few formal sanctions. But enormous powers are inherent in the president of the United States, in his person and his office.
In international meetings, such as the one he conducted last week in Washington with Japanese Prime Minister Takeo Fukuda, and in the International Monetary Fund session in Mexico City where he was represented by Treasury Secretary W. Michael Blumenthal, Carter pledged control of inflation as one the "fundamentals" of America's international responsibility.
If he means it, he can silence the skeptics by speaking out boldly and sharply at the first egregiously high wage or price increase. Even better, he could commission Schultze to make a quick study of, and come up with recommendations on, the use of the tax system - carrot or stick - to induce lower wage and price boosts.
There is yet another alternative. As Bosworth said: "We can do nothing. But this isa truly frightening prospect."