Walter S. Adams - war veteran, retired clerk, patriotic citizen - stood in his booth on the edge of town selling fireworks and pondering the general state of things. "What bugs me the most," he told the questioner, "is what's happening to prices. Take this, for instance" - and he picked up a 3-inch round powder stick wrapped in stars and stripes, called a "Yankee Doodle Salute."
"A couple of years ago these were selling for a dollar. Now they're a dollar-fifty. You just can't get the same thing for a buck these days."
In fact, the conscensus in this pretty Northern California town is that the dollar today is hardly worth a few good pops. And that leaves Walter Adams worried sick.
"I feel the walls closing in," he said. "I'm living now on $300 a month, mostly Social Secirity Food costs more. My utilities are up. Now all I need is for the landlord to raise the rent, I'd be a goner for sure."
Like summer's rising temperatures, inflation is heating up across America, scorching practically everyone. Rising prices, of course, are hardly a new phenomenon. But the double-digit rate at which the Consumer Price Index has been climbing in recent months is.
President Carter has labeled inflation today's worst domestic problem. Polls show that about two-thirds of the country agrees with him. And a survey last month by the University of Michigan found that inflation fears among consumers have reached their greatest proportion since the 1974-75 recession.
In interviews here over the holiday weekend - the first stop by this reporter on a drive from West Coast to East sampling what Americans are saying and doing about inflation - people spokes angrily about the high cost of living. They voiced resentment, frustration and a sense of powerlessness over the continued erosion of their earnings and savings. Some sounded desperate. Those on fixed incomes especially feel the pinch. For them the only defense against rising prices has been to cut back to bare necessities and then cu back some more. But even the relatively affluent have been forced to save less, curb their appetities and alter their expectations.
Most of all, those who moved to this community hoping to find in its surrounding short hills and river valleys something of the good California life are finding their hopes spoiled by inflation. Bob and Nancy Dell-Ergo bought a house here a few months back. They have dreamt of getting a place in the hills with some land. They don't dream any more.
"We were amazed," said Nancy, a 27-year-old schoolteacher, "at what little you could get for the price. We kept coming down and coming down. We ended up in the middle of twon on a little block in a little house for $48,000." And even that, she added, they couldn't have bought without help from their parents.
Santa Rose (pop. 75,000) is home and work place for a broad cross-section of people. It thus provides a good place to guage inflation's effects on everyday life. Once dominated by agricultural interests (wine groves and forests to the north, poultry and cattle farms to the south), the lcoal economy now depends on retail and service industries. Government is also a major influence here, employing 18,000 in local and county jobs. Manufacturing, too, is growing in importance led by Hewlitt-Packard, the electronic instrument maker. At the same time, trade and municipal unions here have a reputation wage settlements.
There is to Santa Rosa a look of freshly-cast concrete. "A City Designed For Living," says the local Chamber of Commerce.
But the living is getting tougher. The cost of living here has risen the past five years by about 45 percent, which is roughly the same as the national average and represents the largest five-year jump since the early 1940s. Evidence of this upward spiral is everywhere. Weekly grocery bills for a family of four now average $60, up from $35 a couple of years ago. The price for a gallon of gas has topped 70 cents, about three times what it was five years ago. The average three-bedroom, two-bath home, which sold for $40,000 in 1973, now is on the market for $70,000. During the same period, the average daily cost per patient at the 220-bed Santa Rosa Memorial Hospital went from $90 to $297.
There are some in Santa Rosa who have been able to remain oblivious to these price rises. Others have profited from them. Bill Tison opened a custom hot tub shop here two weeks ago. He has already sold five of the sculpted redwood whirlpool playthings at $2.000 apiece, and expects to turn a profit his first month in business. "There are some people," said Tison, "who always seem to have money."Marvin Hyman, a local pawnbroker - "I sell money. Next to sex it's the easiest thing to sell" - also reports recent handsome profits. He says he has noticed a higher class clientele trading in higher quality stuff. "When the economy is bad," said Hyman, "business is good. When the economy is good, business is better."
But these are the exceptions. For most here, inflation has meant a turn for the worse and a forced change in lifestyles. Lisa Steele works full-time now as a waitress to help feed her three children and her husband Steven, a mechanic. June Thurman shops at roadside fruit and vegetable stands and at farmer markets, hoping to get groceries at reduced prices. Craig Riley no longer takes his wife and family on long country drives on the weekends. "We'll go to the park instead and toss a football around," Riley said.
Buying a house isn't what it used to be, either. James McConnell, a mortgage officer at the Bank of Sonoma, said he has noticed an increase in cobuyer arrangements, with two or more people buying a property together. "It seems the average wage earner can't afford to buy a home alone any more," said McConnell.
Increasingly, too, people of Santa Rosa are cutting costs by making home repairs and improvements them selves. As a sign of this trend toward self-help, Friedman Bros. Hardware, largest hardware store in the area, recently expanded its "do-it-yourself" book section. It now to install a fireplace to how to repair th roof. "People are buying everything," said Benny Friedman, one of the store's owners. "I have a next-door neighbor who bought a $40 faucet and installed it himself. Do you Know what he saved? He saved a $50 plumbers bill."
This same ethic of economy is evident in local business and government. Stanley Lindsay, Santa Rosa's director of finance, said the city has become "more professional" in its purchasing by centralizing operations and doing more volume buying. Also, there has been a change in what the city buys-smaller cars. Cheaper desks, more basic items "without the bells and whistles," Lindsay said.
Occasionally, in a fit or excess zeal, government purchasing agents have been said to go a bit too far. "We got some Scotch tape recently which, well. I don't know where we found it." said Richard McGlinchey, information officer for Sonoma Accounting. "It must have been picked up from an island in the Pacific where it had been left by the Japanese during the war. I mean, the stuff is really bad."
Even the most efficient business operations have felt inflation's pinch, sometimes especially so since they are likely to have ven less to cut.
Bud Dardi, owner of two McDonald franchieses in the area, said he has done everything he can to squeeze his already lean operation, but the costs keep rising. "We've even started to inventory office supplies, right down to pencils and tissue paper." Dardi said. "There's not much more we can do."
The only way out, Dardi adds, will have to be to raise prices. "We were laughing, some of us operators, in a meeting the other day." he said, "we were laughing about how we used to laugh about how you'd never see a dollar hamburger.But it looks like it's around the corner pretty quick."
In addition to frustration over uncontrollable rising costs, there is confusion as to just what to who is to blame for inflation. Everyone seems to have a favorite villain - it's either greedy unions, filthy-rich businesses or a spend-happy federal government.
Ken Blackman, Santa Rosa's city manager, points the finger at labor groups, which he said have been made more militant in recent years by an inflationary economy they in turn have contributed to. The local carpenter's union, he noted, recently won a 9 1/2 percent boost in pay and benefits. Frank Morabito, secretary of the building trades labor council for the region, defended the raise as a catchup measure, necessary to keep his union members even with inflation. "Our problem has been with the banks," Morabito said. "Their mortgage rates keep going up."
Greg Jones an insurance agent and former city councilman, says the key to stopping inflation is to curtail deficit spending by the federal government. "We could get inflation down to 2 percent if they'd only balance the budget," he said. "The instant they stop running a deficit, they could make a very good case for stable wage and price levels."
But there isn't much faith here in President Carter's pledge to trim the federal budget, nor do many believe business and labor will heed the President's call for voluntary wage and price restraint, "it's been tried before," said Bill Brown, a local retailer, "and where's it gotten us?"
The only office-holders people here believe they have some control over are locally elected officials. That, they say, was the lesson of Proposition 13, the referendum last month which forced an average 47 percent rollback in California property taxes. If inflation is to be stopped, the initiative, some say, will have to come the same way.
"We're really to blame, you and me, for inflation," said Richard Finley, a local restaurant owner, "because we've stood aback and let them raise taxes and let them raise prices. It won't stop until we start refusing to pay."
But instead of refusing to buy, there is evidence in Santa Rosa of many people rolling with the prices. Which presents a sort of paradox about inflation. For despite what the polls say about ebbing consumer confidence, consumer spending here is up. Coddingtown Shopping Center, Santa Rosa's largest, is still a very busy place on Saturday afternoon.
The reason for the heightened buying activity is not completely clear. When asked why they are continuing to spend, some said it was because they have lived with inflation for so long that they have become numb to it. Others said they are trying to beat prices by buying today what they might neet tomorrow. "Why wait?" said Joe Setnor, coming out of J.C. penney's with an armful of packages. "The dollar is just going to be worth less if we do."
Some shopper are continuing to make relatively small purchases while putting off larger items. Some are investing more in jewelry, ar and antiques as a hedge against inflation. "I woun't say we've become more austere." said David Anglin, a car salesman. "I'd say we've become more intelligent."
As rapid inflation has become a more familiar part of American life, it has blurred the future for many families. "Our greatest concern is about the future," said Lee Brians, a fifth-generation dairy farmer. "What would have been adequate savings before just isn't anymore."
A few are taking bigger risks, hoping to get ahead of the price sprial. Robert Isert, a 31-year-old real estate agent, owns a house, condominium and a half-interest in another condominium, and intends to keep investing in more property. He began two years ago with $3,000. "Now I'm $150,000 in debt. By next year, I'll be a quarter of a million in the hole. It takes a lot of balls and a lot of insanity, but its better than saving money or paying it all in taxes."
Most, though, are like Ed Ulrich, a 46-year-old production manager at Hewlitt-Packard. Ulrich says he's just trying to hand on. "As the years go by and inflation continues to roll, the plans I had 10 years ago are no longer possible, plans to retire in my early 50s," he said. "Now, there's no way. I'm at the point now where I can't even think of a particular time to retire."