THE WHITE HOUSE anti-inflation squad did a little dance of triumph the other day around the Bethlehem Steel Company's latest price announcement. It was an increase but, the squad emphasized, it was a modest one. Without White House attention to the steel industry's civic responsibilities, the explanation continued, that price increase might have been much more dramatic.
But it's also true that the increase was Bethlehem's third this year and, added together, they come perilously close to 10 percent. As triumps go, the new price is a rather ambiguous one. But that is not to belittle the efforts of Robert Strauss and the inflation squad. In the campaign against inflation, the successes generally are ambiguous. It's only the disasters that are stark and clear.
Businessmen and economists commonly jeer at the kind of cheerleading that Strauss & Co. are now engaged in. But it has a serious effect. It reminds the country that inflation is not a phenomenon that descends upon us for inscrutable reasons of its own, like a hailstorm. It is the result of decisions that people deliberately make. Strauss & Co. are bringing attention to some of those decisions. They imply that a degree of opprobrium may well attach itself to those companies that fail the test of what Mr. Strauss calls "good corporate citizenship." U.S. Steel, for example, has declined to take the kind of public pledge on prices that Mr. Strauss has been suggesting. One large reason for his warm reception of the Bethlehem announcement was, no doubt, to underscore the contrast between the two companies' responses.
All that, you might reasonably object, dealsonly with atmospherics and psychology. But they are not negligible. Inflation comes from many sources. The peculiarly dangerous thing at the present stage is its tendency to be sel-perpetuating, at an accelerating rate. If the inflation rate for the whole economy last year was nearly 6 percent, most people assume that it will be the same this year and they will move their prices up to protect themselves. Some will add a little margin for safety. That little margin has something to do with the present upward creep in the basic inflation rate, which the administration now unhappily concedes is around 7 percent.
Steel is a tough case. If the government wanted to, it could hold prices down severely be letting in more foreign steel. But the Carter administration has concluded that steel profits were being squeezed too hard and, without a better return, the industry faced more layoffs and spreading obsolescence. There was also the administration's presure last winter on the coal companies - to swallow a sharply inflationary wage settlement in order to end the miners' strike. That bit of recent history also weighs against absolute severity in dealing with steel prices now. As for the companies, there's lengthening list of things that they want from the government. First of all there's more protection from imports. Then there's relief from some of the more expensive environmental requirements. Prices are only one element, and not always the most important one, in a steel company's continuous negotiations with federal authorities.
The steel case is not a bad illustration of the present equivocal state of the struggle with inflation. The government theoretically has the power to curb prices more rigorously, but it has to weigh the health of the industry against the harm that those price increases promise to the economy as a whole. The Bethlehem price increases this year are too high to offer any very encouraging precedent to other industries. But perhaps Strauss & Co. are right in insisting that they can see cause for rejoicing. It could have been worse.