Cracks in the Freeze

Mrs. Nancy Portnof got no satisfaction when she complained to the manager of a Manhattan supermarket about a rise in the price of frozen orange juice from 55-c- for two cans to 30-c- for one can during the freeze. "He just told me to shop somewhere else," she says. Taking him at his word, Mrs. Portnof organized 20 families into a buying union that shops wholesale markets for food.

Few consumers have been moved to such drastic action, but many share Mrs. Portnof's disillusion with the President's anti-inflationary program. They have noted enough price boosts during the freeze to make them highly skeptical of the presumably more flexible controls that will be in effect during Phase II. In a recent Gallup poll, 63% of those questioned said that they expected prices to rise in the next six months.

How well founded is this distrust? Officials maintain that illegal price hikes have not been widespread, yet their own figures raise some doubt. Wholesale prices have dipped slightly the past two months, but in September, the first full month of the freeze, the consumer price index went up .2% nationally. In New York it climbed .5%, and in Philadelphia .9%. Paul W. McCracken, chairman of the President's Council of Economic Advisers, has started an investigation.

Dearer for Two. Some increases seem clearly illegal. Retail prices of seven cuts of meat that are subject to controls have risen substantially in New York City, according to a state-government survey. For instance, porterhouse steak climbed from a pre-freeze high of $1.99 a pound to $2.09. Last week freeze-enforcing Internal Revenue Service agents found only negligible meat violations; possibly shopkeepers had been alerted by the well-publicized study. Another study disclosed even larger jumps in some fish prices. Halibut steak soared 25%, to $1.49 a pound.

Sellers can present some justification for other price boosts, even though the rises annoy consumers. Sammy D's, an Italian restaurant in Minneapolis, last week began charging $2 for antipasto shared by two people, though the identical portion served to one diner remains price-frozen at $1.50. The restaurant labels the increase a "service charge." Many women are convinced that they are paying more for clothing, but "it is very difficult to pinpoint a cause for complaint," says Kitty Dobrina, a Cleveland fashion model. "Stores base the increases on changes in styles. A merchant will say that skirts are longer this year, so the price increase only reflects the cost of the extra material."

Needed: ESP. A dispute about ticket-price increases by the 26 professional football teams has reached the federal courts, where the Government is suing the Atlanta Falcons in a test case. The teams contend that the increase is legal because it was posted before the freeze. The Government points out that the first games to which the higher prices apply were played during the freeze.

The freeze obviously has slowed the rise in U.S. prices, but that is not quite enough to make it a complete success. One of its major aims was to break inflationary psychology--consumers' belief that prices will rise endlessly. If that psychology continues, the Phase II controls, which will depend largely on voluntary compliance, are unlikely to work. At meetings of IRS agents last week, officials passed out buttons proclaiming "We've Got ESP"--for Economic Stabilization Policy. It would take a different kind of ESP to detect any widespread consumer confidence that prices are being brought fully under control.

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