Housewife Power?

By week's end.

President Nixon has never relished the job of price controller, and last week he turned part of the responsibility over to someone he said had far more clout: the American housewife. At his news conference, the President asserted, in effect, that the Government can do nothing more to stop the spiral in food prices. Controls on agricultural products, he insisted, would only breed a black market. Then he added: "The greatest and most powerful weapon against high prices in this country is the American housewife. Her decisions . . . whether she buys something that is more expensive or less expensive, have a far greater effect on price control than anything we do here."

Apparently satisfied that he had disposed of part of his price problem, the President took a more activist line on the cost of nonfood commodities, which have begun to rise at a worrisome rate. Wholesale prices of industrial commodities, such as copper, lead, zinc and lumber, jumped 1% last month. In this case, buyer power is definitely not the solution: the increases have occurred largely because manufacturers are scrambling to purchase materials to take care of expected increases in production. So Nixon announced that, to help keep prices down, the Government will sell off some of the $6.5 billion worth of commodities in its stockpiles.

Economists have long been pressing for such a move. The federal hoards were established originally to ensure adequate supplies of strategic materials in wartime. They have since turned into a kind of price prop; Government stockpile purchases have tended to keep commodity prices from falling. The reserves now comprise not only 15 strategic metals such as aluminum and tin but dozens of anything-but-strategic materials, including even 1,500 tons of feathers. Stockpiling policy in general "is a national joke," says Arthur Okun, a member of TIME'S Board of Economists and former adviser to Lyndon Johnson. "We worked like hell in the 1960s to get the stockpiles down. Most of the pressure against reducing them came from industry, anxious to restrict the supply of certain commodities."

How great an impact the new policy will actually have on prices is open to serious doubt. Only $1.7 billion of the stockpiled commodities can be disposed of easily under current law. Of that amount, more than a third is already promised to industrial buyers under long-term contracts at present prices, including $369 million of aluminum, $162 million of lead and $109 million of zinc. Copper and some other materials cannot be sold from Government stockpiles without explicit approval from Congress, which may not be easy to get. Hendrik Houthakker, a sometime Nixon economic adviser, once lamented: "Every commodity has its political loyalty."

Administration officials voiced hope that the mere threat of stockpile sales would help keep prices in line. The announcement did throw a scare into commodity traders. Prices of copper, silver, zinc and tin futures retreated--but copper and silver had recovered by week's end.

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