Under the Corporate Influence
By Marshall Wittman
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At first glance, these seem like grand times to be a Bush Republican. The president found his mission defending America and avenging terrorist attacks. The recession is over, and the economy seems to be coming back. The Enron scandal has done little to dent his soaring approval. It's hard to find anyone in either party who thinks President Bush is vulnerable in 2004, perhaps not even all those Senate Democrats gearing up to run against him.
Ah, but no matter how mighty his poll ratings, Bush and his party have an Achilles heel: It's their penchant for corporate power. In the end, the success of Bush's presidency will turn on how long Americans tolerate that weakness, and on whether he can find a way to rise above it.
Many of my Republican friends tell me that Bush put that issue to rest by signing a campaign finance reform bill he had campaigned against. Indeed, that hope may be the only way the Bushies talked themselves into finally accepting it. But the corporate influence on this administration will long outlive the demise of soft money. The president and vice president, the Treasury and Commerce secretaries, and an army of political appointees came from the corporate world, and no doubt plan to return to it.
More important, the corporate imperative has become a way of life for many Republicans in Washington, driving not only how they make a living but also how they gather, organize, communicate, and think. Social conservatism is what Republicans talk about at church on Sundays. Corporate conservatism is what many Washington Republicans practice during the week.
Apart from impeachment and cutting taxes, many of the great causes congressional Republicans rallied around over the past decade were more corporate than conservative: defeating tobacco reform in 1998, blocking a patients' bill of rights and prescription drug coverage, filibustering campaign finance reform.
This year, the Bush administration has proved so open to corporate pleading that it was willing to abandon its commitment to free trade and risk a trade war by imposing steel tariffs. Free market theology equates tariffs with taxes. But Bush's White House doesn't trust the invisible hand to carry West Virginia and Pennsylvania in '04. Consequently, the president embraced new taxes (tariffs) in a cynical move that some would even call "Clintonian." That would be unfair, however, because President Clinton was evidently more of a principled free trader than President Bush! It was further amusing to witness Republican lobbyists with pristine conservative credentials lobbying for this de facto tax increase.
To paraphrase those words from Robert Bolt in A Man for All Seasons, "It profits a man nothing to give his soul for the whole world But for West Virginia!!"
The GOP excoriated Ted Kennedy when he proposed denying a tax cut for the wealthy that had not yet been implemented. Unlike Kennedy's proposal, the steel tax will hit hardest middle-income Americans who will pay more for various products. Maybe that was the point.
The ultimate tribute to big money's hold on the Bush administration is that even when Bush appears to stand up for the working man, he does it to benefit corporate America. In an effort to split the Democratic base, Bush adviser Karl Rove's political operation in the White House has reached out to organized labor on steel and a host of other issues where labor is on the same side as management. Note that the White House has undertaken outreach efforts to the Teamsters union on oil exploration in Alaska and the United Auto Workers on fuel efficiency standards. There are even reports that the administration is extending an olive branch to the service-sector unions on issues such as immigration.
For some time, K Street
Republicans had a big problem going into the 2000 election. The anti-government and anti-communist glue that had bound the conservative movement was dissolving. Whatever his weaknesses, Clinton had taken away the easy targets for conservative attacks on Democrats. After years of denying there were any New Democrats or that there was any Third Way, most Republicans knew they had to change.
They were offered two paths. The first, provided by Sen. John McCain,
was to recapture the legacy of President Theodore Roosevelt, by advocating
government as an agent of "national greatness" and insisting
on reform of government and of corporate influence on government. The
second, provided by Bush (and backed by conservative ideologues, K Street,
and the Christian right), was to change the face of the Republican Party
rather than its ideology. The Republican faithful
A century ago, another Republican president saw the need for corporate reform in order to preserve and strengthen American institutions. In the face of opposition within his own party, Teddy Roosevelt challenged the "malefactors of great wealth" to reform and change. He helped them along with anti-trust legislation, campaign finance reform, and industrial regulation; T.R. was truly a "reformer with results."
But the model for the Bush candidacy was the president that T.R. rebelled against, President William McKinley, who ran as the favorite of the new industrial titans of the late 19th century. The architect of the McKinley campaign was Ohio political boss Mark Hanna (who is Rove's role model). Hanna virtually made McKinley president through the marriage of the robber barons' money and the illusion that his candidate was a different kind of Republican.
The Bush campaign was predicated on the marriage of big money with old-fashioned
noblesse oblige under the cover of "compassionate conservatism."
Even though he ran as a "different kind of Republican," Bush
was careful not to upset the corporate theology of the Republican Party.
That doctrine animated his tax cut proposal, which was as economically
regressive as it was fiscally irresponsible. As president, one of Bush's
first initiatives was repealing the inheritance tax
Since T.R. left the Republican Party in 1912, it has not been exactly breaking news that the GOP has close ties to business. For Republicans to succeed, they have had to overcome the perception that they favored the big guy over the little guy.
For a while, the rise of the modern conservative movement helped Republicans put a Main Street face on a Wall Street party. Conservatives broadened the appeal of Republicans by attacking liberal elites on issues such as crime, welfare, and national security. The advent of the Reagan Democrats proved that Republicans could break the perception that they were beholden to big money.
By the late 1970s, big government was far more unpopular than big money. The tax revolt was the most visible symbol of the rebellion against the excessive growth of the government. When President Ronald Reagan vowed to cut taxes, the middle class cheered along with the traditional wealthy allies of the Republican Party. Reagan was, in a sense, a conventional tribune of conservative themes of lower taxes and limited government. But he also struck a definite populist chord.
What broadened the traditional Republican coalition to include blue-collar Democrats and neo-conservatives was Reagan's promise to restore American greatness. His attacks on the Soviet "evil empire" resonated among traditional working-class Democratic constituencies. Reagan had a fundamental populist appeal to rank-and-file Democrats as one who would curb the excesses of liberalism run amok.
The 1990s, however, were a different story. Reagan's successor, President George H. W. Bush, was unable to maintain Reagan's populist popularity. In the midst of the recession in the aftermath of the Persian Gulf War, the Republicans once again became identified with indifference to the plight of the working American. Bill Clinton successfully ran as a different kind of Democrat and was able to recapture some of those Reagan Democrats.
The Clinton administration's early lurch to the left enabled Republicans to rally a revitalized conservative coalition. Main Street Christian evangelicals united with K Street big-money lobbyists to produce the Republican Revolution in 1994.
Upon taking over Congress, however, the Republican leadership opened its doors to the business community to advance an aggressive deregulation agenda. Conservative activists moved into the Republican establishment, many of them becoming business lobbyists themselves. They traded their polyester for Brooks Brothers. These once-populist right-wingers found that they could do well while doing good.
The social conservative agenda gave way to the business wish list. Abortion and school prayer divided the Republican coalition, and there was little movement on either front.
Meanwhile, Republicans dramatically overreached by shutting down the government in 1995, and Clinton consistently outmaneuvered them. The welfare system had long served as the symbol of big government that did not work. By signing welfare reform into law, Clinton was able to take the steam out of the anti-government movement that had partially animated the conservative insurgency.
George W. Bush's success in 2000 was largely a result of presenting himself as a "different kind of Republican" in contrast to the anti-government Gingrich crowd. By advancing a reform agenda on nontraditional Republican issues such as education, candidate Bush appeared more the compassionate conservative than the corporate handmaiden. Meanwhile, at a time of peace and prosperity, the Gore populist attack on Bush's ties to big money never gained traction. The cultural issues were also magnified as the country divided into blue and red states over the perceptions of cultural liberalism and Clinton's personal misbehavior.
Upon assuming office, the Bush administration aggressively pursued a
pro-corporate agenda. This agenda should be distinguished from the traditional
conservative agenda. There was no talk of limiting government. Rather,
the Bush administration proposed to expand the number one target of the
Gingrich revolutionaries
Indeed, the early agenda for the Bush administration appeared to be: comfort the comfortable. Like the Gingrich revolutionaries, the administration made it clear that what was good for business was good for America. The administration's energy and environmental program had the fingerprints of the corporate crowd. Big money's investment in the Bush administration was being rewarded with big government corporatism.
The centerpiece of the Bush agenda was the tax cut. That plan was steeply regressive with a small growth component. Prominently featured were a reduction of the top rate and elimination of the estate tax, a windfall for billionaires. It was truly a tax cut that a robber baron could love. The manna for the masses was a $600 rebate.
The tax measure represented the historic nadir of contemporary conservatism. It is indeed thin gruel to base a movement on $600 rebates and the end of the death tax!
Since Sept. 11, the president's effective wartime leadership has earned him widespread popularity. His moral clarity on the war against terror has a populist appeal that has enabled him to largely overcome the perception that he is tethered to big money. Indeed, in his courageous and resolute pursuit of this war, the president is following the model of T.R.'s assertive nationalism.
But those pesky lords of K Street just won't go away. The fire beneath the World Trade Center was still burning when lobbyists swarmed the Capitol to push for a mammoth stimulus bill of corporate tax breaks. With the administration's blessing, House conservatives held out for billions in special interest favors. The economy where ordinary Americans live was forced to recover on its own.
Meanwhile, Enron imploded. Enron became the metaphor for the corrupt intersection of political money, lax regulation, and the arrogance of corporate greed. Contrary to some Democrats' claims, the issue is not one of Bush administration complicity in the fleecing of the stockholders and the workers. So far, there has been little evidence of administration misdeeds. Rather, Enron has become a symbol of deregulation excess. The close relationship between the corporation and many in the Bush administration only served to highlight the Republican Party's relationship to big money.
There's a cautionary tale in all this. Even though our free market system is morally superior to any other, an enemy within it threatens its legitimacy. Those who don the garb of morality and religion in politics cannot shirk the obligation to condemn financial decadence and immorality. Enron is a tale of soft money from high-six-figure K Street lobbyists lubricating the big deals in the nation's capital. This fast cash purchased a toothless regulatory system that allowed fraud to flourish.
Of course, some Democrats have overreached in their attacks on Enron, much as the Gingrich Republicans did in their assault on big government. The Dems have also erred by trying to ferret out a political scandal within the Bush administration, missing the larger opportunity to champion sensible corporate reform. The challenge for Democrats is to be pro-reform and not anti-capitalist; they can't be seen to be against prosperity.
Although Enron has yet to have an adverse political impact on the GOP, Republicans ultimately have the most to win or lose with the Enron revelations. One of the populist appeals of modern conservatism was its support of law and order against the excesses of liberalism. Enron could eventually highlight the inconsistency that the GOP is soft on wealthy, white-collar miscreants. Republicans have an interest in not only prosecuting the criminals, but also closing the loopholes in the law that enabled knaves to flourish.
The White House is not entirely oblivious to the possible political ramifications of Enron. President Bush has taken very modest steps to address the issue of corporate accountability. Unfortunately, his initiatives are too tepid to forestall future Enrons. Still, it is an important concession any time a Republican administration admits that the market alone does not mend itself. Prudent government intervention is essential.
By advancing a more aggressive agenda with genuine enforcement guarantees in the areas of accounting, pensions, and commodity trading, President Bush could still achieve an important political accomplishment. Such a Nixon-to-China moment could significantly broaden the Republicans' political coalition.
Like President Clinton's action on welfare, President Bush could play against type and reach out to the political center. An innovative corporate reform agenda could undermine the Democratic attacks that Republicans are the handmaidens of corporate power. By tackling the issue of corporate responsibility, he may enrage some on the big money right such as Tom DeLay, the concierge for the K Street corporate crowd. However, given the president's popularity, this is clearly a risk worth taking.
Consistency certainly won't stop the administration from pursuing a more robust corporate reform agenda. This administration has proved that it can turn on a dime when it comes to political considerations. For years, soft money was the near sacred sacrament that held together the religious right and the corporate tycoons. But when the issue of money in politics gained traction in the wake of Enron's implosion, the administration rushed to join the campaign finance reform parade.
Therein lies the choice for President Bush: to go through the motions of reform without really changing his party, or to become a true champion of the common man by saving capitalism from itself. The war has brought out his inner T.R., but he needs to leave his inner McKinley behind.
Marshall Wittmann is a senior fellow at the Hudson Institute and director of the Project for Conservative Reform.