Clinton St. Quarterly, Vol. 6 No. 3 | Fall 1984 (Seattle) /// Issue of 24 /// Master# 57 of 73

I NIGHTS OF THE ROUNDTABLE s Nixon's resignation and pardon unfolded a full decade ago, the folk wisdom of those heady times consigned his party to death and oblivion for at least a generation. Today, as many fondly reminisce about those stalwarts of prime-time coverage, G. Gordon Liddy, Martha Mitchell, the plumbers, Rosemary Wood and all their friends and foes, and the remarkable resurgence of that man with nine lives, few have understood the profound changes in the shape of American politics initiated by Watergate. Thomas Byrne Edsall, in his The New Politics of Inequality (Norton, 1984, $15.95), outlines much of what has transpired. What follows is in good part influenced by his analysis. The corporate business community has arisen from the depths of Watergate to hold virtual dominance over the legislative process in Congress today. Revelations of massive amounts of laundered corporate money channeled into CREEP dropped public approval of big business from 51% in 1966-67 to only 20% in 1974-75. Corporate America responded to this trend by changing its lobbying approach. The old style lobbyists for U.S. Steel, General Motors, Ford and the like were used to dealing with congressional committee chairs who ruled the serfs as barons. With the post-Watergate reform movement sweeping Congress, the power of the committee chairs waned, and the corporate bloc swung into an unprecedented grass-roots lobbying effort aimed at determining both the issues and their outcomes. Bryce Harlow, senior Washington representative for Proctor and Gamble, led the corporate old guard into a reformed business Roundtable that became the political arm of the Fortune 500. Chief executive officers of these major corporations would visit representatives wavering on important legislative matters in their home districts. Corporate America, with its network of plants, suppliers, retail outlets, sub-contractors, sales forces and distributors, makes up a powerful lobbying wedge. Chrysler, in an attempt to sway one Indiana congressman on its bailout, produced a list of 436 companies in his THE WATERGATE-SPURRED REFORM OF THE SYSTEM OF POLITICAL CONTRIBUTIONS HAS IN FACT STRENGTHENED RATHER THAN LIMITED BIG CAPITAL'S CONTROL OF ELECTIONS. district doing $29.52 million worth of business with the failing auto maker. He was duly impressed with the logic of this argument. The Roundtable also revitalized the Chamber of Commerce, which in the '70s went from a budget of $20 million and a membership of 50,000, to a $65 million budget and 215,000 members in 1983. The 2,800 newly motivated state and local Chambers of Commerce have tremendous influence to focus on particular legislators. Working with the National Federation of Independent Business, the Chamber of Commerce has given the Roundtable a powerful united front. The defeat of Carter's proposed Consumer Protection Agency is one of the notches on its pistol. The politicization of employees and stockholders is another weapon in the Roundtable’s growing arsenal. For example, 15,000 Atlantic Richfield employees participate in local political groups through which ARCO channels $1 million annually. The Watergate-spurred reform of the system of political contributions has in fact strengthened rather than limited big capital’s control of elections. Now every division of every corporation can create its own political action committee (PAC) for purposes of applying grease to the pro-business wheel. In 1974, there were 89 corporate PAC’s. In 1982, there were 1,467. In that same span, corporate contributions jumbed from $8.5 million to $35 million. Of the money expended on general elections, 84% went to Republicans and nearly all the remainder to entrenched, incumbent Democrats. The Republicans, with a coherent class-based economic policy, have been able to raise staggering sums of money. For the 1981 -82 election, the Republicans raised $214.9 million to the Democrats’ $39 million. This enormous cash advantage has been translated into a sophisticated political machine that conducts daily polling in key races to see. where last-minute cash blitzes might make a difference. In 1980, only the Republicans had any idea that the Democrats were in danger of losing the Senate. As a result, millions were targeted in key races to put the Republicans over the top. During this period, the Republicans have been most successful at targeting constituencies not traditionally in their camp. Most notorious have been their inroads into normally low and middle income Fundamentalist circles. They’ve also take a big portion of the once-solid South, all but hog-tied the West despite goring its economic base, and while losing the gender gap rally, become the party of “real men." The same corporations which brought you the Marlboro Man and the Los Angeles Olympics, whose grip on the American public largely stems from deft and constant use of the media, has wed their politics to that perfect showman (and former corporate apologist) Ronald Reagan. The upshot of all this has been the end of a fifty-year-long tradition of tilting tax legislation towards those in the lowest income categories. Management has gained the upper hand with labor, has gutted environmental and safety standards, achieved a substantial reduction in social service programs for the poor and elderly and a peace time militarization unprecedented in American history. MEANWHILE, BACKAT THE RANCH I V7 atergate has also had a profound effect on the Democratic Party. The great election W success of 1974 produced internal problems within the party from which it has yet to recover. For the first time in the party's history the suburbs went Democratic, electing reform-minded men and women to Congress who were not all tied to the historical Democratic agenda of income redistribution to help the lower class. While liberal on foreign policy and environmental issues, this emerging wing of the party has cleared the way in the '70s for Reagan’s blatant transfer of economic power. It was the Democrats, after all, who cut the corporate share of taxes from 23 to 12 percent, cut in half the tax on capital gains and created the bewildering mass of tax shelters for the wealthy, all before Reagan was elected. The Democrats have been moving to the right on their economic policies, squeezing their historic support base, and rewarding the affluent while obscuring their actions with populist rhetoric. This has not been a planned policy, but the result of a lack of ideological cohesion and the necessary party discipline to achieve consensus. Economic and social changes in our country have recently occurred with as profound an effect on the Democratic Party as Sputnik had on our science program. Yet the Democrats are still unclear about the origins of their decline. Take taxes. While the median family income climbed three-fold between 1960 and 1979, due to inflation and productivity gains, tax cuts dramatically changed the status of the middle class. The cuts benefited those at the top and bottom, leaving the middle-income wage-earners paying rates set when those same incomes would have made them affluent in the '50s. Under this structure, moving up economically proved painful, with deep tax bites eating up hard-earned advances. Compounding these pressures, the highly-regressive Social Security tax rose 1272% from 1960 to 1981. At the 1979 median family income of $19,684, the Social Security rate was 6.56%, while taking only 1.98% from the family earning $100,000. As middle-income wage-earners perceived that they were shouldering an unfair share of the tax burden, a strong anti-tax sentiment began developing among traditional Democrats. While productivity continued to grow, the Democrats had been free to offer costly social programs. But once the economy started to fail, and the impact of inflation began being felt, many Democrats deserted the party in droves. The creators and children of the New Deal had gone into a new mode and were looking for answers their party failed to provide. UNITED WE STAND hile the Roundtable was organizing the business community, union leaders were sitting on their accomplishments. To the end, AFL-CIO President George Meany was heralding the end of union-management strife while at the same time the heart of the union base in the industrial sector suffered losses of up to one-third of its membership. With increased foreign competition and automation, it’s unlikely that industrial base will ever be regained. Whatever one thinks of unions, and presently only 12% of the country looks favorably on them, every study of Western democracies has shown a direct correlation between strong labor unions and policies of taxation, employment and social spending advantageous to the working class. While union membership declined precipitously during the post-Watergate era, the leadership persisted in the belief voiced by George Meany that the size of the membership doesn't make any difference. Even today, while fighting battles on all sides, the unions have been slow in their attempts to go after the vast low wage ghetto of service workers. Three million clerical and blue collar medical workers are the largest segment of low-wage labor in the U.S. Armies of bank tellers, secretaries and clerks are lucky to make $5 an hour to buy lunch at fast food outlets paying their help worse than farm workers. As long as unions just continue to protect their dwindling, well-paid base and the Democrats pay only lip service to class politics, the post-Watergate conservative ascendancy will continue. BOETOMS UP Today, the bottom third economically of the population favors the Democrats over the Republicans by a 71-29 margin. The upper third favors Republicans by a 56-44 margin. But those with incomes over $30,000 are 34% more likely to vote than those under that income. And the poorest are least likely even to be registered. If is possible that this dormant force will rise up and smoke Mr. Reagan, but the odds remain slim without a strong commitment from the Democratic candidates to restructure taxation and income distribution. The new affluent wing of the party must come to understand that, as shown by a study by Princeton and the Bank of England, lower tax rates don’t mean economic growth. Much of the money yielded to the corporations in lower taxes has been tied up in leverage buyouts, consolidating the hold of fewer firms on the economy without any increase in jobs. A redistribution of wealth stimulates consumer demand and creates employment. Auto sales are supposedly booming, but the 10 million sales of 1983 are a far cry from the 11.3 million of 1977. Five times during the '70s new housing starts topped 2 million. We haven't been close since. The National Association of Home Builders estimates that at least 5 million potential buyers have been priced out of the market. More and more the American people are being split into two tiers, with the middle class disappearing. The supposed economic recovery is being fueled by the spending of the upper tier (the top 1% control over one-quarter of U.S. wealth) with less and less trickling down to the ever-expanding lower class. Four recessions in the last fifteen years have each produced a higher rate of unemployment, and recovery never brings the jobless rate to the old levels. In the late sixties the goal was four percent unemployment. Today, with a “booming” economy, the government is glad to get unemployment under 8%. If, as many are predicting, we suffer a recession in 1985, will 10% unemployment become the norm? Clinton St. Quarterly 31