Fluctuating Fortunes: The Political Power of Business in America
Honest Graft: Big Money and the American Political Process
Two decades ago, Congress swept aside the concerns of the big three auto companies, the major oil and steel companies, the powerful mining and construction industries—in effect, the most powerful economic interests in the country. The Congress did so when it set price controls on oil, enacted tough restrictions on air and water pollution, created a Consumer Product Safety Commission, and established the Occupational Health and Safety Administration.
Within the next ten years, however, the House and Senate took an entirely different direction. In 1980, just before the election of Ronald Reagan and a Republican Senate, both branches of the Democratic Congress competed to pass amendments exempting from federal regulation the funeral home industry, used car dealers, the insurance business, and agricultural cooperatives. That year, a group of corporate lobbyists known as the Carlton Group (for the Sheraton Carlton Hotel, where breakfast sessions were held) met every week to formulate what would become the corporate provisions of Reagan’s 1981 tax bill. Both the Congress and the administration had, in effect, ceded legislative authority to an alliance made up of the leading lobbies of big and small business, including the US Chamber of Commerce, the Business Roundtable, the National Federation of Independent Business, and the American Business Conference.
For the Democratic party, the shifting political influence of the business lobbies has created a major dilemma: the party wants to portray itself as the advocate of working men and women, while the costs of elections put the party under growing pressures to raise campaign contributions from business people who want their own interests protected. The larger circumstances surrounding the forced resignations of Jim Wright, the House Speaker, and Tony Coelho, the House majority whip, suggest how destructive this conflict can become.
Both Wright and Coelho were involved in the intrigues over the collapse and subsequent rescue of the savings and loan industry. George Mallick, the Fort Worth developer whose payments to Wright and to Wright’s wife were central to the charges filed last April by the House Ethics Committee, was an active promoter of the Texas savings and loan industry. Thomas Spiegel, who arranged for Coelho to buy a $100,000 junk bond under questionable conditions, is chairman of the Columbia Savings and Loan of California, a firm whose dealings with Michael Milken of Drexel Burnham are under investigation by federal prosecutors in New York. The collapse of the S&L industry will cost taxpayers upward of $100 billion and will, as the scope of the accompanying corruption, profiteering, and damage to the economy becomes apparent, have lasting political repercussions.
Democratic leaders contend that the party will quickly recover from the crisis provoked by the resignations of Coelho and Wright. But the resignations can be taken as more evidence of the continuing deterioration of the Democratic party from serving as the voice of most American voters to a party identified as the representative of “special…
This is exclusive content for subscribers only.
Get unlimited access to The New York Review for just $1 an issue!
Continue reading this article, and thousands more from our archive, for the low introductory rate of just $1 an issue. Choose a Print, Digital, or All Access subscription.