Julian Zelizer: Attacking the rich but not capitalism
[Julian E. Zelizer is a professor of history and public affairs at Princeton University’s Woodrow Wilson School. His new book, “Arsenal of Democracy: The Politics of National Security — From World War II to the War on Terrorism,” will be published this fall by Basic Books.]
This week, President Barack Obama found himself in a difficult position. At the same time that the president has been trying to build support for his financial bailout program, the media reported that American International Group had paid out huge executive bonuses.
Americans on Main Street, who are struggling to survive, don’t want to see stories about the executives whose companies are receiving taxpayer dollars enjoying generous financial rewards. There is no way that such a story can play well politically.
Obama’s response was swift. The president asked, “How do they justify this outrage to the taxpayers who are keeping the company afloat? This isn’t just a matter of dollars and cents. It’s about our fundamental values.” He has promised to do everything in his power to stop these kinds of payments from continuing. Implicit in his statement is a threat to executives that if they want to continue receiving government assistance, they will have to crack down on this kind of behavior.
Is this kind of rhetoric risky for the president? Some opponents will certainly point to his words as a form of class warfare that Americans don’t like, a line of attack on Obama that began with Joe the Plumber.
But recent American history is filled with examples of presidents who lashed out against bad corporate behavior at the same time that they were trying to save capitalism from severe downturns or self-destruction. President Theodore Roosevelt was a famous “trust-buster” who called for federal regulation of the corporate world. He distinguished between “bad trusts” and “good trusts,” arguing that economic concentration was inevitable but that certain kinds of behavior had to be abolished so the modern corporate economy would remain strong. Roosevelt’s goal was not to end the concentration of economic power but to eliminate abuses.
Franklin D. Roosevelt made similar arguments during the 1930s. The goal of the New Deal was to save capitalism from the Great Depression and avoid the kind of economic and political systems that were taking shape in Europe. FDR often lashed out against capitalists who refused to play by the rules and who continued to resist any sacrifice. In 1935 and 1936, feeling pressure from the populist campaigns of Huey Long, who was assassinated in 1935, and Father Charles Coughlin, Roosevelt denounced corporate and financial titans. During his nomination acceptance speech in Philadelphia in the summer of 1936, FDR railed against a “small group” who had “concentrated into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor — other people’s lives.” FDR won the 1936 election by a landslide.
In 1961, John F. Kennedy called on executives in the steel industry, as well as steel unions, to voluntarily hold down prices and wages during negotiations of their new contract. Under pressure from the president, the unions agreed. Steel executives agreed as well, but then reneged in April 1962 when the companies revealed that they would raise their prices by 3.5 percent. Roger Blough, chairman of U.S. Steel, refused to change his mind after a meeting with the president. Kennedy blasted Blough and his colleagues, telling advisers: “My father told me businessmen were all pr---s, but I didn’t really believe he was right until now.” The administration mounted a campaign against the steel executives that included investigations into possible collusion, leaking Kennedy’s statement about businessmen (cleaning it up to read “sons of b----es”) and issuing public statements in which Kennedy said Americans were facing a dangerous time in the Cold War. The administration also noted that unions had agreed to sacrifice f
or the national good. One by one, the steel companies relented and agreed to hold down prices. Public opinion overwhelmingly approved of Kennedy’s actions. The president followed up with positive statements about the corporate world.
History suggests that the public would support Obama in his effort to condemn bad capitalist practices while trying to demonstrate his strong support for private enterprise. Indeed, it has become very clear that this is exactly what he is trying to do with his economic recovery plan: inject sufficient government funds and impose regulations so private markets can work again.
Read entire article at Politico.com
This week, President Barack Obama found himself in a difficult position. At the same time that the president has been trying to build support for his financial bailout program, the media reported that American International Group had paid out huge executive bonuses.
Americans on Main Street, who are struggling to survive, don’t want to see stories about the executives whose companies are receiving taxpayer dollars enjoying generous financial rewards. There is no way that such a story can play well politically.
Obama’s response was swift. The president asked, “How do they justify this outrage to the taxpayers who are keeping the company afloat? This isn’t just a matter of dollars and cents. It’s about our fundamental values.” He has promised to do everything in his power to stop these kinds of payments from continuing. Implicit in his statement is a threat to executives that if they want to continue receiving government assistance, they will have to crack down on this kind of behavior.
Is this kind of rhetoric risky for the president? Some opponents will certainly point to his words as a form of class warfare that Americans don’t like, a line of attack on Obama that began with Joe the Plumber.
But recent American history is filled with examples of presidents who lashed out against bad corporate behavior at the same time that they were trying to save capitalism from severe downturns or self-destruction. President Theodore Roosevelt was a famous “trust-buster” who called for federal regulation of the corporate world. He distinguished between “bad trusts” and “good trusts,” arguing that economic concentration was inevitable but that certain kinds of behavior had to be abolished so the modern corporate economy would remain strong. Roosevelt’s goal was not to end the concentration of economic power but to eliminate abuses.
Franklin D. Roosevelt made similar arguments during the 1930s. The goal of the New Deal was to save capitalism from the Great Depression and avoid the kind of economic and political systems that were taking shape in Europe. FDR often lashed out against capitalists who refused to play by the rules and who continued to resist any sacrifice. In 1935 and 1936, feeling pressure from the populist campaigns of Huey Long, who was assassinated in 1935, and Father Charles Coughlin, Roosevelt denounced corporate and financial titans. During his nomination acceptance speech in Philadelphia in the summer of 1936, FDR railed against a “small group” who had “concentrated into their own hands an almost complete control over other people’s property, other people’s money, other people’s labor — other people’s lives.” FDR won the 1936 election by a landslide.
In 1961, John F. Kennedy called on executives in the steel industry, as well as steel unions, to voluntarily hold down prices and wages during negotiations of their new contract. Under pressure from the president, the unions agreed. Steel executives agreed as well, but then reneged in April 1962 when the companies revealed that they would raise their prices by 3.5 percent. Roger Blough, chairman of U.S. Steel, refused to change his mind after a meeting with the president. Kennedy blasted Blough and his colleagues, telling advisers: “My father told me businessmen were all pr---s, but I didn’t really believe he was right until now.” The administration mounted a campaign against the steel executives that included investigations into possible collusion, leaking Kennedy’s statement about businessmen (cleaning it up to read “sons of b----es”) and issuing public statements in which Kennedy said Americans were facing a dangerous time in the Cold War. The administration also noted that unions had agreed to sacrifice f
or the national good. One by one, the steel companies relented and agreed to hold down prices. Public opinion overwhelmingly approved of Kennedy’s actions. The president followed up with positive statements about the corporate world.
History suggests that the public would support Obama in his effort to condemn bad capitalist practices while trying to demonstrate his strong support for private enterprise. Indeed, it has become very clear that this is exactly what he is trying to do with his economic recovery plan: inject sufficient government funds and impose regulations so private markets can work again.