Chapter 2
Disaster Republicanism
In The Shock Doctrine: The Rise of Disaster Capitalism, Naomi Klein describes how corporate interests exploited the crisis created by the Hurricane Katrina disaster in order to make radical changes that people in normal circumstances would never make. She cites other instances in Chile under Augusto Pinochet and in Russia under Boris Yeltsin as further examples of crises either precipitated or used as opportunities to take radical actions.[1]
Referring to the rush of charter schools into New Orleans to undermine the public schools after Katrina, Klein observed: “I call these orchestrated raids on the public sphere in the wake of catastrophic events, combined with the treatment of disasters as exciting market opportunities, ‘disaster capitalism.’”[2]
Similarly, as explained earlier, the budget “crisis” in Ohio in 2011 was a manufactured one—generated by years of sharp tax reductions that rewarded the wealthiest Ohioans – that presented a similar “market opportunity” to conservative ideologues. Once that crisis was created, Republican stalwarts like John Kasich and Shannon Jones would bluntly state, “There is no money left,” wrongly implying that “extraordinary demands” by unionized public employees had drained the treasury. McClatchy Newspapers, alone among the major media groups, were quick to pick up on this. “The tax cuts were supposed to stimulate Ohio’s economy and create jobs,” McClatchy reporters observed, “But that didn’t happen once the economy tanked. Instead, the changes ended up costing Ohio more than $2 billion a year in lost tax revenue, money that would have gone a long way toward closing the state’s $8 billion budget gap for fiscal year 2012.”[3]
But the particular brand of conservatism that played out in Ohio in 2011 has deeper ideological origins beyond the facts of the political, social, and economic situation in the state. [CE1] It has its roots [CE2] in a battle that today is largely forgotten but nonetheless remains at the center of conflict between those who see their government as a tool for balancing interests and regulating the worst abuses of the free-enterprise system and those who see government as an obstacle to the unrestricted environment in which they believe these forces should operate.
In modern America, this conflict first burst into the open when Franklin D. Roosevelt took office in 1933. There have been small and ineffective attempts by some conservative commentators to introduce novel theories about the economic collapse of the 1920s and to suggest that the Great Depression was not caused by unregulated capitalism and that the New Deal did not “work.” Chief among the works advocating these theories is the deeply flawed The Forgotten Man, written by right-wing pundit Amity Shlaes. Published in 2009, the book provides a mix of anecdotal stories and a largely ideologically driven [CE3] and inaccurate history of the New Deal. A more recent antigovernment screed, similarly long on ideology and short on facts, is The Battle, by the current president of the right-wing American Enterprise Institute, Arthur C. Brooks. As his central premise and reason for writing the book, Brooks suggests that 70 percent of Americans support free-market principles and 30 percent do not. Brooks argues that the 30 percent is foisting onto the majority a collection of policies that they do not want. But as another conservative commentator, Bryan Caplan—an economist at George Mason University who reviewed Brooks’s book—points out, polling does not, in fact, support Brooks’s central premise. Polls, instead, consistently show that Americans, when asked about specific policies, want government intervention in the economy. “Once you take a more realistic view of American public opinion,” Caplan writes, “there’s not much of a split between the policies voters want and the policies voters get.”[4]
Unfortunately, now that there are few people living who actually experienced and remember the New Deal of the 1930s, a Republican mythology has grown about its ineffectiveness. This is not to say that every single program sponsored by the New Deal worked. FDR was a pragmatic thinker and not the [CE4] zealot his enemies have often portrayed. His efforts were directed toward putting political power back in the hands of ordinary people and finding strategies that actually boosted the economy and aided the unemployed. Certainly, most of the time he embraced Keynesian economics, which posited that the government could and should intervene to correct the inadequacies of the market. But even FDR could not imagine the huge scale of government spending it would take to really transform the economy. When FDR backed off on government spending in 1937, the economy worsened once again. It was only World War II that created the political will necessary for politicians to commit to the level of massive government spending, unhindered by ideology, that ended up working—and, in fact, created an economic expansion that lasted into the 1970s.
Yet economic stimulus was only part of the New Deal, and certainly the scale of the stimulus in the 1930s was not enough to begin to drive the economy forward. The New Deal was much more than simple fiscal stimulation efforts. Through the Works Project Administration (WPA), the Civilian Conservation Corps (CCC), and other publicly funded projects, the New Deal changed people’s lives for the better. My father, in Depression-ridden western Montana, was the beneficiary of work and pay provided by the WPA. Every time we had the opportunity over the years to drive over Flint Creek Pass in the rugged mountains of southwestern Montana, we benefited from the New Deal project on which he had worked in the summer of 1938.
Besides throwing a lifeline to people in need, the New Deal also created the Securities and Exchange Commission and the Federal Deposit Insurance Corporation, which have combined to make banking and investing much safer—which never would have been accomplished by conservatives of the 1920s or today. Social Security has transformed retirement for older Americans. But by far the most successful actions of the New Deal involved protections for workers and for unions, because it was through these reforms that the great American middle class was created. Given the corporate desire to maximize profits , [CE5] corporations would never have created a middle class on their own.[5]
Since the Industrial Revolution began in America, corporations and business leaders could confidently call on government police or military forces to crush strikes and enforce their will on[CE6] workers. The New Deal leveled the playing field. With the Wagner Act, Americans gained the right to organize. Beating and bullying workers to intimidate them against voting to unionize was made illegal. Through the power of unions, ordinary workers were able to wrest decent salaries and benefits from powerful corporate interests.[6]
The wealthy barons of industry opposed all of FDR’s New Deal programs, from the AAA to the SEC to the TVA—programs that created modern America. To business magnates[CE7] , FDR’s chief offenses were taking the United States off the gold standard and openly encouraging labor unions. Naturally, those with the most to gain by keeping workers’ wages low and their own profits high were strongly opposed to these developments.
But these wealthiest Americans[CE8] needed someone to craft for them the beginning of a new ideology that could provide an explanation for the economic world in which they felt most comfortable. They needed a theory that would conceal their personal and corporate greed and undermine the ability of the government to defend ordinary people. With this in mind, the likely touchstone of the modern conservative economic movement [CE9] began with the publication of The Road to Serfdom in 1944 by Frederick August. Von Hayek, an Austrian economist who was then teaching at the London School of Economics. The book contains a number of contradictions, but one of the clearest points that Hayek makes is that a planned economy would lead to the downfall of democracy. This reflects a body of economic theory that was developed by a group of European economists, including Hayek and Ludwig von Mises (Hayek’s mentor), known as the Austrian School. There was nothing particularly new about much of what Hayek was saying—his book was first and foremost a defense of nineteenth-century Robber Baron-style free enterprise—and thus it is difficult to understand how the book, a short but rather dense text, became such a wildly popular bestseller.[7] The key to understanding its popularity, however, is the cover it provided for greed by clothing it in the rhetoric of “freedom,” a strategy that today has become common in Republican circles. GOP presidential candidate Mitt Romney, short on details about any economic plan, continually repeated instead the Hayek-inspired mantra: “America’s economy runs on freedom.”[8]
The embrace of Hayek has much to do with the fact that many of the assumptions about the capitalistic system lay in tatters in the wake of the Great Depression. The assumption of the competence of the wealthy barons of industry had been destroyed by their own actions and inability to manage the economy. The New Deal and the massive government intervention in the economy during World War II represented a rejection of the way the world had worked before FDR. Thus, for the wealthy elite, Hayek’s work was a vindication of all they had done to bring on the economic calamity.
To be sure, Hayek’s book had its critics from the beginning. George Orwell, for example, warned in the British context that a “return to free market competition means for the great mass of people a tyranny worse, because more irresponsible, than that of the state.” John Maynard Keynes himself said, although he got on well with Hayek personally, “what rubbish his theory is.” He said that Hayek had started “with a mistake” and proceeded to “bedlam.” Keynes described one Hayek article as “the wildest farrago of nonsense.” The British journalist, Nicholas Wapshot, has written a revealing study of the conflict between Keynes and Hayek. The two economists engaged in a lengthy correspondnence in the 1930s over their respective economic theories. At one point, in a journal publication, Keynes confessed that in his relationship with Hayek a “thick …bank of fog still separates his mind from mine.”[9]
Over the years, Hayek’s work has garnered many critics, including noted economist Jeffrey Sachs. In an article subtitled “Frederick von Hayek Was Wrong,” Sachs notes that countries that have much higher taxation rates than the United States and better-funded public services, and that spend more generously for research and development as well as for public education—Canada and the Nordic countries, for example—rank higher in most measures of economic performance. “The U.S. spends the least of all rich countries on social services for the poor and disabled,” wrote Sachs in 2006, and it gets what it pays for: “the highest poverty rate among the rich countries and an exploding prison population.”[10]
This collection of disparate concepts held by the Austrian School gradually moved over the years from fringe to mainstream in the Republican Party. In contemporary times, the view [CE10] holds that “social good” will be “maximized by maximizing the reach and frequency of market transactions, and it seeks to bring all human action into the domain of the market,” as David Harvey writes in his important study, A Brief History of Neoliberalism. The curious “neoliberal” tag can be attached to this economic theory because it has its roots in classical European liberal economics. Harvey writes that the “battle of ideas” was central to Hayek’s argument. [CE11] But Harvey and other critics have pointed to the weakness inherent in Hayek’s theory. “The scientific rigor of its neoclassical economics,” Harvey notes, “does not sit easily with its political commitment to ideals of individual freedom, nor does its supposed distrust of all state power fit with the need for a strong and, if necessary, coercive state that will defend” the principles of the theory.[11]
To read Hayek’s Road to Serfdom today is to be struck by the truism that it is difficult to understand a crisis when you are in it. Written during the rise of the Nazis and World War II, Hayek’s argument that Nazism is rooted in economic policy is inaccurate and has been overwhelmed by decades of historical writing about the roots of fascism and its particular German variant. It is, however, the kind of deeply flawed argument that an economist might make when trying to write a history book on a topic about which he knows very little. Hayek’s little book, after all, is not an economic study but is an effort at contemporary history and politics. There is no evidence of an understanding of the driving forces of nationalism that forged the German nation in 1871. Racism or anti-semitism, so central to Nazi ideology go unmentioned. Perhaps this is because an Austrian of Hayek’s generation likely shared these prejudices and so they go unquestioned. There is no appreciation of Hitler’s Mein Kampf, the text so central to Hitler’s ideology. All that exists in the book is the argument that any government intervention in the economy leads to dictatorship – a fact that has been completely discredited by the decades of historical evidence since Hayek wrote his book. The great social democracies of Europe are not dictatorships. Hayek quotes FDR without citing him but FDR and the New Deal ushered in a great deal of social legislation and government regulation. And yet the United States has become more democratic, not less, in the intervening decades. In the midst of all this government intervention in the economy, there has been enormous economic expansion. One can see why John Maynard Keynes must have been so frustrated by Hayek’s largely imagined history.[K12]
Hayek won the Nobel Prize in economics in 1974—but not for his political ideology. Instead, the award honored his genuine theoretical advances in understanding business cycles. The timing of the Nobel Prize, however, drew important attention to his flawed political concepts, which, just as they had done in the 1930s, wealthy conservatives picked up to defend their “Greed is good” ideology that blossomed in the 1980s. “Is Greed Good?” Britain’s conservative Economist magazine asked in 2002. “Only if it is properly governed,” the magazine concluded.[12]
Nevertheless, despite its flaws, in the wake of the New Deal, many of the wealthiest moguls in the United States came to back an organization that was Hayek’s brainchild, the Mont Pelerin Society, named after a mountain resort in Switzerland near where the group first met in 1947. That first meeting was mainly made up of intellectuals—including a young Milton Friedman—who, absorbing and elaborating on the Austrian school over the years, created at the University of Chicago an intellectual hub for what was originally Hayek’s Austrian economic ideology.[13][CE13]
By the mid-1950s, many of the most powerful American financial figures supported the Society, including Sun Oil’s J. Howard Pew, and salt magnate Sterling Morton. The Mont Pelerin Society’s first American meeting in 1958 was the society’s largest meeting[CE14] up to that time, but it was nevertheless not the success organizers desired. Except for its attraction for wealthy business leaders, the Mont Pelerin Society was out of step with 1950s America which had largely embraced the New Deal and its policies. In fact, it played largely a background role in future years as other right-wing think tanks took over its role. [CE15] Meanwhile, in university departments, as historian Kim Phillips-Fein writes, economists were developing sophisticated mathematical theories about business and tradeIn contrast, never focused on mathematical analysis, Hayek and von Mises wrote “political tracts not equations.” Believing that the central theme of the economy was “freedom,” their views gained much support among businessmen who would rather understand their success through the fuzzy concept of the “growth of freedom” rather than the exploitation of workers. “The work of these two thinkers,” Phillips-Fein writes, “became . . . a bible for those who wanted to turn back the New Deal”—and, certainly, for modern corporate raiders and Wall Street traders as well, who would prefer to portray their business activities in the language of “freedom” and “liberty.”[14]
Funded by wealthy corporate leaders, many new organizations sprung up in the 1950s, devoted to the supposed defense of free enterprise. This coincided with the period historians have called “The Great Fear,” a time when Americans imagined Communists under their beds and in control of their government. “The free-market conservatives,” Phillips-Fein writes, “took the nightmarish fears inspired by anticommunism and turned them against the entire liberal state, making it seem as though the minimum wage and labor unions were about to usher in a new era of political enslavement.”[15]
This played out in an important way in Ohio and involved a famous Ohioan, Robert Taft. In some ways Taft, nicknamed “Mr. Republican,”[CE16] would not fit well with today’s even more radical right, which has left a traditional sense of social responsibility behind. Moreover, Taft was opposed to war, rather than enthusiastic about it as per the neoconservatives, and he was more a protectionist than a free trader. But Taft, coming from the famous and wealthy Cincinnati family, was very pro-business and was strictly opposed to Franklin Roosevelt’s promotion of government’s role in the economy, no matter how much it benefited individual Americans. Harshly criticizing New Deal policies, Taft called FDR a socialist and argued that his program was taking the United States down the road to a totalitarian dictatorship.[16]
Taft was elected to the Senate three times, in 1938, 1944, and 1950. The 1944 election is essential to understanding his conflict with labor unions. His opponent, William G. Pickrel, a Dayton attorney and former Democratic lieutenant governor, ran a strong campaign, but the key to the close election was a new political dynamic. Labor unions and the workers they represented had been made powerful by the New Deal and, by 1944, were working to make their power felt. The Congress of Industrial Organizations, known as the CIO, had formed a political action committee and targeted Sen. Taft for defeat.
The CIO PAC was involved in a series of campaigns across the country, but the Taft–Pickrel race was one of the most heated and most important. Taking a page out of FDR’s critique of conservatives, [CE17] historian David Farber writes, the CIO accused Taft of waging [CE18] a systematic campaign to force America back into the Robber Baron days when a few big business kings ran both the government and the country from a few offices in Wall Street.”[17]
Pickrel himself picked up the argument to hammer Taft: “Taft comes from one of Ohio’s wealthiest families . . . He represents wealth and large corporations.” Internationalists, meanwhile, laid into “Mr. Republican” for being an isolationist. Taft, who had been opposed to war until Pearl Harbor, was attacked for being soft on fascism in Japan and Germany. The result of this furious criticism was an extremely close election in which Taft won by 50.3 percent of the vote to Pickrel’s 49.7. [18]
Not surprisingly, upon being elected, Taft began to target the growing power of organized labor, which he saw as the enemy of his allies: the business community and other pro-business politicians. When Republicans won back control of Congress in the 1946 elections, they began to push through pieces of legislation that would limit labor’s power, at the behest of their traditional allies—the National Association of Manufacturers, the Chamber of Commerce, and other business groups. Taft’s agenda was clear, according to Farber: “He intended to increase the power of employers and reduce the strength of organized labor.”[19]
Interestingly, although Taft’s animosity toward workers was shared by the bulk of legislative supporters of Senate Bill 5, in contrast to them, Taft announced, in 1947, that he supported workers’ rights to organize and to engage in collective bargaining. [CE19] This is in contrast to the Republican stance in 2011 because the truth of Senate Bill 5 is that it did eliminate any real collective bargaining power for public employees.[CE20] SB 5 allowed for the continued existence of public unions, but it outlawed strikes and binding arbitration. Thus, if the two sides could not reach agreement, SB 5 permitted the management to simply impose its last offer. As was pointed out repeatedly, this would be not collective bargaining but collective begging.
The Taft-Hartley Act of 1947 placed a series of restrictions on what labor unions could do to pressure employers to negotiate fairly with them. Probably most importantly, the law gave employers the ability to work with state legislatures to pass “right-to-work” laws that would cripple union power. Right-to-work was a particularly ruthless portion of the Senate Bill 5[CE21] attack on public unions. In Ohio, it is illegal to force employees to join unions. But at a workplace where the majority of employees have democratically chosen to unionize, employees who choose not to join are still responsible for paying Fair Share fees. These are fees that help pay for the fair share of expenses incurred in negotiating and defending the contract that supports all the employees, union members or not. Many proposents of so-called right-to-work bills inaccurately call them “Workplace Freedom” bills but they in fact undermine freedom at the work place because they undermine the democratic processes that the union has established through a majority vote to unionze. It is obviously unfair for a worker to benefit from the union’s work on their behalf and to “freeload” on their fellow workers who share the cost of maintaining the union and defending the contract .[20] [CE22]
Through the 1950s, the Republicans enjoyed ascendancy. Comfortably in control of the White House with the popular World War II hero Dwight D. Eisenhower, Republicans did little to impose the growing radical ideological strand that was developing within the party. Eisenhower himself was a moderate who purposely chose not to attack the New Deal’s legacy, primarily because he was not opposed to it. That is not to say that during the campaign he did not criticize Democrats and the New Deal, but he saw the programs of the New Deal as accomplished fact and, as he wrote to his brother, “Should any political party attempt to abolish Social Security and eliminate labor laws and farm programs, you would not hear of that party again in our political history.” When faced with the wrath of conservatives for not attacking New Deal programs, he countered they had “now become accepted in our civilization.”[21]
Among the hallmarks of the Eisenhower administration were calculation, caution, and compromise. As he wrote, “Some of the intellectuals (and particularly some of the pseudo-intellectuals) . . . are prone to forget that leadership in a democracy consists of making progress by compromise.” In this spirit of compromise, Eisenhower took a number of actions that would make him unelectable to today’s Republican Party. For example, he extended both the Housing Act and the Social Security Act. But chief among Eisenhower’s virtues was his lack of hostility toward the labor movement: “Only a handful of unreconstructed reactionaries harbor the ugly thought of breaking unions,” he wrote. “Only a fool would try to deprive working men and women of joining the union of their choice.”[22]
But behind the scenes in the 1950s, the insidious ideology of the Mont Pelerin group and the Austrian economists had taken root in corporate boardrooms. Historian Kim Phillips-Fein has written about the “determined few” who, beginning in the 1950s, worked for more than 40 years to undermine the system of labor unions. One of the key figures in this effort was Lemuel Ricketts Boulware, the man who managed General Electric’s labor relations and community affairs program. And there is another connection to the attack that would one day be brought against the labor movement: when Ronald Reagan’s movie career began to fade, he became a corporate spokesman for GE, introducing the corporation’s television drama programs and touring plants to give pep talks to workers. During this time, Boulware was able to transform the former Screen Actors Guild president into an ardent union-busting political figure.[23]
Boulware’s antiunion strategy was so widespread that it grew to be known in the industry as “Boulwarism.” Basically, it consisted of management meeting with the union for negotiations, pretending to listen, and then releasing to the public what it said was its “last, best, and final offer.” Boulware’s response to having this unfair labor practice tagged with his name is telling: “The term was coined by some bad people,” Boulware wrote, “who have been desperately trying the emotional diversion of putting what they have hoped would be the worst possible name on the very fine thing which our GE relations program—of striving all year long to do right voluntarily and be known to do so.” But Boulwarism was not only about blowing up contract negotiations; Boulware launched a complex and detailed indoctrination program of GE employees.[24]
“Starting in 1947,” Phillips-Fein writes, “all of GE’s supervisors—whom Boulware referred to as job salesmen—were given manuals containing suggested answers to workers’[CE23] tough questions. They were supposed to respond by reciting ‘the catechism of the marketplace.’” [CE24] Always the intent was to direct the employee along an approved political track of indoctrination. For example, if an employee complained about not getting a Christmas bonus, managers were to respond, “We feel that every time the state, an employee, or anyone else, takes over one of our individual responsibilities completely, we are one step further along the road to socialism and a halt to progress.” Boulware believed that all supervisors and managers were “thought-leaders,” and he put them in charge of the indoctrination of thousands of GE employees over a long period of time.[25]
Certainly not every huge American corporation fought unions with the same tenacity and belligerency as did GE. But, as Phillips-Fein points out, Boulware’s labor relations techniques began to spread through the business community. In the late 1950s, inspired by GE, the National Association of Manufacturers began to hold management training sessions to teach managers how to derail unionization drives using Boulware’s tactics. And under Eisenhower, the National Labor Relations Board moved rightward, issuing several decisions that aided employers against workers.[26] Finally, for the purpose of our study, we should not underestimate GE’s significant presence in Ohio—particularly in Cincinnati, historically a hotbed of Republicanism and home to a large GE Aviation plant since the 1950s.
What the Mont Pelerin Society, the virulent anti–New Dealers, and Boulwarism and other corporate clones represented in the 1950s was a fringe radical element within the Republican Party. This fringe element thus already had a significant history before Barry Goldwater’s devastating defeat at the hands of Lyndon Johnson in 1964. But several issues had caused conservative extremist views to bridge the gap between the corporate and political worlds. Chief among these was the civil rights movement.
Of course, today the Republican Party dominates the American South, the states of the Old Confederacy. But this wasn’t always the case. From the Civil War until the 1960s, the South had been solidly Democratic—a tradition stemming from the Civil War, when the Democratic Party was the party of secession. But today, that’s no longer the case: [CE25] if the South were not solidly Republican, the Republican Party would no longer be a national party.[27]
The 1964 election allowed the bridging of the divide between corporate ideology and mainstream Republican Party politics. Throughout the 1950s, there had been a struggle within the party between moderates, represented by Nelson Rockefeller, and conservative extremists, represented by Barry Goldwater. In 1957, Goldwater, the Senate campaign committee chair, and Meade Alcorn, the Republican Party chair, spearheaded an effort that became known as “Operation Dixie.” Leadership in the Republican Party could see that the only way to win elections nationally was to break the Democratic Party’s control of the South.
Initially, directed by Eisenhower’s moderate supporters, Operation Dixie targeted the growing cities in the south, trying to convince professionals and white-collar workers that there was a new future possible for the South and it lay in breaking free from the old Democratic Party and the racial divisions connected with that history. Most of those connected with the campaign believed that they were making progress, and there was evidence that this class of urban voters might well be moving toward the Republican Party. But then Eisenhower ordered the intervention of federal troops in the desegregation crisis at Little Rock’s Central High School.
Heading Operation Dixie was I. Lee Potter, former state party chairman of Virginia and a Republican National Committee[CE26] staff member. Potter had been given a budget of nearly $21,000 in the second half of 1957 and set himself the goal of creating a feeling of “respectability in being a Republican candidate.” Even small victories would build the idea that it was possible to have a two-party system in the South. But the “Little Rock situation,” Potter reported, “threw us into quite a tailspin,” adding that he had traveled to each Southern state in the wake of the crisis and “there has been severe damage done.” To appease the civil rights opposition in the South, Potter urged the Eisenhower administration to pull the troops out, turning the responsibility “back over to the states.” Potter said it was the only way of “getting candidates and raising money in 1958. We’ve lost the enthusiasm and appear to have lost the votes.”[28]
While even Alcorn thought that perhaps it was better to simply give up at this point, Eisenhower insisted on persevering. [CE27] In fact, Operation Dixie extended beyond Eisenhower’s administration and into new conservative leadership. Even after the defeat of Richard Nixon in the 1960 election, the GOP continued the fight to move into the South. [CE28] Now, however, with moderates under heavy fire, conservatives moved within the party to make use of Operation Dixie’s machinery to take the drive in a new radical direction.
William E. Miller replaced the more moderate Alcorn and began to pour even greater resources into Operation Dixie. By 1964, the operation was taking up nearly a third of the RNC’s expenditures. And its character had changed as well. Under Miller, Operation Dixie operatives and candidates no longer shied away from racial issues. They very often made distinctly racial and segregationist appeals.[29]
Alcorn regretted the strategy’s transformation under Miller and later Goldwater; he would later remark, “[Operation Dixie’s] whole purpose was perverted.” He held that although his effort had been to set up a structure to promote a progressive Republican Party in the South, “the machinery was taken over to create a lily-white Republican organization.” [CE29] The appeals to the segregationists, Alcorn maintained, were sharply against the goals set during the Eisenhower administration to create a party in the South that would “obliterate any division or segregation between white Republicans and negro Republicans.”[30] Instead, Operation Dixie was used for opposite purposes : to plant the seeds of a new and radical Republican Party. Unrecognized at the time, this development would provide an avenue for the fringe economic ideas rooted in the Austrian ideology to find a route toward electoral power because, in its resistance to civil rights, the South moved to support the Republican Party and so provided a political base to the Hayek-inspired ideologues.[31]
This puzzling collage of ideas came together in the person of Barry Goldwater. The Arizona senator’s most famous expression about his philosophy was, ironically, not written by Goldwater at all. His ghostwriter for Conscience of a Conservative was Brent Bozell, the brother-in-law of William Buckley. Bozell had already done some speechwriting for Goldwater and must have had a good sense of the ideas that Goldwater would feel comfortable having published under his name. Although anyone reading Conscience of a Conservative might suspect from its fine writing that Goldwater had not actually been the author, the book nevertheless became a massive bestseller.[32]
In Conscience, one can see the blending of the two conceptions that had once not been Republican—or, in the case of the Austrian economics, not even American. The book used harsh language in writing off all social legislation as simply dependency-creating nonsense that would destroy the individual discipline and strength on which America was posited to have been built. But then, echoing the Austrian economists, Goldwater argues that this is not about helping poor people but is all about “liberty.” “The effect [CE30] of Welfarism will be felt later on—after its beneficiaries have become its victims, after dependence on government has turned into bondage, and it is too late to unlock the jail.”[33]
It should come as no surprise that Goldwater also attacked unions in Conscience; today’s Republicans who attack unions are definitely taking a page from Goldwater. He advocates all the traditional arguments in favor of union busting, including right-to-work legislation, and counters labor’s arguments with all the inaccurate clichés so common among those who railroaded Senate Bill 5 through the Ohio legislature. For example, Goldwater complains that unions donate to political candidates without consulting with the members who pay dues. Of course, every union has democratic processes in place to elect a leadership that is responsive to the membership; however imperfect those processes, they are certainly in sharp contrast to corporate political donations, where there is no democracy for employees and no limits to what those fortunate few in the boardroom may decide to do with the corporation’s vast resources that are, after all, generated by the employees. But Goldwater and the contemporary conservatives who are regularly attacking the involvement of unions in politics fail to recognize this hypocrisy.
As conservatives took over the Republican Party, they combined the racial and cultural attitudes of the South with the Mont Pelerin Society’s hostility to labor. Neither of these strains would prove electorally successful in the short run. In the Republican Party in the early 1960s, Nelson Rockefeller reflected the moderate mainstream inside the party rather well, but he carried with him some unfortunate baggage. A divorce and a new wife nearly twenty years his junior did not endear him to many GOP voters. Further, his wealth and East Coast connections breathed “establishment” to those who wanted their party to take a fresh approach. Rockefeller did two things to greatly boost his chances. He hired the political team of Stuart Spencer and William Roberts, who, as Spencer-Roberts Consultants, introduced much that was modern into the old campaign model. They eventually went on to future triumphs as Ronald Reagan’s gubernatorial and presidential campaign advisors. Rockefeller also leaned on his family’s history of support for historically black colleges in the South to reach out to blacks and even Hispanics.[34]
During the campaign, as George Kabaservice writes in his aptly titled Rule and Ruin: The Downfall of Moderation and the Destruction of the Republican Party, Rockefeller hammered at Goldwater’s philosophy, “depicting him not as a conservative but as a radical reactionary, backed by extremists, who would abolish Social Security, renounce civil rights, and the United Nations.” While these descriptions are mainstream in some parts of the Republican Party today, Goldwater further damaged his image by appearing to be a dangerous madman by suggesting that it would be appropriate to use nuclear weapons in Vietnam. Rockefeller emphasized, rightly, that his opponent was outside the mainstream of American public opinion.[35]
One of the ironies of this takeover of the Republican Party by the extremists is that, in a sense, the party deserves some credit for one of the greatest political accomplishments of the twentieth century—the Civil Rights Act of 1964. For years, more Republicans than Democrats had pushed for federal action against the obviously racist policies of the Old South. The Democrats had been hindered from taking action by having so many conservative senators from Southern states. It took a political magician of the stature of Lyndon Johnson to create a large enough coalition of Southern Democrats as well as the political will to push the bill through. A majority of Republicans as well as Democrats voted to pass the bill when the opportunity finally came.
But not Goldwater. He felt that the federal government had no business legislating the civil rights of those African Americans living under Jim Crow. In Conscience, he maintained that he was “unimpressed by the claim that the Supreme Court’s decision on school integration is the law of the land.” These sentiments were, of course, exactly what the white supremacists in the South wanted to hear. So Goldwater voted against the Civil Rights Act and, as Kabaservice observes, “put his stamp—and, by association, that of the Republican Party—on the side of Southern resistance to what was now the law of the land.”[36]
Opinion pieces in the wake of Goldwater’s vote compared the Arizonan unfavorably to Ohio’s Robert Taft. The contrast was clear, as Kabaservice writes: “The Taft tradition was supportive of civil rights in a way that ideological conservatism was not.” Longtime Republican political operative William Rusher was editor of the National Review magazine at the time of this change. He was unapologetic: “The Republican Party, like it or not, has a rendezvous with a brand new idea,” he wrote. All the party needed to do in the South was offer anti–civil rights candidates. He suggested that the party should be appealing to the moderates, but the message was clear: the GOP should not be an ally to national civil rights legislation.[37]
This was, of course, music to the ears of supporters of Sheriff Bull Connor and Gov. George Wallace. Historian Dan T. Carter has made a careful study of the political transformation of the South during this era, and his book From George Wallace to Newt Gingrich: Race in the Conservative Counterrevolution, 1963–1994 is particularly impressive in outlining the roots of contemporary Republican power and its connection to the likes of Gov. Wallace. Carter acknowledges that today’s Republicans are naturally reluctant to admit that Wallace and the strain of American politics that he represents are largely responsible for the rise to power of the new conservative movement. But, Carter maintains that
the fundamental differences between the public rhetoric of the Alabama governor and the new conservatism sometimes seem more a matter of style than substance. In Barry Goldwater’s vote against the Civil Rights Bill of 1964, in Richard Nixon’s subtle manipulation of the busing issue, in Ronald Reagan’s genial demolition of affirmative action, in George Bush’s use of the Willie Horton ads, and in Newt Gingrich’s demonization of welfare mothers, the Wallace music played on. [38]
At the 1964 Republican Convention in San Francisco, Nelson Rockefeller took the stage to address the extremists who were seizing control of the party: “These extremists feed on fear, hate, and terror. They encourage disunity. These are people who have nothing in common with Americanism. The Republican Party must repudiate these people,” Rockefeller shouted above the booing and jeers that eventually drove him from the stage. Later, in a statement much more widely quoted, Goldwater asserted, “Extremism in defense of liberty is no vice.” The power in the Republican Party had passed to the extremists.
So out of step with America were those who had taken over the Republican Party that in the election of 1964, Lyndon Johnson had no problem painting Goldwater as someone who held views too dangerous to be allowed into the White House. Republicans faced a complete repudiation of their radical policies in their landslide defeat in 1964.
But from the depths of that defeat, with the extremists largely in control, the Republicans began to rebuild the party from the ground up, without the baggage of moderation. Some of this had to consist of developing a more sophisticated way of expressing their new and somewhat foreign political philosophy. In other words, this new Republican ideology had to be crafted in such a way to sound to ordinary people as though it was about more than defending the wealthy —even if a great deal of deception was necessary. The result of this goal was the development of a series of think tanks in which significant amounts of money were invested by the wealthiest and most powerful people and corporations in America.
The American Enterprise Institute, founded in 1943 at roughly the same time as the Mont Pelerin Society, initially worked at creating professional critiques of government policy from a conservative perspective. From the beginning, it tried to create an intellectual façade, granting its staff seemingly academic titles and chairs. However, it began to come into its own in the wake of the Goldwater disaster. William Baroody, Sr., president from 1962 to 1978, began to hire more professional and ideologically oriented staff and to seek out a great [CE31] deal of corporate and private funding. A former U.S. Chamber of Commerce official, Baroody was the right man for the job, having been a principal adviser to the Goldwater campaign.
John Micklethwait and Adrian Wooldridge, British journalists with the magazine The Economist, have written a perceptive study of the conservative movement in America. Most importantly, they follow the money. They argue that the constellation of right-wing think tanks that have generated this ideological offensive—especially the Heritage Foundation, the American Enterprise Institute, and the Cato Institute—have been funded by sources they call the “Big Five.”
“The first of these Medici of the conservative Renaissance was Joseph Coors,” Micklethwait and Wooldridge note. The wealthy brewery magnate [CE32] provided $250,000 in seed money for Heritage and also contributed to other right-wing organizations, including the Committee for the Survival of a Free Congress, the Independence Institute, and Accuracy in Media. The next major source of funding for right-wing thinkers was Richard Mellon Scaife, heir to the Mellon fortune and thus possessing historic connections to his family’s resistance to the New Deal. One of the early financial advisers to Goldwater, the candidates’s complete defeat [CE33] “convinced [Scaife] that conservatism needed to match the enemy’s intellectual firepower.” By 1973, he began to turn the spigot on. His first contribution to Heritage was $900,000. In 1976, he donated another $420,000, which was then 42 percent of Heritage’s income. Micklethwait and Wooldridge write, “The Washington Post [CE34] has calculated that in four decades after 1960 Scaife and his family’s trust gave at least $340 million to conservative causes—or about $620 million in current [2004] dollars.”[39]
The third major benefactors are no strangers to Ohio. Friends of John Kasich, Wisconsin’s Gov. Scott Walker, and their Republican allies, David and Charles Koch have been “prolific givers to libertarian causes.” Their father, Fred Koch, had made his money in the oil business, built fifteen oil refineries in Stalin’s Russia, and became a founding member of the John Birch Society. Charles was a cofounder of the Cato Institute in 1977. The Koch brothers [CE35] developed a large network of fellowships, grants, and scholarship to nurture libertarians.[40] The Kochs [CE36] have been especially generous benefactors to the American Legislative Exchange Council, the right-wing group that is particularly responsible for Senate Bill 5 and other undemocratic legislation in Ohio and elsewhere. [41]
The fourth largest funder of right-wing think tanks has been the Lynde and Harry Bradley Foundation. With a fortune made in a Milwaukee-based electronics company, Allen-Bradley, Harry Bradley was a committed John Birch Society member. The founder of the Birch Society, Robert Welch, was a frequent speaker at Allen-Bradley sales meetings in the late 1950s. Harry Bradley also supported the conservative journal the National Review, contributing both money and articles. Although Bradley died in 1965, his foundation has continued to give money to right-wing causes and, in fact, received a huge cash injection when Rockwell International bought Allen-Bradley, pushing the foundation’s assets above $260 million.[42]
The John M. Olin Foundation makes up the last of the “Big Five” conservative financial benefactors. John Merrill Olin “was another right-wing businessman obsessed with the threat to liberty,” [CE37] write Micklethwait and Wooldridgee. Olin focused on trying to plant seeds of his ideology in academia. He supported the law and economics program at the University of Chicago and tried to encourage imitators elsewhere. Olin was particularly generous to a “handful of favored scholars” such as Robert Bork, who was chair of legal studies at the American Enterprise Institute [CE38] for several years, and Irving Kristol, a journalist and writer who has been dubbed the “godfather of neo-conservatism.”[43]
Other foundations also contributed huge sums to right-wing think tanks, including the Smith Richardson Foundation and the Howard Pew Freedom Trust. Perhaps even more importantly, the political activities of business organizations expanded during this time[CE39] . The Chamber of Commerce had long been working against unions and workers, especially through suppression of the minimum wage, and in Ohio this has played a particularly damaging role. But in 1972, the five hundred largest corporations created the Business Roundtable specifically to lobby for their interests: union-busting, deregulation, and tax cuts. The contrast between labor union political action committees and corporate ones is also illustrative of the transformation that had taken place by the early 1970s. Labor PACs outnumbered corporate PACs in 1974 by 201 to 89. But just two years later, corporate America had turned that around, with 433 corporate PACs and 224 labor ones. By 1984, corporate PACs had a 4-to-1 advantage.[44]
The Heritage Foundation, one of the chief benefactors of all this money, is more extremist than even AEI and “wrote the book on how to market and popularize political ideas,” according to Jacob Weisberg, writing in Salon, the online magazine. Why have the Heritage Foundation and its allies been so successful at promulgating ideas that are bad for most of the population and the nation at large?[45]
Money, Weisberg says. Corporations and the wealthy are eager to pour money into Heritage and other right-wing think tanks that will push ideas that will directly benefit them by passing the tax burden on to those less able to pay and by freeing business from government oversight as much as possible. While some would point to the Brookings Foundation as a liberal counterpart, Weisberg points out that this is not true. Brookings could only dream of the wealth lavished on the Heritage Foundation, not to mention the other right-wing think tanks pumping out justifications for bad policy. Further, Brookings sees itself much more as a scholarly organization not driven completely by base political motivations. By contrast, the former president of Heritage, Ed Feulner, has said, “We conduct warfare in the battle of ideas.” Whereas some of the other right-wing think tanks maintain some standards of scholarship, Heritage is unconcerned by such niceties, Weisberg notes.[46]
Evidence of the impact of the funding of “research” and reports that conclude that various right-wing policies are effective and helpful with problems facing the nation—however wrong-headed such reports may be[CE40] —are easy to find. Jude Wanniski, a one-time Wall Street Journal editorial page writer, for example, used an AEI grant to write his book The Way the World Works, wildly popular in right-wing circles for promulgating the theory of supply-side economics.
Wanniski, a native of Pennsylvania like Kasich, began his career as a newspaper reporter in Alaska, then moved on to Las Vegas, and finally, in 1965, started working for The National Observer, a Dow Jones publication. He served as associate editor of The Wall Street Journal from 1971 to 1978. Wanniski left that position when he was spotted handing out brochures for a New Jersey Republican candidate, a violation of journalistic ethics. “Wanniski was a genius, the smartest man I ever met,” conservative columnist Robert Novak wrote after his colleague’s death. “While he made his living as an economic consultant, his real profession was changing the way the world worked.”[47]
The conservative journal National Review listed Wanniski’s book as one of the one hundred most influential books of the twentieth century. The Way the World Works had a great impact on the “Republican Revolution” of 1994 and was inspirational not only for Newt Gingrich but for John Kasich. Wanniski became the cheerleader for economic ideas that he discovered quite by chance at a dinner with Professor Arthur Laffer of the University of Chicago. Different versions of this event have appeared, but I will provide here Laffer’s own recollection, as offered to the Heritage Foundation in 2004:
The story of how the Laffer Curve got its name begins with a 1978 article by Jude Wanniski in The Public Interest entitled, “Taxes, Revenues, and the ‘Laffer Curve.’” As recounted by Wanniski (associate editor of The Wall Street Journal at the time), in December 1974, he had dinner with me (then professor at the University of Chicago), Donald Rumsfeld (Chief of Staff to President Gerald Ford), and Dick Cheney (Rumsfeld’s deputy and my former classmate at Yale) at the Two Continents Restaurant at the Washington Hotel in Washington, D.C. While discussing President Ford’s “WIN” (Whip Inflation Now) proposal for tax increases, I supposedly grabbed my napkin and a pen and sketched a curve on the napkin illustrating the trade-off between tax rates and tax revenues. Wanniski named the trade-off “The Laffer Curve.”[48]
Interestingly, Laffer, who said he has no exact memory of this, went on to say that the roots of the supply-side concept that would be so thoroughly embraced by the Republican Party came from the seventeenth-century Islamic historian Ibn Khaldun in his famous work The Muqaddimah and had also been expressed with “incredible clarity” by the liberal economist John Maynard Keynes.[49]
The bearing that this has on John Kasich is that Wanniski was a great fan as Kasich rose to prominence in Congress as the chief dismantler of the New Deal legacy. Wanniski often sent “memos” to people he wanted to influence, and on the Polyconomics Institute website[CE41] still devoted to Wanniski, there are several memos to and about Congressman Kasich. Polyconomics was established in 1978 as an economic forecasting firm consulting with banks and corporations.
“If there is one big reason to be optimistic,” Wanniski wrote in 1995, “it is the leadership, enthusiasm and vision of House Budget Director John Kasich. Of all the players, Kasich is the one who clearly has no ax to grind other than the national interest. He is passionate in making the case to the other boys that they put their narrow interests aside.”[50] In memos to Kasich, Wanniski often offered advice on ways that Kasich could sharpen his argument, or take different approaches, or change his mind—for instance, regarding most favored nation status for China. Often, Wanniski offered his enthusiastic support: “Your Sunday appearance on NBC’s ‘Meet The Press,’” Wanniski wrote in 1998, “was as good as I’ve ever seen you . . . I must say you were almost, shall I say, presidential in handling [the tough questions].” [51]
It is important that we recognize this relationship between Wanniski and Kasich because it demonstrates that Kasich was a leading proponent at the very beginning of the flawed “supply-side” economic theory that has nearly bankrupted the nation and crippled governments in Ohio and elsewhere. [CE42] So tied was Kasich to Wanniski that he attended the Polyconomics Institute[CE43] annual meeting in 1997, along with a number of other important and controversial figures. But the star, according to Wanniski, was Nation of Islam leader Louis Farrakhan. Wanniski had a habit of embracing controversial figures, including Moammar Khadafy and Saddam Hussein. And Wanniski gushed with enthusiasm over Farrakhan. “Of all the speakers,” Wanniski reported, “Min. Farrakhan clearly enjoyed John Kasich the most, three times standing to applaud Kasich’s impassioned statements on the interference of government in our lives. [Farrakhan] noted that with people like Kasich, and [Jack] Kemp, in the Republican Party, there may be a brighter future for the GOP in the black community.”[52]
Although there is no question that Wanniski’s The Way the World Works has become a formative book for current conservative philosophy, many experts believe that the book is full of silly platitudes based more on fantasy than reality. I am going to quote generously from the review written by noted economist Benjamin J. Cohen:
The book would be much less distressing if we were permitted to read it as satire rather than as scholarship. Then we might merely smile and wink when Wanniski assures us that the [Wall Street] Journal is “without commitment to economic dogma.” We might grin when he argues that of all of the world’s economic problems in the postwar era, the most serious has been the personal income tax rate. We might guffaw when he asserts that high taxes are “the primary cause by a long shot of the poverty of the world . . .[CE44] But, the book, [Wanniski] insists, is to be taken seriously . . . For all of his erudition, he does not appear to appreciate the dangers of the colorful historical generalization, the univariate theory of history. For all of his sophistication, he still insists on trying to reduce complex reality to trite oversimplification . . . Readers of Das Kapital[CE45] will be amused to learn that “The Marxian idea does not concern itself with economic growth, but with economic contraction”; readers of Keynes’ General Theory will be amused to learn that his book was written “to systemize [socialism] into an economic model.”[53]
Concluding his authoritative review of what is a very poor book, Cohen summarizes the problem: “Nothing like a convenient twisting of the facts to fit one’s own theory. Serious scholars can expect to learn little from this type of approach to historical problems.” Even David Stockman, Reagan’s budget director, has criticized Wanniski’s extremist support for supply-side economics calling him, “the real prince of darkness, a fanatic,” among the cadre of supply-siders inside the administration.[54]
The year of publication of Wanniski’s book, 1978, is important since the administration of Ronald Reagan warmly embraced many of the book’s nonsensical principles to drive new policy decisions. Even more importantly, the Heritage Foundation also produced Mandate for Leadership, a detailed program for the incoming Reagan administration, a catalog of various ideologically driven policies that shared much with flawed tracts of both Hayek and Wanniski.[55]
While Reagan often cast himself in the image of FDR, his administration began to systematically undo the social progress that had been made since the New Deal. For our purposes, one of the most brutal attacks came in the context of his crushing of the Professional Air Traffic Controllers Organization[CE46] , the air traffic controllers’ union. “This signaled,” Harvey notes in his study of neoliberalism, “an all-out [CE47] assault on the powers of organized labor.” Harvey argues that PATCO was more than just an ordinary union because it was a white-collar union that had the “character of a skilled professional association.” And PATCO was an icon of middle-class unionism, the middle class that, in fact, unionism had built since World War II.[56]
“The effect on the condition of labor across the board was dramatic,” Harvey writes, “perhaps best captured by the fact that the Federal minimum wage, which stood on a par with the poverty level in 1980, had fallen to 30 percent below that level by 1990.” What ensued after this brutal and ideologically driven action was a long and steady decline in real wage levels across the country. As Harvey points out, the whole complex of neoliberal policies championed by the Republican Party since that time has driven down wages, deindustrialized the nation, chopped away at the middle class and the American standard of living, and dramatically expanded the gap between the very wealthy and everyone else. Generous tax breaks to the wealthy and to corporations, Harvey notes, have only made it easier for them to extract money from the United States and invest it overseas. [57]
So, has there been a huge revolt by taxpayers at seeing both state and national treasuries emptied for the purpose of rewarding the wealthy primarily for being wealthy? Has the attack on workers caused a huge blowback? As universities are steadily being privatized and our public schools slowly turned over to corporations, has there been enormous outrage? For the most part, the answer to these questions is no, and the reason is the hugely effective propaganda campaign that has convinced the public that these changes are reasonable and pragmatic. Nothing, of course, could be further from the truth.
And in the face of this assault on the American way of life, we have actually seen this process being accelerated by Republican Party figures who seem to be acting out of desperation to transform the country into something it has never been. The wave of Republican victories in 2010 brought a series of radical governors into office and won back the U.S. House. The governors of Ohio, Florida, Michigan, and Wisconsin have been particularly aggressive in pushing radical right-wing policies. Union busting, of course, leads the way, but voter suppression laws and the privatization of government services are obviously also extremely important to their strategies.
But why the desperation, and why now, when it appears the GOP is actually in a powerful position? Jonathan Chait, former senior editor at The New Republic, got a hint from the preamble to conservative star Sen. Paul Ryan’s budget proposal: “America is approaching a ‘tipping point’ beyond which the Nation will be unable to change course.” This is a sentiment that both Rick Santorum and Gingrich also echoed on the campaign trail in 2012.[58]
What are these people talking about? Chait believes that the Republicans have become acutely aware of demographics. The modern GOP, Chait argues, is “staring down its own demographic extinction.” The Republican Party, as Chait outlines, has become increasingly narrow in the people it represents, mainly rural whites and whites without a college education. The Democratic Party, by contrast, does better with college-educated whites and is dominant among racial minorities. With the American population growing more educated and dramatically less white, Chait argues, the Democratic Party is en route to a natural Democratic majority. [59]
Chait tempers his argument by noting that no coalition is permanent, but the changes that are taking place cannot be underestimated. As I’ve noted, the Republican Party has built its coalition by embracing the racial attitudes of the states of the Old Confederacy and used the resulting political base to promote the economic policies of the Austrian School. Barack Obama’s election and re-election demonstrate that the Republican strategy does not have the power that it once did. When a party or nation is in an inevitable decline, one might think that the wise strategy would be one of careful management. Instead, the Republicans have opted for outright confrontation. But, as Chait points out, it was this kind of thinking that led the South to start a war with the North, the Japanese to start a war with the United States, wars hopeless from the start. “At varying levels of conscious and subconscious thought,” Chait argues, “this is also the reasoning that has driven Republicans in the Obama era. Surveying the landscape, they have concluded that they must strike quickly and decisively at the opposition before all hope is lost.”
Chait, of course, did not have the benefit of having seen the 2012 presidential campaign when he wrote the material quoted here. In the wake of President Obama’s impressive victory, there was clear evidence of the durability of a coalition based on a more diverse electorate than the white men the Republicans have been trying to target. Washington Post commentator E. J. Dionne cited exit polls that demonstrated that the electorate may be becoming aware of the stacked economic deck that conservative policies champion. In the exit polls, only 10 percent of those polled said that Obama’s policies aided the rich, while 54 percent said that Romney’s policies favored the rich. More importantly, as Dionne points out, “voters rejected a core Republican proposition: that the economy works on behalf of everyone.” Polls showed instead that 54 percent of the voters believed that the economy works for the rich, while only 39 percent said it was fair to most Americans. Attacks on what conservatives called “class warfare,” Dionne wrote, were ineffective because “a majority thinks there is a class war and the wealthy are winning it.”[60]
Even right-wing South Carolina Republican Sen. Jim DeMint’s recent book, aptly titled Now or Never: Saving America from Economic Collapse, claims that 2012 may be the last chance for the Republican Party.[61] And in Ohio, the desperation has been clear, and not only as reflected in Senate Bill 5. [CE48] Republican majorities in both houses have passed voter suppression laws, and there has been a grotesque Republican attempt at drawing new legislative and congressional districts showing genuine desperation on their part. In a state split roughly 50–50 between Democrats and Republicans, but trending Democratic, the GOP has already gerrymandered a situation in which they have 13 out of 18 congressional seats. And the newly-gerrymandered map ushered in more power for the Republicans in 2012 with a 12–4 majority in congressional seats. “Even though most Ohio voters backed Democrats in this year’s presidential and U.S. Senate elections,” The Cleveland Plain Dealer reported after the November elections, “new congressional maps designed to protect GOP incumbents kept three quarters of the state’s U.S. House of Representatives seats in Republican hands.” And this is in the context of Republicans winning only 52 percent of the votes cast in Ohio congressional races. “This is a tossup state, the battleground of battlegrounds, except when you stack the deck,” Steve Fought, a Democrat who worked on the Democratic congressional campaigns, told the Plain Dealer. “That is the only way they were able to hold their power in Ohio and the only way they were able to hold their power in the House of Representatives. But you have to give them credit. They knew what they were doing and it worked.”[62]
Many Americans, even some Republicans, have recognized the destructive nature of the conservative policies that have been imposed on the nation. George H. W. Bush was right when he pronounced this ideology “voodoo” economics. And Judge Richard Posner of the Seventh U.S. Circuit Court of Appeals in Chicago, in an interview after the Supreme Court ruled that the Affordable Care Act was constitutional, said that he has become less conservative as the Republican Party has become more “goofy.” Perhaps it is best to quote Posner in some detail, to understand just what a moderate and sophisticated Republican thinks about the drastic turn his party has taken. Speaking about right-wing criticism of Chief Justice John Roberts, Posner said:
Because if you put [yourself] in his position . . . what’s he supposed to think? That he finds his allies to be a bunch of crackpots? Does that help the conservative movement? I mean, what would you do if you were Roberts? All of a sudden you find out that the people you thought were your friends have turned against you, they despise you, they mistreat you, they leak to the press. What do you do? Do you become more conservative? Or do you say, “What am I doing with this crowd of lunatics?” Right? Maybe you have to re-examine your position.[63]
Similarly, longtime Republican activist Bruce Bartlett has come to a new understanding of his right-wing colleagues. “Frankly, I think I’m at ground zero in the saga of Republicans closing their eyes to any facts or evidence that conflict with their dogma,” Bartlett wrote recently in an essay titled “Revenge of the Reality-Based Community.” Rather than listening to him, Bartlett wrote, “they threw me under a bus.” Bartlett’s study of the 1930s convinced him that, contrary to what he had previously thought, Keynes had been correct in the policies he advocated. Uncomfortable though it was, “facts were facts.” Further, Bartlett now believed that more Keynesian intervention was necessary in the wake of the 2008 collapse. Uncomfortably, he found himself “joined at the hip with Paul Krugman,” an economist he had formerly considered his intellectual enemy. “For the record,” Bartlett wrote, “no one has been more correct in his analysis and prescriptions for the economy’s problems than Paul Krugman. The blind hatred for him on the right simply pushed me further away from my old allies and comrades.”[64] Bartlett further wrote,
The economy continues to conform to textbook Keynesianism. We still need more aggregate demand, and the Republican idea that tax cuts for the rich will save us becomes more ridiculous by the day. People will long remember Mitt Romney’s politically tone-deaf attack on half the nation’s population for being losers, leeches, and moochers because he accurately articulated the right-wing worldview.[65]
This chapter has been an attempt to understand where the radicalism of the proponents of Senate Bill 5 came from so that politics in Ohio and beyond can move in a direction that addresses real issues and real problems. Hopefully, the behavior of the Republican Party in Ohio and across the nation in recent years will cause many Americans to re-examine their positions. Ohio provided a case study of the problem in 2011, when a series of policies driven by this extreme, conservative ideology, with roots in a foreign economic philosophy, created a battleground in the Buckeye State.[66]
[1] Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism (New York: Picador, 2008).
[2] Ibid., 6. As will become clear later in the chapter, it is important to note that the man who called for the attack on public schools was economist Milton Friendman, a devotee of Frederick A. Hayek and the Austrian school of economics.
[3] “As Companies Seek Tax Deals, Government Pays High Price,” The New York Times, Dec. 1, 2012, http://www.nytimes.com/2012/12/02/us/how-local-taxpayers-bankroll-corporations.html?pagewanted=all&_r=0.
[4] Amity Shlaes, The Forgotten Man: A New History of the Great Depression (New York: Harper, 2007); Paul Krugman, “Amity Shlaes Strikes Again,” The New York Times, Nov. 19, 2008, http://krugman.blogs.nytimes.com/2008/11/19/amity-shlaes-strikes-again/; Arthur C. Brooks, The Battle: How the Fight Between Free Enterprise and Big Government Will Shape America’s Future (New York: Basic Books, 2010); Bryan Caplan, “If Only: A Review of Arthur Brooks’ The Battle,” Library of Economics and Liberty, http://econlog.econlib.org/archives/2010/05/If_only_a_revie.html.
[5] William E. Leuchtenburg, Franklin D. Roosevelt and the New Deal, 1932–1940 (New York: Harper & Row, 1963).
[6] For a review of the impact of the Wagner Act, see David Brody, Labor Embattled: History, Power, Rights (Urbana: University of Illinois Press, 2005), and Robert Michael Smith, From Blackjacks to Briefcases: A History of Commercialized Strikebreaking and Unionbusting in the United States (Athens: Ohio University Press, 2003).
[7] Frederick A. Von Hayek, The Road to Serfdom (London: Routledge, 1944).
[8] Greg Sargent, “Mitt Romney: ‘America’s Economy Runs on Freedom,’” The Washington Post, May 18, 2012, http://www.washingtonpost.com/blogs/plum-line/post/mitt-romney-americas-economy-runs-on-freedom/2012/05/18/gIQAWJ1nYU_blog.html.
[9] Nicholas Wapshott, Keynes-Hayek: The Clash That Defined Modern Economics (New York: Norton & Co., 2011) 100-101.
[10] Daniel Yergin and Joseph Stanislaw, The Commanding Heights: The Battle for the World Economy (New York: Simon and Schuster, 2002) 124–125; Jeffrey D. Sachs, “Welfare State Beyond Ideology,” Scientific American, November 2006, http://www.scientificamerican.com/article.cfm?id=the-social-welfare-state; George Orwell, The [London] Observer, April 9, 1944.
[11] David Harvey, A Brief History of Neoliberalism (Oxford: Oxford University Press, 2007) 3, 20–21.
[12] “Special Report: Is Greed Good? Only If It Is Properly Governed,” The Economist, May 16, 2002, http://www.economist.com/node/1119945.
[13] Yergin and Stanislaw, 123–131.
[14] Kim Phillips-Fein, Invisible Hands: The Making of the Conservative Movement from the New Deal to Reagan (New York: Norton, 2009), 45–52.
[15] Ibid., 60.
[16] Michael Bowen, The Roots of Modern Conservatism: Dewey, Taft, and the Battle for the Soul of the Republican Party (Chapel Hill: University of North Carolina Press, 2011) 6–7; David Farber, The Rise and Fall of Modern American Conservatism: A Short History (Princeton: Princeton University Press, 2010) 16–17.
[17] Farber, 30–31.
[18] Ibid.
[19] Ibid., 35.
[20] Ibid., 35–36.
[21] William Leuchtenburg, In the Shadow of FDR (Ithaca, NY: Cornell University Press, 1985) 49.
[22] Louis Galambos, ed., The Papers of Dwight D. Eisenhower (Baltimore, MD, Johns Hopkins University Press, 1989) 13: 1385: 13: 1357.
[23] Philips-Fein, ix–xii.
[24] Ibid., 100.
[25] Ibid., 100–102.
[26] Ibid., 103–105.
[27] Kari Frederickson, The Dixie Revolt and the End of the Solid South, 1932–1968 (Chapel Hill: University of North Carolina Press, 2000); Joseph Crespino, In Search of Another Country: Mississippi and the Conservative Counterrevolution (Princeton: Princeton University Press, 2007).
[28] Daniel J. Galvin, Presidential Party Building: Dwight Eisenhower to George W. Bush (Princeton: Princeton University Press, 2010) 65–66.
[29] Ibid., 67.
[30] Ibid., 67–68.
[31] Crespino, 3.
[32] Farber, 89–90.
[33] Barry Goldwater, The Conscience of a Conservative (New York: Mcfadden-Bartell, 1961) 48–49
[34] Geoffrey Kabaservice, Rule and Ruin: The Downfall of Moderation and the Destruction of the Republican Party from Eisenhower to the Tea Party (New York: Oxford University Press, 2012) 92–93.
[35] Ibid., 93–94.
[36] Ibid., 102.
[37] Ibid., 103; William A Rusher, “Crossroads for the GOP,” National Review, Feb. 12, 1963, 109–112.
[38] Dan T. Carter, From George Wallace to Newt Gingrich: Race in the Conservative Counterrevolution, 1963–1994 (Baton Rouge: Louisiana State University Press, 1996) xiv.
[39] John Micklethwait and Adrian Wooldridge, The Right Nation: Conservative Power in America (New York: Penguin Press, 2004) 76–78. Micklethwait and Wooldridge deserve a great deal of credit in tracing the money behind the right-wing ideology mill.
[40] Ibid.
[41] Ibid.
[42] Ibid., 79.
[43] Ibid., 79.
[44] Ibid., 79.
[45] Jacob Weisberg, “Happy Birthday, Heritage Foundation!” Slate, Jan 9, 1998, http://www.slate.com/articles/news_and_politics/strange_bedfellow/1998/01/happy_birthday_heritage_foundation.html. Weisberg is quoting Will Marshall, then president of the New Democrat Progressive Policy Institute.
[46] Ibid.
[47] Robert Novak, “Father of Supply Side,” Sept. 1, 2005, CNN website, http://www.cnn.com/2005/POLITICS/09/01/supply.side/index.html.
[48] Arthur Laffer, “The Laffer Curve: Past, Present, and Future,” June 1, 2004. Heritage Foundation website, http://www.heritage.org/research/reports/2004/06/the-laffer-curve-past-present-and-future.
[49] Ibid.
[50] Jude Wanniski, “Will There Be a Budget?” Memos on the Margin, 1995, Polyconomics website, http://www.polyconomics.com/index.php?option=com_content&view=article&id=542:will-there-be-a-budget&catid=19:1995&Itemid=26.
[51] Jude Wanniski, “John Kasich, Presidential Timber,” Memos on the Margin, 1998. Polyconomics Institute website, http://www.polyconomics.com/index.php?option=com_content&view=article&id=2349:john-kasich-presidential-timber&catid=37:1998&Itemid=30.
[52] Jude Wanniski, “Farrakhan at our Conference,” Polyconomics Institute website, http://www.polyconomics.com/index.php?option=com_content&view=article&id=643:farrakhan-at-our-conferencefedwatch&catid=21:1997&Itemid=26. See also Joyce Price, “Kasich Gets Farrakhan’s Praise, Kemp Also Has Minister’s Respect,” The Washington Times, March 2, 1997.
[53] Review by Benjamin J. Cohen, Journal of Interdisciplinary History 10: 10 (Summer 1979), 359–360.
[54] Brian Lamb, “Q and A with David Stockman,” C-Span, April 2, 2013, http://www.c-spanvideo.org/program/AwithDa.
[55] Weisberg, ibid.
[56] Harvey, 25.
[57] Ibid., 26–27.
[58] Jonathan Chait, “2012 or Never,” New York Magazine, Feb. 26, 2012, http://nymag.com/news/features/gop-primary-chait-2012-3/.
[59] Ibid. This well-researched theory was first introduced by John Judas and Ruy Teixeira, The Emerging Democratic Majority (New York: Scribner, 2004).
[60] E. J. Dionne, “Mitt Romney’s Class Problem,” The Washington Post, Nov. 7, 2012, http://www.washingtonpost.com/blogs/post-partisan/post/mitt-romneys-class-problem/2012/11/07/f082c60e-2897-11e2-b4e0-346287b7e56c_blog.html.
[61] Jim DeMint, Last Chance: Saving American from Economic Collapse (New York: Center Street, 2012). Since Republican policies are largely responsible for the 2008 economic collapse, it stretches reality for DeMint to suggest that he and his party have something to offer at this point. No surprise that Tea Party favorite Rand Paul wrote an introduction to DeMint’s book.
[62] Sabrina Eaton, “In Evenly Split Ohio, Redistricting Gives GOP 12–4 Edge in Congressional Seats,” The Cleveland Plain Dealer, Nov. 11, 2012, http://www.cleveland.com/open/index.ssf/2012/11/in_evenly_split_ohio_redistric.html.
[63] National Public Radio interview with Nina Totenberg, aired July 6, 2012. http://www.npr.org/blogs/itsallpolitics/2012/07/05/156319272/federal-judge-richard-posner-the-gop-has-made-me-less-conservative.
[64] Bruce Bartlett, “Revenge of the Reality-Based Community: My Life on the Republican Right and How I Saw it All Go Wrong,” The American Conservative, Nov. 26, 2012, http://www.theamericanconservative.com/articles/revenge-of-the-reality-based-community/.
[65] Ibid.
[66] For a perceptive analysis of the authoritarian aspects of Republican ideology, see Marc J. Hetherington and Jonathan D. Weiler, Authoritarianism and Polarization in American Politics (New York: Cambridge University Press, 2009).
[CE1]AU: It’s not entirely clear how roots can “defy the facts” of a situation. Consider ways to revise? OK
[CE2]Maybe “origin” would work here to avoid repeating “roots”? STET
[CE3]AU: This is the second use of this phrase in this paragraph; consider adjusting one or the other? OK
[CE4]AU: Vary phrasing? OK
[CE5]AU: The phrasing of “maximize profits at any cost” seems incongruous, since maximizing profit typically involves cutting costs. Consider rewording? OK
[CE6]AU: This phrase is most often used as a sexual euphemism; recommend avoiding. Rephrase to something like “enforce their will on”?
[CE7]AU: Correct? OK
[CE8]AU: Correct? YES
[CE9]AU: Correct? YES
[CE10]AU: Edit OK? YES
[CE11]AU: Please specify, key to what?
[K12]This paragraph is in response to the comments above wishing more clarification about the flaws of Hayek’s work.
[CE13]AU: The University of Chicago was established in 1890; please clarify this statement. OK
[CE14]AU: Its largest meeting up to that date, or ever, as this indicates? Please check and possibly revise. OK
[CE15]AU: The next few sentences seem to indicate that Hayek and von Mises’ ideas actually resonated with wealthy business leaders, which would appear to contradict this statement. Please consider ways to clarify.
[CE16]AU: Correct? YES
[CE17]AU: Does this quote read correctly with revision? YES
[CE18]AU: Where does this quote-within-the-quote end? Please insert closing single quotation mark where appropriate—or delete the opening one, if it is a typo. OK
[CE19]AU: If the Republicans in 2011 made similar statements that were supportive of labor rights, the contrast must not be in their words, as the first sentence implies. The next paragraph seems to show that Taft’s legislation was actually similarly anti-union, despite this pro-labor statement. Please clarify exactly how they did differ, or eliminate this statement of contrast. OK
[CE20]AU: Collective bargaining power? Please check phrasing. OK
[CE21]AU: If right-to-work was introduced in 1947, what was different about it as presented in SB 5, or why was it raised again? Please clarify.
[CE22]AU: Connection between right-to-work laws and political financial support is not completely clear. Please clarify. OK
[CE23]AU: Correct per original source? OK
[CE24]AU: Addition of single quotes correct? (That is, the entire highlighted portion is a quote, and “the catechism of the marketplace” is a quote within the quote.) Yes
[CE25]Edit OK for emphasis? OK
[CE26]Please spell out on first use. OK
[CE27]AU: Consider avoiding this phrase, which might look like a deliberate pun here, in the context of a former Army general and the question of National Guard troop deployment. “Persevering,” or some other choice? It was a deliberate pun.
[CE28]AU: This phrasing is a bit unclear; doesn’t a defeat mean that a fight would be over? Please consider ways to revise.
[CE29]AU: Changes ok, for sentence clarity, flow, and grammatical completion? YES
[CE30]AU: Grammatically, this should be “effect.” Please verify spelling in original. OK
[CE31]AU: “A great deal of”? Or is this a statement of quality, as it currently appears? Please consider revising. OK
[CE32]AU: Consider adding a “gloss” here for readers who may not know Coors. It could be something like “Coors, heir to the brewing fortune, ...” or you could replace Coors with “The wealthy brewery magnate ...” OK
[CE33]AU: It is not implicit that being a financial advisor to someone makes that person a hero to his advisor. Please clarify. OK
[CE34]AU: Is this italic in original? Please verify. YES
[CE35]AU: Who does “they” refer to? The Cato Institute, or the Koch brothers? Please clarify.
[CE36]AU: Again, please specify who this refers to.
[CE37]AU: Who wrote this? Consider following the quotes with “, writes [author name] in [publication name],” like you do for other similar quotes.
[CE38]Please spell out on first use.
[CE39]OK to add? YES
[CE40]AU: Correct, for clarity? YES
[CE41]Consider being more specific in identifying the site—possibly add the name of the site or the name of the group running the site? OK
[CE42]AU: Please consider ways to rephrase for greater clarity. “Kasich was a leading proponent, from the very beginning, of the flawed economic concept…”? OK
[CE43]AU: Consider reworking this and possibly adding a little more detail. The use of “the”—“the Polyconomics Institute [CE43] meeting”—makes it sound like this is a particular, significant meeting. If so, more detail would be welcome. If that’s not the case and this is meant in a more general way, “a” would be better to use (and you still might want to gloss the Polyconomics Institute [CE43]). IN AN EARLIER PARAGRAPH I’VE ADDED A SENTENCE ABOUT THE FOUNDING AND BUSINESS OF POLYCONOMICS.
[CE44]AU: Should closing quote be inserted before or after ellipsis? That is, does the ellipsis represent material that Cohen left out of Wanniski’s words (closing quote should follow ellipsis), or does it represent material that you have left out from Cohen (closing quote should precede ellipsis)? IT IS MATERIAL THAT I HAVE LEFT OUT. IT WAS NOT MY INTENTION TO CLOSE THE QUOTE HERE IN EITHER EVENT. THE QUOTE CONTINUES.
[CE45]AU: Is this italic in original? Please verify.
[CE46]AU: Please spell out on first use. OK
[CE47]AU: Hyphenated in original? Please verify. OK
[CE48]AU: Correct? OK
