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September 16, 2016


(I am indebted for research for this essay to an article in The Washington Spectator written in its September 1 edition by Mark Dowie entitled “Corporate Lobby: the Third Chamber of Congress.)

My followers know that I have blogged often of Lewis Powell’s “infamous memo of 1971” to his friend who was the chairman the of the U.S. Chamber of Commerce’ Education Committee, Eugene B. Sydnor, Jr. Powell (a lawyer for the tobacco industry who continued to represent such industry long after it was established that tobacco was killing and otherwise maiming and disabling Americans by the millions) held forth in Richmond, Virginia, and was appointed to the Supreme Court by Richard Nixon not long after he sent his memo to his friend. Nixon apparently approved of Powell’s view that the rich and corporate class should take over America’s political process, and it worked. That class has enjoyed spectacular success as its takeover is proceeding at warp speed at the expense of the rest of us.

His “confidential” memo was leaked to Jack Anderson, an investigative reporter of that day, and Anderson saw to it that the memo was widely circulated. The memo is widely believed to herald the beginning of the wedding of the Republican Party with corporate influence and money, which not co-incidentally, started a process in which remnants of the New Deal and wage equality quickly became things of the past. Wage inequality started in the 1970s and is with us yet today stronger than ever, a direct result of the wedding of the Republican Party to banking and corporate interests fortified by inane court decisions which promise to keep the current political and economic arrangement in perpetuity unless we can somehow reverse this takeover by corporate and banking interests via reversal of such decisions, Constitutional change or statute, a daunting but essential task if we are to save our democracy.

Proof in the pudding? Median wages (adjusted for inflation) have not moved since the 1970s following Powell’s memo while the Dow has reached historic heights due primarily to wage theft as capital has gobbled up labor’s share of the economy’s income and its increased marginal productivity as well. Wage inequality is the biggest domestic issue we have these days, and has led to tepid demand and an underperforming economy which, when added to continuing corporate outsourcing (the latest being Ford’s decision to move all its small-car assembly to Mexico – thanks to the protective provisions of NAFTA) will remove billions of dollars in demand from our economy – just what we don’t need – another “downer” for our economy but (presumably) profitable for Ford, though if more Americans are thrust into poverty Ford may have a problem in marketing their foreign-made cars back here.

But I digress; this essay is about Powell’s memo and the resulting political and economic chaos it has created, including its effect in making the U. S. Chamber of Commerce just another Koch-type cheerleader for special interests. I have referred to such memo in many blogs but have not laid out what was in it. This essay will cure that shortcoming.

Powell (the corporate lawyer before his ascent to the Supreme Court) argued in his memo that “capitalists (should) carry the banner of confrontational politics” and “not to hesitate to attack liberals and push politicians for the support of the free enterprise system.” Powell, a former president of the American Bar Association and a winner-take-all for capitalism, wrote that American business was “under broad attack” from political organizations that wanted to institutionalize “socialism or some form of statism.” He wrote that “We are not dealing with sporadic or isolated attacks from a relatively few extremists or even from the minority socialist cadre. Rather, the assault on the enterprise system is broadly based and consistently pursued. It is gaining momentum and converts.”

He wrote that the enemies of American enterprise included “not unexpectedly, the Communists, New Leftists and other revolutionaries who would destroy the entire system, both political and economic.”  (How ironic it is that here we are 45 years later and it is not the liberals or the communists who are hard at work destroying our political and economic system but rather modern day capitalists themselves in myopic pursuit of profit and blinded by greed, those championed by Powell as the saviors of the system!)

Powell went on to write that “Few elements of American society today have as little influence in government as the American businessman, the corporation, or even the millions of corporate stockholders. . . . . Business must learn the lesson, long ago learned by labor and other self-interest groups, that political power is necessary; that such power must be assiduously cultivated; and that when necessary, it must be used aggressively and with determination.” To silence the “disquieting voices” the national chamber “would require far more generous support from American corporations than it has ever received in the past.”

When Richard Lesher (who had been running the Chamber for 22 years) decided to support the Clinton Administration’s health care package in 1994 (which Hillary was promoting), Republicans Newt Gingrich, Dick Armey and Tom DeLay let the Chamber’s board know that his time was up, that he had to go. Gingrich (who was Speaker of the House by 1997) identified a successor to Lesher in Tom Donohue, a take-no-prisoner lobbyist for the trucking industry. The chamber, Donohue told Gingrich and the Wall Street Journal (and in consonance with Powell’s earlier memo) was a “sleeping giant, missing in action from many political battles.”

Thomas J. Donohue was chosen as the new CEO of the Chamber, and the Chamber’s culture changed overnight. From its humble beginnings and its core mission (which it still claims) “to advance human progress through an economic, political, and social system based on individual freedom, incentive, initiative, opportunity and responsibility,” it has morphed into just another lobbyist for the rich and corporate class under Donohue’s leadership, and speaking of Donohue, he now has a chauffeur-driven Lincoln, a private jet, and $5.5 million annual pay package, and is the most generously compensated lobbyist in America. He has done well for himself, but more importantly from the perspective of the rest of us, what is he now having the Chamber do to further its benign-sounding core mission “to advance human progress?”

I will list some of the “reforms and positions” he is advocating on behalf of the Chamber to the political class and discuss how such “reforms and positions” are at odds with the Main Street idealism the Chamber used to represent before it was captured by the corporate and banking class (with Donohue’s help) in keeping with the advice from Powell in his memo of 45 years ago. Stay tuned.     GERALD      E

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