The Multinational Monitor



The Mega-Corporate World of Ronald Reagan

by Ralph Nader

Back when some of our nation's political leaders were wise, Thomas Jefferson said that the purpose of representative government was to curb the "excesses of the monied interests." Many decades later, in 1936, Franklin D. Roosevelt-one of the last Presidents to hold corporations accountable for the state of the economy-promised that while "the malefactors of great wealth" had met their match in the previous four years, they would meet their master in the following four.

Ronald Reagan thinks and acts to the contrary.

During Mr. Reagan's first term, the "malefactors of great wealth"-big business or multinational corporations-have regularly met their obedient servant in the White House. And the power of the "monied interests" has become ever more focused on turning representative government into a versatile accounts receivable for too many mismanaged, speculating, negligent, avaricious, unsafe, or downright criminal companies. This Reagan-corporatist revolution has little to do with being conservative. It has everything to do with building a government of the Exxons, by the General Motors, and for the DuPonts.

So systematic, recurrent and widespread are the policies against basic, historic American values that some political commentators have wondered aloud how Reagan can still be so much in the running for re-election. The implication in their observations is proper: Presidents should be judged for what they do, not for what they say, or what they say they do. These commentators still expect a framework of accountability around the White House that includes the departments and agencies of the executive branch directed largely by Presidential appointees.

But Ronald Reagan, the "teflon President," has a strategy that has little to do ' with accountability. That strategy invites j closer scrutiny:

Rule one is Never get openly involved in the details. He who rises by details falls by details. Stay abstract, using heroic phrases of reassurance and national pride.

Rule two is Amiability-especially in "aw shucks" demeanor with lots of eventoned toned voice, pendant smiles and head shrugs.

Rule three is Stay insulated from impromptu media exposure. Reagan's aides even joke about this, as Lyn Nofziger did on the campaign trail in 1980 when he told reporters, "I've got Ronnie under house arrest from you guys."

Rule four is Induce condescension. If people think they are so much smarter than you, then they don't expect much and they forgive more.

Rule five is Create a banality of wrongdoing, of cruelty, of hypocrisy, of selling the country short. Banality avoids the constant search for novelty by the media and helps opposing politicians throw up their hands in despair. Any President whose administration can incite the response of the jaded-"So, what else is new?"-is already almost out of the woods. Banality is nourished by frequency -a numbing frequency of abuses whose very quantity depreciates their provocative impact.

Rule six is Seize the semantics and wrap the national symbols around one's own political ideology.

Rule seven is Be blessed by an opposition party that has largely surrendered the basic contention of its politics, namely that of challenging the maldistribution of power between the haves and have-nots. The formula that used to win again and again for the Democrats-that they were the party of the people and the Republicans were the party of the rich-is no longer used in these times of massive campaign finance beggary and a corporate lock on the economy in which it is increasingly within companies' prerogative to transfer operations overseas or close down, plant by plant.

People see the overlap by the two parties as currying the favor of business interests. Deprived of distinct political choice, people begin to doubt the credibility of the party out of office when it claims it will be different.

But the radical regime of Ronald Reagan does provide a background against which there can indeed be significant choices affecting the needs and rights of citizens. Here are some of the directions being pursued by the Reagan - Big Business axis:

  1. The concentration of power within government and business has increased in both political and economic terms. The corporate merger movement, given the green light by Reagan, is moving from rabid to frenzied. Nine of the ten largest mergers in U.S. history have occurred under the permissive reign of Reagan. It's difficult to know what limits Reagan would put on mergers, most of which promise no greater efficiencies, no economies of scale, no market discipline of bad management, and no new jobs.

    Reagan's former Justice Department chief, William Baxter, said, "There is nothing written in the sky that says the world would not be a perfectly satisfactory place if there were only 100 companies, provided each had one percent of every product and service market." There may be nothing written in the sky, but there is much written in the anti-monopoly laws, their legislative history, and judicial decisions that would give pause to such a concentrated political economy. Corporate bigness makes its demands on small business and the consumer in prices, in political manipulation, and in being too big to fail without a bailout. But, to give just one example, the loss of family farms in the tens of thousands each year to agribusiness and banks receives no attention from the rural Illinois native Ronald Reagan. He extols this way of life when he wants votes, and then forgets it after the election.

    Within the federal government itself there is greater concentration of power from many agencies to just one-the White House Office of Management and Budget. The OMB makes political judgments, invites back door "ex parte" meetings with business lobbyists, denies the public its right to know and respond under the Administrative Procedures Act, and generally translates unilateral White House dictates. OMB does this in violation of fair play, and, by some expert opinion, in violation of administrative laws as well.

    The Reagan government also shuts Americans out of its decision-making processes by ending legal aid for poorer petitioners before regulatory agencies like the Federal Trade Commission, by using every technical objection to deny citizens legal standing to challenge their government, and by giving early preferential notice of proposals to its industrial and commercial friends. If there is any company on the Fortune 100 list that objects to these antidemocratic powerplays, then it has kept a very low visibility.

  2. Under Reagan, there is a wholesale repudiation of the historic role of the American government to protect or expand the public's health and safety. Health and safety laws go unenforced or underenforced below even the laggard levels of the past. The Food and Drug Administration's enforcement level, for instance, is down about 50 percent, as are the enforcement actions against dirty meat and poultry plants and violators of motor vehicle regulations. The enforcement record at OSHA is a disgrace made worse by reductions in serious inspections, and the redrawing of what constitutes sanctionable violations.

    Since taking office, Reagan has not issued a single new worker health standard to limit any chemical or gas, although in January 1981 dozens of these standards were nearly ready to be issued to reduce cancer, emphysema, and other diseases and injuries in the workplace that claim about 100,000 American lives a year. Only one motor vehicle standard has emerged -that dealing with rear mounted lights on automobiles-while several critical lifesavers were revoked or shunted aside.

    And the list can go on and on to demonstrate that Reagan has very little interest in saving lives when that objective inconveniences his corporate masters. What do the pesticide companies want, for example? The answer can be seen in Reagan's waivers and exceptions for dangerous pesticides, the absence of regulatory action against suspect farm chemicals, the virtual halt of testing food for pesticide residues, and the reduction of research for non-toxic ways of controlling pests.

    The behavior of Reagan's Environmental Protection Agency in bowing to corporate polluters has been reported many times, but Reagan's own responsibility needs to be made clearer. EPA chief Ann Gorsuch did the President's bidding. It was the White House that stopped the new EPA chief, William Ruckelshaus, from doing anything to reduce the sources of acid rain. It is Reagan and the corporate polluters who oppose overdue implementation of stricter safety standards for America's drinking water-now so contaminated with heavy metals and cancer-causing chemicals. The corporate polluters want the air and water pollution laws severely weakened; many polls conclude that the overwhelming majority of people want them strengthened. Reagan sides with his corporate patrons.

  3. So extreme is the President's corporatism that he is finding more genuine conservative groups taking sharp issue with his policies. In a little-reported evolution that may change the future complexion of American politics, organizations which call themselves conservative populists are teaming up with their progressive counterparts to oppose corporate bailouts. Last year this coalition defeated the breeder reactor boondoggle-a high Reagan priority. In 1981 it nearly defeated legislation to coerce consumers into paying for the Alaska gas pipeline even if the project isn't completed and consumers don't receive any natural gas. The synfuel industry's welfare project is under similar pressure (although that project may be selfdismantling because of mismanagement and poor economics). The new coalition also put up a strong fight against Reagan's bailout of big U.S. banks that made imprudent loans at skyhigh interest rates to foreign countries.

    Reagan, who spent years lecturing around the country for General Electric on the virtues of sink or swim free enterprise, has become the most prominent advocate of big business bailouts in American history. If this goes against his philosophic grain, then it demonstrates the power of giant business over his government. Reagan's formerly strong belief in states' rights is surrendered when companies want his backing for a weaker federal law replacing the adaptable common law in the 50 states that gives people injured by dangerous products the rights to sue and recover compensation from manufacturers. It is surrendered when banks demand that his agencies preempt stronger state regulations designed to protect depositors and borrowers.

  4. The simplest of international decencies are rejected by the Reagan administration in obeisance to the multinationals. Early on, Reagan repealed Carter's executive order which, by requiring notification to foreign governments, was intended to restrain the export from this country of hazardous products illegal for domestic sale but not for export (such as certain drugs and pesticides), or to stop outright illegal exports. And now with Reagan's knowledge and support, a clutch of global corporations, State and Commerce Department officials, and the U.S. mission to the United Nations is working to stop the U.N. draft guidelines on consumer protection. These principles of consumer safety and economic rights are drawn heavily from U.S. law and practice. They are just principles, having no force of authority, but meant to have moral impact on many countries and companies. But suggesting that the world has something to learn from U.S. consumer protection achievements over the past century is apparently too provocative for the corporatists in the Reagan camp. They seem unmindful of disasters that have occurred in Third World countries, not a few of them generated by western corporations taking advantage of the absence of indigenous consumer safeguards.

    Such unmindfulness has become habit. The Reagan government is the only member of the United Nations to have voted against a U.N. resolution seeking to deter the kind of dumping of hazardous materials that occurred with the export from the U.S. of children's pajamas treated with the carcinogen tris. All our allies voted the other way. Similarly, there was just one dissent-that of the Reagan government-when the World Health Organization approved a code for better marketing practices for infant formula promotion.

  5. Every President has a unique mission � of trust imposed upon him by certain conservation laws, some of which were enacted by Republican-dominated Congresses and Presidents early in the century. Federal lands comprise one-third of the nation, from the pristine wilds of Alaska to the barren deserts of Arizona (a prime solar energy region some day). But does Reagan use his communication skills to etch in the minds of more Americans the grandeur and permanence of this public trust? No -although he no longer talks about his support of the sagebrushers who want state control, and then private ownership and exploitation, of these lands.

    Instead, through his agent James Watt, Reagan launched the biggest natural resource giveaway program to corporations in modern American history. The ReaganWatt team wanted to lease billions of acres of offshore lands so fast, that the oil company beneficiaries-to-be had to say they couldn't absorb that rapid a transfer. So they settled for massive leaseholds on public lands whose oil and gas potential the government couldn't independently verify.

    In a glutted market of declining prices, Reagan and Watt proposed to lease as much coal bearing land in 15 months as 11 administrations have in the 63 years since the government began leasing such land. They knew that the coal and oil companies were already sitting on existing federal coal leases without producing any coal; what the companies want is not to produce, but to simply control huge reserves of resources obtained at giveaway prices in a depressed market. Reagan was all too eager to deliver, until organized opposition retired Watt and cooled off the election sensitive President himself.

    One would at the very least expect Reagan to want to give taxpayers value for what they pay government contractors to develop. But that isn't the case. By Presidential directive, agencies are urged to turn over to companies exclusive patent rights to government-financed discoveries to the fullest extent permissible.

  6. The curtain around Reagan's corporate state is one of intense secrecy whose function is to exclude the public's participation and monitoring. This is an administration that doesn't want to know what corporations do: It has stopped collecting much data about the large oil companies, for instance, or about line of business reporting by conglomerates. Referring to across-the-board cuts in federal statistical gathering services, the University of Chicago's Dean William Kruskal has written, "When a vessel is in stormy seas, it is foolhardy to cut corners on radar, navigational equipment, good maps, and ample, well-trained crews."

    The government has other ways of making information scarce, too. Under Reagan, it has defined as "trade secrets" whatever information companies want withheld.

    The price of government reports and pamphlets, meanwhile, has skyrocketed - driving the number of publications requests from the government's Consumer Information Center in fiscal 1984 to half of what they were in fiscal 1982. People wanting to be placed on mailing lists of the Federal Communications Commission or the Interstate Commerce Commission for agency press releases are referred to private contractors who sell this service. The principle of the broadest possible distribution of information about what the government is doing and deciding has been destroyed. The pretext is that "the user should pay" - but as printing volume declines, prices go up, in a vicious circle of exclusion. The government pays almost $100 million a year for marching bands-twice what it costs to administer the Freedom of Information Act -but doesn't charge any viewers' fees.

    Because of industry demands, Reagan has also weakened basic research and development that elevates awareness of hazards and opportunities. The experimental safety vehicle program and the fuel economy research program have both been closed down, for instance. Research undertakings in energy conservation, cancer prevention, drug safety, toxic chemicals, and consumer product safety have all been sharply reduced. The problem with these programs apparently is that they could lead to future stronger safety standards-a prospect companies would rather avoid.

All in all, the Reagan government is the consummate promoter of the rich and powerful, against the interests of the rest of America. It isn't just Reagan who occupies that eminent political office; it is a network of collegial business interests. The modern Uncle Sam dispenses subsidies, monopolistic licenses, protectionism, selective enforcement, lucrative contracts, loan guarantees, and bailouts. These goodies make for a corporate welfare that requires nurturing and enlargement. Toward this objective, it pays corporations to have their own business agent in the White House.

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