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The Corporate Coup: Chris Hedges And Ralph Nader

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In this episode of teleSUR’s Days of Revolt, Chris Hedges and Ralph Nader trace the advancement of corporate control in the US political system. –  November 3, 2015

CHRIS HEDGES, HOST, DAYS OF REVOLT: Hi. I’m Chris Hedges. Welcome to Days of Revolt.

We’re filming this segment, one of two segments, in Washington with author, former presidential candidate, consumer advocate, lawyer Ralph Nader. His two latest books: The Emerging Left-Right Alliance to Dismantle the Corporate State–or Unstoppable–and then Return to Sender: Unanswered Letters to the President 2001-2015.

In this first segment, we’re going to talk about the corporate coup d’état which took place, when it took place, how it was orchestrated. And it was largely an attempt by corporate power to respond to the very effective mobilizing that Ralph had done in Washington on behalf of the citizenry and advocacy groups to protect workers’ rights, to promote clean water, clean air, OSHA.

So let’s begin with this. Lewis Powell, who was the general counsel to the U.S. Chamber of Commerce and would later be appointed to the Supreme Court, wrote a memo in August 1971 that expressed corporate concern over Nader’s work. Quote:

“Perhaps the single most effective antagonist of American business is Ralph Nader, who–thanks largely to the media–has become a legend in his own time and an idol of millions of Americans.”

Powell goes on to recommend, quote:

“There should be no hesitation to attack the Naders, the Marcuses and others who openly seek destruction of the system. There should not be the slightest hesitation to press vigorously in all political arenas for support of the enterprise system. Nor should there be reluctance to penalize politically those who oppose it. (…)

Nineteen seventy-one the Powell Memo goes into force. And what begins to unravel?

NADER: Well, the Powell Memorandum was a combination of illusion and paranoia. He says it was an attack on the economic system in America. Basically, his memorandum laid out a strategy to attack democracy in America. And he basically said to the business community, you’ve got to hire a lot more lobbyists swarming over Congress, you’ve got to pour a lot more money into their campaigns, both parties’, Republican and Democrat. You’ve got to get out on the campuses and get right-wing speakers to combat progressive speakers. He had the whole 180 degrees.

HEDGES: And the right-wing think tanks were his idea, like Heritage and all–.

NADER: Right, you know, pump money into Heritage and all the other corporate think tanks, to use a euphemism (they’re just propaganda venues).

And what was interesting–I think the commentary on the Powell Memorandum missed a main point. It was easy to say. He said, look, galvanize, come into Washington like a swarm, media, lobbying, put your high executives into government offices, regulate offices, Department of Defense, and so on. But that wasn’t the most successful strategy, although it was successful. The most successful was that the Powell Memorandum led to the massive corruption of the Democratic Party. And that came at the same time that Tony Coelho, who was a congressman from California, took over the fundraising for the House of Representatives Democrats.

HEDGES: Well, so what year are we talking about?

NADER: That was, like, 1970, ’71.

HEDGES: Oh, it was that early.

NADER: Yeah. When he basically said to the Democrats, hey, look at all these political action committees. Why are the Republicans raising all this money from business? We can do just as well. And that’s when the Democratic Party started going off the cliff.

And there was an article in The Atlantic Monthly by Gregg Easterbrook, October 1986, and he basically said it worked like a charm, because once the money started flowing into the Democratic coffers, there was a big tax bill up. And within a year or so, the Democrats were trying to outbid the Republicans in carving out tax loopholes for big business in return for campaign cash. And so what the Powell Memorandum did was it recognized that if you can corrupt the Democratic Party, the Republican Party would be more corrupt, because it will try to outbid them for the favor of corporatism.

HEDGES: And what effect did this have on the relationship between the Democratic Party and labor? Labor had traditionally been at least one of the pillars of the Democratic Party establishment.

NADER: Well, labor was put on the defensive, from which it’s never recovered. First it was being eroded by automation, then by globalization, shipping jobs overseas. And then they used to represent about one out of every four dollars that went into the two party campaigns, mostly Democrat. And right now it’s like they’re–there’s 32 to one, 32 corporate dollars to one union dollar going into the campaign–

HEDGES: In the Democratic Party.

NADER: –coffers. And that was the beginning of the slide.

And it’s amazing how you could see it. There were fewer congressional hearings that we would want. It was tougher to get regulatory agencies to issue even proposed health and safety standards for environment.

HEDGES: Right. And let me just go back, because if I have this right, you at least authored or helped author–was it 24 pieces of major consumer legislation?–OSHA, the mine and safety act, the Clean Water Act, which you then worked with a legitimate liberal wing of the Democratic Party to push through and become law.

NADER: That’s right.

HEDGES: And this assault effectively destroyed that possibility, that mechanism.

NADER: To do more. This was the basic legal structure for the consumer, environment, and worker safety movements. And it started in 1966 with the auto and highway safety laws, and it went up to the early ’70s. And with few exceptions–listen to this–there hasn’t been a single major piece of legislation advancing the health, safety, and economic rights of the American people since 1974, arguably since 1976. That’s the effect of money in politics. That’s the effect of a totally subservient strategy by the liberals. And your book, The Death of the Liberal Class, which you really wrote as an understatement, they have sabotaged any kind of counterattack to the Powell Memorandum and the corporate onslaught, which wouldn’t have been that hard to neutralize.

HEDGES: And what effect did that money have on citizens groups like the ones that you founded and work with?

NADER: They began working harder and harder for less and less every day, going up to Congress, going–.

HEDGES: Is that because the number of allies within the Democratic Party diminished significantly? Or because they were bought off? Or what happened?

NADER: Well, they were defeated in the Reagan landslide against Jimmy Carter in 1980. We lost the champion of consumer protection center, Magnuson. We lost Senator Frank Church. We lost Senator Nelson. It was just–it was a disaster.

And then something happened with the liberal and progressive groups here. They lowered their horizons. They hunkered down. They became very defensively tactical, that is, just to try to stop a few things. They never put forth an aggressive agenda the way Heritage Foundation, Cato Institute, and others have done. And once you’re on a defensive in politics, you’re on the defensive. It’s almost impossible to recover. It’s like you’re back on your heels, heels, heels. You see?

And then something else happened, and that was that the citizen groups started making excuses for the few progressive senators and representatives who got away with kind of plateauing with a few good bills they introduced. But they didn’t want to be pushed. And, for example, Senator Sanders does not like to be pushed by the progressives.

HEDGES: Well, you saw this with Obamacare. So you saw groups like, after Obama walked away from the public option, sending out memos to all of their followers that you have to–even though he’s destroyed the public option, even though Obamacare is written for and by the insurance and pharmaceutical industry, you have to pass it to save the Obama presidency.

NADER: Yeah. I mean, the process is very simple. Think of a tug-of-war. Twenty-four-seven the corporations are pulling both parties in their direction. And what did the progressive or liberal citizen groups do to try to pull the Democratic Party? They lower their expectation level and settle for less. In other words, they’re signaling this virus, this sickness called least worst civic advocacy on the Democratic Party. In the meantime, the Democrats are saying, hey, we got these guys. They’re going nowhere. So we can start cashing in more with these corporate political action committees and PACs.

HEDGES: So, Ralph, the Powell Memo comes out. Corporate money starts going into Democratic coffers. At what point did you become aware that things were changing? How rapidly did that seachange become part of your own knowledge?

NADER: Well, it became apparent after Nixon was elected again in 1972 in spite of the Watergate scandal and he stiffened his spine. Up until then, he was scared of liberals.

HEDGES: Well, I’ve heard you say that Nixon was our last liberal president.

NADER: He was the last president afraid of liberals, too. He still heard the rumble from the people coming out of the ’60s. And so he signed into law in his first term the EPA bill, the OSHA jobs safety bill, the Product Safety Commission bill. He wanted a better health insurance system than Clinton proposed later. He wanted the voting rights for the District of Columbia citizens.

HEDGES: And much of that came out of your office.

NADER: Yeah. And he also adopted a minimum incomes plan, which Congress split on and rejected, to try to abolish poverty. There’s been no president that had that agenda since. This is Tricky Dick, the red baiter.

HEDGES: Right, right, the man without a heart.

NADER: Yeah.

HEDGES: So, okay, the second term. So that’s when you begin to see the change?

NADER: Yeah.

HEDGES: And what did you see happening? What were the effects that you–.

NADER: It began with the Democrats looking funny on Capitol Hill. They started going out to these fundraising parties. And Gerald Ford, as you know, took over from Nixon, and he imposed wage price controls, which was completely out of the range of the Chamber of Commerce. He went crazy over that, because there was four or five percent inflation that they wanted to tackle. That gave us a breather, because here you had the Republican administration pushing wage price controls. And then Jimmy Carter won the election in 1976, and so we had another breather in the sense he appointed some pretty good people to run the regulatory agencies. But you could see the beginning signs of the Democratic Party folding.

HEDGES: Were you still able to push through legislation that protected consumers and citizens? At what point did that begin to really become impossible?

NADER: In the mid ’70s.

HEDGES: In the mid ’70s.

NADER: We got the Freedom of Information Act through in 1974, the Safe Drinking Water Act through. We got a toxic chemical prevention bill in 1976. We got the National Cooperative Bank to fund consumer co-ops in 1978.

And then it all began falling into inaction, stagnation. And Jimmy Carter was spooked by the OPEC price increase for gasoline.

HEDGES: Right. Did you find–because you worked closely with many of these congressmen and senators, did you find that doors literally just begin to close to you? What was the process?

NADER: Well, it was very gradual, because the high water mark of the consumer movement legislatively was the consumer protection bill, which went down in 1978 after having passed the House one year and the Senate one year, going back five, six years. And that brought together all the corporate lobbyists in the Madison Hotel, where they got together and planned the strategy, ’cause they couldn’t stand a small consumer protection agency that spoke for consumers in the executive branch and could take the lax regulatory agencies to court if they didn’t do the right thing. Just a $15 million little budget.

And I knew when that went down narrowly in the House, it went down because Jimmy Carter didn’t go all out and even get his own congressman from Plains, Georgia. That was a sign. And looking back on it, it couldn’t have been clearer. That was the turnaround point. It was all downhill from that.

HEDGES: And essentially those within the Democratic Party that were amenable to this kind of legislation, to standing up for labor, would you say they were physically pushed out of the Democratic establishment? Were they bought off? What happened? Or both?

NADER: It was more they were pushed out.

HEDGES: They were pushed out.

NADER: Yeah.

HEDGES: And so you got the rise of what I call these faux liberals, like Clinton or Obama, who speak in that traditional language of liberalism, you know, defending the interests of working men and women and the poor, but in fact serve corporate power.

NADER: Without a doubt. It’s the rhetorical snake charmers.

HEDGES: Right.

NADER: Clinton was an enemy of environmental, consumer, and worker issues. He broke the modest welfare system for single moms in 1986 [sic]. He sold out to the agribusiness companies in 1986. He allowed huge mergers in a bill he signed for the communications and the media giants, all in 1986, and quite apart from bombing Iraq illegally, killing civilians, not opposing a swollen military budget that was unauditable. I mean, the list goes on.

And basically it shows a strain in American politics where it’s if you can smile and have the right rhetoric–and Reagan did that, too–you get away with it. It’s amazing how when we talk about the Orientals being overwhelmed with emotional oratory over 100 years, right, nothing like the U.S. All you’ve got to do in politics is say the right thing, even though your whole record is contrary, and you’re on your way.

HEDGES: Well, that’s the Clintons. And we’re about to get his wife. I mean, certainly she’s a formidable candidate within the party, despite the record.

NADER: The same approach, though.

HEDGES: It’s the same approach.

NADER: Same approach. It’s saying what you didn’t do. And this should come out in the next year.

HEDGES: So what happens to you at this point? So you’ve been engaged in this battle since, what, the middle ’60s when you took on GM. You’re essentially watching the entire superstructure that you had created–and we should add that you founded many–I mean, I think part of your genius was that you founded these citizen action committees, and then they spun off as independent entities. How many? I mean, a large number.

NADER: Oh. Over a hundred.

HEDGES: Over a hundred. And they became–. So that structure, which had stood up for ordinary men and women in this country and fought in Washington on their behalf, what began to happen to that structure?

NADER: Well, several things. One is the foundations started backing off. So they funded less and less. Where Ford Foundation started public interest law firms in San Francisco, Los Angeles, elsewhere, they didn’t want to touch it. They were very, very skittish. So the citizen groups lost a big base of funding.

HEDGES: But why would the foundations have been affected by this political change?

NADER: Because the trustees are overwhelmingly corporate.

HEDGES: Right.

NADER: And they were afraid the IRS would go after them as well, which was not an illusion.

The second thing we did was we began to defend against deregulation. And I think people like Joan Claybrook really fought successfully to stop the massive drive to deregulation. What we couldn’t stop was the nonenforcement of good laws on the books.

HEDGES: Right, which is essentially how they’ve invalidated–

NADER: That’s right.

HEDGES: –so many of the laws that you put into place.

NADER: Yeah. They put deregulatory agencies, the auto safety agencies, product safety commissions, Food and Drug Administration, the Environmental Protection Agency, they put them to sleep. You know. And that’s why we have a lot of these –.

HEDGES: Right, by underfunding them, basically.

NADER: Underfunding them and putting pro-corporate people in charge.

HEDGES: Right.


And the third thing we did was go out around the country and start new groups, figuring we’ve got to rebuild the civic–actively–infrastructure. And one of the ways we tried to do it–and we succeeded in Wisconsin and Illinois and San Diego–is to get laws requiring companies in their billing envelopes to put an insert, like your electric, gas, water company, banks, put in their billing envelopes an invitation for their customers to band together and join a nonprofit advocacy group with economists, lawyers, organizers, so on.

Guess what? Just when we were ready to sweep the country–Governor Mario Cuomo was going to do it for the banks by executive order. So when you got your monthly statement periodically, you get an insert saying, you upset about these $30 bank bounced check charges which cost $1? You want to do something about redlining, whatever? You can join this group.

And just at that time, the corporate forces brought a case to invalidate this insert, saying it violated–catch this–it violated the right of Pacific Gas and Electric to not rebut the content of the insert. Therefore it violated Pacific Gas and Electric’s First Amendment rights to stay silent. And so the Supreme Court of California said this is nonsense. They dismissed the case.

So the corporate, PG&E, go to the Supreme Court and they win five to three–the most extreme corporate personhood decision to date, more extreme than Citizens United, where it basically said that a corporation has a First Amendment right to remain silent and not require, at no expense to itself, to put a insert in a billing envelope to invite people to join their own consumer defense organization. And guess who wrote the majority opinion? A former utility lawyer from Richmond, Virginia, by the name of Lewis Powell.

HEDGES: Oh. Wow.

NADER: And guess who dissented on our side, saying, what? A corporation doesn’t have a conscience; this is mixing reality with metaphor. Justice Rehnquist, the arch right-winger.

HEDGES: You have told me that by the time Bill Clinton’s administration was in place, basically you were completely locked out.

NADER: Well, yeah, as locked out as you could be. I mean, I was never invited to the White House to discuss things. He had a ambassador in the White House who received us from time to time. But–.

HEDGES: The party was utterly ineffectual in terms of addressing the issues you spent your career championing by Clinton’s administration.

NADER: Yeah, pretty completely. Yeah.

HEDGES: Which is–is that what led you to mount your first presidential campaign?

NADER: Yeah.

HEDGES: In ’96, right?

NADER: Yeah. Well, you start listening to Jefferson, you know, the government has to be changed every 15, 20 years. And they weren’t listening to the civic groups. And so we were shut out here. So what’s the point? You either go into the political arena or you go to Malibu and watch the whales. And most of the citizen groups just scaled down their horizons and tried to make the best out of it. But they were being taken to the cleaners by the Clintonites.

HEDGES: And at that point we could say that certainly the most vital aspects of American democracy were extinguished. Is that too harsh a word?

NADER: Well, they were suspended. Let’s put it this way. I mean, they didn’t repeal the Bill of Rights and they didn’t repeal the laws which we got on the books.

HEDGES: Right, but they overturn it by judicial fiat, in essence.

NADER: Well, certainly the insert movement, which would have developed thousands of groups, organized to challenge all these companies that were underregulated, like banks and insurance companies.

HEDGES: Well, if you look at Citizens United, unlimited corporate cash becomes the right to petition the government, or a form of free speech.

NADER: That’s right.

HEDGES: This is overturning the whole raison d’être for these constitutional amendments and redefining them as aiding and abetting corporate hegemony.

NADER: Yeah, well, they broke the barrier between commercialism and citizenship and they commercialized elections. They commercialized politics. So everything was for sale; when the dam broke and the corporations went into areas that were relatively forbidden to them, everything was for sale. And when everything is for sale in democracy, guess what? I mean, who can buy it? The people with the most money.

There’s got to be sanctuaries in a democratic society where nothing is for sale. Government shouldn’t be for sale. Childhood should not be commercialized and be for sale. The environment shouldn’t be for sale. Our genetic inheritance shouldn’t be for sale. Elections shouldn’t be for sale. They’re all for sale now.

And that’s why we can develop a left-right alliance, because evangelicals don’t like everything for sale. They like a certain spiritual sanctuary. And that’s the only political realignment, Chris, I see in the next ten years. It’s not the parties. It’s a left-right alliance on things like prison reform, which is emerging on the violation of civil liberties and the Patriot Act, on the swollen militarism and the military budget, on crony capitalism. How about that? That’s all the corporate welfare, subsidies, handouts, bailouts. We’ve got an 80 percent in the polls support on no longer bailing out Wall Street.

HEDGES: And that’s what we’re going to talk about in our second segment, the rise of especially third-party movements. We’d all be a lot better off if everyone had, as I did, voted for you starting in 2000.

And thank you very much. Yeah.

NADER: You’re welcome, Chris.

HEDGES: And thank you for watching Days of Revolt.

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