The Powell Memorandum
Maybe, like me, you find yourself wondering what the hell happened to this country. And maybe you’re old enough to remember what it was like before Ronald Reagan got his filthy talons into it. Back then a single wage earner was enough to provide a middle class life style for a family, send the kids to college, take a vacation every year. But the demolition really began ten years before Reagan, in 1971. First, let me paint in some background scenery.
In 1962 the Rachel Carson book Silent Spring exposed the dangers of the insecticide DDT, helping give birth to the environmental movement. 1965 saw Ralph Nader’s book Unsafe at Any Speed do the same for consumer awareness. In 1970 was the renewal and expansion of the Clean Water Act, and the establishment of the EPA, the Environmental Protection Agency. What these all had in common was that industries were finally going to be held accountable for their callous treatment of people and the planet. It was going to be a new age, one of using resources responsibly. Lewis F. Powell, Jr. was an attorney in Richmond, VA, serving on the Board of Directors of tobacco giant Philip Morris, and also a consultant for the Tobacco Institute. We could call him a visionary of sorts; only he could see that this new era of government regulation was a serious threat to the kind of predatory capitalism that led to gigantic profits.
On August 23rd, 1971, he drafted a memo to the U.S. Chamber of Commerce, warning of a major “ongoing attack of the American free enterprise system.” As he saw it, business and industry was going to have to get politically involved if it were to survive. He said the Chamber would have to transform itself from a passive business group into a powerful political force. He listed “avenues of action” that the Chamber and business community should take in response to fierce criticism in the media, campus protests, and new consumer and environmental laws. He repeatedly emphasized that this threat needed to be taken seriously, and that they had to recognize that political power must be used “aggressively and with determination . . . without embarrassment and without the reluctance which has been so characteristic of American business.”
His radical approach was to gain control of every aspect of society, from the media to the universities, even the courts. Powell understood that CEOs and business leaders lack the skills to go head-to-head with Congress or the Sierra Club, so he advocated creating legal foundations, think tanks and other front groups, to be the foot soldiers. In 1972 the Business Roundtable was established, the 200 or so CEOs of America’s largest corporations. 1973 saw the formation of ALEC, the American Legislative Exchange Council. They’re made up of lobbyists and (nearly all Republican) state legislators. ALEC drafts legislation ready to introduce on the floor. No work required, here’s some money (in recent years the State Policy Initiative has been doing the same). The Charles Koch Foundation began in 1974, and in 1977 changed its name to the Cato Institute. In 1975 the Heritage Foundation was born. There are many more, like Citizens For a Sound Economy, founded in 1984, now known as the heavily Koch-funded Americans For Prosperity.
Their purpose was to reshape the debate, to keep the media under constant pressure, while influencing members of Congress with a locust swarm of lobbyists (the latest count for the Washington, D.C. area is about 40,000). Powell called for “an activist-minded Supreme Court” that would shape “social, economic, and political change” to the advantage of corporations. Activists on the court? Where have we heard that before? That’s what the Republicans whine about whenever a decision doesn’t go their way, isn’t it? What became of Lewis Powell? Three months after he wrote the memo, President Nixon nominated him to the U.S. Supreme Court, where he served for sixteen years. He was instrumental in two key decisions that laid the groundwork for the Citizens United case. Up until Buckley v Valeo (1976) the spending of money on political campaigns was treated as a behavior, which could be regulated. In Valeo the court ruled that corporate (or any other) campaign spending was a form of protected speech under the 1st Amendment. In 1978 First National Bank of Boston v Bellotti, the court granted corporations the 14th Amendment protection given to “persons.”
I have to do an aside here. Bellotti merely reaffirmed the corporate personhood status that is supposed to have come from the 1896 case Santa Clara Co. v Southern Pacific Railroad. I say “supposed” because in that case the court never bestowed personhood to corporations, but the clerk who wrote the head note said it did, and future courts would use it as precedent, apparently without reading the whole case. It turns out that the clerk was a former railroad executive. That’s quite the coincidence.
Forty-five years later, we can see Powell’s legacy everywhere. The power elite had their stacked activist Supreme Court, at least until the recent death of Scalia. Decades of budget cuts to regulatory agencies, along with less union membership nationwide, have allowed capitalism to exploit workers while pillaging the environment. It’s more profitable. An example showing how this works is the FDA in 1996. It had to rule on whether GMOs were safe to introduce to the industrial food system. Deputy Commissioner Michael Taylor ruled oh, heck yes, since they don’t differ substantially from the original plants. Prior to his position at the FDA, Michael Taylor was an attorney and lobbyist for Monsanto. More coincidence? Here’s another: before Tom Wheeler headed the FCC, he was a lobbyist for the telecommunications industry. There’s actually a term for this, called “agency capture.”
Big media outlets, whether network or cable, are all owned by giant corporations, and so you’re not going to hear news about things they don’t want you to hear. Weeks ago a satellite study came out from Harvard, showing all natural gas fracking wells leak at least some methane, by design. Concrete shrinks a bit when it sets, so the well casings will leak. It may not be much, but there are over a million of them just in the U.S., and methane is a far more potent greenhouse gas. Did you see anything about that on the media? Why not? Well, look at their commercials; Exxon-Mobil, Chevron, America’s Natural Gas, etc. These are monstrous ad revenues at stake. Stories about getting money out of politics? Up to $5 billion is expected to be spent on this presidential campaign. The vast majority of that will be TV ads. And the one candidate who says he’ll break up the media conglomerates — that would be Bernie Sanders — is virtually shut out of coverage. That’s how it works.
Let me give you one more instance that just happened recently, to show you how far all this has gone. On Mar. 20th Senate Majority Leader Mitch McConnell was on Fox (alleged) News, and Chris Wallace asked him that if Hillary is elected President, will the Senate then have a hearing for Obama’s Supreme Court candidate, Merrick Garland. Here’s what McConnell said: “I can’t imagine that a Republican majority in the U.S. Senate would want to confirm, in a lame-duck session, a nominee opposed by the NRA and the National Federation of Independent Businesses.” The NFIB was the plaintiff in the first lawsuit against the Affordable Care Act, better known as Obamacare. But the NRA? The nominee has to pass muster with the friggin’ NRA? I wasn’t aware that they were a part of the government.
Before Ronald Reagan, corporate taxes made up nearly a third of government revenues. Today it’s about 9%. And we wonder why there’s no money for schools or infrastructure. In 1985 the Capital Gains tax allowed people who do nothing but move money around, creating nothing, to pay roughly half the taxes of a middle class income. When Senator Elizabeth Warren said the system is rigged, she was right on point. Author Chris Hedges (Days of Destruction, Days of Revolt) has called it a slow-motion corporate coup d’etat. Why do you think that of all the banksters and hedge fund managers that nearly ruined the economy, not one has gone to jail, let alone be indicted? The corporate state owns everything now, the courts, the politicians, the media, the food we eat, and with privately owned electronic voting machines, even our vote. Over 200 years ago our second President, John Adams, was concerned that America could end up with a business aristocracy, that it would be the end of liberty and the country. And he was a conservative!
All this can’t be laid at Powell’s feet, but he certainly paved the way for the system we have now. The thing is, these elites never get it that these systems are unsustainable. They’re been trying it for thousands of years and it always fails, because people refuse to be treated like animals. They will always resist, and of course the first response by authority is usually violence, which only makes matters worse.
Look again at the presidential race. Forget about Bernie, the power elite will never allow him to be the nominee, let alone President. He’s a threat to the status quo. So we’re left with a corporate whore, a fascist, and a religious fanatic. If I’m right, our next president will be the most corporate one, and that is without a doubt Hillary Clinton. I don’t think it will be all bad, though. As our first woman president I expect her to be stronger on women’s issues, and more an advocate for a quarter of our children who live in poverty. And she’s brave enough not to take the Republican’s constant bullshit quietly, like Obama has. She’ll fight back, and that will be fun to see. But the end game is the same, as it’s been for decades, the gradual phasing out of the middle class while avoiding riots in the streets. In the mean time, you might want to catch up on your Charles Dickens.