Yesterday, for the first of three posts on the romance between business and the political right, I wrote about what some historians call “the golden age of capitalism,” which, as far as our governmental arrangements are concerned, was also a golden age of liberalism. In the years after World War II, coincident with America’s decades-long economic boom, even the nation’s top corporate executives seemed to buy into the Keynesian consensus that the best way to assure their own firms’ prosperity was to put money in the pockets of ordinary Americans.
Then, suddenly, they didn’t—my subject for today.
Here’s an irony of the history of conservatism’s relationship with business and business’s relationship with conservatism: “Wall Street” used to be the right-wing industrialists of the forties and fifties’ greatest term of derision. (Wall Street was the place that humiliated them by forcing them, hat in hand, to beg for capital.) Phyllis Schlafly wrote of the “Wall Street kingmakers” who controlled the Republican Party like dictators, forcing on it “liberal” nominees (like the financier Wendell Willkie), the kind of people who read the liberal Republican flagship organ the New York Herald-Tribune. Wall Street liked Lyndon Johnson. It tolerated unions. And, as long as the postwar boom was still booming, it accepted business’s relatively subordinate role in federal policy making. Which of course drove the 1950s and ’60s versions of Tea Partiers—I’ve called them “Manionites.”
Then, lo, the boom bust.
The 1970s was a time of falling rates of profit due largely to fallout from the Vietnam War, from the Arab oil embargo, and lots of successful labor militancy. A reaction was not long in following. And the leaders of the new business reaction now came from Wall Street and the blue-chip companies that had only a decade earlier formed the core of the postwar golden-age corporate-liberal bargain. The romance between business and conservatism entered a new phase: white-hot and smoldering.
Its leaders were people like William Simon, who made a pile of money lending money to New York as senior partner in charge of government and municipal bonds at Solomon Brothers. Then, when New York needed a federal bailout to pay back those loans when banks like Solomon Brothers greedily called them in (they could make more money now loaning to the same resource-rich Third World and Middle East nations who crushed the boom by using oil as a weapon), he did everything he could, as Gerald Ford’s secretary of the Treasury, to block it, making liberalism out to be the only reason for the nation’s every problem. As he wrote in a book modestly titled A Time for Truth, published by Reader’s Digest Press, “The philosophy that had ruled our nation for over forty years had emerged in large measure from that very city which was America’s intellectual headquarters, and inevitably, it was carried to its fullest expression in that city. In the collapse of New York those who choose to understand it could see a terrifying dress rehearsal of the state that lies ahead for this country if it continues to be guided by the same philosophy of government…. Nothing has destroyed New York’s finances but the liberal political formula…. Liberal politics, endlessly glorifying its own ‘humanism,’ has in fact been annihilating the very conditions for human survival.”