The Wrecking Crew by Thomas Frank

The Wrecking Crew: How Conservatives Rule by Thomas Frank

Wall Street Journal columnist, Thomas Frank, begins his book, The Wrecking Crew, by reminding us that conservatism has meant different things in other lands and other times, like a respect for tradition and institutions inherited from the past. In an American context, however, conservatism has always been an expression of business and that concept is fundamental to understanding the conservative movement. It is an economic philosophy which has as its guiding principle minimal government interference in the marketplace, including opposition to taxation, organized labor, regulation, and state ownership.

When, in 1929, there was a catastrophic breakdown of the business system, conservatism fell out of favor and populist economics in the public interest began to assert its influence. For decades, there was a truce between business and labor, with each understanding that there was to be no final and decisive victory over the other.

The conservatism that began to resurface in the 1970’s and 1980’s developed in such a way as to withstand a 1929-style disaster. Conservatives were no longer to be recognized as wealthy and influential bankers and manufacturers, trying to advance their own interests. Rather they defined themselves, for the most part, by what they were against – the government. Recast as rebels, outsiders, mavericks, and even freedom fighters, the new conservatives successfully built a grassroots movement of the embittered and aggrieved – everyone from blue collar patriots worried about the Soviets to fundamentalists watching their culture fall apart.

This phenomenon is examined in depth in Frank’s previous book, What’s the Matter with Kansas? Conservatives have been successful in getting large numbers of people to vote against their own economic interests, by identifying with their social issues and convincing them that, they too, are outsiders and that the problem rests with the government.

Once in power, conservatives govern badly and, according to Frank, they do so intentionally. One tactic is to appoint individuals to head up government agencies who are openly opposed to the very purpose of the organization they are heading up. The first of these in this new age of conservatism was James Watt, Secretary of the Interior, under Ronald Reagan. Prior to accepting that position, Watt ran a legal foundation which fought the department’s conservation policies on behalf of wealthy ranchers, oil companies, and timber interests. Then there was Anne Gorsuch, appointed by Reagan to head the Environmental Protection Agency (EPA). Immediately upon taking office, she did away with the EPA’s Office of Enforcement. She recognized that the regulations would be rendered useless, if there was no mechanism for enforcing them.

Examples from the current administration include Nancy Nord, the chair of the Consumer Products Safety Commission, who opposed measures that would give her agency greater authority, and the ability to weed our dangerous toys. Officials at the Mine Safety and Health Administration reduced fines to mine owners for safety violations, and those appointed to the Labor Department are people opposed to the concept of organized labor.

In 2004, at the Food and Drug Administration (FDA), a career scientist discovered that a side affect of Vioxx, an already approved drug, was heart attack. His politically appointed superiors were not pleased with his findings. When he stated emphatically that the public was his client, he was corrected. Industry was his client.

The reason for this behavior – subverting the very purpose of government while working for government – is that there is a lot of money to be made doing so. While the average citizen may view the salary of a politician or the head of a government agency as a good salary, the potential to make very much more is great, if one aids a particular company or industry at public expense, and then later goes to work for that very company or industry.

The documentary “Why We Fight” documents one such case. Dick Cheney was, prior to being George W. Bush’s vice president, the Secretary of Defense under George Bush, senior. In this capacity, he commissioned a study conducted by Kellog, Brown, and Root (KBR), then a subsidiary of Halliburton, to see whether it might be beneficial to privatize services from cooking to laundry within the military, services previously performed by military personnel. KBR concluded that it would be beneficial and it was awarded lucrative contracts at U.S. military bases around the world. Dick Cheney was then offered the position of C.E.O. at Halliburton. Within four years, his net worth went from just over a million dollars to over seventy million dollars. Then, some years later, we saw him back in a government role, where he became one of the primary architects of the invasion and occupation of Iraq.

Thomas Frank tells us that in Iraq, conservatives got their chance to remake an entire country into a free-market utopia, with minimal interference from regulators and liberals. While the war profits of Halliburton and Exxon are well documented, the larger story is how American tax dollars have been used to create money-making opportunities for a broad range of American companies. The job of planning the privatization of Iraq’s government-owned industries went to a management consulting firm in McLean, Virginia. A firm from North Carolina got the job of setting up town and city councils. Blackwater got the job of protecting American officials. Even the job of training the Iraqi army was outsourced. One American contractor was quoted as saying that getting the rights to distribute Procter and Gamble products would be a gold mine and that one well-stocked 7-Eleven could knock out thirty Iraqi stores. One has to wonder how the American public benefits from this use of our tax dollars.

In the chapter “City of Bought Men,” Frank delves into the lobbying industry. Lobbying, he tells us, is how money casts its vote. Lobbyists exist so businesses can explain their needs to government. They write bills, help see them through the legislative process, and help with the running of reelection campaigns. It is hugely profitable. As an example of how this works, Frank cites the case of the University of Alabama whose $1.5 million in lobbying fees yielded $150 million dollars worth of research earmarks. The University paid the lobbying firm, Van Scoyoc, whose various officers contributed $123,500 to the campaign of Alabama Senator Richard Shelby. Shelby’s role, of course, was to make sure that the University of Alabama got their $150 million.

Citing a 1874 case, thrown out by the Supreme Court, in which a lobbyist sued for non-payment, Frank reminds us that persuasion-for-hire is nothing new. What is new is how large the lobbying industry has grown and its enormous role in matters of public significance. Here, too, our elected officials have enormous opportunities, upon leaving office, to either become lobbyists themselves or to work for the industry for which they have done the most, while in office. In fact, in the example above, two of Shelby’s former staffers are now vice presidents at Van Scoyoc.

Conservative presidents from Ronald Reagan to George W. Bush have created enormous federal deficits. While they have talked about “bringing spending under control,” each has spent far more than the amount of revenue taken in. In the interest of private gain, public debt has skyrocketed.

In summary, conservatives serve the public poorly, but they do so intentionally. The worse they rule, the better, because in the end, it will only cause the general public to hate government more. That is a major step in dismantling it and rendering it powerless against business. The next conservative candidate to come along once again will proclaim his maverick status and his desire to take on Washington.

And what of liberals? Unfortunately, the system initiated by the new conservatism has rendered liberals relatively powerless. Bill Clinton came to the office of the president as somewhat of a populist but had to change quickly. He inherited a large deficit from the previous administration, and both jittery bond traders on Wall Street and the Federal Reserve Chairman needed to be assured regarding a Democrat in the White House. They asked that he bring federal spending under control. He did. But it was at the cost of existing federal programs and new programs that might have been implemented. In his second term, he ran the government on a balanced budget for four straight years.

Initially irritated, Clinton had become a convert. He appointed Robert Rubin, former chairman of Goldman Sachs, as his Treasury Secretary. Rubin, in fact, was a major force behind the deregulation of the financial services industry, including the repeal of the Glass-Steagall Act, which had separated speculative activities from commercial banking, since the Great Depression.

So the call for less government and less regulation, has taken root in both political parties, and both share responsibility for our current economic crisis. If there is an alternative path, it will require a broad understanding of how we got to this point. For beginning that effort, we own a debt of gratitude to Thomas Frank.