Business Power, Partisan Politics, and the Rise of the Regulatory State

Shifting Coalitions: Business Power, Partisan Politics, and the Rise of the Regulatory State by Gregory A. Elinson A dissertation submitted in partial satisfaction of the requirements for the degree of Doctor of Philosophy in Political Science in the Graduate Division of the University of California, Berkeley Committee in charge: Professor Paul Pierson, Co-Chair Professor Robert A. Kagan, Co-Chair Professor Eric Schickler Professor Sean Farhang Professor David Freeman Engstrom Professor Anne Joseph O’Connell Fall 2015 Shifting Coalitions: Business Power, Partisan Politics, and the Rise of the Regulatory State Copyright 2015 by Gregory A. Elinson Abstract Shifting Coalitions: Business Power, Partisan Politics, and the Rise of the Regulatory State by Gregory A. Elinson Doctor of Philosophy in Political Science University of California, Berkeley Professor Paul Pierson, Co-Chair Professor Robert A. Kagan, Co-Chair The central claim of this dissertation is that organized business’s rise to political power and its variable relationship with the Republican Party are tightly linked. Indeed, I argue that business’s political renaissance in the late twentieth century is tied to an increasing reassertion of power within the Republican coalition. Whereas analysts of business power typically highlight the organizational tools developed by business groups to assure unity within an otherwise diverse array of interests and pursue their political comeback, I will show that attention to the relationship between business and the GOP enables us to situate these tools — business’s deployment of PACs, for example, or their increasing attention to elite-level lobbying — in a larger partisan political context. As we will see, and in contrast to existing scholarship, business’s relationship with the conservative movement of the postwar period and the Republican establishment varied over time. Careful attention to the reasons underlying that variability make clear that business’s central place within the Republican Party has never been guaranteed, but rather is the result of hard effort and creative defense. !1 To my father, who found the path, my mother, who kept me on it, and to my wife, who might just see me through to the end. !i Acknowledgements I owe an incredible and continuing debt to so many people. I can only hope that I have been worthy of their time and attention. I am especially grateful to Bob Kagan, for being the mentor and scholar I want to be when I grow up; to Paul Pierson, for showing me that this kind of work – both substantively and methodologically – is both possible and necessary; and to Eric Schickler, for helping me find an intellectual home in the study of American political development. I also want to acknowledge David Engstrom, for showing me that there is real value in “thinking like a lawyer”; Anne Joseph O’Connell, for graciously agreeing to shepherd a dissertation project not necessarily near or dear to her own interests; Sean Farhang, for leading a new wave of law-and-politics scholarship; and Gordon Silverstein, who first told me that looking to law can help bring together an interest in how ideas and institutions shape politics. I have benefited from the general financial support of the Institute of Governmental Studies at Berkeley, as well as the personal support of its director, Jack Citrin, the John M. Olin Program in Law and Economics at Stanford, and the Gerald Ford Presidential Library. And my in-laws, Michele Bloch and Jeff Rubin, were kind enough to let me stay with them for months at a time while doing some of the archival research presented here. It is impossible to thank my family – including my nana and my brother, Ariel – in this short space. Suffice it to say that my parents, Helen and Zinovy, worked as hard as they possibly could to make sure I would never have to live their disappointments. And if this project comes to mean anything, all credit is rightfully theirs. When I applied to graduate school, I knew only that if I got into Berkeley, I was going. I suppose I knew it would change my life, even if I couldn’t possibly anticipate exactly how. Berkeley brought me wonderful friends – among them, Kim Twist, Stephen Goggin, John Hanley, Morris Levy, Daniela Levy, and Matthew Gichohi. But it also brought me Ruth Bloch Rubin, whose fingerprints are all over this dissertation. I am skeptical that someone so brilliant, creative, warm, and funny should spend as much time with me as she does. But I am thankful she seems to disagree. !ii Table of Contents Chapter 1 | Evaluating Business Power ..................................................................................1 Chapter 2 | Nixon and Business: Examining the Politics of Regulation ................................27 Chapter 3 | Tenuous Ties: Ford, Business, and the Republican Party .................................... 73 Chapter 4 | Divergent Trajectories: Carter and the Politics of the Business Roundtable and U.S. Chamber of Commerce ...........................................................................................105 Chapter 5 | Snatching Defeat from the Jaws of Victory: Business in the Age of Reagan ....143 Chapter 6 | Assessing Contemporary Business Power.......................................................... 188 !iii Chapter 1 | Evaluating Business Power “How politically powerful is American business?”1 Answering this question has taken on greater urgency in the generation since David Vogel considered the political influence of American business. The financial crisis of 2008, the accompanying “Great Recession,” rising economic inequality, stagnating real wages, increasing executive pay, changes in the rules governing campaign spending and contributions, and the variety of legislative and administrative projects designed to address – or to exacerbate – these phenomena have helped to popularize the field of political economy and, with it, the study of business power. If, as Vogel suggests, the rise of industrial capitalism in the late nineteenth and early twentieth centuries created a fundamental “tension” between “the nation’s central economic institutions and its democratic heritage,” then the rise of post-industrial, finance-based capitalism in the late twentieth and early twenty-first centuries has emphatically reasserted that tension. Consider the Chamber of Commerce. A formidable player in the electoral arena, the Chamber spent over $33 million during the 2010 midterm elections, making it, according to the Center for Responsive Politics, “the biggest spender among organizations that were not national party committees.”2 Two years later, the group would go on to spend more than $35 million on congressional races alone.3 In the 2004 elections, the Chamber “deployed 215 people in 31 states, sent 3.7 million pieces of mail, made 5.6 million phone calls and sent more than 30 million e-mail messages on behalf of its candidates.” In that year, nearly all of the candidates receiving the Chamber’s endorsement won.4 Such was the Chamber’s power in 2006, that Rahm Emanuel, then serving as chairman of the Democratic Congressional Campaign Committee, declared the Chamber “worried him more than the Republican Party did.”5 The Chamber’s influence and financial might extend beyond electoral politics. Due, in part, to the savvy strategy of the group’s litigation arm – the National Chamber Litigation Center (NCLC) – the Supreme Court’s “business rulings” under Chief Justice John G. Roberts, Jr. have been “far friendlier to business than those of any court since at least World War II.”6 For example, in 2011, the Chamber, in concert with the Business Roundtable, successfully persuaded a federal appeals court to overturn a Securities and Exchange Commission ruling concerning so- called “proxy access,” which would have aided shareholders seeking to unseat members of corporate boards of directors. Citing the Chamber’s argumentation, the appeals court overturned 1 David Vogel, Fluctuating Fortunes: The Political Power of Business in America (New York: Basic Books, 1989), 3. 2 Center for Responsive Politics, http://www.opensecrets.org/outsidespending/detail.php?cmte=US+Chamber+of +Commerce (date accessed: July 15, 2013). 3 Sheryl Gay Stolberg, “Pugnacious Builder of the Business Lobby,” New York Times, June 1, 2013. 4 Gretchen Morgenson and Glen Justice, “Taking Care of Business, His Way,” New York Times, February 20, 2005. 5 Tom Hamburger and Alexander C. Hart, “White House Takes on the U.S. Chamber,” Los Angeles Times, October 25, 2009. 6 Adam Liptak, “Corporations Find a Friend in the Supreme Court,” New York Times, May 4, 2013. !1 the SEC on the grounds that the agency had not conducted an adequate assessment of the rule’s costs and benefits.7 Moreover, business’s victories in the legal arena affect its conduct in the electoral one. The Supreme Court’s ruling in Federal Election Commission v. Citizens United (2010) has ushered in an era of tremendous business participation in financing political campaigns directly and indirectly, through independent expenditures in support of those campaigns. The Chamber also exercises considerable influence through its lobbying efforts. In 2012, the Chamber of Commerce spent $136 million lobbying state and federal governments, more than three times the lobbying budget of its next closest competitor, the National Association of Realtors.8 The Chamber’s impact may also be measured cumulatively. From 1998-2013, the Chamber spent almost $1 billion on its lobbying efforts; the next highest spender, General Electric,

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