A Lesson for Obama: President Kennedy’s Stand Against the Steel Industry

In April 1962, when U.S. Steel and five other steel corporations unilaterally decided to jack up their prices and squelch an intricate set of compromises that the Kennedy Administration had expended a great deal of effort in negotiating, President John F. Kennedy responded with an aggressive counter attack that shocked the Washington press establishment. He turned loose his younger brother, Attorney General Robert F. Kennedy, who subpoenaed the expense accounts of the top steel executives and dispatched F.B.I. agents to “interview” them.

Robert Kennedy also sent the not-so-subtle message that the Justice Department and its Anti-Trust Division, along with the Internal Revenue Service, were about to make the executives’ lives miserable unless they honored their original agreement with the White House and the labor unions to maintain prices.

Here’s what JFK told the nation at a press conference about the steel crisis:

“In this serious hour in our Nation’s history, when we are confronted with grave crises in Berlin and Southeast Asia, when we are devoting our energies to economic recovery and stability, when we are asking reservists to leave their homes and families for months on end and servicemen to risk their lives — and four were killed in the last two days in Vietnam — and asking union members to hold down their wage requests at a time when restraint and sacrifice are being asked of every citizen, the American people will find it hard, as I do, to accept a situation in which a tiny handful of steel executives whose pursuit of private power and profit exceeds their sense of public responsibility can show such utter contempt for the interests of 185 million Americans.” [Quoted in Robert Dallek, An Unfinished Life, p. 485.]

Can anyone imagine President Barack Obama saying anything like this about the economic crisis and the wars requiring sacrifice and how unconscionable the health insurance and pharmaceutical industries are behaving today against the national interest?

And what was the result of Kennedy’s honest public appraisal of the situation taking on big business? Contrary to what the David Broders and the Mara Liassons and the Adam Nagourneys and all the other Beltway savants would opine today — the public supported Kennedy’s tough stand by a margin of 58 to 22 percent and the President’s approval rating stood at 73 percent. Taking on big and powerful corporate executives and denouncing their greed and “contempt for the interests” of the American people turned out to be good politics! Who woulda thought?

Ah, but times were different back then and any president today has no choice but to toady up to big business in order to avoid attacks from the Republican Right. But when Kennedy took his stand against Big Steel conservative publications blasted him comparing him to Mussolini and claiming that his administration belonged in the Soviet Union. Bumper stickers blared: “Help Kennedy Stamp Out Free Enterprise!” And Arizona Senator Barry Goldwater said that Kennedy was trying to “socialize the business of the country.” Sound familiar?

The point is that in politics there are no guarantees. A president cannot always split the difference or compromise or get along or be “bipartisan.” Sometimes a president has to take a chance and risk his approval rating to stand up for the people who elected him.

If the Democrats go into the 2010 midterm elections without passing concrete measures that move the pendulum back toward labor and away from corporate domination it will remind voters that the Democratic Party is still the party of Mondale, Dukakis, Gore-Lieberman, Carter, Clinton, and Kerry. These guys can ride in tanks, say they love guns and the death penalty, call for deregulating business and slashing welfare, or salute and say “reporting for duty” — but they’re still a bunch of hapless losers. That’s why it’s so easy to Swift Boat the Democrats. Their “brand” is already identified with weakness and waffling. You can always leave it to the Democrats to fumble the ball on the goal line — just as they did with the health care reform bill.

The health insurance and financial services industries that Obama must confront on behalf of the people have wreaked far more damage to American society than anything Kennedy faced. One year in office is too short a time to judge a president’s success or failure. That’s why historians never do that. But so far we’ve seen Wall Street, the health insurance and pharmaceutical industries, and even Fox News roll President Obama.

In 1962, John F. Kennedy was heavy-handed in his response to the steel industry. You could even say (accurately) that he abused his executive power. But he did it for the right reasons and as a result it was a politically popular heavy-handedness. President Obama seems to never do anything “heavy handed”; he has a “light touch.”

In 1960, Kennedy had squeaked into office in one of the closest elections in American history (a far narrower margin than Obama’s in 2008), the Southern wing of his party was up in arms against him, and he had a serious challenge daily from Nikita Khrushchev and the Soviet Union. Yet even while facing a contentious midterm election Kennedy rapped the knuckles of steel industry executives.

The time will come when Obama is going to have to rap some knuckles of corporate titans himself if he wants to deliver on his promises and be remembered as a successful president.

Joseph Palermo

Originally published by the Huffington Post. Reprinted with permission from the author

Published by the LA Progressive on January 1, 2010
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About Joseph Palermo

Joseph Palermo is Professor of History, California State University, Sacramento. Professor Palermo's most recent book is The Eighties (Pearson 2012). He has also written two other books: In His Own Right: The Political Odyssey of Senator Robert F. Kennedy (Columbia, 2001); and Robert F. Kennedy and the Death of American Idealism (Pearson, 2008). Before earning a Master's degree and Doctorate in History from Cornell University, Professor Palermo completed Bachelor's degrees in Sociology and Anthropology from the University of California, Santa Cruz, and a Master's degree in History from San Jose State University. His expertise includes the 1980s; political history; presidential politics and war powers; social movements of the 20th century; the 1960s; and the history of American foreign policy. Professor Palermo has also written articles for anthologies on the life of Father Daniel Berrigan, S.J. in The Human Tradition in America Since 1945 (Scholarly Resources Press, 2003); and on the Watergate scandal in Watergate and the Resignation of Richard Nixon (CQ Press, 2004).