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img052 - 106 Politics by Other Mm consequently less able to...

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Unformatted text preview: 106 Politics by Other Mm: ' consequently less able to intervene against business on behalf of “ groups disadvantaged by market processes. For example, financial deregulation and the relaxation of antitrust enforcement in the ‘1 19805 left labor and other Democratic constituencies with little protection against the threat to their interests posed by the largest .I ‘ wave of corporate reorganizations—hostile takeovers, leveraged ,_ buyouts, plant closings—since the days of J. P. Morgan. Deregulation also eroded the accommodations between busi- ness and labor that had been fashioned by the Democrats. During the New Deal period the federal government established or ex— ‘- tended a regime of regulation over numerous sectors of the Amer- ican economy. Characteristically these regulations restricted price competition among firms within the regulated industry and, in some cases, erected barriers to the entry of new firms. To the extent that firms within such industries could pass added costs to their customers without fear of being undersold by competitors, they lost an incentive to control their labor costs. Union-management relations in most regulated industries were consequently more co- operative than adversarial in character. Rather than fight each other over wages and work rules, unions and employers entered the po— litical arena as allies to defend and extend the regulatory regime and to secure direct or indirect public subsidies for their industries. Asserting that these business-labor accommodations served “special interests” at the expense of the “public interest," an un- likely coalition of conservatives and liberal consumer advocates se- cured a substantial measure of deregulation during the late 19705.4 Through deregulation, conservatives hoped to get business to break its alliance with organized labor. Consumer advocates, for their part, were happy to weaken the labor unions and business interests that had been their rivals for influence within the Democratic party. In the face of the threats that Reaganism posed to them both, liberals and labor rekindled their coalition in the 19805. Increas- ingly, organized labor supported liberal causes, such as the nuclear freeze and comparable worth, that it would formerly have disdained. The Republican Offensive 1 07 Liberals, for their part, began to see merit in a number of causes sup— ported by organized labor, such as protectionism, and lost their en- thusiasm for deregulation. The Republicans, though, continued to press for deregulation, and with good reason. Particularly in airlines, telecommunications, and trucking, deregulation allowed nonunion firms to undersell the established giants in their industry. Established firms were com- pelled to demand givebacks from their unions to lower their own labor costs, and alliances between business and labor were dis- mpted. REORGANIZING POLITICAL FORCES By undermining the governing capacities of institutions over which the Democrats exercised influence, the Republicans also weakened the Democrats’ social base. They destabilized some of the major political forces upon which the Democrats depended and reorganized them under Republican auspices. Most observers assume that politicians must deal with whatever groups they find in society, but it is important to note that polit- ical leaders are not limited to working with some predefined con— stellation of forces. At times politicians can destroy established centers of power, reorganize interests, and even call new groups into being. Leaders can attempt to reorganize the constellation of in— terests central to the political process in several ways. They may be able to transform the political identities of established groups, cre- ate new political forces by dividing existing groups, or construct new interests by uniting previously disparate elements. In these ways the Republicans worked to reshape the political attachments of business executives, middle—class suburbanites, blue-collar eth- nics, and white southerners. Reunifying Business In the 19805 the Republicans sought to unify the business com- munity under their auspices. After World War II the Democrats ...
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