‘Corporatists’ Undermining Democracy

Silently, almost secretly, an elite commission has begun work in Washington to propose remedies for our most serious economic problems. Officially established by Congress, the National Economic Commission hopes to release its report in December in order to influence the plans and programs of the next President.

The less anyone else knows about its members’ work, the happier they’ll be. Conducting what syndicated columnist David Broder characterizes as an “almost covert” operation, they’re providing a virtual textbook example of democracy--corporatist-style. They’re hiding out because they’re moving toward unpopular proposals and they want to cut deals behind closed doors, leaving the public outside to scratch our heads and make the sacrifices they demand. Democracy is the victim.

Suggested by Wall Street fixer Felix Rohatyn and recently endorsed by New York Gov. Mario Cuomo, the National Economic Commission was created by Congress in December, 1987. Concerned about the federal budget deficit and problems of declining trade competitiveness, Congress designed the commission to pursue a bipartisan consensus strategy for improving U.S. economic performance.

It has 12 members--six Democrats and six Republicans--with one more from each party to be appointed by the President-elect immediately after the November election. Its roster embodies the essence of “blue ribbon” politics. It is co-chaired by consummate Washington insiders, Robert Strauss (former adviser to President Jimmy Carter and current Democratic Party mogul) and Drew Lewis (former secretary of transportation under President Reagan).

The remaining members are all super-heavyweights, among the most politically powerful representatives of their respective constituencies. They include Chrysler star Lee Iacocca, Wall Street’s Rohatyn, Casper Weinberger and Donald Rumsfeld (representing the Republicans’ intimate alliance between big business and the government), Lane Kirkland of the AFL-CIO, Dean Kleckner of the American Farm Bureau and four immensely influential members of Congress--Sens. Daniel Patrick Moynihan (D-N.Y.) and Pete V. Domenici (R-N.M.), and Reps. William H. Gray III (D-Pa.) and Bill Frenzel (R-Minn.).

So far, the commission has been keeping a profile so low, as we said in grammar school, that it could play paddle ball against the curb. It has held only three public hearings and plans no more until after the election; more significantly, it intentionally planned those hearings around relatively minor, uncontroversial, sanitized issues such as inter-governmental relations.

From now through the November election, instead of public hearings, it plans a series of “subgroup meetings,” organized so that they may legally remain private. According to the precedent of “sunshine” laws in the United States, applied in this case, commissions created by Congress may not hold official hearings that are not open to the public. To avoiding running afoul ofthose laws, the commission will organize small meetings, always designed to include less than a quorum of its members. But there will be no further contact with the public, no open debate, no airing of its views, concerns, agendas or probable recommendations.

Then, once presented with a new President-elect and two new members--whammo! There will be a few public hearings (probably too late to make much difference), a flurry of internal meetings, arguments and negotiations and a final report released with pomp and circumstance in time to inform and pressure the incoming Administration and Congress.

Why this almost covert strategy? According to commission staff, they want to avoid becoming embroiled in presidential politics. Since they hope for bipartisan recommendations, and since electoral campaigns are anything but bipartisan, they reason that their final report would be undermined if its deliberations or recommendations had become political hot potatoes.

‘Living Beyond Our Means’

Fair enough. But I think that there are two other fundamental reasons for its back-room style, one concerning economics and the other concerning politics.

First the economics: There is a near consensus among elites in the center of the political spectrum, among both Republicans and Democrats, about remedies for our current economic maladies. Many of us to the left of that consensus call it “austerity economics.” This program would place first and paramount priority on reducing the federal deficit and would pursue deficit reduction primarily through a combination of some form of tax on consumption and cuts in government entitlement programs.

This plan is favored on the theory that we’ve been living beyond our means, borrowing too much for the government and for consumption, and that we must trim both the government deficit and private consumption to promote savings and revive the economy. Coupled with an unwillingness to seek significant cuts in the defense budget, this program would effectively impose the costs of economic revival on poor, working and middle-class Americans.

This strategy plays well in the board rooms and the back rooms, but it doesn’t play well in Peoria. Walter Mondale in 1984 and Bruce Babbitt in 1988 learned about the electoral popularity of proposals for the citizenry-at-large to tighten its belt.

Little wonder, then, that austerity proponents would prefer as little public discussion and debate about their proposals as possible. And it seems likely that the commission will recommend the essence of this package--however attractively it may wrap it in tinsel and colored ribbon. According to a draft of a private memo by commission guru Rohatyn, a copy of which I was able to obtain, a “significant majority vote (say 9:3 or 10:2)” is reasonably likely to endorse “some type of consumption tax,” avow the “need to slow the growth of entitlements” and affirm its “reluctance to further weaken our defense posture.”

The result? “The public will likely witness a charade,” columnist William Greider writes, “in which a group of distinguished leaders from both parties presents the President with a list of unpalatable choices, and he graciously defers to their wise counsel, despite any promises he made to the voters.”

So much for the economics. The commission’s strategy also reflects a political approach to governance that many call “corporatist.” Bred of suspicion about the shortsightedness and intemperance of the general public, corporatists seek negotiated accords among key elites representing big business, big labor and big government. They seek to manage the economy from the top, fostering institutional stability. They prefer to share and distribute power among the few, throwing political crumbs to the rest of us.

Democracy Undermined

Such elites have been worrying about a “crisis of governability” since the early 1970s. When confronted with a crisis, they turn naturally toward negotiations at the pinnacle and settlements imposed from on high. This was the kind of “solution” that Rohatyn helped engineer for the New York City fiscal crisis of 1974-75, and this is equally the kind of the solution that he and his political soul mates hope to help contrive for the nation as a whole.

Whatever the policies achieved through such corporatist governance, corporatist process undermines democracy. It reinforces the impression that public views and public participation don’t matter. It lifts critical debate out of the public arena and cloaks it behind closed doors. It helps foster the ridiculously low voter participation rates in this country--however complex their sources--because it robs voting of much of its meaning: If the fix is already in, why bother?

We can do better. Our economic destiny should be a subject of open and intense public debate, not private deals and covenants. May we look forward to the day, columnist Gary Wills wonders, when “government by the people might still, at some point, become a self-descriptive phrase we can use without embarrassment”?