CHAPTER 5

The Producer versus the Consumer

Just a few years ago, consumerism for most corporations was a cloud no bigger than a man’s fist, a fitful disturbance that would surely pass as quickly as it materialized. Today, consumerism is swirling around U.S. business like a tornado, shattering old assumptions, shaking the foundations of major industries.

—Sales Management Magazine, c. 1970

AMERICAN TELEVISION VIEWERS tuned to NBC around midnight on Saturday, December 11, 1976, would have encountered what appeared to be the holiday edition of a low-budget talk show called “Consumer Probe.” That night’s guest, Irwin Mainway of Mainway Toys, cut the perfect swath as a stereotypical greasy and unscrupulous businessman, complete with a dark three-piece suit, aviator sunglasses, a thin mustache, and a thick Chicago accent. The show’s host, a somewhat indignant and selfrighteous consumer advocate, took Mainway to task for what she called the “unsafe toys for children” that his company manufactured and marketed. The litany of questionable products included the “Pretty Peggy Ear-Piercing Set,” “Mr. Skin Grafter,” and “Johnny Switchblade: Adventure Punk,” a rubber doll from whose arms sprouted two sharp knives when you pressed his head. Accused of peddling what was “by no means a very safe toy,” Mainway took umbrage. To the contrary, he insisted, nothing was wrong with Johnny Switchblade. “[L]ittle girls buy ’em, you know, they play games, they make up stories, nobody gets hurt. I mean, so Barbie takes a knife once in a while, or Ken gets cut. There’s no harm in that.” The host then produced another product, “Bag O’ Glass”—a clear plastic sack filled with what she called “jagged, dangerous glass bits.” Again Mainway defended the product’s logic and his company’s integrity. “The average kid,” he said, “picks up, you know, broken glass anywhere…. We’re just packaging what the kids want.”

“So, you don’t feel that this product is dangerous,” the host pressed.

“No,” Mainway declared. In fact, his company was a model corporate citizen. “Look, we put a label on every bag that says: ‘Kid! Be Careful! Broken Glass!’ ”

Of course, NBC viewers late on a Saturday evening in 1976 were actually watching Saturday Night Live, the irreverent sketch comedy program then in its second season. The unctuous Irwin Mainway was played by Dan Aykroyd, while guest host Candace Bergen portrayed the humorless consumer advocate. Giving voice to the opprobrium of consumer rights activists across the country, Bergen’s character concluded that Mainway’s entire product line was “really unsafe and should rightfully be banned from the market.” Insulted yet again, Mainway pointed out that no toy could be 100 percent safe, so the accusation was unfair. (His exact words were: “Hold on a minute, sister….”) To drive his point home, he graphically demonstrated how easily he could get a painful splinter from a wooden block, strangle himself with the cord of a toy telephone, or choke on a large foam ball. Crestfallen, the host ended the interview. “Well, this is certainly a very sad situation,” she berated Mainway. “One of the precious joys of Christmas warped by a ruthless profiteer like yourself.”¹ Mainway, foam ball blocking his airway, flailed his arms wildly as the show faded to black.

Playing to Saturday Night Live’s generally young, urban, and liberal audience who would welcome consumer hero Ralph Nader as host just one month later, the show’s writers unsurprisingly cast Aykroyd’s character as outlandish and hyperbolic. At the same time, Candace Bergen also invoked unsympathetic derision as the scolding, selfrighteous consumerist. By mocking both sides—the criminally negligent “ruthless profiteer” and the schoolmarmish social do-gooder—the satire, perhaps unwittingly, encapsulated the hotly contested politics of American consumer product regulation in the mid-1970s.

On one side of this struggle stood business leaders, who produced and sold products to an ever more selective, vigilant, and risk-averse consuming public. On the other stood the consumer rights movement, a subset of the larger liberal reform movement that also championed stricter workplace safety and environmental protection laws and achieved significant success lobbying the federal government in defense of what its supporters called the “public interest.” Saturday Night Live’s short romp through consumer politics revealed the major contours of that debate. Candace Bergen’s declaration that “Teddy Chain Saw Bear” and “General Tron’s Secret Police Confession Kit” should be “rightfully banned from the market” by federal decree surely seemed reasonable, but viewers were left to wonder about the role of caveat emptor as an alternative to the strong arm of the regulatory state. Moreover, Dan Aykroyd’s claim that no product (not even a foam ball) came with absolutely no risks echoed the business community’s longstanding complaint: social regulations were inherently arbitrary, discriminatory, and insufficiently attentive to the costs of compliance or the real likelihood of harm. Such unrealistic demands for perfect products, many businesspeople claimed, led inexorably to business failures and higher prices. At a time of persistent inflation, how could such debilitating consumer product regulations really serve the consumer’s best interest?

For the writers and actors at Saturday Night Live, both sides of this debate lay open to ridicule, suggesting the evolving nature of consumer politics in the mid-1970s. And indeed, as this chapter shows, the national debate over consumer protection underwent a remarkable transformation during the mid-1970s largely in response to the successes of an increasingly mobilized and organized corporate lobbying community. Once a relatively uncontested social goal, consumerism emerged from the contested politics of a stagflationary decade as a fraught clash of interests. The country’s most famous consumer champion, Ralph Nader, had shot to popularity in the late 1960s, but his glow wore off during the malaise of the Carter years. Public opinion polls recorded that trajectory: in 1974, 73 percent of Americans professed some or a great deal of respect for Nader, and in 1975, 76 percent agreed that it was “good to have critics like Nader to keep industry on its toes.”² Between 1976 and 1979, however, national confidence in Nader fell from 64 to 52 percent (and those with “a great deal of confidence” dropped from 28 to 16 percent). More telling, the percent of respondents with hardly any or no confidence in him rose from 18 to 34 percent.³ Indeed, in 1971, only 5 percent of survey respondents agreed with the claim frequently made by business activists that “Nader is a trouble maker who is against the free enterprise system.” But by 1980, a full quarter of respondents to a General Electric poll claimed that “more activity by people like Ralph Nader” would hurt the economy.⁴ While GE’s poll likely reflected a skewed base, it highlighted a general trend confirmed by the political battles discussed in this chapter.

The decline of Nader’s symbolic potency mirrored a real drop in support for regulatory legislation, which helped nurture a deregulatory impulse and the increased salience of business- and market-oriented political discourse. Several vital factors underlay this shift in American politics, including an increasingly organized and well-funded intellectual challenge to liberal policies, devastating inflation and economic stagnation, and political and cultural anxieties that generated distrust in government in the wake of Vietnam and Watergate. This antistatist mood, ironically abetted by the likes of Nader and his public interest reform movement, which criticized the government for colluding with powerful interests, created essential space for yet another vital development: the sophisticated lobbying campaigns engineered by organized business associations and prominent corporate leaders. Although their success was far from complete—the success of antismoking and auto-safety campaigns as well as antifraud protections for senior citizens stand out as notable pro-consumer achievements—the business movement largely halted the tide of liberal reform legislation, especially concerning consumer product regulation, by the end of the decade.

To analyze the mechanisms of business lobbying as well as its effect on the shifting politics of consumer product regulation, this chapter traces the origins, rise, and slow death of Ralph Nader’s biggest legislative priority for the consumer movement in the 1970s, a consumer protection agency in the federal government. Designed to institutionalize consumerism by inserting what Nader called a “consumer perspective” into the national regulatory apparatus, the Consumer Protection Agency (CPA) was a constant fixture on the congressional docket from 1969 to 1978. Despite widespread and well-placed support, however, it failed to become law, ultimately defeated by the overwhelming lobbying of united and effective corporate interests. The agency’s final loss in 1978 marked a turning point in regulatory and consumer politics. Not until lawmakers created the Consumer Financial Protection Bureau (CFPB) as part of the Dodd-Frank Act of 2010 did a comprehensive government agency designed to protect consumers regain legislative legs; even then, the CFPB faced administrative and conceptual limitations, with purview only over financial matters.⁵

The story of the proposed Consumer Protection Agency exposes the shifting political terrain on which organized business leaders operated during the 1970s. Just as the politics of inflation discussed in the previous chapter broke down along classical fault lines, pitting business against labor, so too did the politics of regulation highlight a dichotomy between the interests of “producers” and “consumers.” For activists like Ralph Nader, consumer advocacy meant putting the needs of consumers ahead of profits and rewards to producers. Bemoaning the final defeat of the CPA in 1978, one of Nader’s top deputies, attorney Mark Green, predicted that “the influence of producers’ interests on regulation will continue.”⁶ Although business leaders protested that such a distinction between consumers and producers rang false because everyone was a consumer, the old-fashioned categories remained mainstays of the debate. President Gerald Ford, for example, articulated precisely that division in an address to the Chamber of Commerce in 1975 by declaring his solidarity with business leaders in their campaign to reduce the costs of social regulations. “Ultimately,” Ford told the businessmen in the crowd, “all such costs are paid by you, the producers, and your wives, the consumers.”⁷

Ford’s comment, intended to blur the distinction between producers and consumers, in fact highlighted it by articulating the highly gendered nature of the politics of consumer protection. While businessmen and their wives clearly shared a desire for affordable and safe products, they naturally, in Ford’s telling, approached the issue with different priorities and perspectives. Political debates over consumer protection in general, and the Consumer Protection Agency in particular, frequently stereotyped consumer advocacy as feminine, weak, and dependent, from Candace Bergen’s portrayal of the prim and judgmental “Consumer Probe” host on Saturday Night Live to widespread decrees that a hyper-regulatory “nanny state” threatened to emasculate the nation. Finally, insinuations by Nader’s political opponents that the unmarried consumer advocate was gay testified to the prominent place of gender and sexuality in consumer-related public policy debates.

For business leaders, the discursive dichotomy between producing and consuming—including its class and gender overtones—provided a framework for challenging the notion that one side represented the “public interest” while the other stood only for private gain. As this chapter argues, business lobbyists’ ultimate deflection of legislation to create a Consumer Protection Agency hinged on their ability to reframe debate over the bill and cast its proponents as elite special interests rather than champions of the general welfare. Uniting their networks of energized businesspeople and tremendous resources, business associations launched a major offensive against the CPA. Deploying a strategy also used successfully by other conservative political activists, anti-CPA lobbyists parlayed economic anxiety and the public’s inherent distrust of bureaucracy to break the back of the consumer movement by the end of the 1970s. At the same time, they successfully advanced the argument that corporate interests in fact aligned with consumers’ welfare. Although they failed to dethrone “consumerism” completely, they applied just enough pressure on the legislative system to deplete its political momentum. As with their work against the labor law bill and Humphrey-Hawkins, business groups’ indirect lobbying against the CPA halted the tide of the liberal reform agenda and permanently altered the landscape of American politics.

PRODUCERS AND CONSUMERS

The modern consumer rights movement emerged in the 1960s, but its origins lay in the reformist politics of the late nineteenth and early twentieth centuries, a response to the rapid changes wrought by urbanization and industrialization. During the Progressive Era, muckraking writers like Ida Tarbell and Upton Sinclair helped raise public awareness of the dark underside of industrial capitalism, exposing the exploitative working conditions, crushing poverty, and dangerous products that accompanied mass production, mass distribution, and mass consumption. Citizens’ groups like the National Consumers League emerged, first on local stages and soon as national organizations, bringing attention to the ravages of industrial society, lobbying for local health ordinances and safer working conditions, and organizing boycotts to protest issues from corruption to racial discrimination. In the process, Progressive reformers cultivated a political identity for consumers as conscientious citizens who could, when organized, use their collective purchasing power to fight for social change.⁸

At the level of policy, industrialization inspired fundamental changes in the regulatory role of government at both the state and federal levels. Stifled by a political tradition of minimal state interference in the conduct of business, policymakers slowly responded to the changing economic landscape. In the last half of the nineteenth century, for instance, organized farmers convinced several state governments to empower departments of agriculture to set quality controls on meat. By 1906, Congress officially nationalized the process of regulating food and pharmaceutical products with the Pure Food and Drug Act, whose passage owed largely to organized consumer groups. That legislation laid the groundwork for national product safety standards and affirmed consumers’ importance as a political force.⁹

Consumers’ growing political identity received a boost from the rapid advance of industrial capitalism, as diversified and integrated national firms increasingly provided the goods Americans used in their daily lives, from mouthwash and shaving cream to radios and automobiles. By the 1920s, professionalized advertising agencies urged Americans to see themselves as discriminating consumers by marketing products in deeply personalized terms. In the 1930s, the economic deprivations of the Great Depression gave rise to yet another manifestation of consumer identity. While Herbert Hoover tried to revive the economy on the supply side through such programs as the Reconstruction Finance Corporation, which supplied federal loans to businesses, Franklin Roosevelt predicted in 1932 that “in the future we are going to think less about the producer and more about the consumer.” The National Recovery Administration, the public face of the first New Deal between 1933 and 1935, included consumer councils among its myriad code-writing bodies, and the Federal Food, Drug, and Cosmetic Act of 1938 granted the Food and Drug Administration (FDA) stronger regulatory authority. Moreover, the mandate of the Federal Trade Commission (FTC) also underwent a major transition during the 1920s and 1930s; originally designed to protect individual firms from the uncertainties of the marketplace, the FTC under the New Deal increasingly worked to protect consumers from abuses by business. The Roosevelt administration’s job creation, personal home loan, Social Security, labor relations, and direct aid programs, while experimental and haphazard at first, ultimately congealed into an ideologically coherent policy regime focused on defending citizens’ purchasing power. As the Keynesian faith in the government’s power to promote growth and employment through demand-side stimulus came to dominate policy debates, the New Deal made the federal government the guardian of the consumer’s material interest.¹⁰

In the aftermath of World War II, economic policymakers continued to place a premium on what historian Meg Jacobs has called “pocketbook politics,” but the experience of the Great Depression fundamentally altered popular ideas about what constituted the “consumer’s interest.” Earlier consumer crusades had targeted poverty and economic dislocation in addition to quality of life issues—such as those arising from diseased meat or unsafe drugs—but consumer politics in the postwar years came to revolve nearly exclusively around economic questions: who could purchase what, and for how much? Many consumer activists, for example, used their purchasing power to challenge racial discrimination, protesting stores or restaurants that hired African American workers but refused to cater to African American clients. Others mobilized over the cost of everyday consumer goods, most notably during strikes over the price of meat when war-time price controls ended in the mid-1940s. In an increasingly modern and technologically oriented society, consumers demanded greater information about products, and consumer organizations played a vital role securing access to such data. Moreover, consumer activism was not limited to the United States. In war-torn Europe and parts of the developing world, citizens also organized themselves as consumers to navigate the uneasy transition to growing affluence.¹¹

Yet while consumerism as a political identity flourished, explicit focus on consumer protection declined significantly between the 1930s and the early 1960s. Although precise measurements of public concern with any particular issue are impossible to attain, the incidence of the term “consumer protection” in five national newspapers tells a striking story. Used 50 times in 1940, the term appeared only 5 to 10 times per year through the 1950s; in 1960, it was used 23 times but skyrocketed from there, doubling to 50 in 1965 and hitting 750 in 1971. (Usage declined slightly at the end of the 1970s, reached 550 in 1985, and settled into the 200 range from 1990 to 2008.) Similarly, popular magazines devoted increasing attention to consumer protection in the 1960s: the Readers Guide to Periodical Literature listed 4, 9, and 6 articles under that heading in 1963, 1964, and 1965 but 32 and 48 in 1969 and 1970, respectively.¹² Although such figures are not an exact proxy for public interest, they certainly show an increase in media attention to the politics of consumer protection and thus corroborate the notion that after decades on the back burner, product safety reemerged as a vital political topic in the 1960s.

That reemergence corresponded with the protracted economic boom of the 1960s that decisively recast Americans’ expectations of material goods and produced what historian Lizabeth Cohen has called “the third wave consumer movement.” While the first wave of consumer activism emerged in the Progressive period to confront the perils of industrial society and the second wave took shape during pits of despair during the Depression, this third wave grew from the warm glow of affluence.¹³ As living standards rose, Americans increasingly rejected caveat emptor as a sufficient standard and demanded greater protections against unscrupulous vendors and hazardous products. As with environmental laws, the push for consumer protection began, unevenly, at the state level. In 1957, New York and Rhode Island became the first states to enforce deceptive trade practice laws through bipartisan state commissions. In the 1960s, growing numbers of states passed laws regulating such practices as the sale of consumer debt from stores to financial institutions, the advertisement of prescription drugs, and the return policy for items purchased from door-to-door salespeople. State-level consumer protection varied significantly by region, however. The ethos of consumerism found greater support among wealthier and better-educated citizens, who formed the bulk of the third-wave consumer ethos. State regulation flourished, therefore, in richer states whose populations included higher percentages of middle- and upper-class liberals. The South, where conflicts over racial desegregation seeped into all political issues that involved strengthening the hand of government, enacted fewer and weaker consumer protection laws than other regions.¹⁴

On both the state and federal levels, the politics of consumer protection thrived when liberals—Republicans as well as Democrats—did well electorally, such as in the midterm election of 1958 and Lyndon Johnson’s landslide reelection in 1964. Tapping into the ethos of third-wave consumerism on the campaign trail in 1960, John F. Kennedy helped nurture the revival of a consumer identity rooted in protection by promising to be “a high-powered lobbyist” for the consumer. Two years later, he reinforced that message by proclaiming a “Consumer Bill of Rights,” including the right to safe products, to information about them, to choice among goods, and to a voice in politics. Kennedy’s proclamations both confirmed consumerism’s newfound importance as a political force and, perhaps more important, signaled the shift in the locus of consumer protection politics toward the federal government. Discrepancies in state regulation, both in focus and enforcement, convinced consumer activists to turn their focus to the federal government. By the 1970s, the FTC beefed up its prosecution of deceptive trade practices, frequently using the experience of state commissions as a model. It also increasingly collaborated with state governments to launch antitrust and consumer protection lawsuits.¹⁵

In addition to benefiting from top-down support, consumerism gained strength from national outrage over stories of death and injuries that resulted from faulty, unsafe, or polluting products. In 1962, for example, Americans recoiled in horror at stories of “thalidomide babies” born with serious birth defects linked to an antinausea medication their mothers had taken while pregnant. Although many states passed their own consumer product safety legislation, issues such as thalidomide stretched so far beyond state borders that local action seemed insufficient, especially since the types of industries involved operated on a national—even international—level. Liberal policymakers in the federal government channeled the public’s shock into tremendous support for the Kefauver-Harris Amendment to the Federal Food, Drug, and Cosmetic Act in 1962, which required pharmaceutical manufacturers to provide proof of their products’ safety. In the years that followed, Congress passed dozens of other laws designed to protect consumers from inferior or untested products, compel truth-in-advertising, limit environmental pollution, and regulate marketplace transactions.¹⁶

Organizationally, third-wave consumer politics shifted into high gear in the mid- to late 1960s, propelled by a sophisticated infrastructure of local, state, and national organizations and prominent leaders. Longstanding groups like the National Consumers League and the Consumers Union, founded in the 1920s and 1930s, respectively, found themselves joined by newcomers like the Consumer Federation of America, founded in 1967, and myriad state-level organizations. With the publication in 1965 of his seminal exposé of the car industry, Unsafe at Any Speed, a young lawyer from Connecticut named Ralph Nader emerged as one of the consumer movement’s most influential leaders. Boasting degrees from Princeton and Harvard Law School, Nader recalled the classical muckraking tradition of the Progressive Era by denouncing corporate greed and accusing automobile executives of willfully peddling lethal products. His advocacy for automobile safety directly propelled the National Highway Safety Act of 1966 and, soon thereafter, the requirement that all cars come equipped with seatbelts. By the end of the decade, Nader established national networks of public interest law firms, research groups, and grassroots organizations, including Public Citizen and Congress Watch, cementing third-wave consumerism’s growing influence.¹⁷

By the time Richard Nixon assumed the presidency in 1969, eight years of consumer-oriented Democratic presidents had firmly cemented the goals of consumer protection in national politics. On the campaign trail, Nixon had hinted that he might abolish the position of White House Special Assistant for Consumer Affairs, established under Johnson, but public outcry quickly convinced him that he could ill afford to appear “anticonsumer.”¹⁸ Instead, in April 1969, Nixon appointed Pennsylvania Republican Virginia Knauer to that post; in 1971, he expanded her powers by executive order and created the Office of Consumer Affairs in the Executive Office of the President.¹⁹ In that role, Knauer became the most vocal consumer activist within the White House, where she lobbied successfully for a plank in the Republican Party Platform to support an independent consumer agency.²⁰ That platform also endorsed the Consumer Product Safety Commission (CPSC), a regulatory agency charged with writing and enforcing safety standards. Although Nixon worried about expanding the federal bureaucracy, Knauer convinced him to sign the CPSC into law, which he did “with reservations” in October 1972, days before cruising to reelection.²¹

For many business leaders, the CPSC joined the ranks of the EPA and OSHA on the greatest-hits list of antibusiness social regulation, which they viewed as the ill-conceived product of American culture’s deep bias against free enterprise. Indeed, as the consumer movement gained strength, conservative business leaders grew increasingly vocal about the inherent anticorporate prejudice that it embodied. At New York’s Waldorf-Astoria hotel in April 1970, the NAM’s Marketing Committee organized a conference on industry’s “crisis in credibility.” Donald Gaudion, the chairman of that committee and CEO of New Jersey–based chemical company Sybron, Inc., reminded attendees about the dramatic decline in “[f]aith in the honesty and responsibility of American business” since the mid-1960s, worsened by consumerism’s inherent critique of business’s integrity. “Demands by consumer advocates for more and more protective legislation,” Gaudion argued, “raised doubts in the public mind…. Once doubt about industry’s good faith is implanted in the public mind, all industry is suspect, and each company suffers a loss of respect from its employees and its community.”²²

Such consternation echoed throughout the business community. Also in 1970, the Chamber of Commerce’s Consumer Issues Committee produced and distributed a filmstrip called “The Consumer Revolution” that opened with ominous images that invoked terrifying “signs of revolution” in America: “Restless youth demanding sweeping changes…. Militant minorities battling for social and economic change…. Rioting in our cities…. Bombing office buildings…. Marches on Washington.” Last on that list: “Angry consumers protesting rising prices and other problems of the marketplace.” All of these were part, the narrator explained, of a frontal assault on basic American institutions. “Business is one of the battlegrounds,” the filmstrip proclaimed, “[and the] battle has a name: Consumerism.” In that context, many business leaders saw nothing forced about linking Ralph Nader with the Black Panthers and the Weather Underground—all were subversive, un-American, and deeply threatening.²³

However, like Richard Nixon, business leaders were only too aware of consumerism’s massive public appeal, and their instinct for self-preservation meant that they reserved their most vitriolic denunciations for private conversations. The Chamber of Commerce’s incendiary filmstrip, for example, explicitly addressed trade association audiences, not the general public. More publicly, corporate leaders and business associations took pains to acknowledge legitimate consumer concerns and to promote business’s social responsibilities. The Chamber, for example, adopted and publicized a “Business-Consumer Relations Code,” which declared business’s civic obligation to health and safety, high quality at low prices, clear warranties, and the elimination of fraud. The code formed the centerpiece of a major public relations campaign designed “to encourage businessmen in general and trade and professional associations in particular to take a more positive role in the consumerism front.”²⁴

To be sure, many corporate leaders genuinely believed that consumers had legitimate grievances and that business bore clear social responsibilities—to safe products as well as to the environment, workplace conditions, and social justice. Even so, they also realized the political and strategic advantages that came from taking such an accommodating posture toward consumerism. Embracing the spirit of welfare capitalists of earlier generations, some prominent chief executives believed that making public peace with consumer activists could in fact help preserve business prerogatives. In 1975, the CEO of SC Johnson explained to his fellow Business Council executives during a retreat weekend in Hot Springs, Virginia, that his company had removed fluorocarbon propellants from its aerosol products because Americans wanted “business to make voluntary decisions on our own terms and not dictated by government regulation, but reflecting the consumer’s self-interest.”²⁵ The Chamber of Commerce promoted its Business-Consumer Relations Code in the same spirit. According to Chamber president Ritter Shumway, ignoring consumer issues would only add “new layers of bitterness to consumers’ attitudes toward business,” but an effective response by business would “counter the flood of legislative ‘remedies.’ ”²⁶ This strategy of accommodation reflected the American business community’s long history of deflecting new regulatory requirements by shrewdly, if cynically, responding to the public’s concerns.²⁷

Other business leaders, however, firmly rejected such calls to embrace the spirit—if not the methods—of consumerism. Many concurred with conservative economist Milton Friedman, who famously argued in 1970 that business’s only “social” responsibility was to generate profits.²⁸ Friedman, of course, had the luxury of not selling anything to the consuming public; most businesspeople did not feel free to be quite so strident. Nonetheless, major employers’ associations like the NAM and the Chamber of Commerce frequently tried to split the difference and articulate their anticonsumerist message with a softer touch. For example, the Chamber’s effort to promote business values through televised public service announcements in 1972, discussed in chapter 2, included a spot on the role of consumers in society. Over a busy street scene, Chamber executive vice president Arch Booth explained that all those people—“businessmen, housewives, doctors, lawyers, laborers, teachers, students”—were also “bosses … the public, the consumers … in our economy.” Consumers were “bosses” because they, not the government, “determine what shall be produced by what they buy.” The cartoon simultaneously validated consumers’ social and economic importance and blurred the distinction between “producer” and “consumer,” so vital to the consumer movement’s political project. Yet the colorful ad could not hide the creeping nervousness just below the surface. Despite Booth’s affectionate, grandfatherly comforts, the rapid rise of consumer protection politics clearly struck a note of fear into an already jittery business community. In both its prejudices and practices, business leaders believed, organized consumerism posed a significant threat to profits and, more important, corporate autonomy.²⁹

INSTITUTIONALIZING THE MOVEMENT: THE CONSUMER PROTECTION AGENCY

Among the many ironies of the presidency of Richard Milhous Nixon is this: on the subject of consumer protection legislation, both the liberal reform movement and the business community believed fervently that the president was in the other’s pocket. After Nixon put his signature on legislation creating OSHA and the CPSC and, by executive order, created the EPA, lawyers at the Chamber of Commerce warned the group’s members starkly about “the tremendous clout which the government now has to regulate manufacturers, distributors, retailers, private labelers and importers of hundreds of different consumer products—in the name of safety.”³⁰ The president of the Grocery Manufacturers of America, an attorney from Cincinnati and former lobbyist for Sears, Roebuck named George W. Koch, complained to a White House aide that Nixon’s apparent embrace of consumerism had left many of his business supporters in a “frustrating lurch.”³¹

Yet at the same time, consumer advocates viewed Nixon with deep suspicion, responding to the Republican’s inauguration in 1969 by jump-starting a particular consumer protection initiative that had been incubating for a decade. Beginning in 1959, liberal members of Congress led by Estes Kefauver had proposed legislation to establish a cabinet-level “Department of Consumer Affairs.” By the mid-1960s, Kefauver had died and the mantle fell to a cohort of younger legislators from both parties, many of whom had been elected in the liberal wave of 1958. Just two months after Nixon’s inauguration, one of the Senate’s most liberal and consumer-oriented Democrats, Abraham Ribicoff of Connecticut, invited Ralph Nader to help his Senate subcommittee draft a bill that would protect consumers against the potential setbacks the incoming administration might launch. To the surprise of many congressional liberals, the consumer hero strongly argued against Kefauver’s idea of a “Consumer Department” in the president’s cabinet. Rather than add another layer of regulatory bureaucracy or create another cabinet position accountable to the president, Nader proposed to institutionalize the consumer movement by inserting the “consumer voice” into the proceedings of regulatory agencies through a new type of government body: the Consumer Protection Agency.³²

During its legislative career from 1969 to 1978, the specific title of the government body Nader had in mind changed several times for both political and practical reasons. It was alternately known as the Agency for Consumer Protection (ACP), the Agency for Consumer Advocacy (ACA), and the Office of Consumer Representation (OCP), but those names usually described much the same structure and purview. Despite the minor protests of certified public accountants, the final bill that Congress voted on (and rejected) in 1978 called for a Consumer Protection Agency (CPA), and that is the term most historians have used to refer to the bill throughout its lifetime.

No matter its technical name, the agency Nader proposed would possess a unique structure that reflected his critique of both corporate power and the regulatory state. Nader embraced a strand of populist liberalism that deeply distrusted all instances of concentrated power, very much in the Jeffersonian tradition. That Jeffersonianism extended to Nader’s conception of the business corporation, which he also viewed through the antiquated prism of the nineteenth century. Prior to the rise of general incorporation laws shortly before the Civil War, all corporate charters in the United States came directly from state legislatures, and in rare cases Congress—that is, corporations existed only by the grace of the government and only when elected officials believed the corporation served the public good. Even the arch-Federalist Supreme Court Chief Justice John Marshall, decreeing that private contracts superseded state prerogatives in Trustees of Dartmouth College v. Woodward (1819), nonetheless captured the early republic’s attitude toward corporations: “The objects for which a corporation is created are universally such as the government wishes to promote,” he wrote. “They are deemed beneficial to the country.”³³ Ralph Nader similarly understood corporations as public institutions that carried social responsibilities, a vision that underlay his long and unsuccessful campaign to require federal charters for large corporations and put “public” representatives on corporate boards of directors.³⁴

If Nader’s conception of the corporation differed from the more individualistic vision that most businesspeople espoused, his notion of the state itself also departed from that of most mid-century liberals. His Jeffersonian populism reflected a deep distrust of centralized state power as well as corporate power, and he worried acutely about the expansion of government bureaucracies and the administrative apparatus of the state. He thus parted ways with labor-oriented Democrats and union leaders who saw a robust federal government as the key to preserving the public good. Nader refused to support a “Department of Consumer Affairs” because he believed that adding more governmental structures only compounded the real threats to civic participation in government and the promises of democracy. Instead he argued that the principle aim of policy should be to decentralize power through procedural reforms that subverted both the state and corporations to the common goals of all citizens—the “public interest.”³⁵

Nader’s politics deeply informed his fixation on the problem of regulatory capture, which to him was the primary reason that consumers were not adequately represented in government. The theory of regulatory capture, promulgated widely by political scientists in the mid-twentieth century, argued that the immutable logic of large organizations inevitably caused regulated firms and industries to manipulate and control the decisions of the very agencies charged with regulating their conduct. Individual government regulators, according to this view, shared so many repeated transactions with representatives of the firms they regulated that they developed intellectual and personal empathy for them, and so made rules in their interests. In a more sinister sense, many critics opined the famous “revolving door” through which former government insiders found lucrative positions working for regulated firms as lobbyists, parlaying their contacts and deep knowledge into special favors for their employers. Nader believed that additional layers of regulation, including a cabinet post, would not address the structural problem at hand but simply create another regulator who could be captured by industry. Rather, to truly institutionalize the “consumer’s voice” in government would require the fundamental reform of regulatory procedures themselves.³⁶

Nader thus proposed a Consumer Protection Agency that would oversee and influence the process of administrative rule making by regulatory agencies, not promulgate regulations itself. Instead of crafting rules, the CPA would have statutory authority to oversee regulations and policies written by all government agencies to ensure that they reflected the best interest of consumers and that industry insiders did not wield undue influence on administrative decision making. The CPA would have the authority to audit a wide range of agencies, from the Office of Economic Opportunity, which handled employment fairness, to the Securities and Exchange Commission, which set transparency requirements. Moreover, it would act as a clearinghouse for public grievances, from high costs to faulty products to product recalls. Finally, the CPA would conduct research into consumer issues, facilitating the work of consumer protection agencies within the federal government and state-level commissions. And to avoid conflicts of interest and allow the agency a broad range of oversight, Nader insisted that the agency possess administrative independence; it should be positioned outside of any department (such as the Treasury or the Federal Reserve) and report directly to the Executive Office of the President.³⁷

Most important, the CPA would fundamentally alter the process of regulatory decision making in Washington because it would have legal standing to intervene before federal regulatory agencies, boards, and courts. Making the case for the CPA to supporters, Joan Claybrook of the group Public Citizen argued that regulatory agencies, including the EPA and OSHA, operated “in a quasi-judicial capacity, holding hearings, listening to arguments, and making decisions.” Corporations used their tremendous financial resources to hire expert witnesses and provide complex data to support favorable regulations. Since “consumers” were disparate, unorganized, and not centrally funded, regulators frequently did not hear opposition to the industry view, so the Consumer Protection Agency would fill that void. Agency lawyers would fact-check corporate claims, compel regulatory agencies to use their subpoena power to obtain data directly from regulated companies, and appeal any decisions that went against consumer interests. Thus, from its inception, the CPA embodied deep skepticism about state power, bureaucracy, and the potentially corrupting influence of corporate power. If Ralph Nader was Jeffersonian in his political vision, he was Brandeisian in his policy prescriptions.³⁸

Almost nothing about the proposed CPA sat well with the vast majority of business leaders, especially those who were active in Washington-based employers’ associations. Nader’s theory of the corporation as a public institution struck many as anachronistic at best, destructively socialist at worst. More than a century of law, not to mention hundreds of years of liberal property-rights philosophy, affirmed that the corporation was a collection of private contracts and a sacrosanct and autonomous part of the body politic, capable of paying taxes, suing in court, and owning property. To deny that corporations enjoyed private status was to discredit the entire concept of free enterprise; if corporations were public, what stood in the way of the nationalization of industry? Moreover, many conservatives believed that Nader’s fixation on regulatory capture reinforced the consumer movement’s affront to corporate integrity: the theory effectively indicted all business leaders as nefarious fat cats who undermined democracy for their own ends rather than the virtuous producers of prosperity, as they far preferred to see themselves.

As proposed in 1969, the Consumer Protection Agency thus combined consumerism’s instinctive distrust of business with social regulation’s costs of compliance—the worst of both worlds. Politically active business leaders loudly condemned the plan. The proposed agency, according to the NAM’s director of government affairs, threatened to install “a tax-supported consumer activist group within the government.” Such an agency would boast “unprecedented investigatory powers over the private sector and the rest of government.” Killing the bill in Congress became one of the business community’s top priorities.³⁹

ORGANIZED BUSINESS ON THE MARCH

The corporate offensive against the Consumer Protection Agency began quickly. In the late spring of 1969, just weeks after Nader and Ribicoff announced their proposed agency, several dozen Washington lobbyists organized regular meetings to coordinate an industry response. Major employers’ groups and trade associations, particularly the NAM, the Chamber, the National Federation of Independent Business (NFIB), and the Grocery Manufacturers of America (GMA), took the lead mobilizing the Washington Representatives from their most prominent member firms. From the beginning, these organized corporate representatives acknowledged the daunting challenge they faced in opposing the CPA. In fact, George Koch of the GMA (no relation to the Koch Industries family), bestowed the code name “RW80D” on the group at its earliest meetings. The appellation referred to Jules Verne’s Around the World in 80 Days, whose lesson, Koch told his fellow lobbyists, was “nothing is impossible.” Despite consumerism’s tremendous popularity and conservatives’ relatively weak position in Congress, the lobbyists knew that many avenues lay before them. James Madison’s ingenious, not to say infuriating, system of safeguards against the “mischiefs of faction” meant that stopping a bill was much easier than passing one. In the United States, reactive lobbying had an inherent tactical advantage over proactive lobbying.

Organized business’s counteroffensive against the Consumer Protection Agency centered institutionally around that ad hoc committee, which rebranded itself the Consumer Issues Working Group (CIWG) by 1973. At its helm stood Washington veteran Emmett Hines, the director of government relations—that is, chief paid lobbyist—for construction materials manufacturer Armstrong Cork, who structured the CIWG as a coordinating body through which CPA opponents exchanged information, crafted lobbying strategies, and divided up public relations tasks. Lacking a formal structure or legal existence, the group relied on its members for financial and logistical support, including staff and office space. While early meetings attracted representatives of several dozen firms, by 1977 the CIWG counted more than four hundred members, including industrial giants like Bethlehem Steel, Maytag, Ford, United Airlines, and most major oil companies. But throughout its battle against the CPA, the CIWG’s most significant institutional support came from employers’ associations—the NAM, the Chamber, and, upon its creation in 1972, the Business Roundtable—which tapped widespread and growing lobbying infrastructure to work vigorously against the bill.⁴⁰

The corporate lobbyists and association representatives in the CIWG understood well that the idea of the CPA—like the consumer movement in general—enjoyed great popularity among the public and tremendous support from lawmakers in both parties. Indeed, even most moderates endorsed the concept; Republican representative Gerald Ford of Michigan pronounced it “a sound, workable bill” in 1971.⁴¹ Deeply anxious about the business community’s negative public image, many corporate leaders worried that the very impression of a coalition of industrial interests working against the bill would push fence-sitting legislators over to the consumer movement’s side, if only so they would not have to face constituents’ accusations that they caved to pressure from “big-business lobbyists.” Recognizing this dynamic, the NAM’s marketing director specifically encouraged members to stress their position as independent, nonaffiliated small business owners when they wrote anti-CPA letters or telegrams to their elected officials. “Your letters will be more effective,” he explained, “if you omit any reference to NAM or its materials.”⁴²

Fighting an uphill battle, CIWG lobbyists focused on specific strategic objectives, looking for congressional allies who could help them thwart the majority’s will and stall the bill. In 1970, the bill raced through subcommittees in the House and Senate with near unanimity. In December, the CPA passed the full Senate 74 to 4, and observers predicted a similarly lopsided victory in the House.⁴³ Knowing the bill would surely pass a floor vote and that even if opponents could convince Nixon to veto it Congress would override that veto, the CIWG turned its fire on the last procedural gauntlet the legislation had to run. Before any bill could come to the floor for a vote, it first had to pass muster with the House Rules Committee, a bipartisan fifteen-person body that decided what legislation went to the floor, when, and under what conditions for debate. In the two days after the Senate vote, the CIWG lobbyists worked feverishly to persuade conservative members of the Rules Committee to block the bill from moving forward. In a telling example of strategic arm-twisting, one lobbyist from the NFIB leaned on Texas Democrat John Young by reminding him about the small business owners in Young’s district. Although the idea of a CPA might be good in theory, the lobbyist told the congressman, it contained a few provisions that had to be “smoothed out and structured” or it else would be too burdensome for small companies. Some 286,000 NFIB members had come out against the CPA, the lobbyist continued, and 21,000 of them lived in Texas.⁴⁴ Under such pressure, Representative Young joined six others in voting against sending the bill to the full House. With one member absent, the Rules Committee dead-locked 7 to 7, and the bill died.⁴⁵

After such a close vote and with continued momentum in Congress, consumer advocates blazed ahead with another version of the CPA bill once the new Congress, elected during the midterm election of 1970 that saw significant liberal and Democratic Party gains, took office. In October 1971, the House passed a new CPA bill 344 to 44. To Nader’s chagrin, this new legislation slightly restrained the proposed agency’s investigative powers, despite efforts by Nader allies in the House to pass strengthening amendments. Nonetheless, the somewhat weaker bill still called for an independent agency with jurisdiction to participate in formal regulatory and other rule-making procedures. With such overwhelming support, proponents hopefully set their eyes on the upper chamber, where only four senators had voted against the CPA the year before.⁴⁶

Few consumer advocates predicted, however, that two of those lonely votes from 1970—archconservative Democrats Sam Ervin of North Carolina and James Allen of Alabama—would ultimately succeed in leading filibusters in two successive Congresses, stalling the advance of the CPA through shrewd parliamentary procedure backed by the growing lobbying weight of the CIWG. Ervin, the seventy-six-year-old veteran of World War I who had achieved national prominence as a vocal opponent of civil rights legislation, took credit for leading the 1970 floor fight against the CPA when he tried, largely without success, to insert industry-specific loopholes and exemptions into the legislation.⁴⁷ Philosophically, Ervin opposed the expansion of federal regulatory power over states, which he believed the bill embodied. More specifically, he agreed with the Chamber of Commerce’s argument that more robust consumer regulations would likely compel business to disclose corporate secrets, such as recipes or chemical formulas.⁴⁸ Not coincidentally, the North Carolinian’s business constituents included major tobacco companies, who worried, as an attorney for R. J. Reynolds wrote to Ervin, that an activist CPA might place “the power to destroy the tobacco industry … squarely in the hands of the Federal Trade Commission.”⁴⁹ Allen, also a segregationist southern Democrat, expressed concern that the CPA would be inherently hostile to other government agencies and thus urged compromise legislation that denied the CPA subpoena power and specifically protected private corporate information.⁵⁰

Ervin and Allen became natural allies with the CIWG lobbyists, and as the campaign for the CPA reemerged in 1972, the Washington lobbyists worked furiously to assist their filibuster. According to Senate Rule XXII as it then stood, two-thirds of all members present and voting had to vote for cloture in order to end debate and bring a measure to a vote; Ervin and Allen therefore had to convince 32 fellow senators to reject cloture to maintain a successful filibuster. Throughout the summer of 1972, the senators worked closely with CIWG representatives to identify allies and secure their support. With particularly enthusiastic assistance from George Koch and the GMA, CIWG lobbyists supplied the senators with information, data, talking points, and even prepackaged speeches to prolong debate and counter arguments by CPA proponents. Ervin put forward a compromise that he called an “Amicus Amendment,” which would have reduced the CPA’s authority over federal agencies to the same level of influence that an amicus curiae brief has in a lawsuit. The ploy failed to sway any CPA supporters, but it provided Ervin and his growing list of conservative allies some political cover from charges that they were openly hostile to consumers.⁵¹

Through their logistical support for Ervin and Allen’s filibuster, organized business groups demonstrated their growing skill at managing indirect lobbying campaigns. All summer long, lobbyists targeted specific senators and mobilized businesspeople in their constituencies to bombard them with telephone calls, letters, telegrams, and often personal visits. Such a barrage aimed not only to shape the senators’ own thinking but also to assure them that important voters would defend their decision and that they could take a stand against bureaucracy without drawing the wrath of consumers. The quality, not just the quantity, of constituent mail thus figured prominently into this strategy, suggesting a unified “letterhead theory of indirect lobbying.” All else being equal, letters from the owners of small companies or middle managers at large firms that arrived on embossed company stationery appeared to carry more weight than hastily scrawled personal notes. Such business correspondence overwhelmingly urged senators to join the filibuster and reject the CPA or else water it down with Ervin’s Amicus Amendment. By providing their members with specific language and point-by-point arguments, the CIWG groups helped ensure that anti-CPA mail also appeared more authoritative than the simple slogans (“Consumers need a voice”) that senators tended to hear from CPA proponents.

In September 1972, the CPA bill made its way through committee and headed toward the Senate floor. Sam Ervin, who had unsuccessfully argued against the bill in committee, loudly promoted his Amicus Amendment, and quietly shored up support for a filibuster, received the following letter from a constituent: “Having read newspaper accounts of your opposition to SB3970, which would set up an independent Consumer Protection Agency, I am writing to commend you for your stand and to express the hope that you will continue to oppose this unwise legislation when it is deliberated upon the floor of the Senate.”

The letter came on formal personal letterhead, clearly typed and personally signed from a businessman in Charlotte. In a remarkable testament to the coordination of the anti-CPA movement, Ervin also received the same letter, in exactly the same wording, from a businessman in Raleigh. And several more from men in Charlotte, at least two of whom used the same corporate suite address (but did not identify their company). Such a coordinated campaign reflected the supreme skill the bill’s opponents displayed in rallying businesspeople at local levels and giving the impression of broad-based support. (Evidence of coordination also belied the claim that the letter writer got his information from newspapers—clearly he got it from the person who gave him the form letter.)⁵² Moreover, the coherence and sophistication of the anti-CPA grassroots effort clashed starkly with the more traditional methods of lobbying employed by Naderite organizations like Public Citizen, which worked their standard coalitions in Congress and believed that they still could achieve a strong showing.

On October 5, 1972, as the 92nd Congress approached a preelection recess, Ervin and Allen’s filibuster faced its final test and passed. The bill’s proponents mustered only 52 votes for cloture, far below the two-thirds majority needed, and the bill died for that session of Congress. (Sixteen senators missed the vote, but their presence would not have altered the outcome.) The 30 senators who voted against cloture included 18 out of 45 Republicans, mostly from the Midwest and West, and 12 Democrats, all but one of whom hailed from the former Confederacy. The liberal reform movement badly misjudged its support in Congress, and the anti-CPA forces deftly tapped into the traditional home of anti–New Deal conservative politics and the power of the filibuster to kill the measure.⁵³

Two years later, in August 1974, the House again passed the CPA, this time by a smaller but still substantial margin of 293 to 94. Once again, conservative senators Allen and Ervin led a filibuster, prolonging debate both in committee and on the Senate floor, and relying on logistical support from the CIWG lobbyists to keep their members in line. During the long summer that culminated in Nixon’s resignation in August, Ervin—who had bolstered his credibility with many liberals through his dogged chairmanship of the Senate Watergate Committee during the previous eighteen months—successfully pushed through an amendment exempting small businesses from the CPA’s oversight powers. Although such a concession may have paved the way for greater support from the small business community, the various organizations working through the CIWG remained united in opposition. Explaining that logic, the NFIB’s lobbyist wrote to Ervin that although he was grateful for the exemption, he worried that it would not survive a conference with the House. Arguing that “[w]ithout it, the Consumer Protection Agency is totally unacceptable to the small business community,” the NFIB lobbyist reaffirmed his stark opposition.⁵⁴

Once again, liberal senators and their allies in the consumer movement worked hard to convince just enough filibustering senators to change their mind and vote for cloture. Lobbyists for the pro-CPA Consumer Federation of America published a target list of “swing senators” whom they hoped to bring to their side. Of their top fifteen, eleven were Republicans, illustrating the strong link between southern Democrat antistatist conservatism and opposition to the Consumer Protection Agency.⁵⁵ The final cloture vote on September 19, 1974, echoed the same partisan and regional dynamic. CPA supporters managed to muster 64 votes, three shy of the two-thirds majority they needed to invoke cloture. (Edward Kennedy [D-MA] and William Fulbright [D-AR] were absent, but their votes would not have changed the results.) The 34 senators who voted against cloture included 21 of the 42 Republicans in the chamber, plus Conservative James Buckley of New York, and 12 Democrats, all but one of whom came from the South. Indeed, seven of the Republicans hailed from the South, meaning that more than half the filibuster strength came from the former Confederacy.⁵⁶

The CIWG’s successful use of parliamentary procedures to defeat the CPA in 1970, 1972, and 1974 emboldened the business community and enraged liberal consumer activists. Washington Post journalist Jack Anderson, who had leaked the Powell Memorandum in 1972 and devoted much of his writing to exposing corporate malfeasance, described the CIWG as “an awesome array of industry nabobs,” and Nader railed against corporate “special interests” that had waged a “massive campaign to defeat the bill.”⁵⁷ Yet the hair’s-breadth margins of the cloture votes diminished any sense of victory for business lobbyists. According to Nixon aides, CIWG leader Emmett Hines called the White House to express “concern, verging on alarm, of significant portions of the business community” that the Nixon administration might consider a compromise measure, warning starkly against emboldening bipartisan consumer advocates and alienating the business community.⁵⁸ Even after the successful filibusters, Hines knew the battle was far from over.

A NEW FRONT: THE BATTLE FOR PUBLIC OPINION

In truth, business lobbyists had done little more than buy themselves more time. Public opinion polls confirmed that Americans still liked the idea of a CPA, so its passage appeared to be a question of when, not if. Depending on how pollsters asked the question, 50 to 65 percent of Americans supported the CPA between 1974 and 1976, while only around one-third opposed it (the remainder did not understand it enough to have an opinion).⁵⁹ The Watergate scandal and Nixon’s resignation in 1974 stiffened public sensitivity to underhanded business dealings (such as those that funded Nixon’s secret slush funds), bolstering support for the measure in principle. Moreover, the 92 “Watergate babies” elected in the fall of 1974 altered Congress’s ideological makeup, and 7 of the 35 senators who had filibustered the CPA left office by January—including Sam Ervin, who retired.⁶⁰ Anti-CPA lobbyists understood well that their strategy had to extend beyond legislative parlor tricks and actually reshape public debate about the bill they hoped to defeat permanently.

Anti-CPA lobbyists knew that convincing legislators to oppose the bill would require vigilance and unity, but maintaining a united and committed front frequently proved challenging. CPA supporters—including Nader groups and Republican Virginia Knauer, who stayed on in the Ford administration as director of the Office of Consumer Affairs—published the names of several companies that actually supported the bill, hoping to win over undecided members of Congress. CIWG lobbyists retorted quickly that such firms represented a distinct minority and continued to argue, quite accurately, that the majority of major firms and business associations steadfastly opposed the CPA.⁶¹

But business opposition frequently appeared broader than it was deep—CIWG lobbyists worried that the bill did not arouse a sufficient sense of urgency among many businesspeople. After all, a decade of strong consumer protection laws, both state and federal, had not yielded apocalyptic results. Perhaps key legislators and their business allies would lose interest in fighting the CPA or even come around to accepting some version of it. Combatting such potential lethargy required convincing businesspeople that the proposed bill represented a far more dire and devastating federal intrusion on business than anything that had come before. Making that case, the Chamber of Commerce published a short opinion piece called “Consumer Protection Agency: You Think You Don’t Have a Stake in It? Well, Read On.” The article stressed the proposed agency’s subpoena and interrogatory power and conjured horror stories of overregulated small business owners brought to ruin by a dictatorial “Administrator of the CPA,” who would monitor their every move. Invoking the same vague yet ominous specter of intrusive “big government” that had animated conservatives’ ideological opposition to the New Deal state for decades, the Chamber of Commerce claimed that the CPA would create a bureaucratic nightmare for small business owners.⁶²

Because their grip on the levers of power in Congress remained so tenuous, anti-CPA lobbyists focused on the public square as much as the cloakrooms of the Capitol. And by 1974, as consumer advocates prepared to ride the liberal tailwinds toward another pass at the bill, no business group was better suited to take on that dual challenge than the Business Roundtable. The wealth and resources of its member corporations created a vital infrastructure for organized informational campaigns. In late 1974, the Roundtable inaugurated its public relations campaign against the CPA by paying $25,000 to the highly reputable Opinion Research Corporation (ORC) of Princeton, New Jersey, to survey Americans about consumerism and consumer legislation.⁶³ According to the ORC’s poll, 75 percent of respondents opposed “setting up a Federal Consumer Protection Agency over all existing consumer-related agencies.” Instead they favored “making existing agencies work better and more effectively.” Thirteen percent of those surveyed said they did favor the CPA, but half of those respondents changed their minds when the pollsters told them the cost would be “at least $60 million for the first three years.” Moreover, most poll respondents claimed that the best recourse for faulty products lay with retailers, manufacturers, or better business bureaus, not with the federal or state government.⁶⁴

The ORC poll thrilled the Roundtable’s executives, who heard exactly what they had wanted to and quickly disseminated the results to their allies in the CIWG for widespread distribution. Firms and associations wrote editorials, cartoons, position papers, and talking-point memos for newspapers across the country during the winter and spring of 1975, creating a blitz of apparently scientific anti-CPA publicity. Most anti-CPA propaganda reaffirmed business’s longstanding arguments about the link between regulations and inflation, business failure, and job losses but now included the exciting news that the American public finally shared those sentiments. Over the next three months, the White House collected 245 editorials that invoked the “75 percent” figure as proof that members of Congress who backed the CPA in fact ignored the will of the people.⁶⁵

Perhaps the best-known pundit who used the ORC data to attack the CPA in the spring of 1975 was a certain B-movie star and avowedly conservative former California governor. The Roundtable’s survey, Ronald Reagan wrote, confirmed that most people opposed creating “another big bureaucracy which is bound to mushroom (don’t they all?).” Moreover, Reagan insisted, the consumer movement’s complaints about business were largely unfounded, since “[o]nly 13 percent said they had been treated ‘unfairly’ as consumers.” Linking antiregulatory politics to populist complaints about liberal elitism, Reagan claimed that the CPA bill would merely create a forum for “professional consumerists” and “bureaucrats” to make policy by “equat[ing] their own opinions with those of all consumers.”⁶⁶ Tapping into the same antistatist and antibureaucratic rhetoric that had shot him to national political prominence during the Goldwater campaign in 1964, the future president relied on his celebrity among conservatives to spread the message further than business associations could by themselves. The day Reagan’s editorial appeared, GMA president George Koch slyly forwarded it to a staffer in the Ford White House, noting, “The pressure continues to mount for a veto.” Given rumblings that Reagan would challenge Ford for the Republican nomination the next year, Koch’s message resounded clearly.⁶⁷

The ORC poll provided excellent ammunition for anti-CPA conservatives and business groups, but, as consumer advocates pointed out, it reflected a profound polling bias. An investigation by the Congressional Research Service of the Library of Congress lambasted the polling company for asking a loaded question that posited a false choice between creating “an additional Consumer Protection Agency” and making simple improvements to existing agencies. “By repeating the point that the agency would be ‘additional’ four times in the course of the question,” the report concluded, “this item may well have focused the concerns of the respondents on the size of government bureaucracy. It is consequently very difficult to know if respondents were reacting to the Consumer Advocacy Agency or if they were expressing their dismay with the complexity and size of government [italics added].” Indeed, differently phrased Gallup and Harris polls showed that the CPA remained popular.⁶⁸ Senator Charles Percy of Illinois, a liberal Republican and fervent CPA supporter, claimed that his “own mail and conversations with consumers around the country” convinced him that the bill was both good policy and a political winner.⁶⁹ But for business lobbyists, the ORC poll provided a valuable lesson: framing mattered, and public antipathy toward government bureaucracy provided a politically useful countermeasure against antibusiness bias.

The ORC survey constituted only part of a multipronged public relations blitz against the CPA bill. Advertising in Reader’s Digest, for example, the Business Roundtable mocked the consumerist notion that companies should make perfect products. “Have you ever stopped to think what it would cost to build a television that would ‘never’ fail or wear out? Many thousands of dollars.”⁷⁰ The anti-CPA movement also led to political cartoons, such as one that depicted the agency as an obese, overbearing mother figure, locking the consumer in a bear hug and declaring: “I’d just love ya to death!” The cartoonist commented: “Just what we need…. Smother Love” (see figure 5.1).⁷¹

This cartoon and dozens more portrayed the CPA as an emasculating threat to individual choice, while others adopted a more menacing tone and cast the proposed agency as an all-seeing “Big Brother.” In the years to come, such invocations of the “national nanny” formed an increasingly prominent part of conservative critiques of regulation, including, quite prominently, efforts by the FTC to regulate advertisements during children’s television programming in the late 1970s. As FTC chairman Michael Pertschuk observed, that meme spread deeply throughout political culture, manifesting in such stalwart organs of the “liberal establishment” as the Washington Post. Longstanding conservative attacks on heavy-handed consumer regulation thus gained increased prominence through the CPA battle, and the basic message was simple: bureaucratic meddling would wreak havoc on producers and, by extension, consumers.⁷²

Even as business activists deployed advertisements, editorials, and cartoons to weaken public support for the CPA in general, they also honed their arguments about the bill’s details in an effort to win points with specific legislators. The proposed legislation’s treatment of labor unions, which business lobbyists believed was hypocritical and unfair, provided perhaps the most fruitful line of attack. In the original version, the CPA administrator’s jurisdiction would have extended to the NLRB on issues “directly concerning a labor dispute involving wages or workplace conditions affecting health and safety.” That is, the CPA could theoretically have ruled against workers’ interests if it judged that they conflicted with consumers’ interests (by driving prices up, for example). In need of support from organized labor after the failed efforts in 1970 and 1972, the CPA’s supporters in Congress removed that language from the 1974 and 1975 versions, leaving the NLRB beyond the CPA’s purview. According to Senator Sam Ervin, this “labor exemption” would apply “whether or not the CPA administrator might determine that these [activities] could result in a substantial effect on the interests of consumers.”⁷³ For business lobbyists as well as conservative politicians like Ervin, this change smacked of unscrupulous deal making and liberal favoritism to labor. Michigan Republican Robert Griffin, long a critic of union privilege but otherwise disposed to support consumer issues, voted against the bill because he believed that exempting the NLRB meant the CPA catered to “special interests.”⁷⁴ This fixation on the “labor exemption” thus represented a shrewd tactic by corporate lobbyists, at least on the margins. Although consumer issues attracted tremendous support, labor remained as divisive as ever.

Figure 5.1. In May 1975, as conservative pressure grew for President Ford to veto the Consumer Protection Agency, Richmond Times-Dispatch editorial cartoonist Carl E. “Chick” Larsen lampooned Ralph Nader’s plan as an overbearing mother. Courtesy Richmond Times-Dispatch and the Special Collections and Archives at Virginia Commonwealth University.

Yet despite the CIWG’s massive public relations blitz and intense lobbying, the proposed Consumer Protection Agency remained popular with the public and retained significant support in Congress as the bill ran the legislative gauntlet once again in 1975. Without Ervin to lead another filibuster, CIWG lobbyists failed to prevent cloture when the Senate considered the bill in the spring of 1975. Indeed, one executive at the NAM complained that “Consumer militants have been busy telling Senators and the Administration that ‘business has given up the fight.’ ”⁷⁵ Heading into the summer, the House appeared poised to approve the measure as well, and all eyes turned to the only remaining obstacle in its path: the newly installed holder of the presidential veto, President Gerald R. Ford.

THE SLOW DEATH OF THE CPA

Ascending to the presidency under unprecedented circumstances in the summer of 1974, Gerald Ford encountered a deeply divided, angry, and distrustful country. The national nightmare of Watergate, combined with military failure in Vietnam, the energy crisis, and inflation, had bred widespread discontent, which Jimmy Carter would later term “a crisis of confidence.” The voting public, as White House pollster Robert Teeter commented to Chief of Staff Dick Cheney, was “more alienated and more cynical than at any point in modern times.” Widespread public animus, Teeter claimed, extended to “the government, businesses, unions, school systems, media, churches, and even stores where people shop.” But this variety of targets shared a vital common feature: they were all big.⁷⁶ At the heart of America’s malaise in the mid-1970s was a classical critique of concentrated power and inaccessible, unaccountable, undemocratic elites. Fear of “bigness” cut both ways in debates between business leaders and consumer advocates, as each camp tagged the other as “Big”—“Big Business” on one hand and “Big Government” on the other. In the short term, the public aimed its anger over Watergate squarely at corrupt politicians like Nixon and former vice president Spiro Agnew, as well as their greedy corporate benefactors, rather than the federal government. Over time, however, conservative politicians, intellectuals, and activists successfully used that discontent to build a powerful critique of bureaucracy and, by extension, government itself. The story of the endgame for the Consumer Protection Agency legislation brings into sharp focus the way some conservatives—particularly organized business lobbyists—linked populism with antigovernment sentiment in the interest of weakening the regulatory state.

Like many moderate Republicans, Gerald Ford had supported the CPA earlier in the decade, but in the spring of 1975 the president found himself torn. In April, the new Senate—without Sam Ervin in it—broke an anti-CPA filibuster and passed the bill, sending it to the House of Representatives. With liberal ranks swelling with Watergate babies, House approval seemed certain and business lobbyists pressured Ford for a veto. On one hand, Ford deeply respected the opinions of business leaders, and knew he could ill afford to alienate conservative and business-oriented voters. On the other, as the head of the Republican Party, Ford bore the brunt of public criticism over the cronyism and corruption that Watergate had exposed. Senator Robert Dole, Republican from Kansas (and Ford’s future running mate), urged the president to take a centrist path by proposing a politically acceptable alternative policy.⁷⁷ White House advisor Bill Baroody Jr. agreed, warning that an outright veto would paint Ford as “reactive, negative, anticonsumer and a ‘tool of big business.’ ”⁷⁸ Splitting the baby, however, just might work.

To reconcile the consumer movement’s demand for representation with business’s insistence on less bureaucracy, Ford thus proposed a series of “Consumer Representation Plans,” which would require the heads of regulatory agencies to analyze their operations and demonstrate that they properly represented the “consumer interest.” Although presented as a compromise, Ford’s suggestion completely discounted Ralph Nader’s fundamental concern about the process of regulatory governance, since simply telling agencies to look out for consumer interests did nothing to prevent regulatory capture. Moreover, the proposal in fact reinforced the false choice that the Opinion Research Corporation poll had proposed between creating a new super-agency and “making existing agencies work better.”⁷⁹ Yet despite protestations from consumer groups, such distinctions proved difficult to explain to many voters, and Ford’s alternative to the CPA served its most important political function: it provided cover for legislators, and the president, to oppose the CPA while still insisting with some plausibility that they cared about consumer protection.

In September 1975, Ford announced that he would veto the CPA if it passed the House. In response, CIWG lobbyists identified 84 persuadable representatives and launched a full-court press. O. Pendleton Thomas, CEO and chairman of B. F. Goodrich and chairman of the Business Roundtable’s consumerism task force, beseeched the group’s 150 members to use their gravitas to lean heavily on those wavering lawmakers, and their lobbying bore fruit in November. Although the House of Representatives passed the CPA bill, the small margin—208 to 199—meant no chance to override a presidential veto.⁸⁰ In a bitter irony, consumer advocates had finally achieved passage in both houses of Congress, but they decided against reconciling the two versions only to see their bill vetoed, and so the CPA once again ended up in the legislative waste bin.⁸¹

With the 1975 vote, the anti-CPA coalition finally succeeded at more than manipulating parliamentary procedure, even though its ultimate victory had rested on the threat of a veto. At long last, business lobbyists could boast that their message had begun to sink in, as support for the CPA began to soften even among Congress’s most liberal members, especially the Watergate babies. Indeed, nearly a third of the new Democratic House members voted against the CPA in the fall of 1975. Typical of this group was freshman representative Christopher Dodd (D-CT), who had run for office on a platform of price controls, environmental protection, and other liberal causes. Unlike his father, Senator Thomas Dodd (D-CT), who had voted for the CPA in 1970 just before retiring, the younger Dodd decided that a new, autonomous agency would only add “a new layer of bureaucracy” to the federal government. While he agreed that corporations often captured regulators, Dodd embraced Ford’s Consumer Representation Plan alternative, arguing that Congress should redress the imbalance of power within the existing structure.⁸² Dodd’s language, if not his sympathies, exactly mirrored the coordinated message of business lobbyists. More important, the freshman legislator calculated that business’s message would resonate with his upper-middle-class constituents in the Connecticut suburbs.

The defeat of the CPA bill in 1975 thus represented a significant, if incomplete, triumph for organized business groups. The NAM, for example, which had rated the bill one of its “major national legislative issues” and lobbied hard against it, praised the “united business community” for stopping the CPA.⁸³ “The surprising shift in Congressional sentiment,” its leaders boasted, “was the fruit of more than five years of intensive and effective action by the NAM organization in concert with individual members and a host of national, state and local business associations.”⁸⁴ But business lobbyists knew they had failed to achieve a knockout punch. The CPA retained majority support in Congress and in public opinion polls. When Jimmy Carter narrowly defeated Gerald Ford in 1976, the political calculus changed yet again. No longer able to count on a presidential veto, corporate lobbyists knew they would have to stop the bill directly on Capitol Hill.

The advent of the Carter administration in January 1977 marked a new beginning for the CPA’s supporters. For the first time in the bill’s long legislative history, the man in the White House had actively campaigned for the measure and positioned himself as a friend of the consumer in the tradition of his Democratic predecessors, Kennedy and Johnson. Indeed, one of Carter’s first acts as president was to reappoint Esther Peterson—longtime consumer advocate, advisor to Kennedy and Johnson, and one of the CPA’s original architects—as Special Assistant for Consumer Affairs. Peterson’s explicit mandate was to shepherd the Consumer Protection Agency through Congress and to Carter’s desk.⁸⁵ All she needed was a simple majority in the House and a filibuster-proof majority—amended from 67 to 60 in 1975—in the Senate.⁸⁶

The CPA’s supporters and opponents all knew the stakes were high. Writing to a state-level consumer leader, Ralph Nader warned: “If big business can defeat this simple yet compelling idea, they will be encouraged to defeat the entire consumer agenda, nationally and locally, with all that implies against the health, safety and economic well-being of all Americans.”⁸⁷ For their part, business lobbyists realized that they faced an uphill battle, given the new political environment. By 1977, James Ferguson, CEO of General Foods, had taken over the Business Roundtable’s consumerism task force. Imploring member CEOs to remain vigilant and active, he claimed that the “effectiveness of our ‘grassroots’ campaign could make an important difference in what we believe will be an extremely close vote.”⁸⁸ In terms of resources and energy, however, business opposition to the CPA had reached the height of its power. More than four hundred companies and trade associations, including the Roundtable, had joined the CIWG, allowing the ad hoc group to coordinate public information campaigns and lobbying strategies on an ever larger scale. As before, larger and wealthier corporations and associations took the lead writing editorials, white papers, cartoons, and advertisements, which the CIWG distributed broadly. The Business Roundtable even hired a public relations company, North American Precis Syndicate, to write negative ads and articles about the bill. Business lobbyists in turn used those pieces, clipped out of newspapers and magazines, to demonstrate public opposition to the bill.⁸⁹

Ironically, business lobbyists’ arguments against the CPA actually reflected the same antistatist populism preached by the bill’s supporters. All sides agreed that wasteful and bloated government bureaucracy drove up prices and ultimately hurt consumers. The salient question remained whether the proposed CPA would make that situation better or worse. Critics portrayed it as “yet another” layer of bureaucracy.⁹⁰ To the contrary, Nader insisted, the agency would be “a bureaucracy fighter, prodding other agencies to be responsive to consumers.” Yet even in making that case, consumer advocates like Nader consistently framed the CPA as a solution to the problem of government regulation, effectively conceding that, as Ronald Reagan would famously state, “government is the problem.”⁹¹

That mixed message presented challenges to the bill’s defenders. As Esther Peterson later recounted, CPA backers struggled to explain the bill to voters because it targeted the process of governance rather than immediate consumer problems. “[W]e didn’t say that we were going to see that your zipper’s repaired, or that your car was going to be repaired,” Peterson explained, but that there would be “a structure for taking care of these questions.”⁹² Jimmy Carter himself perpetuated the confusion. On the campaign trail in 1976, Carter had railed against the excesses of big government, promising to halt “the proliferation of new agencies, departments, bureaus, boards and commissions because they add more to an already confused federal bureaucratic structure.” But as for the Consumer Protection Agency? “This agency, in my opinion,” Carter hastened to add, “is different.”⁹³ Articulating exactly how it was different became the greatest public relations problem for the bill’s supporters.

CPA supporters further compromised their intellectual arguments for the bill by relying on individualistic and materialistic justifications for the legislation. Given the country’s precarious fiscal and economic footing in the late 1970s, as well as their inherently populist worldview, they stressed the agency’s relatively low cost. Indeed, at $15 million a year, the proposed CPA would cost just a little more than five cents for each of the 220 million people in America. Put another way, they claimed, a year’s worth of effective consumer advocacy equaled “about 5 or 6 HOURS of the Department of Defense’s annual budget.” Perpetuating this pocketbook justification, the consumer organization Public Citizen organized a “Nickel Campaign” through which CPA supporters mailed the five-cent coins to Congress. (The irony that the coins bore the visage of Thomas Jefferson, secular saint of small-government populists, was likely lost on everyone involved.)⁹⁴ Of course, the Nickel Campaign’s focus on the CPA’s administrative costs completely discounted the substantive conservative critique that consumer product regulation generated high compliance costs for firms. Nonetheless, by engaging business lobbyists and other critics on the question of cost, the consumer movement made a strategic decision to embrace the materialistic and individualistic frameworks advocated by their opponents.

After a tough summer of airmail nickels, editorial wars, and intense personal lobbying, the CPA’s future remained uncertain. Powerful and vocal opposition by the CIWG convinced the bill’s supporters in the House to redraft the measure in October, offering a variety of incentives to undecided legislators. Although Esther Peterson believed she had just enough votes to pass it in the House (and that Senate passage would be easier), House Speaker Tip O’Neill (D-MA)—an ardent supporter—flinched at the last minute and pushed the vote back to the winter.⁹⁵

On February 8, 1978, the House of Representatives voted on the CPA for the fourth time in as many Congresses. This time, without ambiguity, it fell to defeat, 189 to 227. Peterson’s optimistic vote count had been scuttled, perhaps by the delay but certainly by the mounting pressure from organized business, whom consumer advocates quickly blamed for the loss. “This Congress is a wholly owned subsidiary” of American business, Ralph Nader railed.⁹⁶ “I am frightened for my country after seeing this demonstration of corporate power,” declared Peterson. In twenty-five years in Congress, Speaker O’Neill announced, he had “never seen such extensive lobbying.” Yet such a fixation on the quantity of business lobbying ignored its real qualitative achievement. Not only had CIWG lobbyists and major employers’ associations mustered tremendous financial, logistical, and human resources, but they had also succeeded in shifting the dominant discourse, both in Congress and in the public square. As Mark Green, director of Public Citizen, conceded, the most common sentiment among legislators was: “I’m with you on the merits … but I can’t convince my constituents that this bill is not a move toward big government.”⁹⁷ The Consumer Protection Agency went down, after a decade of struggle, because organized business lobbyists had changed the conversation.

THE AMERICAN CONSUMER, POLITICIZED

The final defeat of the Consumer Protection Agency at the hands of a well-oiled and sophisticated lobbying campaign by conservative business groups and corporate executives marked a sea change in consumer politics. In the course of less than ten years, the organized business community had taken what appeared to be a legislative slam dunk for public interest liberals and rendered it politically unviable. Along with their landmark victories against labor law reform and meaningful full employment guarantees, the death of the CPA marked the business movement’s true coming-of-age in the late 1970s. United through national employers’ associations, the business lobby generated common cause among executives from the Fortune 500 as well as small business owners, from moderates as well as antistatist conservatives, from northern and midwestern industrialists as well as segregationist southern Democrats.

The business mobilization against the CPA succeeded because it mixed sophisticated lobbying tactics with the enthusiasm of vast networks of political and intellectual allies, both of which encouraged prominent business leaders to deploy their own resources and political capital. As the battle wore on, corporate lobbyists honed their ability to read the national mood and frame their message around universal concerns, not narrow business issues. But they also realized that winning in Washington required the skillful manipulation of existing political fault lines. Industrial executives at the Business Roundtable, for example, understood that the greatest opposition to consumer and environmental protection regulations had come from the West and the South, where populist fears of an overreaching government largely reflected persistent antagonisms over racial politics. Although many of them personified the “eastern business establishment” to a fault, Roundtable executives worked hand in glove with populist southern conservatives like Sam Ervin and James Allen to mobilize the successful filibusters that twice thwarted the CPA’s forward progress. In the first half of the twentieth century, many southern Democrats had joined the ranks of populist Texan Wright Patman to protect “the little guy” from corporate predation, but after the 1960s, business conservatives managed to undercut those alliances. Organizations like the Business Roundtable forged a strong alliance by finding common ground with populists by opposing an expansive federal government. Moreover, corporate lobbyists worked hard to capitalize on the growing schisms between various factions of liberals, targeting suburban professionals who, while supportive of consumerism in general, worried about government bureaucracy and felt less instinctive common ground with organized labor. In this light, particularly given the historic support for social regulations among northern liberals, the business lobby’s success in persuading Watergate babies like Connecticut’s Chris Dodd stood out as a singularly important achievement.⁹⁸

Despite the demise of Ralph Nader’s number one priority, however, consumerism—like environmentalism—remained a popular and potent force in American politics. Rather than inaugurate a return to nineteenth-century notions of laissez-faire capitalism, the conservative critique of the organized consumer movement operated in a much more nuanced manner, taking full advantage of two dueling political traditions: the primacy of the individual and the pursuit of equality and, by extension, opposition to unfair privilege. As cultural historian Lawrence Glickman has argued, conservatives—including organized business leaders—turned the tide against Ralph Nader by co-opting liberal language and aggressively portraying “professional consumerists” as yet another “special interest” out to gain favor from the state. And even as they demonized liberal consumer activists as weak and implicitly feminine, Glickman argues, conservatives also pushed notions of “laissez-faire consumerism” in the 1980s, lauding consumers as intelligent and independent, with no need for a smothering nanny state.⁹⁹

This focus on economic self-interest ultimately formed a critical part of conservative policymaking in the Reagan administration, from regulation, as the next chapter explores, to issues like antitrust. As political scientist Marc Eisner has argued, historical debates about corporate monopolies in the United States focused on the inherent problem of “bigness,” but during the 1970s and 1980s, policymakers concentrated more narrowly on the specific economic effects of price discrimination. Collective disadvantages, in other words, motivated conservative economists and policymakers far less than individual harm. The business community’s ideological assault on the consumer movement thus resonated broadly. By eliding consumerism with business-oriented conservative values, this co-optation also helped dissolve the longstanding dichotomy between the “consumer” and the “producer” in popular discourse.¹⁰⁰

But for the leaders of the organized business community, the legislative defeat of the CPA marked an incomplete victory. The drive to institutionalize the public interest movement through procedural reform to the nation’s regulatory structure may have died in Congress in 1978, but the cultural and political forces that underlay its power remained. Indeed, while public interest liberals loudly bemoaned business’s newfound lobbying prowess, the men at the heart of that movement saw far more work before them. Fresh from their recent string of policy victories, a growing number concluded that the time for playing defense was over. Rather than manipulate the levers of power in Washington to stop or water down legislation they opposed, many business leaders adopted a proactive posture by proposing and lobbying for much-needed change. Flexing their new muscles, organized employers’ associations launched a major campaign to comprehensively reform the nation’s regulatory structure.