Kennedy (83 page)

Privately he made clear that he did not wish to be placed in that kind of situation very often, that he could not hope to repeat that kind of success very often, and that steel and every other industry had to be able to change its prices from time to time without creating a government crisis. (He also predicted privately that a violent press campaign and the traditional American sympathy for the underdog would soon swing the pendulum of public opinion away from his position in the steel dispute.) In his next press conference opening statement, and in an address shortly thereafter to the United States Chamber of Commerce, he stressed his concern for the steel industry’s and all industries’ need for higher profits, lower costs, faster modernization and greater markets in an expanding economy. “There can be no room on either side,” he said, “for any feelings of hostility or vindictiveness.”

But the olive branch held out by the President to the steel industry in particular and all business in general was met in many instances with poisoned arrows. Roger Blough, without altering his politics or philosophy, was cooperative and constructive at all times. Had administration-business relations depended on him—and on men like Tom Watson, Jr. of IBM, who was an effective liaison—all would have been well. Even most Republican leaders had little to say about steel. But right-wing columnists and commentators maintained a steady attack on the President’s action. And after a week or so of mixed feelings and constant agitation, many businessmen—who had, in private conversations with administration officials, condemned Big Steel’s increase as bad economics, bad public relations and bad judgment, and who had, inwardly, breathed a sigh of relief at the President’s preservation of the prices they paid for steel products—began a torrent of abuse against the President’s success. Any industry that raised prices, they said, was inviting the “steel treatment.”

U.S. Steel’s announcement of rescission had cited as reasons “competitive developments today, and all other current circumstances, including the removal of a serious obstacle to proper relations between government and business.” But the very surprise and swiftness of Big Steel’s retreat convinced those who had thought it impossible that the government must have used excessive power, and new obstacles to proper relations between government and business soon followed.

Amidst all the talk of “dictatorship,” “blind fury” and “socialism” among these business critics, three specific complaints on the steel incident stood out, all of them more superficial than substantive. The first was the FBI’s nighttime inquiry, already mentioned. The second was a doubt that the President would be equally stern with labor, forgetting that the whole crisis had been precipitated because the President
had
successfully insisted on the Steelworkers moderating their demands.
⁴

The third was a widely repeated story from
Newsweek
and the New
York Times
that the President, in our first conference after the Blough visit, had quoted his father as saying “all businessmen” were sons-of-bitches. Having been one of those whom the President addressed, I could not be clearer in my recollection that he was talking only about the steel industry. But the erroneous story became a
cause célèbre
in the business community, and arose at a press conference:

His correction was ignored and his hope was unfulfilled. Buttons for businessmen appeared bearing the caption “S.O.B. Club.” Bumper stickers appeared reading “Help Kennedy Stamp Out Free Enterprise” or “I miss Ike—Hell, I even miss Harry.” Another said: “Goldwater for President, Kennedy for King of Palm Beach.” A
New Yorker
cartoon enjoyed by the President portrayed one tycoon saying to another in their lavishly upholstered clubroom: “My father warned me that all Presidents were S.O.B.’s.”

Most of the jokes circulated, particularly after the May stock market slide, were much more bitter. Typical was the crack: “When Eisenhower had a heart attack, the market went down. If Kennedy had a heart attack, the market would go up.” But the President enjoyed the story of a businessman supposedly visiting at the White House, whom JFK sought to reassure with the words: “The economic outlook is good, no matter what the market says. If I weren’t President, I’d be buying stock myself.” To which the businessman replied, “If you weren’t President, so would I.” And he enjoyed another which had Joseph P. Kennedy staring disgustedly at the ticker tape muttering: “And to think I voted for that S.O.B.!”

Occasionally the President replied with a little humor of his own. At a New York Democratic rally on his forty-fifth birthday in May, he joked that he had received a wire from Roger Blough reading: “In honor of your birthday, I believe that you should get a raise in pay…. P.S. My birthday’s next month.” In June he revealed that the “nicest” letter he had received in a long time came from a Bethlehem Steel executive writing: “You are even worse than Harry Truman.” And a year later, at another New York dinner, he referred to the fact that down the hall in the same hotel Eisenhower was receiving an award as the man who had done the most for the steel industry that year. “Last year,” claimed Kennedy, “I won the award…they came to Washington to present it to me, but the Secret Service wouldn’t let them in.”

But there was little humor that summer of 1962 in the attitude of many outspoken executives. As mentioned in the previous chapter, careful analysis made clear that Kennedy’s attitude toward business in general and steel in particular had no more to do with the stock market slide of 1962 than it did with its record climb in 1961 and 1963; but those searching for a scapegoat convinced not only themselves but the nation that the market decline, inasmuch as its worst day was less than two months after the steel fight, must have been caused by it.

Nor did they stop there. They accused Kennedy of favoring socialism and price controls, opposing free enterprise and profits, and retaining too many antibusiness advisers—mentioning Bob Kennedy, Heller, Goldberg, FTC Chairman Dixon and Arthur Schlesinger, Jr. (although the latter had nothing to do with the steel case or other economic decisions). They assailed Dillon for being a traitor to his class and Hodges for not representing them in the Cabinet.

To these critics, every conciliatory Kennedy speech was duplicity, every favorable Kennedy move was a menace. They wanted him to oppose inflation in general, but not specific price increases. They wanted him to improve the balance of payments, but not by curbing foreign tax havens. They wanted him to cut back subsidies, but had in mind
aid to education and welfare, not the Federal subsidies paid to shipowners, shipbuilders, publishers and sugar importers. They wanted him to reduce corporate taxes, but not with the investment tax credit.

If he remained calm during the stock market slide, they said he was indifferent to recession. If he sought new antirecession measures, he was power-hungry. If he met their demands to be equally tough on labor, he was intervening too much in private enterprise. If settlements recommended by a panel of impartial Federal mediators cut back union demands for railroad firemen or jet flight engineers, that was the result of simple justice, but if they provided for a union shop in the aerospace industry, that was the result of Kennedy bias. “No matter what he did,” said the head of the Michigan Chamber of Commerce, “I’d be suspicious.”

Much of this opposition was emotional, illogical, political and inevitable. It was led largely by men who were Republicans or right-wing Democrats by conviction, habit and association. Nothing any progressive President could conceivably do would have appeased them, and Kennedy was not only a progressive Democrat but a stranger to balance sheets and market reports, a friend of labor and—worst of all—an intellectual from Harvard. “He has never attacked Khrushchev or Tito or any other enemy half as hard as he attacked our own steel industry” was one comment more prevalent than relevant.

Most of these bitter businessmen could not agree in their own ranks on any specific complaints or proposals. They talked loosely of S.O.B. references, midnight raids and radical advisers, but, when asked for concrete suggestions on government policy, they tended to complain of Congressional actions that long antedated Kennedy: income tax rates, antitrust laws, big government and regulatory agencies. None of them agreed on what economic policies they wanted him to push. Some wanted a quickie tax cut in 1962 and some didn’t. The President’s bold new transportation program, calling for less regulation and more competition, and pushed by the President over strong opposition from Commerce and the ICC, was regarded as probusiness by the railroads and antibusiness by the truckers. The coal and textile industries liked the investment tax credit but opposed the trade bill. Others supported the trade bill but resented the tax credit.

One poll of businessmen cited at his press conference showed them two to one for both bills while simultaneously convinced that the administration was hostile to business. Asked “what this apparent inconsistency suggests,” the President said it suggested “that most businessmen, number one, are Republicans, and, number two, that they realize what is in the best interests of business and the country.” A Gallup Poll at the height of the supposed “crisis of confidence” showed fewer than one in five businessmen who thought Kennedy was antibusiness.
Nevertheless, most Republican leaders and newspapers continued to say that business was anti-Kennedy (which was only partly true) and that Kennedy was antibusiness (which was not true).

“I don’t think,” said Douglas Dillon, “that there had been a President in a long time who had basically done as much for business…[but] it took the business community a long time to recognize this.” John Kennedy was no more probusiness than he was prolabor. If appeasing business required suspension of the food and drug and wage-hour laws, or a toleration of inflation and tax loopholes, or a withdrawal of his reforms for stock exchange transactions and for the businessman’s cherished “travel and entertainment” deductible expense accounts—or “if to stop them saying we are antibusiness, we are supposed to cease enforcing the antitrust laws,” he told a press conference, “then I suppose the cause is lost.”

But more than any previous Democratic leader in this century, he looked upon private enterprise with an objective, unjaundiced eye as an essential, constructive part of the American economy. He stressed repeatedly that his hopes for economic growth, plant modernization and government revenues depended on ample business profits. Corporate profits throughout his administration rose some 43 percent, higher and longer than ever before. Production rose, capacity utilization rose, and business confidence—as reflected not in speeches and newspapers but in actual plant expansion and investment—continued strong throughout his tenure.

To help keep business costs down and their markets growing, Kennedy pursued policies designed to achieve wage moderation, competitive transportation, low-cost credit, lower tariff barriers abroad, a supply of trained workers, expanding consumer purchasing power and lower taxes. After all their suspicions and criticisms, businessmen found that the investment tax credit increased the profitability on the purchase of new equipment more than an equivalent reduction in corporate income taxes. They found that Kennedy, unlike his predecessor, was willing to promulgate the modernization of tax depreciation rules they had long sought, to relegate the government from senior partner to junior partner in their enterprises through a reduction of corporate income taxes below the 50 percent level, and to reduce top-bracket personal income taxes and transportation excise taxes.

A variety of other programs extended credit and other aid to small business, to businessmen located in depressed communities or rundown neighborhoods, to bankers, builders, railroads, exporters, textile mills, coal mines, small lead and zinc producers, the lumber industry, the fishing industry and many others. Nor would a President dedicated to “big government” instead of private enterprise have directed that the
national stockpiles be drastically reduced, that surplus government plants and installations be sold, that private industry be permitted patents on discoveries Federally financed and that a new communications satellite system be governed by a privately owned corporation. The latter bill, despite built-in protection of the government’s interest and assurances of public participation without domination by any single company or stockholder, was filibustered by Senate liberals as a giveaway to big business at the very time many business spokesmen were assailing Kennedy as a socialist.

But those who assumed that business hostility to Kennedy began in the spring of 1962 made a mistake which the President never made. Except for an early clash between the Department of Commerce and its Business Advisory Council—resulting in the Council’s divorcing itself from its special position within government—relations between business and the Democratic administration were normal; and normal, for Democratic administrations, meant more suspicion on the part of business than praise. The President recognized this inevitable political gulf. “It would be premature to seek your support in the next election,” he told one business group his first month in office, “and inaccurate to express thanks for having had it in the last one.” “I do not think it wholly inaccurate to say that I was the second choice of a majority of businessmen for the office of President,” he told the U.S. Chamber of Commerce. (“Their first choice,” he added a week later, “was anyone else.”)