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Ted Kennedy, Deregulation, and the Mob.
In the days since his death, Ted Kennedy has been hailed on the left as a friend to organized labor. Here at TAP, our own Harold Meyerson wrote that Kennedy was a lifelong defender of workers "unable to join unions" and an opponent of Jimmy Carter's agenda of "deregulating industries." But Doug Henwood, editor and publisher of Left Business Observer, remembers Kennedy differently, as a supporter of deregulation in trucking and air travel. And sure enough, the conservative Washington Times editorial page hailed Kennedy as the leading congressional ally for Carter's deregulation agenda.
Last week Matt Yglesias wrote that Kennedy's history as a deregulator should be lauded, since it increased competition and brought down prices for consumers. But as Henwood demonstrates -- with charts! -- since deregulation, truckers' wages have declined and airline prices have inflated.
Of course, breaking up these monopolies cut down on corruption and organized crime. The Kennedy family was no friends of the Teamsters; as a Senate investigator, Bobby Kennedy interrogated Jimmy Hoffa harshly on his ties to the Mafia, and in 1960 wrote a book, The Enemy Within, about crooked unions. Teddy was close to Bobby and likely internalized this vendetta. "Bobby Kennedy saw Hoffa as absolute evil," historian Ronald Steelf has said. "And so he could elevate this struggle against Hoffa into some kind of titanic moral issue, which is why he became so dedicated to it." Indeed, for a time after JFK's assassination, Teddy suspected Mafia involvement as a result of Bobby's Hoffa investigation.
Henwood though, sees something simpler, a back door between Kennedy's staff and companies that made a profit busting unions. "What a remarkable achievement: a policy that has led to huge losses for both labor and capital," Henwood writes. "And any tribute to Teddy Kennedy that omits his prominent role in this disaster is incomplete."
--Dana Goldstein
COMMENTS (5)
"Of course, breaking up these monopolies cut down on corruption and organized crime."
Oh really? Is there some monopoly/corruption index we can check for that?
(LBO reader)
Posted by: Miracle Max | August 31, 2009 12:31 PM
The whole article is a real cut & paste with no appreciation of context. Airline deregulation was wildly and broadly popular, politically, and its proponents included Ralph Nader.
Posted by: Rich | August 31, 2009 2:37 PM
Economic policy should be driven by what is best for the consumer. Big capital (and to a lesser extent, big labor) can take care of itself.
Yes, deregulation was a disaster for unions and for capital. So what? It was a bonanza for consumers, and therefore a tremendous success.
Posted by: enplaned | August 31, 2009 6:23 PM
From where was that article cut-and-pasted, Rich? And what about popularity makes a bad policy good? Is it enplaned's silly idea that making things cheaper for those who have trumps increasing the wages and clout of those who work? Consumerism is Reaganism under a different name.
Posted by: John A Arkansawyer | September 1, 2009 8:01 AM
I enjoy Ms. Goldstein's writing a lot more when she sticks to topics she knows something about. Enplaned hits the nail on the head: airline deregulation broke up a cartel, to the ultimate benefit of consumers. The average airfare per passenger mile has dropped by half in real terms since deregulation. (And, contra Doug Henwood, this is not an consequence of more out-of-route miles due to the hub and spoke system. For one thing, it is equally true of international fares, where circuity is lower. For another thing, the declining trend persisted after the hub-and-spoke proportion of domestic traffic had peaked.)
Deregulation democratized air travel. What used to be an unaffordable luxury for most Americans is now a consumer product. The benefits to consumers were so enormous and so unambiguous that most of the industrial world followed the U.S. lead in promoting airline competition.
Ms. Goldstein's credulous recital of Henwood's tendentious griping is really beneath her.
Posted by: pain perdu | September 1, 2009 1:30 PM