Perspective: When corporations buck powerful politicians, there is temptation to resort to retaliation
Certainly, political leaders have long sought to leverage both lawful and unlawful means to shape business behaviors. Much like DeSantis’s attacks on Disney, 61 years ago this month President John F. Kennedy waged a “war” with the nation’s steel barons. The Kennedy administration engaged in a campaign of harassment and intimidation undertaken by the FBI and the IRS to coerce the steel barons to come to heel, rather than pursuing legal means such as antitrust actions in the courts.
But on April 10, Blough handed Kennedy a news release announcing that his company was raising prices beyond what they had agreed upon. Kennedy was furious at this betrayal, viewing this as a slight against him and against a key element of his base, organized labor. Kennedy’s secretary of labor, Arthur Goldberg, proclaimed “this is war,” while the president told McDonald, “You’ve been screwed and I’ve been screwed.
Even the FBI and the IRS got involved. One steel executive complained “that all the telephone calls of the steel executives in all the country are being tapped” and that “the income tax returns of all the steel executives in the country are being scrutinized.” FBI transcripts of the steel executives’ conversations were allegedly forwarded to the president’s office.Kennedy reportedly relished flaunting this power.
The strategy may have worked in the short term, but it had long-term consequences. By April 12, the steel war had ended, with all the major steel companies rescinding their price increases. He also won the plaudits of a majority of Americans, with 73 percent of them expressing a favorable opinion after Kennedy forced the price rollback.
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