Columns » Warwick Sabin

Back where we started


As the new year begins, 2005 already seems destined to be uncomfortably similar to 1905, which means it is high time to usher in a new progressive era. One hundred years ago this nation was dominated by unregulated corporate oligopolies and monopolies in the retail, energy, transportation, communication and financial industries. Taxes were low, but average American citizens had bigger concerns. Not only were they at the mercy of big business for the prices of basic goods and services, but they could only dream about things that we take for granted, like safe working conditions, fair wages, and reliable food, drinking water and medicine. The Progressive Era started in the late 1800s as people demanded that federal, state, and local governments act in their behalf to curb capitalistic excess and establish basic standards for an equitable society. This movement led to public schools, the breakup of monolithic corporate entities, and laws like the 1906 Food and Drugs Act, which still ensures that the meat you buy or the prescription you fill won’t make you sick. Amazingly, much of the progress of the Progressive Era is being chipped away by the same greed and avarice that it rose to combat in the first place. Here are some examples: Communication: By 1905 most of the telephone service in the U.S. was controlled by AT&T and the Bell System, and it took almost 80 years before this monopoly was fully dismantled. Now the major cellular phone carriers are rapidly merging into large conglomerates — the recent Sprint-Nextel deal only pushes the bar higher — setting the stage for a total reversal of the previous industry reforms. You should care because the only thing keeping your cell phone bill affordable is the chance you could easily switch your service to a competitor. And thanks to the Telecommunications Act of 1996, which stripped away regulations on media ownership, big corporations are buying up local radio stations, TV channels and newspapers. If you like only having one source for news where you live, then you probably aren’t reading this in the first place. Energy: Remember Standard Oil? It was a trust that controlled most of the production and distribution of petroleum in the U.S. Like the Bells, it became so powerful that early 20th-century progressives acted to break it up. Now we have ExxonMobil, ChevronTexaco, and ConocoPhillips: mergers of companies that derive from the original Standard Oil breakup. And then there is the Enron scandal, which resulted from energy deregulation in California. Retail: In the early 1900s, there was a national retailer that promised its customers the lowest possible prices through its ability to buy wholesale products in bulk. It drove out competing local small businesses wherever it went. Sound familiar? This was the Great Atlantic and Pacific Tea Company, better known as A&P, and it was finally reined in by the Robinson-Patman Act in 1936. Now Wal-Mart is simultaneously the world’s largest corporation and, like A&P before it, the nation’s biggest grocery chain. What will be the motivation to keep prices low after its competitors disappear? Food and drug safety: In the last month, six FDA-approved drugs (Vioxx, Celebrex, Bextra, Aleve, Naprosyn and Nevirapine) have been shown to pose serious unacknowledged health risks to consumers. As it happens, pharmaceutical companies are among the biggest contributors to federal campaigns, and a recent Los Angeles Times article revealed that 530 government scientists at the National Institutes of Health have accepted compensation from biomedical companies in the last five years. It makes you wonder whose interests our food and drug regulators actually serve. Of course, shortly after the Progressive Era, the nation learned even tougher lessons during the Depression, and the U.S. government under President Franklin D. Roosevelt passed a host of measures, called the New Deal, to ensure that we never suffer like that again. Now we are throwing away those reforms, too. Five years ago, when the economy was doing great, the U.S. Congress repealed the portion of the 1933 Glass-Steagall Act that separated commercial banks, investment houses and insurance companies. Now a single financial institution is free to offer all of those services under one roof, which is quickly leading to big mergers and, of course, scandal. There is a good reason why Glass-Steagall was among the first New Deal laws passed. Social Security is the next domino being readied for the fall, and its preservation should be the clarion call for American progressives. It is a common-sense program that works, established by people who understood what life was like before it existed. Our postwar expansion was built on a foundation of economic security provided by Social Security and other New Deal initiatives. We study history to learn from our mistakes, not to repeat them.

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