Businesses also expanded existing trade associations, like the Chamber of Commerce and the National Association of Manufacturers, while creating new ones to bring the corporate policy agenda to elected officials. In the 1960s, according to business historian David Vogel, trade associations were “under-staffed, relatively unsophisticated, and were held in little regard by either the companies that belonged to them or the legislators whose views they were supposed to influence.” By 1980, more than 2,000 trade organizations, employing 42,000 staff, had their headquarters in Washington, D.C. For the first time since the 1920s, when Secretary of Commerce Herbert Hoover pushed for the establishment and growth of trade associations, the total number of people working for private businesses such as trade associations and lobbying, law, and PR firms exceeded the number of federal employees in the Washington metropolitan area.
A new environment for health decisions
By the 1980s, these changes in business and politics had transformed the environment in which investors and corporate managers made decisions, narrowing their options for satisfying Wall Street, while widening their opportunities for using their political clout to overcome opposition to their business plans.
On the business side, corporate managers really had only a few choices that allowed them to satisfy investors’ growing thirst for quick and steady returns on investment. They could create blockbuster products that produced windfall profits for at least a few quarters or years. They could dramatically increase market share by finding new populations of customers or by driving competitors out of business. They could buy and sell companies, hoping to profit by selling off assets or acquiring fast-growing businesses. Finally, companies could increase profits by firing workers, cutting benefits, or using their political muscle to lower taxes or resist or weaken regulations, thereby leaving more revenue as profit. On the political front, corporations expanded each of these opportunities by deploying their new armies of lawyers, lobbyists, public relations staff, and trade associations.