Excerpted from Ronald Reagan: The American Presidents Series: The 40th President, 1981-1989 by Jacob Weisberg. Out now from Times Books.
Ronald Reagan began working for GE in 1954 as a liberal anticommunist and finished in 1962 so far to the right that the company felt it had to drop him as a spokesman. This transformative eight-year period in his life remains underexamined, however, in part because it is poorly documented in comparison with the rest of his career. Nonetheless, it stands as the pivotal stretch when his mature political views and skills emerged. Reagan described working for GE as his “postgraduate course in political science,” the time when his conservative ideology was formed.
In the early 1950s, Hollywood was threatened by the new television business emerging in New York. One of the obstacles to producing television on the West Coast was a SAG rule that banned actors from having agents who served as producers, which was seen as a conflict of interest. Reagan’s agent, Lew Wasserman, wanted to produce television and had set up a separate company, Revue Productions, to do so. But to hire actors, his firm, MCA, needed a waiver from SAG, whose president, Ronald Reagan, was its own client. In 1952 the SAG board voted to give a secret “blanket waiver” to Revue Productions, granting it an unlimited right to produce television programs. Only six board members, including Reagan, were in on the discussion, and one of the other five was his wife, Nancy.
Making matters look even worse, Reagan did this favor just after Warner Bros. dropped him, at a moment when he was seriously short of funds. He was still paying child support to Jane Wyman and private school fees for their children, Maureen and Michael. He had a new daughter and a new house in Pacific Palisades that needed furnishing, on top of a second mortgage and horses to feed at a 320-acre ranch he had recently bought in the Santa Ynez Mountains. At his low point, Reagan was reduced to emceeing a Las Vegas nightclub act in a straw hat and bow tie, a job he despised.
The steady paycheck MCA found for him in 1954 was made possible by the waiver he’d granted to Revue. It was hosting a television program suggested by MCA to General Electric’s advertising agency, BBDO, at a starting salary of $125,000 a year. The public aspect to his role was hosting and occasionally acting in half-hour episodes of General Electric Theater, which was broadcast Sunday nights on CBS. This anthology program was devoted to adaptations of novels, plays, and short stories, often featuring top stars such as Jimmy Stewart, Jack Benny, and Judy Garland. Over eight seasons, it became the epitome of midcentury middlebrow entertainment. On any given week, General Electric Theater might feature a crime thriller, a romantic comedy, or a dramatic fable.
The program was a rapid success, becoming the third-best-rated show on television in 1956–57, lagging behind only The Ed Sullivan Show and I Love Lucy, both also on CBS. The content was controlled by GE, which wanted to avoid controversy and make sure it didn’t clash with its slogan, “Progress is our most important product.” The Reagan family was enlisted to represent the slogan “live better electrically” in their new, modernist ranch house, which was kitted out as a showcase for GE products. It had a retractable roof over the atrium, a heated swimming pool with underwater lights, intercoms in every room, and an elaborate lighting system that could produce a variety of colored effects. There was an electric barbecue, a refrigerated wine cellar, three TVs, three refrigerators, two freezers, two ovens, and a dishwasher with a built-in garbage disposal. The company had to install a three-thousand-pound switch box to handle the electric current. A series of three-minute commercials featured the Reagans telling three-year-old Patti about their “electrical servants,” such as the vacuum and waffle iron that “make Mommy’s work easier.” Dad told viewers that “when you live better electrically, you lead a richer, fuller, more satisfying life.” The endorsement came naturally to Reagan, who regarded scientists as wizards who could solve any problem, from cancer to pollution.
His broadcast presence was reinforced by his role as a goodwill ambassador for GE, spending up to 12 weeks a year touring the company’s plants around the country. After World War II, GE’s president, Ralph Cordiner, had delegated authority over its manifold business, ranging from household appliances to airplane engines, to 120 separate department heads. Having a visible spokesman who toured these decentralized operations would help sell the company’s policies in the provinces and reinforce a common culture. Ultimately, Reagan would spend what he estimated to be two full years on the road, visiting all 139 facilities and addressing most of GE’s 250,000 employees. On tour, he might deliver as many as 14 speeches a day, starting on a factory floor and finishing as the after-dinner speaker for a local chamber of commerce or Rotary Club branch.
For Reagan, it was a dry run for politics. He learned how to interact with a live audience, and not just perform for the camera and microphone. He learned how to test which jokes went over and refine the way he told them. He learned how to preserve his voice and manage his energy during weeks of uninterrupted travel. He learned how to come across not as a distant matinee idol, but as a man of the people. His views were also in transition. Because he had a fear of flying, his contract specified travel by train. These trips were taken in the company of Earl Dunckel, the GE public relations man responsible for the speaking program. Dunckel, who described himself as an archconservative, later recalled long hours debating with Reagan about Truman and the New Deal. The long train rides also gave Reagan the time to read, think, and write. His reading included Witness, by Whittaker Chambers, which he is said to have virtually memorized; F. A. Hayek’s The Road to Serfdom; and Economics in One Lesson, a classic of free-market literature by the journalist Henry Hazlitt.
A more distant corporate influence was Lemuel Boulware, the company’s chief labor negotiator, whose importance at GE was second only to Cordiner’s. Boulware was known for a strategy of collective bargaining, under which the company would listen to union demands, do extensive research, and then come back with what he called a “fair, firm offer.” According to union leaders, it meant “telling the workers what they are entitled to and then trying to shove it down their throats.” Boulware wanted management to bypass union leadership to speak directly to workers, enlisting them as “mass communicators for GE.”
Though he had no documented interaction with Boulware himself, Reagan was spending many weeks a year in conversation with midlevel executives, plant managers, and workers steeped in Boulware’s antiregulatory views. According to Dunckel, Reagan “didn’t want to be at a loss to discuss it, if they wanted to discuss it.” Over time, Reagan’s speeches came to match the message from headquarters about the inefficient, irrational, and meddlesome federal government. After a couple of years, Reagan was professing concern about the “business climate,” a term Boulware coined, and recounting tales of “government interference and snafus.” Now that he could no longer shelter his income through the “temporary corporation” loophole, high marginal tax rates were a constant preoccupation of his.
It was during his years traveling with Dunckel in 1955 and 1956 that Reagan “came to the realization that he was no longer a Democrat, that the gap had widened too far to be bridged,” as he put it. In 1957 he returned to his alma mater, Eureka College, as graduation speaker. His speech echoed his Fulton commencement address of five years earlier: Americans were a people on a mission from God. But now his vision was less about chosen-ness than about technological progress and consumerism. Having soaked up Hayek and Hazlitt and Boulware, he warned against freedom being lost from within through “carelessness and apathy.”
It’s just that there is something inherent in government which makes it, when it isn’t controlled, continue to grow. … Remember that every government service, every offer of government financed security, is paid for in the loss of personal freedom. …
America, he contended, was pretty far along on Hayek’s road to serfdom. It was evolving toward socialism without ever choosing it, simply by piling one federal program on top of another. But the risk wasn’t purely bureaucratic accretion; it was also placing limits on what individuals would be allowed to accomplish. People trying to construct a floor under America’s standard of living were actually building a ceiling “above which no one shall be permitted to climb.” Reagan’s “America the Beautiful” 1952 had become “Government the Ugly” by 1957.
Here, to pin it down, is Reagan’s decisive break with New Deal liberalism, and the first developed expression of his philosophical alternative. Roosevelt, coming from the American upper class, saw the unregulated power of business as the threat to the people, and government as a hero to the rescue. Reagan, coming from the American lower middle class, now saw those roles reversed: taxation and regulation were the villains, corporations and markets his heroes. Years before the Great Society and the Civil Rights Act, Reagan was framing continued expansion of federal authority not just as wasteful, but as the primary threat to individual liberty.
Reagan’s 1959 address “Business, Ballots, and Bureaus,” delivered to a meeting of GE executives at the Waldorf-Astoria hotel in New York, took this charge a step further, arguing that the perils of communism and government expansion were intertwined. This is the earliest-surviving version of what became known as “The Speech,” Reagan’s political credo, which ended up as “A Time for Choosing,” his famous televised endorsement of Barry Goldwater in 1964. Once, Reagan said, Americans’ main contact with the federal government was through the Post Office, but “today there is hardly a phase of our daily living that doesn’t feel the stultifying hand of government regulation and interference.” He called this shift in power away from individuals and toward bureaucratic institutions “the very essence of totalitarianism.” This was just what the Communists had planned. Reagan quoted Karl Marx that the best way to impose socialism is “to tax the middle class out of existence,” and Nikita Khrushchev’s remark that “your country is becoming so socialistic that in fifteen years the causes of conflict between our two countries will have disappeared.” Both quotations are undocumented.
By the time Reagan endorsed Richard Nixon for president in 1960, “I had completed the process of self-conversion,” he later wrote. Reagan finally got around to switching parties in 1962. The conservative belief system he worked out during the previous decade wasn’t Boulware’s or Hayek’s or William F. Buckley’s, though those were all influences. It was his own.
Reagan’s favorite example of creeping socialism was the Tennessee Valley Authority, the New Deal planning agency that controlled power and water in much of the South. But the TVA was one of GE’s biggest customers, buying fifty million dollars’ worth of turbines a year. In Reagan’s 1965 autobiography, he writes that when he heard that his criticism was causing consternation at headquarters, he phoned Cordiner to discuss it. Cordiner told him that as a GE employee he was free to speak his mind. In return, Reagan offered to substitute some other example of overweening government in his speeches—there were so many to choose from. Cordiner said that would make his life easier.
What Reagan fails to mention is that the TVA was then suing GE as part of a price-fixing conspiracy that implicated Cordiner. During the 1950s, executives from GE, Westinghouse, and other companies met secretly to rig bids for large customers. In late 1960, after a series of highly publicized Senate hearings, the Justice Department handed down indictments, and several GE executives went to prison. The company also paid tens of millions of dollars in fines and civil settlements. Its stock price dropped 40 percent. The real story of GE and the TVA in 1960 wasn’t about a corporation being timid about criticizing the government. It was about a company that got caught trying to cheat the government. But Reagan had by that time developed a blind spot about corporate abuse, one that paralleled his inability to see government as a force for good.
In March 1962, General Electric vice president J. Stanford Smith informed Reagan’s agent that the company was dropping him and its television program, comparing it to Cadillac making model changes “to sustain public interest.” That General Electric Theater was losing ratings to Bonanza in the same time slot on NBC, combined with the increased cost of the program, provided an excuse that Reagan didn’t accept. He wrote to friends that government officials had pressured GE to fire him, after first trying to get him to shut up about politics and just sell toasters, which he wouldn’t do. In a series of letters, GE officials insisted that they hadn’t been pressured and attempted conciliation. “In token of our appreciation for your personal interest, we would like to replace the appliances you now have in your home with our newest models,” Smith wrote Reagan.
But neither the TVA nor the ratings were likely the whole reason that GE dumped Reagan. While the aftermath of the price-fixing scandal was still playing out, Reagan emerged as the linchpin in another criminal antitrust investigation in early 1962, this one targeting Hollywood. At issue was what the Screen Actors Guild had done for MCA. With the help of the “blanket waiver,” MCA had become “the octopus,” a quasi-monopoly controlling 60 percent of the entertainment business. Given that Reagan had signed the waiver as president of SAG in 1952, he was at the center of what was now a budding scandal. The U.S. attorney general, Robert Kennedy, convened a federal grand jury in Los Angeles to consider criminal charges.
Reagan was called to testify on Feb. 5, 1962. On the crucial point of SAG’s decision to grant MCA’s blanket waiver, his testimony was one “I don’t recall” after another. The grand jury investigation did not yield indictments. However, a civil antitrust case against MCA named SAG (and, by implication, Reagan) as a coconspirator. MCA settled that suit with the Justice Department by agreeing to sell off its talent agency. In his 1965 book, Reagan expresses outrage at this unwarranted government interference, complaining that the breakup of MCA left actors without representation—though the spun-off talent agency continued to represent him and most others. Whatever the merits of the case, it provides the missing explanation for Reagan’s firing. GE surely didn’t want a spokesman enmeshed in an antitrust scandal and battling with the U.S. attorney general as it rebuilt after a parallel scandal of its own. Reagan made the connection himself in his grand jury testimony, reminding the U.S. attorney questioning him that GE had fired the employees “you gentlemen were engaged with recently”—that is, those sent to prison for price fixing.
Reagan’s myopia now extended to all forms of corporate malfeasance; it’s hard to find an example of him criticizing business thereafter. What he saw instead was government meddling in legitimate enterprise. After Robert Kennedy subpoenaed Reagan’s tax returns from 1952 to 1955, hoping to find evidence of a payoff from MCA, Reagan told his children that Kennedy had pressured GE to cancel his program because of his politics. He maintained that had the great Ralph Cordiner not retired from GE by that time, he never would have been let go. But Cordiner didn’t retire until the end of 1963. He was the man who fired Ronald Reagan.
Excerpted from Ronald Reagan by Jacob Weisberg, published by Times Books, Henry Holt and Company, LLC. Copyright © 2016 by Jacob Weisberg. All rights reserved.