A Democratic President, blindsided by the cynical behavior of a few powerful industry titans acting in opposition to the common good, seizes the bully pulpit and rallies public opinion and congressional action to the cause, resulting in a rare instance of corporate interests bending to the public will.
Sounds too good to be true?
This, of course, was President John F. Kennedy in 1962 reacting to the surprise announcement from U.S. Steel's Chairman, Roger M. Blough, that the company, along with other key producers, intended to raise the price of steel six dollars a ton, not long after Kennedy and Labor Secretary Arthur Goldberg had actively participated in the negotiation of a new labor contract for unionized steelworkers.
The contract had been heralded by the Kennedy administration as an exercise in restraint - "non-inflationary", by both the steelworkers and the top steel companies. Kennedy praised the contract as an example of "industrial statesmanship." No wonder that the President was suddenly furious - his confidence and trust in one of his negotiating partners had been suddenly and markedly betrayed.
Blough disclosed his intentions in a mimeographed statement that he personally handed to the President after hastily arranging for the meeting on the very same day. Aides later recalled that the transformation in the President's demeanor was startling.
When Blough was gone, Kennedy strode furiously around his office, muttering: "Can you imagine those . . .!" Said an aide later: "I've never seen him so angry."
Time.com - "Smiting the Foe", Friday, April 20, 1962
Kennedy had a personal stake in the agreement due to his administration's involvement in the negotiations and had considered Blough's action as an intentional insult.
To exact his revenge, Kennedy called upon all his powers as President, including legal retribution, economic reprisal, public threats and covert pressures. Most of all, he used his great political skills to arouse popular emotion for his cause. His theater was to be his press conference, which had already been scheduled for the next afternoon. Most Americans, upon scanning the morning headlines, had known that Kennedy planned to criticize U.S. Steel's decision. But what they heard and saw on television was one of the most savage sustained attacks ever launched by a U.S. President against big business.
Time.com - "Smiting the Foe", Friday, April 20, 1962
It is not a mischaracterization of Kennedy's demeanor during his remarks on the following day to say that he was seething anger. His remarks were short and to the point.
"In this serious hour in our nation's history, when we are confronted with grave crises in Berlin and Southeast Asia, when we are devoting our energies to economic recovery and stability, when we are asking reservists to leave their homes and families for months on end and servicemen to risk their lives—and four were killed in the last two days in Vietnam and asking union members to hold down their wage increases, at a time when restraint and sacrifice are being asked of every citizen, the American people will find it hard, as I do. to accept a situation in which a tiny handful of Steel executives whose pursuit of private power and profit exceeds their sense of public responsibility can show such utter contempt for the interest of 185 million Americans."
President John F. Kennedy
Using the moral high-ground and calling upon the nation to recognize that the quest for industrial riches did not trump the interests of the American citizenry.
He accused the steelmen of "irresponsible defiance of the public interest" and "ruthless disregard of their public responsibilities." There was, he insisted, "no justification for an increase in steel prices." Under the free-enterprise system, he conceded, wage and price decisions "ought to be freely and privately made. But the American people have a right to expect, in return for that freedom, a higher sense of business responsibility for the welfare of their country than has been shown in the last two days.
Time.com - "Smiting the Foe", Friday, April 20, 1962
The Justice Department, Council of Economic Advisers, and Congressional Democrats all jumped into the action - there was the promise of investigations and hearings regarding the coordination of price increases amongst the largest producers and the impending release of evidence that the increases were unnecessary to preserve the steelmaker's profits and marketshare. The Defense Department under Robert McNamara announced that it was granting a contract to a rival supplier, the only other supplier capable of producing a certain type of steel suited to a particular military application.
There was also a pervasive feeling in the business community that the increase was turning into a public-relations disaster for U.S. Steel and the other steelmakers who had followed suit. Blough realized within days that his position was untenable, and was forced to revoke the price increase, especially after another large producer balked at a similar move.
Relations between President of the United States and the President of United States Steel were never cordial again after that episode. Kennedy, however, had demonstrated the incredible power of the Presidency in mobilizing public opinion against the narrow special interests of the industrialists.