Koch Brothers-- Looking For The Roots Of The Problem

The new issue of the Texas Observer digs around in the fetid sewer that is the Koch family background. Yasha Levine's sleuthing helps put in perspective exactly why the Koch's have made themselves the biggest threat to American democracy since Adolph Hitler-- and for many similar-- if not identical-- reasons. To understand why Charles and David Koch are using their billions to assault American democracy-- even teaming up with Iran (the way their father had teamed up with Stalin) to do so-- you have to look back at the history of this demented, hate-filled family. There Levine finds the roots to their antipathy towards democracy, equality, public education, Social Security, organized labor, environmental, consumer and financial protections and the 99%. They've spent hundreds of millions already and plan to spend another $200 million in 2012 electing 1%-ers like Paul Ryan, Mitt Romney, John Boehner, Mitch McConnell, Scott Brown and other right-wing anti-government sociopaths hellbent on turning back the clock on America. Levine starts with their grandfather a wealthy Dutch-German immigrant who settled in Texas and brought his foreign, hate-filled fascist ideology to his new country, where he tried enforcing it on the people he found here.

Little has been written about Harry Koch. He's the least-known member of the Koch family, which has been marching under the same laissez-faire banner for the past three generations. Harry Koch emigrated to America in 1888, settled in a North Texas railroad town and became a newspaper publisher and aggressive corporate booster. He advocated for railroad and banking interests, amassing wealth and helping big business fight organized labor and squelch reforms.

Much of the Koch brothers' ideology can be found in Harry Koch's newspaper editorials of nearly a century ago. Take, for instance, the Kochs' current fight against Social Security. Harry Koch took part in a multi-year right-wing propaganda campaign to shoot down New Deal programs. Grandfather and grandsons employ eerily familiar talking points to bash government pension and welfare programs.

"No political system can possibly guarantee either a national economic security or an individual standard of living. Government can guarantee no man a job or a livelihood," Harry Koch wrote on February 1, 1935, nine months before Charles Koch was born.

Fast-forward 75 years and you can see Charles Koch using the same lines of attack in his company's newsletter: "government actions ... stifle economic growth and job creation, which in turn will significantly reduce the standard of living of American families."

...Harry Koch's rise from immigrant small-town newspaper publisher to entrenched business heavyweight might seem like a classic coming-to-America story, confirming that through hard work, perseverance and luck, anything is possible. But that narrative would be misleading. Harry may have lived among settlers who struggled to eke out a living on the frontier, but he was never really one himself. The difference was right there on the surface for everyone to see: While Harry Koch prospered, almost everyone else in North Texas descended into poverty.

On top of the crippling boom-and-bust cycles that gripped the country from the 1890s through the late 1920s, settlers faced crop failures, low agricultural prices and real estate booms that made it impossible for new farmers to afford land. Many sunk into deep debt and poverty.

The misery and hopelessness of frontier life sparked a powerful new grassroots populist movement, which sought to reform and curb the worst of corporate abuses. Harry Koch was not sympathetic to the cause. (In 1897, while the country was still in the grips of one of the worst economic depressions in its history, Harry Koch penned a long, gushing account of a luxurious trip to a convention thrown for boosters and businessmen in Galveston. Between detailed descriptions of all the oysters eaten and champagne bottles emptied at swanky parties, Harry expressed shock and outrage that the street railway union organized a strike during the convention and forced attendees to temporarily move about on foot. But not for long. "Santa Fe officials took pity on the suffering newspaper men and made up a train to Woolman's lake where the oyster roast was to be held," Koch wrote approvingly.)

In a series of early editorials, Harry Koch scoffed at the idea that land rents should be regulated, and ridiculed the plight of heavily indebted farmers, writing that while they might find indebtedness unpleasant, a much bigger problem was their laziness and inability to take care of the farm equipment they had purchased on credit. He patronized Quanah farmers with platitudes about honesty and success: "Be honest. Dishonesty seldom makes one rich, and when it does riches are a curse. There is no such thing as dishonest success." He delighted in the fact that unlike other cities and towns across America-- filled with strikes, riots, political agitation and violent unrest-- the people of Quanah largely steered clear of politics, concerning themselves with what they understood best: hard, honest labor. "A very commendable trait among western people," Harry wrote, "is that they have no time to give to politics."

Throughout the 1890s, Harry never shied from using his newspaper to promote specific business interests and as a platform to express his aristocratic views on society.

But something began to change at the turn of the century. Koch shed his abrasive attitude toward the masses and began reinventing himself as a champion of the common man.

In 1901, Koch published a long editorial that hinted at this transformation. In the piece, he defends popularly embattled trusts and monopolies with the counterintuitive argument that such protectors of wealth were a force for the common good. He based his argument on the false notion that trusts lowered the price of consumer goods:

"Let this thing be borne in mind as significant, that all real trusts, all that are destined to succeed and endure, are established on a basis of permanent lower prices for their products. Everybody knows that sugar and oil have been considerably cheaper since these industries have been under trust control. And the same is true, barring periods of fluctuation, of all industries under effective monopoly, from steel rails to cigarettes."

Harry Koch's transformation was remarkable: Not only was he attempting to convince readers of his point of view by appealing to their own best interests, but he was fleshing out economic arguments in language that his grandsons continue to use today. Harry's defense of trusts reads exactly like the pro-monopoly propaganda regularly cranked out by scholars at The Cato Institute-- a libertarian think tank founded by Harry's grandson Charles Koch in 1977. University of California-Irvine Professor Richard McKenzie recently published an article in Cato's Regulation magazine titled In Defense of Monopoly, in which he echoes Harry's 110-year-old editorial, including this claim: "The monopolist does not charge higher prices; it lowers them."

This new rhetorical approach was not Harry Koch's invention. Rather, Harry was being swept up in a larger national revolution in the way American business elites communicated with the public.
At the turn of the 20th century, growing public outrage at the way financial elites were handling the economy, combined with a rapid expansion of voting enfranchisement that increased participation in the democratic process from 15 percent of the population in 1890 to 50 percent in 1920, began posing a real threat to the entrenched interests of American corporations.

To protect itself, corporate America began experimenting with modern public relations techniques and developing strategies to manipulate and manage public perceptions.

Harry Koch was right in the thick of it.

In 1910, Koch became the founding director, as well as one of the biggest shareholders, of a small North Texas railroad company called the Quanah, Acme & Pacific. After two decades of laboring to promote other people's railroad interests, he had finally come into his own. The Tribune-Chief became the de facto advertising arm of the QA&P, extolling the region's bright future and certain prosperity while hawking company shares and promoting land in towns created and owned by the line. He had his own railroad and his own newspaper to promote it.

In the 1930s, corporations were forced to ramp up their pro-business public relations campaigns to deal with the violent backlash in public opinion caused by the Great Depression.

Harry Koch rolled out an aggressive multi-year attack on Roosevelt's New Deal. Tribune-Chief criticisms of the program echoed the propaganda of corporate boosters like the National Association of Manufacturers. The paper slammed public pensions, regulations, tariffs, unions, muckrakers, labor laws and deficits, and filled its op-ed space with pro-business opinion pieces delivered fresh from New York lobby groups like the American Bankers Association, whose president, R.S. Becht, wrote to assure Quanah readers that there was no need for the government to regulate banks. Industry self-regulation-- or "voluntary self reform," as he called it-- would be enough.

Despite, or because of, overwhelming public support for FDR's pension and welfare programs, they became major targets, with Harry Koch publishing two or three op-eds in a single day attacking them. "Some ten million old folks are wanting to draw $200 a month from the government, and one hundred million stand ready to quit work when they do. Why not pension all of them?" Koch wrote in a February 1935 editorial, while claiming in a different editorial that the "idea of an old age pension is a splendid idea ... such a pension is proper. But great care should be taken...in preparing old age pension laws."

His editorials contained the same familiar right-wing claims that we hear today: that there is not enough money to support "entitlement" programs, that government will tax industry into ruin, that similar programs in other countries have failed, that regulation is unconstitutional and workers, given the opportunity, will quit en masse and live off government charity.

In a 1934 editorial titled "Democracy's Problem," Harry rejected "mobocracy," which had "been discarded as undesirable, even if attainable." Mobocracy was the right's popular name for "tyranny of the majority," and remains a favorite whipping horse of Koch-funded libertarians, who increasingly promote the idea that America is not a democracy and was never intended to be one. Here's Steve H. Hanke, senior fellow at the Cato Institute, writing in a 2011 editorial: "Contrary to what propaganda has led the public to believe, America's Founding Fathers were skeptical and anxious about democracy. They were aware of the evils that accompany a tyranny of the majority. The Framers of the Constitution went to great lengths to ensure that the federal government was not based on the will of the majority and was not, therefore, democratic."

Harry Koch passed away in 1942, not long after business' epic battle against the New Deal reforms. The Quanah Tribune-Chief was passed on to his eldest son, who took over the paper with his wife and kept it in the family until the 1970s. Meanwhile, Harry's other son, Fred Koch, used the fortune he made building refineries for Stalin in the 1930s Soviet Union to ramp up his own business in Wichita, Kansas. He would build a successful oil transportation empire that would one day grow into Koch Industries, the largest privately held oil company in the country.

But even after the family's base of operations moved away from Quanah, Harry Koch's ghost would never be far removed. His life at the intersection of news media, big business, public relations and ideological warfare would be passed on as a family tradition from father to son to grandson, elevating his offspring to ever higher levels of wealth and influence.