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Congress and Its Members, (CQ Press, 2004).
* “Lord of the Air: What’s Left for Airbus After Overtaking Boeing in Commerical Aircraft Market?” Fortune, 11-10-03: 144.
* David Mayhew, Congress: The Electoral Connection (1974).
16
Class 9, Corporate Political Strategies
Class Overview (Approximate)
Time Topic/Activity
8 – 8:30 Overviewing Corporate Political Strategy
8:30 – 9:15 Corporate Political Donations
* Databases and discussion – (please bring laptops if you have wifi cards to access Internet)
* Frontline Video “So you want to buy a President?” on ‘96 Pres Election, 20 minutes
Break
9:30 - 10:15 Business Political Privilege, Issue Visibility & Reframing, Interest Withholding
10:15 - 11 Chrysler Bailout
11- noon In-class team exercise on Issue Reframing
Class Readings:
Reading Availability
Schnietz, Note on Campaign Finance Blackboard class e-room
Clawson, Money Talks (1992): 88-93 www.study.net
Schnietz, Note on Interest Withholding Tax Legislation Blackboard class e-room
Schnietz, Note on the Bailout of Chrysler Corporation Blackboard class e-room
“Bailout for Airlines Showed Weight of Mighty Lobby,” NY Times, 10-10-01: A1. Blackboard class e-room
“Hard-Edged Insurance Chief Taking on New and Public Face,” NY Times, 10-31-
01: C1.
Blackboard class e-room
Questions:
1. What are the distinctions between hard and soft money (Schnietz Note)? What has soft money been
replaced with?
2. Corporate political contributions are often criticized for “buying” legislators’ votes on bills
(Clawson). What do you think – does money matter and, if so, under any particular circumstances?
3. Many people argue that business is “politically privileged,” or naturally advantaged, in comparison
with many other interest groups when seeking to influence public policies. In what ways is this true?
How does the Interest Withholding Case support and undermine the business political privilege
argument?
4. Was the interest withholding legislation an example of a low or a high visibility issue? What
“public interest” rationales (issue reframing) did the ABA offer in seeking to repeal the law? If
high-visibility political strategies are generally more risky and costly (and they are), then why did
the ABA pursue one?
5. What were the causes of Chrysler’s financial difficulties in 1979? What were the main arguments
against public assistance to remedy Chrysler’s financial trouble? What public interest rationales did
Chrysler develop to counter opposition and develop support for the loan guarantees? What grade
would you give Chrysler’s political strategy to get the loan guarantees passed?
6. What explains why the airline industry received public subsidies after 9-11 but not the insurance
industry? After all, both industries are highly politically active and faced enormous financial losses
and liabilities in the aftermath of the terrorist attacks on the World Trade Centers and the Pentagon.
The NYT article suggests the airline industry prevailed because it had a “mighty lobby.” Is it that
simple?
Recommended (not required) additional readings:
* Bill Vlasic & Bradley Stertz, Taken for a Ride: How Daimler-Benz Drove Off with Chrysler (2000).
17
Class 10, International & Trade II
Class Overview (Approximate)
Time Topic/Activity
8:00 - 8:45 Overview of International Trade Issues
8:45 - 9:30 Costs & Benefits of Free Trade vs. Protectionism
Break
9:50 - 10:30 Anglo-American vs. German-Japanese Styles of Capitalism
Evolutionary Capitalism
10:30 - noon Penetrating “Closed” Markets
* Japanese non-tariff protection and the keiretsu structure
* Challenge to America video (1994) on Japanese Keiretsu structure & “patient” capital
* Toys “R” Us Japan
Class Readings:
Reading Availability
Russell Roberts, The Choice: A Fable of Free Trade and Protectionism (Prentice
Hall, 1994): 4-14; 26-33.
www.study.net
Schnietz, Note on Ricardo’s Comparative Advantage. Blackboard class e-room
“With Little Evidence, Florida Growers Blame Tomato Woes on NAFTA,” Wall
St J, 4-3-96: A1.
Blackboard class e-room
James Fallows, “How the World Works,” The Atlantic Monthly (1993): 61-87. Blackboard class e-room.
www.study.net
K. Miyashita & D. Russell, Keiretsu: Inside the Hidden Japanese Conglomerate
(1994): 43-53.
www.study.net
Case: Toys “R” Us Japan, HBS Case No. 5-798-007. * www.study.net
* HBS Publishing
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