David Warsh: Discovering an octopus of their own

G. Frederick Keller's "The Curse of California,'' which appeared in The Wasp on Aug. 19, 1882, is the likely origin of the depiction of the Southern Pacific Railroad monopoly as an octopus.

SOMERVILLE, Mass.

Last  week, when the tax bill and Michael Flynn’s plea deal dominated the news, Secretary of State Rex Tillerson came under increased pressure from the White House to resign. Might that story be almost as important as the others?

The question to ask is, why did the former Exxon CEO take the job? The 65-year-old Texan has grandchildren and well over $50 million in the bank. The secretary and I are not pals, but I think I understand. He did it because he was an Eagle Scout, and because his old hunting buddy, former Secretary of State James A. Baker, III, told him  that he thought it would be worth the struggle.

Struggle it has been.  The diplomatic press corps has been all over Tillerson for months, accusing him of wrecking, or unravellng, or dismantling the State Department by reorganizing it in an effort to comply with the 31 percent budget cut ordered by Trump.

Tillerson replies that the department’s $55 billion budget was at an all-time high under the Obama administration. He is seeking to impose an 8 percent cut among the agency’s 35,000 employees.  His aim, he says, is to make a somewhat smaller department function much as it did under his friend Baker, in the George H. W. Bush administration.  No doubt the human costs of careers derailed have been significant; the extent to which the department’s mission had been impaired will be an open question for many years.

Meanwhile, Tillerson has disagreed with the president on nearly every important foreign-policy question: the Paris Climate Accord, the Transpacific Partnership, the pursuit of a diplomatic track with North Korea, the Saudi campaign against Qatar, maintenance of a strong line against Russia in Ukraine. He hasn’t denied calling the president, not just a moron, but a crude slang term for a four-star moron, the highest rank of moron that there is.

Public life has few afflictions more annoying than a specialist press corps whose favorite sources have been spurned. If there were any doubt that outrage has overwhelmed reason at the editorial board of The New York Times, its story "Help Wanted: Top Diplomat'' should resolve it. CIA Director Mike Pompeo, said to be the front-runner to replace him, is “potentially every bit as inimical to the national interest” as is Tillerson, according to the Times.  Pompeo, a former Kansas congressman, is very much a member of the president’s inner circle. As Aaron David Miller and Richard Sokolsky wrote yesterday in Politico, Rex Tillerson Isn’t the Problem – It’s Trump.

The president, it is often said, doesn’t like to fire people.  He prefers to humiliate them until they quit. My guess is that Tillerson won’t make it easy for him.  The clamor of the diplomatic press notwithstanding, actually dismissing Tillerson might cost the president dearly in many quarters – Congress, for example, or the Pentagon – as did firing FBI director James Comey. It is conceivable that, despite the ruckus, Tillerson stays.

William Allen White, turn-of-the-20th-Century Kansas newspaper editor and Progressive sage, wrote in 1905, “It is funny how we all found the octopus.” He was talking about the giant business and money trusts, whose significance he had dismissed only a decade before, in the heat of a populist onslaught.

In a similar way, those in the "mainstream media'' who doubted the existence of a “deep state” a few months ago, mainly for the sinister connotations of the term, may soon be discovering an octopus of their own. An American Establishment exists, attenuated but still powerful. Like the roster of firms that compose the once-dominant Dow Jones Industrial Average, the Establishment’s uppermost ranks have changed a great deal over the years. Broader indices have come  into play. But, in the words of another  wordsmith, Mark Twain, reports of its death have been exaggerated.

So far the Establishment has caused President Trump to appoint a series of moderates to top jobs, of whom Tillerson and White House Chief of Staff John Kelly are the foremost. Who knows what happens if those bonds give way.

David Warsh is a long-time economic historian and political and financial columnist. He is proprietor of economicprincipals.com, where this first ran.