The FTC often experiences “blowback” when it does its job well. Consider the FTC’s dutiful attempt to quickly require warning labels on cigarettes following the seminal 1964 Surgeon General’s report. The Commissioners gathered on a Saturday morning to read the long anticipated report (it was released on the weekend to avoid affecting the stock market) and some smoked while they read it. Then Chairman Paul Rand Dixon was deeply affected by the report:
“…Dixon read the report, read the conclusions, and he put down his cigarette and said, ‘That’s my last cigarette.’ He stopped smoking cigarettes right then and there. He started talking about his boys and how worried he was that his boys were smoking cigarettes. That report had an enormous effect on Dixon personally.”[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][1]
Commissioner Elman, working with Richard Posner (now Judge Posner) quickly developed and persuaded the other Commissioners to release a notice of proposed rulemaking that specified an option of two different strong warnings for cigarettes:
“CAUTION: cigarette smoking is dangerous to your health and may cause death from cancer and other diseases”
“CAUTION–CIGARETTE SMOKING IS A HEALTH HAZARD. The Surgeon General’s Advisory Committee has found that ‘cigarette smoking contributes to mortality from specific diseases and to the overall death rate’”
The FTC stood up to formidable political opposition, with the President, Congress, powerful law firms, advertisers, and broadcasters all against the proposed warning and it managed to approve the Cigarette Rule in just five months.
But in the end, Congress intervened, mandating the rather milquetoast: “Cigarette smoking may be hazardous to your health.” The blowback included a bar on the FTC from specifying stronger warnings on packs or advertising of them, and preempted the states from similar measures.
Former Wall Street Journal reporter Louis M. Kohlmeier recounted, “After Congress slapped down the FTC, a grateful tobacco industry demonstrated its thanks with cash…at least $10,490 [about $80,000 in today’s dollars, most of which was] divided among members of the House Commerce Committee.”[2]
Consider that in retrospect that the FTC was not only right about cigarettes causing cancer and death, but if its proposal for cigarette labels had been adopted, the FTC may have been able to head off lawsuits by smokers claiming that they did not know smoking was harmful. As much as the FTC’s proposed warning stung, in the long run, would it have protected the cigarette industry from hundred billion dollar settlements in the 1990s?
[1] Norman I. Silber, With All Deliberate Speed: The Life of Philip Elman (2004).
[2] Louis M. Kohlmeier, Jr., The Regulators: Watchdog Agencies and the Public Interest (1969).
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