Hidden History: How FDR Blocked Upton Sinclair’s Election as California Governor

The Great Depression – Part 4 We have a Plan

PBS (1993)

Film Review

Part 4 is largely about famous author Upton Sinclair’s campaign for California governor. This is something they definitely don’t teach in school. Because he nearly won.

The parallels with Bernie Sanders 2016 presidential campaign are uncanny. Sinclair, also a socialist, registered as a Democrat for the 1934 campaign. He received the same massive popular response from Californian workers that Sanders and UK Labour leader Jeremy Corbyn have received. Thousands of young people flocked to join the California Democratic Party, which hadn’t won a gubernatorial race in  35 years.

Sinclair easily won the Democratic primary and polled ahead of his Republican opponent until he was betrayed by the Roosevelt administration. After trying to pressure him to quit the race in favor of the third party candidate, they made a deal for California Democrats to support Sinclair’s Republican opponent – in return for the latter’s support of Roosevelt’s New Deal legislation.

In the last weeks of the campaign, Sinclair was also hurt by the massive media smear campaign launched by MGM studio boss Louis B Meyer.

Although Sinclair lost the election, 27 members of Sinclair’s EPIC (End Poverty in California) organization team won seats in the California legislature.

This episode also covers San Francisco’s 1934 general strike and FDR’s unsuccessful attempt to create a national health service as New Zealand did in 1938.

The Robber Barons Behind Neoclassical Economics

John D Rockefeller

Classical Economics as a Stratagem Against Henry George (free link)

By Mason Gaffney (2007)

Book Review-Part II

(In Part I, I discuss how Henry George’s work inspired the Populist and Progressive movements of the early 1900s and how the corporate elite struck back by inventing a new type of economics for the rich, called neoclassical economics.)

Who Paid for Neoclassical Economics to Take Over American Universities?

Gaffney’s book traces the phenomenal public support Georgism enjoyed before the tenets of neoclassical economics took hold in American universities. In addition to inspiring the Populist and Progressive movements, an LVT to fund irrigation projects in California’s Central Valley made California the top producing farm state. In 1916 the first federal income tax law was introduced by Georgist members of Congress (Henry George Jr and Warren Bailey) and included virtually no tax on wages. In 1934 Georgist Upton Sinclair was almost elected governor of California.

Gaffney also identifies the robber barons whose fortunes financed the economics departments of the major universities who went on to substitute neooclassical economics for classical economic theory. At the top of this list were

• Ezra Cornell (owner of both Western Union and Associated Press) – founder of Cornell University
• John D Rockefeller – helped found the University of Chicago and installed his cronies in its economics department.
• J. P Morgan – investment banker and early funder of Columbia University
• B&O Railroad – John Hopkins University
• Southern Pacific Railroad – Stanford University

The final section of Gaffney’s book lays out the tragic economic, political, and social consequences of allowing the Red Scare and neoclassical economics to stifle America’s movement for a single Land Value Tax:

Economic Consequences

1. The corporate elite has privatized, or is privatizing, most of the public domain (including fisheries, the public airwaves, water, offshore oil and gas, and the right to clean air) without compensation to the public.
2. The rate of saving and capital formation continues to fall rapidly. This is the main reason there is no recovery. Although profits soar, corporations have no incentive to invest in expansion and jobs. Instead they invest their profits in real estate, derivatives, and commodities speculation.
3. American capital is decayed and obsolete. The US has lost much of its steel and auto industries. Power plants and oil refineries are ancient and polluting. Most public capital (infrastructure) is old and crumbling.
4. The number of American farms has fallen from 6 million in 1920 to 1 million in 2007.
5. The USA, once so self-sufficient, has grown dangerously dependent on importing raw materials and foreign manufacturers.
6. The US financial system is a shambles, supported only by loading trillions of dollars of bad debts onto the taxpayers.
7. Real wage rates have continued to fall since 1975,
8. Unemployment has risen to chronically high levels.
9. Inequality in wealth and income continues to increase rapidly.

Political Consequences

1. The corporate elite has nullified all the Progressive Era electoral reforms by pouring money into politics and “deep lobbying,” at all levels of government, including our institutions of higher learning and our public schools.
2. The corporate elite continue to pour ever more of our tax money into prisons.

Social Consequences

1. Homelessness has risen to new heights, in spite of decades of subsidies to home-building and, favorable tax treatment of owner-occupied homes
2. Hunger is rampant.
3. Street begging, once rare, is everywhere
4. Americans have experienced a sharp loss of community, honor, duty, loyalty and patriotism.
5. In the shadow world between crime and business there is now the vast, gray underground economy that includes tax evasion, tax avoidance, and drug-dealing.
6. The US which once led the world in nearly every endeavor, has fallen far behind in infant survival, in longevity, in literacy, in numeracy, in mental health.
7. American education no longer leads the world. Privatized education in the form of commercial TV has largely superseded public education.

photo credit: cliff1066™ via photopin cc