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FRED
10-15-08, 09:48 AM
Huey Long, Upton Sinclair, Ham and Eggs… What Almost Was

By Mark Sengel (iTulip)

With Eric Janszen quoting Mussolini and Stalin to warn readers that aspiring autocrats have in the past used political opportunities created by financial and economic crises to take a nation left or right, the bailout debates on iTulip sent me back to school to find a colorful history of populist near misses here in the United States.


http://www.itulip.com/images/thestateofconcfusion.jpg (http://www.itulip.com/images/thestateofconcfusionLG.jpg)

Fake "Ham and Eggs" currency distributed in the campaign to defeat a 1938 ballot initiative in California.

"Every man a king, but no one wears a crown." - Huey Long


Huey Long was elected governor of Louisiana at 35 in 1928. He had dropped out of high school, but had passed the bar exam at 21. At 25 he was elected railroad commissioner. In that position he began to win concessions from utility companies. He secured refunds from the phone company after successfully arguing the appeal in front of the US Supreme Court. As governor he proposed a 5-cent tax on a barrel of crude. When Standard Oil mocked the idea, he threatened to take over its refineries and kick the company out of the state. A deal was struck.

At the start of his term as governor, Louisiana had just 300 miles of paved roads and the highest illiteracy rate in the country. Long's massive program of road and bridge construction created thousands of jobs, presaging the WPA. He made good on a campaign promise of free textbooks for all, increasing enrollment dramatically. He cajoled stronger banks in the East into saving local banks in Louisiana. Bank failures in the state were much lower than the national average.

As Lance Hill writes, "Long placed increasing importance on the role of the state in salvaging capitalism from its apocalyptic crisis. Similar to Mussolini (of whom Huey genuinely knew little), Long had arrived at the conclusion that the solution to economic crisis was the intervention of the state as a reconciling force detached from the interests of labor or capital." After being elected to the U.S. senate, he retained control of the governorship through a handpicked successor and a massive patronage system. Long campaigned for Roosevelt and supported New Deal proposals, but once in the senate, began proposing more radical ideas. Most famous was his Share Our Wealth Society. It promised an income of 2,000 dollars for every household, a 30 hour workweek, retirement pensions, and free college tuition. It was to be paid for by taxing the rich. A rich man's eighth million of income was taxed at 100%, 7th million at 64%, 6th million at 32%. By 1935 there were 27,000 Share Our Wealth clubs in every state with seven million members. Some days Long received more than 30,000 pieces of mail in his senate office.

Hill writes, "Huey Long was convinced he would be in the White House by 1940. His plan was to field a third party candidate in 1936, stealing the Southern Dixiecrat and left vote from Roosevelt and throwing the election to the Republicans. After four years of conservative and devastating Republican rule, the country would be on the verge of economic collapse, and Huey would sally forth to sweep the country off its feet. It was a shrewd strategy, and at all points realizable." Long was assassinated on September 8th, 1935.

Upton Sinclair wrote more than 90 books, won a Pulitzer, and is most remembered for The Jungle which led to regulation of the food industry. He also won 879,000 votes in an unsuccessful bid for the governorship of California in 1934. He was defeated by Frank Merriam who rallied conservatives into a "Stop Sinclair" movement. Merriam's backers included Louis B. Mayer and William Randolph Hearst. During the campaign, Mayer turned studios in Los Angeles into propaganda machines, producing fake newsreels to run before feature films in theaters across the state. One newsreel showed Soviets arriving in California to vote for Lewis. Another showed bums hopping off trains, flocking to California for handouts.

Months before the vote, Upton Sinclair wrote:
“Such is the trap prepared for me next January. The banks will be demanding their money, and refusing to lend any more to an ex-Socialist Governor--unless, of course, he promises to be "good." We have to make it plain that efforts at sabotage will not frighten us, and that if we cannot find anybody else to tax, we will tax the banks. If the people of California elect Upton Sinclair their next Governor, it will be because they want somebody who means to end poverty, and would prefer to die rather than fail.

"To meet the situation we shall need cash, and a great deal of cash, immediately. The people will have to pass an emergency measure which will bring in this cash. We shall assuredly not take it from the poor, nor shall we leave ourselves in the position where we have to take orders from the financial oligarchy which has brought us to our present plight.

"Let me make clear that I am not proposing a program of confiscation, nor have I any secret desire to destroy private business under the guise of taxation. As Governor, I shall confront a deficit for which I have no responsibility; a breakdown of private business caused by its own blind greed. This emergency can only be met by taxation, or by increase of debt, which is taxation put onto our children. We can follow one of two courses: the old method, of taxing the poor, or a new method, of taxing those who have so much money that they do not know what to do with it.”
"Ham and Eggs" was a 1938 California ballot initiative. It proposed to give everyone over the age of 50 thirty dollars every Thursday. The money was scrip to be issued by the state. One unit = one dollar. To encourage recipients to spend the money and stimulate the economy, the scrip could expire. To prevent it from expiring, owners would be required to buy revenue stamps and affix them to the bills. FDR called it a fantasy. The movement took off when Archie Price committed suicide by swallowing rat poisoning. Price had written a local newspaper two years earlier, explaining that he had no family, could not work, and would end his life when his savings ran out. He was true to his word. Price was set to be buried in a pauper's grave, but Roger Coffin, a Ham and Eggs organizer, convinced a San Diego funeral home to bury Price in Glen Abbey Cemetery. Thousands attended the funeral including prominent politicians. The "Ham and Eggs" initiative was narrowly defeated, 1,398,999 to 1,143,670.

Editor's note: I appreciate the contributions iTulipers like Mark Sengel make to our understanding of history. I have argued here since 1999 that a political economy characterized by wide disparities of wealth, income, and debt is, in an economic catastrophe, a petri dish perfectly prepared to grow the ugliest and least constructive economic solutions ever conceived by man. You will see me continue to pursue my mission to offer alternatives–Harper's Magazine, Forbes Magazine, and others and in my book–during the difficult period that is coming. - Eric Janszen

Further reading

Huey Long:
http://www.hueylong.com/programs/share-our-wealth.php
http://www.youtube.com/watch?v=AbyMeMApC3U
http://www.pbs.org/kenburns/hueylong/
(The first documentary Ken Burns made is one of his best.)

Upton Sinclair:
www.ssa.gov/history/epic.html (http://www.ssa.gov/history/epic.html)

Ham and Eggs:
http://www.sandiegohistory.org/journal/92fall/battle.htm

iTulip Select (http://www.itulip.com/forums/showthread.php?t=1032): The Investment Thesis for the Next Cycle™
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Chris Coles
10-15-08, 10:56 AM
By pure chance I have come to this new thread having just read this well written article in the Washington Post which sets out the most recent history of our present travails.

The Crash: Risk and Regulation
The Washington Post examines how Wall Street innovation outpaced Washington regulation.

What Went Wrong

How did the world's markets come to the brink of collapse? Some say regulators failed. Others claim deregulation left them handcuffed. Who's right? Both are. This is the story of how Washington didn't catch up to Wall Street.

By Anthony Faiola, Ellen Nakashima and Jill Drew
Washington Post Staff Writers
Wednesday, October 15, 2008; Page A01

A decade ago, long before the financial calamity now sweeping the world, the federal government's economic brain trust heard a clarion warning and declared in unison: You're wrong.

The meeting of the President's Working Group on Financial Markets on an April day in 1998 brought together Federal Reserve Chairman Alan Greenspan, Treasury Secretary Robert E. Rubin and Securities and Exchange Commission Chairman Arthur Levitt Jr. -- all Wall Street legends, all opponents to varying degrees of tighter regulation of the financial system that had earned them wealth and power.

Their adversary, although also a member of the Working Group, did not belong to their club. Brooksley E. Born, the 57-year-old head of the Commodity Futures Trading Commission, had earned a reputation as a steely, formidable litigator at a high-powered Washington law firm. She had grown used to being the only woman in a room full of men. She didn't like to be pushed around.

http://www.washingtonpost.com/wp-dyn/content/article/2008/10/14/AR2008101403343.html?wpisrc=newsletter

don
10-15-08, 11:06 AM
"History is written by the Victors" though in our case it's shown on television, on the radio and at the multiplex. The books do get written. They're just not read by enough people to be threatening. ;)

orion
10-15-08, 12:56 PM
I understand the concern about not ending up with Lenin, Stalin, Hugo Chavez, etc., but unfortunately I see a paralell to another of your very good observations, the Dollar Ratchet, but now we are proceeding along the path of the Socialist / Totalitarian Ratchet. Every crisis requires more government intervention (of course they didn't have anything to do with the mess we are in now??) till we completely give up on free markets. I guess we head down this path till we crash like an economy and start the cycle over with the hopes of a better democracy and true capitalism. There probably is some kind of K-Wave for governments. The minute you start (with lots of good intentions) to settle wage, debt, life's lottery differences you open the door eventual dictators. So what is my answer? I would turn to the ideas of Mises and Jefferson/Madison, take our medicine. Aren't we just trying to appease the uneducated / the masses/ whatever term fits, so they don't turn over the applecart? How long can you do that?

don
10-15-08, 02:17 PM
I'm not sure what is meant by "true capitalism' but we are certainly seeing unfettered capitalism play itself out.

Held in check by whom?

Labor? Hardly.

Government? Bought some time ago.

Powerful global enemies? Nope, they're gone.

Historical conditions have lead the US to the FIRE economy but it's hardly restrained within those parameters.

:)

orion
10-15-08, 02:44 PM
Don, What has happend is that Government has not done the job so many people keep hoping they will do to impartially manage the system. But as you say government has been bought off, but I would say it is from both labor (minimum wage, unemployment benefits, etc) and corporate (corp welfare, bailouts, poor supervision). Each side gets their turn (FDR vs Reagan). Government plays all sides against each other to maintain its existence. Unfortunately we will never have a completely just or moral society so a policeman is called for but he is one of us and the game starts over. I apologize for the gross misuse of "true capitalism" as this is definitely a red flag and is too general a term. Back to von Mises, Hayek, Adam Smith for better definitions and suggestions.

don
10-15-08, 03:54 PM
Don, What has happend is that Government has not done the job so many people keep hoping they will do to impartially manage the system. But as you say government has been bought off, but I would say it is from both labor (minimum wage, unemployment benefits, etc) and corporate (corp welfare, bailouts, poor supervision). Each side gets their turn (FDR vs Reagan). Government plays all sides against each other to maintain its existence. Unfortunately we will never have a completely just or moral society so a policeman is called for but he is one of us and the game starts over. I apologize for the gross misuse of "true capitalism" as this is definitely a red flag and is too general a term. Back to von Mises, Hayek, Adam Smith for better definitions and suggestions.

Thanks Orion, for responding in a way that pushes the conversation forward a bit!

(If iTulip was strictly an investors forum, that would be okay with me. It's saved my bacon more than once. The only hit I've taken was for the tech -led recession that never happened. I liquidated real estate, went cash, and had my 6-figure ass handed to me. I did have iTulip's admission of missing that one as well so we shared an allegorical tear. But on occasion the iTulipers step outside the strictly $$ management game to look at a larger picture, which never hurts, and can help, the old portfolio.:))

Chris Coles
10-15-08, 06:41 PM
While I do realise that I nowadays sound like the proverbial broken record, the over all problem is that what we thought as being a perfect system, capitalism, is not at all perfect and is thus still evolving. if we can get to understand that simple fact, then we have a good chance to still succeed.

Government is acting to fill the leadership vacuum that the present system has created. We have lost sight of the simplicity that a working system brings to us.

Invest capital, (free money), into privately owned free enterprise business. Business earns income and repays provider of free money with reward of dividend on the income earned.

Government earns tax income from the business success and the employees income, plus a rake off from the increase in transactions that in turn stem from the success of that business and the employees spending.

Spare income is saved to carry on the process of investment of the free money.

So what is wrong?

The system stopped investing capital, replacing free money with loans from banks and while the crest of the wave of earlier success still had momentum, government added more and even more employees paid from tax income.

Having laid it out in such a simple manner, the answer is obvious. We create new savings institutions that go back to basics and invest savings as free money, (capital), ............. The more we invest, the greater the success of private industry, the less government needs to cover the shortfall with tax income spent on employment, the more prosperous we become.

Debate?

Kcim67
10-15-08, 06:52 PM
I understand the concern about not ending up with Lenin, Stalin, Hugo Chavez, etc., but unfortunately I see a paralell to another of your very good observations, the Dollar Ratchet, but now we are proceeding along the path of the Socialist / Totalitarian Ratchet. Every crisis requires more government intervention (of course they didn't have anything to do with the mess we are in now??) till we completely give up on free markets. I guess we head down this path till we crash like an economy and start the cycle over with the hopes of a better democracy and true capitalism. There probably is some kind of K-Wave for governments. The minute you start (with lots of good intentions) to settle wage, debt, life's lottery differences you open the door eventual dictators. So what is my answer? I would turn to the ideas of Mises and Jefferson/Madison, take our medicine. Aren't we just trying to appease the uneducated / the masses/ whatever term fits, so they don't turn over the applecart? How long can you do that?
DEMOCRACY? The control of a group by its own members or the will of the majority! This happens to include your uneducated, your masses and yes your applecart turners if that's what they choose to do. You so called true capitalists are a sick joke, an I'm alright jack look after number self serving hypocrites, you keep the masses in their place by exactly that, depriving them of education depriving them of opportunity of decent healthcare or any of the other tools they require to play the game, they fix the rules to favour themselves and when it all goes wrong they just make up some new ones. The markets are not free, never have been and never will be this is where the injustice lies, Mises style economics is a pipe dream, whilst you allow narrow interest groups to control braodcasting, publishing, education, the senate, congress and even your president your already in a dictatorship and you don't even see it, dictated by a smaller and smaller minority as every year passes and wealth is further concentrated. I can gaurantee that true capitalism you would not like because it would truly be indiscriminate it would wipe out wealth wherever it found sloth and greed and you could not control how it chose to disperse.
What you all need to worry about is that your uneducated masses have got millions of guns and are armed to the teeth and if that had to truly kick in then you might get a kind of entreprenuerial capitalism nobody bargained for!

orion
10-15-08, 09:25 PM
Well I will feel quite at home with the gun toting guys. And no I am not the Monopoly guy out to screw everyone for my well being. I am very reluctant when Mr Government gets involved because there are people who use that power for their own purposes. There is no perfect system but I would and do support education (I actually spend some of my capitalistic loot for the cause) especially so the masses can appreciate the debates by the founding fathers that ring truer everyday and sometimes still don't have an answer concerning banks, democracy, foreign entanglements, etc.

tombat1913
10-16-08, 05:36 AM
DEMOCRACY? The control of a group by its own members or the will of the majority! This happens to include your uneducated, your masses and yes your applecart turners if that's what they choose to do. You so called true capitalists are a sick joke, an I'm alright jack look after number self serving hypocrites, you keep the masses in their place by exactly that, depriving them of education depriving them of opportunity of decent healthcare or any of the other tools they require to play the game, they fix the rules to favour themselves and when it all goes wrong they just make up some new ones. The markets are not free, never have been and never will be this is where the injustice lies, Mises style economics is a pipe dream, whilst you allow narrow interest groups to control braodcasting, publishing, education, the senate, congress and even your president your already in a dictatorship and you don't even see it, dictated by a smaller and smaller minority as every year passes and wealth is further concentrated. I can gaurantee that true capitalism you would not like because it would truly be indiscriminate it would wipe out wealth wherever it found sloth and greed and you could not control how it chose to disperse.
What you all need to worry about is that your uneducated masses have got millions of guns and are armed to the teeth and if that had to truly kick in then you might get a kind of entreprenuerial capitalism nobody bargained for!
So the government is corrupt and the masses are stupid. What's your solution? What big idea do you have?

*T*
10-16-08, 07:02 AM
So the government is corrupt and the masses are stupid. What's your solution? What big idea do you have?

Educate the masses => Continuous Revolution.

The 'masses' must have the power of appropriation to prevent the over-concentration of wealth or power. Government has that power, but the problem arises when 'the masses' are no longer represented by the government. Then the cycle begins again.

A variant of this conversation was dealt with in the Socratic dialogues if I recall correctly (I'm no classicist). It is a process as old as mankind.

The solutions historically proposed are among the following:

- Self-restraint by all in excessive accumulation of wealth while others starve
- Non-attachment to material things
- Right of appropriation by the common man
- Slaughter of the disenfranchised
- Progressive taxation

Chris Coles
10-16-08, 09:28 AM
Educate the masses => Continuous Revolution.

The 'masses' must have the power of appropriation to prevent the over-concentration of wealth or power. Government has that power, but the problem arises when 'the masses' are no longer represented by the government. Then the cycle begins again.

A variant of this conversation was dealt with in the Socratic dialogues if I recall correctly (I'm no classicist). It is a process as old as mankind.

The solutions historically proposed are among the following:

- Self-restraint by all in excessive accumulation of wealth while others starve
- Non-attachment to material things
- Right of appropriation by the common man
- Slaughter of the disenfranchised
- Progressive taxation

History is behind us. We have to move forward and not repeat the mistakes of history. So I vote for Free Enterprise where the manager of the business owns the business.

I stand for the original idea of a free society where the application of freely available capital to invest in new competitive enterprises for the betterment of everybody; creates a society where anyone may better themselves. Some by being the entrepreneur, others by working for and with the entrepreneur to the combined betterment of them all.

Prosperity comes from investment of capital into the entrepreneurial activities of the people, not from feudalism that will inevitably make them slaves.

orion
10-16-08, 10:11 AM
*T*, Thanks for the sign post to Socrates. It is very interesting how we continue to discuss some subjects and sometimes find an answer difficult. That is what I love about the founding fathers as they were well educated on the classics and fully aware of the pitfalls of democracy. I am also concluding that you just can't avoid cycles as we test the boundaries of these unanswered questions.

Chris Coles
10-16-08, 10:19 AM
*T*, Thanks for the sign post to Socrates. It is very interesting how we continue to discuss some subjects and sometimes find an answer difficult. That is what I love about the founding fathers as they were well educated on the classics and fully aware of the pitfalls of democracy. I am also concluding that you just can't avoid cycles as we test the boundaries of these unanswered questions.

Gosh! that answer would make any bureaucrat smile. or again, how to say nothing with panache.:):)

No question remains unanswered, just that everyone will argue that the answer given is not correct.

*T*
10-17-08, 05:31 AM
I vote for Free Enterprise where the manager of the business owns the business.

I 'vote' (old paradigms die hard!) for free enterprise where the management + workers all own the business.

Kcim67
10-17-08, 06:08 AM
Gentlemen, I am so glad to have discovered this forum, i find your debates and ideas enthralling, incitive and above all usually well reasoned. I made my post in a slight fit of anger at the ineptitude of some of our leaders and political commentators. I am neither pro or anti anything I believe in horses for courses and evolution. I have learned more here and at ChrisMartenson.com in the last couple of months than I've learned in years. Thank you for your replies to an unreasonable post.

The horizon of the present is being continually formed, in that we have continually to test all our prejudices. An important part of that testings is the encounter with the past and the understanding of the tradition from which we come... In a tradition this process of fusion is continually going on, for there old and new continually grow together to make something of living value, without either being explicitly distinguished from the other. (Gadamer 1979: 273)

<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /><o:p>The concern is not to 'win the argument', but to advance understanding and human well being. Agreement cannot be imposed, but rests on common conviction (Habermas 1984: 285-287). In this, the understanding we bring from the past is tested in encounters with the present and forms what we take into the future (Louden 1991: 106). We experience a 'fusion of horizons'.

Kcim67<o:p></o:p>
</o:p>

Chris Coles
10-17-08, 07:42 AM
Gentlemen, I am so glad to have discovered this forum, i find your debates and ideas enthralling, incitive and above all usually well reasoned. I made my post in a slight fit of anger at the ineptitude of some of our leaders and political commentators. I am neither pro or anti anything I believe in horses for courses and evolution. I have learned more here and at ChrisMartenson.com in the last couple of months than I've learned in years. Thank you for your replies to an unreasonable post.

The horizon of the present is being continually formed, in that we have continually to test all our prejudices. An important part of that testings is the encounter with the past and the understanding of the tradition from which we come... In a tradition this process of fusion is continually going on, for there old and new continually grow together to make something of living value, without either being explicitly distinguished from the other. (Gadamer 1979: 273)

ffice:office" /><O:p>The concern is not to 'win the argument', but to advance understanding and human well being. Agreement cannot be imposed, but rests on common conviction (Habermas 1984: 285-287). In this, the understanding we bring from the past is tested in encounters with the present and forms what we take into the future (Louden 1991: 106). We experience a 'fusion of horizons'.

Kcim67<O:p></O:p>
</O:p>

KC Welcome,

We are always looking for new minds to try and catch us out. We all get angry from time to time, but it is a fine individual that can look the rest of us in the eye and admit their own, (perceived), mistakes.

Chris.

dogster
12-09-08, 10:21 AM
I loved this overview of Huey Long and Upton Sinclair. What is lost in the movie version accounts of Huey Long is any mention of the scrip currency.

I believe the oncoming depression is a banker engineered event, certainly no accident. The clownish shucking and jiving of Henry Paulson and Ben Bernanke is just a smokescreen. Drawing fire to their evident incompetence deflects attention away from the obvious facts that:

1. Congress has the constitutional power to regulate money

2. Congress can print debt free dollars whenever it chooses.

3. Because of 1 and 2 , the banking industry is an unessential parasite that can't possibly collapse soon enough. see Web of Debt

(http://webofdebt.com)However, because Congress will never come to its senses, the American people's only hope of breaking free of the Fed/banker credit stranglehold lies in the possibility of states printing their own tax coupon scrip.

To that end, I am hurling myself at the internet trying to raise general awareness through my campaign to become Michigan governor in 2010
Raftshol for Governor 2010 (http://wraft.blogspot.com). When you visit the site, please click on the google ad.

Again, thanks for the wonderful article.
Warren Raftshol