The lesson of California - Page 2

ANNIVERSARY SPECIAL: The Golden State that invented the tax revolt is failing, but the conservative movement presses on
Image by Tom Tomorrow

Today's vast network of conservative think tanks didn't exist at that time, so Uhler tapped conservative thinkers from the American Enterprise Institute and the Hoover Institute at Stanford University, as well as other conservative economists such as Peter Drucker from Claremont McKenna College.

"There were 35 people who helped us design the first effort at a constitutional initiative in California to limit year-over-year growth of the state's general fund," Uhler said. "All of us as free market enthusiasts and economists all shared the belief that government beyond a certain level eats the seed corn of the nation and doesn't produce anything."

While voters narrowly rejected their group's first effort to cap government growth — Proposition 1 on the November 1973 ballot — the ground had been prepared and the seeds had been sown for the tax revolts that would sweep the country in the late 1970s, with many of the campaigns coordinated by Uhler and the organization he formed for that purpose in 1975, the National Tax Limitation Committee, and a rapidly growing network of similar, interconnected organizations.

As Uhler worked with Reagan to weaken California's government from within, his fellow travelers were developing national and international strategies to create aggressive, coordinated, well-funded campaigns to attack government and spread the free market dogma.

In August 1971, Lewis Powell — a conservative corporate attorney who President Richard Nixon had just nominated to the U.S. Supreme Court (where he served from 1972-87) — wrote a confidential memorandum to the leadership of the U.S. Chamber of Commerce titled "Attack on the American Free Enterprise System."

He sounded the alarm that the ascendant environmental and consumer movements were going to destroy capitalism in the country unless corporate America aggressively fought back in a coordinated fashion, which he spelled out in great detail.

He called for all major corporations to develop aggressive legal and public relations strategies for fighting the left, creation of a network of think tanks and media outlets to push the conservative message, manipulation of the legal system, and sponsorship of university programs to study conservative ideas and incubate future leaders — which all came to pass in the coming decades.

"American business [is] 'plainly in trouble'; the response to the wide range of critics has been ineffective and has included appeasement: the time has come — indeed, it is long overdue — for the wisdom, ingenuity, and resources of American business to be marshaled against those who would destroy it," Powell wrote.

Part of that strategy involved having the federal government promote and popularize free market economic theories being developed by Friedman and his colleagues at the University of Chicago, a movement that is well-documented by journalist Naomi Klein in her book The Shock Doctrine: The Rise of Disaster Capitalism.

In 1971, Friedman and his colleagues began working with rich conservatives in Chile who were allied with Gen. Augusto Pinochet, who in turn were conspiring with the CIA to overthrow and assassinate the democratically elected, leftist President Salvador Allende, which they successfully did on Sept. 11, 1973.

Friedman's economic theories called for a radical restructuring of society — slashing taxes and social spending; removing most regulation and trade restrictions; crushing labor unions; promoting economic growth at any cost — and Pinochet executed the strategy in brutal fashion, ordering the death of at least 3,200 of his political opponents, including the car-bomb assassination of economist Orlando Letelier in Washington, D.C., in 1976.

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