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The New Testament has a lot to say about the poor, but it is short and not very sweet on how tricky it is for the rich to get into heaven.
California, however, has proved to be a heaven on earth for big-league moneymakers — billionaires, in modern-day dollars — for almost as far back as there were fortunes to be made.
In its 176 years of statehood, California has become vastly rich, leading the ranks not just among states but among nations. Its current billionaires may number as many as 200. Forbes magazine puts 85 Californians on its list of the 400 richest Americans.
Over those decades, tycoons have leveraged their fortunes to shape the state with their railroads, mines, newspapers, oil businesses and ranching and agriculture.
Yet in industrialized society, as in physics, every action can generate that equal and opposite reaction, and over those decades, Californians have a history of saying “enough” when its rich men get too big for their board shorts.
Proposition 40, the one-time “billionaire wealth tax,” marks the latest of these skirmishes between the uber rich and regular Californians who see the accumulation of wealth and power as an abuse or, at least, feel deprived of their fair share.
To call California the “Golden State” is to underestimate its assets. Gold itself kick-started the modern era, but it’s the land itself that was always rich, abundant in every measure, with more than enough for millennia of early Californians.
Then came the handful of decades of the rancheros, the Spanish and Mexican land-grant barons. They were grandees of enormous estates where cattle mostly tended themselves until they were rounded up and sold for their hides, which came to be called “Yankee dollars.”
This agri-stocracy ruled over a part of California equivalent in size to the state of New Jersey, yet like “Downton Abbey” British aristocrats, they were rich in acreage but hard up for cold hard cash. Their laborers came cheap, often Native Americans dispossessed from their own rights. Californios’ reign began to vanish even before the discovery of gold, when droughts and floods wiped out their easygoing livelihoods, and their lands were cut up, sold off, and their land grants swept aside by the new state.
California’s new Yankee masters were men of industry, which also sometimes looked like reckless plunder. A tree that wasn’t board-feet of lumber was a waste, a landscape that wasn’t plowed was a waste, a river that wasn’t diverted to irrigate was a waste.
Durable riches were amassed by California’s “Big Four,” whose wealth would likely classify them today as billionaires. Mark Hopkins and Collis P. Huntington ran a hardware store in Sacramento, at a propitious time and place to supply gold miners.
And by the time the gold had played out, the two had joined forces and fortunes with two other formidable men: Charles Crocker and Leland Stanford. Their railroad company, the Central Pacific, made the nation’s transcontinental railroad happen, and later created and controlled the Southern Pacific.
In the last decades of the 19th century, the reach and strength of the SP’s power — and the abuse of it — became too much for Californians to stomach. The Southern Pacific muscled out the competition not just on land but on the seas and rivers. Farmers and manufacturers and ordinary Californians could hardly move freight or ride the rails without SP — and paid dearly for this monopoly. Banks were under its sway, and cities that didn’t meet its demands could be bypassed by new rail lines. Robber barons manipulated public utilities, virtually ran the Legislature and “owned” politicians, lawyers, and even judges
The 1880 incident remembered as the “Mussel Slough” tragedy, near Hanford, became a flash point in the nation’s shifting attitudes toward its rich industrialist class, and it brought “the Octopus” — the nickname for SP — under unwelcome scrutiny.
Details are murky even now, but a number of families had settled on SP land near Hanford with expectations they could eventually buy it at a certain price — as was occasionally done with some SP land. When it looked as if the prices would rise as much as tenfold and settlers were being evicted instead, a gun battle broke out, and seven men, mostly settlers, died.
A few efforts to restrain Southern Pacific were tried, and died, but at last, in 1911, a governor named Hiram Johnson gave voters the tools to end-run SP.
Johnson had prosecuted graft and civic corruption in San Francisco, and his progressive reforms gave California voters some of the very tools your ballot offers you today: the initiative, recall, referendum, and women’s suffrage.
For much of the rest of his career, as senator and as a contender for the GOP presidential nomination in 1920 and 1924, Johnson tried to pull his party back to its skepticism of monopolistic riches, but never could. In 1924, trying to win the nomination against incumbent Calvin Coolidge, Johnson warned, “The Republican Party is dominated by an unholy alliance between crooked big business and crooked politics.”
Also in 1924, investigations were afoot into the Teapot Dome scandal, which would swing the public’s attitude about another hugely profitable California industry and its enormously rich founder.
Edward L Doheny was the founding “oiligarch” of the oil boom that enthralled and enriched L.A. a hundred years ago.
Doheny was scrounging handyman jobs when he arrived in Los Angeles, but in 1893, with a ginned-up drill and a sharpened eucalyptus log, he chonked away at a scrap of land just east of downtown, and struck oil — oil, at a time when the world was beginning to crave it.
Within a couple of decades, L.A. would become an oil boom town. By the 1920s and ‘30s, L.A. wells were supplying more than a quarter of the world’s oil appetite. The Uplifters booster club sang its official drinking song: “Yes, it’s oil oil oil/that makes L.A. boil!” From Huntington Beach to the edge of Santa Barbara, the coast bristled with wells — “like a porcupine” was the popular imagery.
By then Doheny had extended his petro-empire to the Teapot Dome federal lands in Wyoming. A onetime Interior secretary named Albert Fall was convicted of taking bribes from Doheny and another oilman for no-bid drilling there, and though Doheny himself was acquitted twice, his reputation never recovered. The very night he died, in 1935, his widow and her sister shoveled bushels of his private papers into their West Adams mansion’s basement incinerator.
The billionaires’ attack on California’s wealth tax initiative shows why it’s needed.
A good government pushback was soon afoot, promoted by county Supervisor John Anson Ford, a judge and future mayor named Fletcher Bowron, and a man whom Ford chose to look into government practices in what became a bigger and dirtier scandal everywhere that man looked.
He was Clifford Clinton, a local hero as founder of Clifton’s renowned cafeterias. His efforts were mocked as “goo-goo” — for “good government.”
The mayor, Frank Shaw, a man with a polio limp and an Oliver Hardy mustache, had presided for five years over Graft City, and his brother sold LAPD jobs and the answers to promotion exams.
But in 1938, 27 years after voters got the recall power, by almost two to one, they used it to boot Shaw from the mayor’s office — the first time a recall was ever used to give a mayor the heave-ho.
As Los Angeles became more crowded and less pleasant a place to live, the high-handedness of Southern California developers and officialdom occasionally got those hands slapped. Sometimes that slow-growth impulse took the form of NIMBYism. Sometimes it was about preserving wildlands and habitat. Sometimes it showed up as resentment that residents were told to save water — a perfectly legitimate concern — but only to allow the building of more houses.
The civic cleanup movements of the 1930s engaged mostly white, middle-class Angelenos. In the 1980s, working-class people of color were stopping big public projects that they said would have brought crime and pollution to neighborhoods already overburdened.
The Mothers of East L.A. organized and protested and lobbied, and put the brakes on plans for a state prison in their midst, and created a template for community power. In South Los Angeles, a group called Concerned Citizens of South Central Los Angeles got wind of a solid waste incinerator project called LANCER, took on civic and industry forces and strategized and worked and got the city to cancel its plans. The environmental justice movement is now a permanent factor in civic politics.
And now the tech bubble — not the money one but the cultural one — is on the verge of getting the populist “pop,” too.
Like the railroads, like the oil business, the Silicon Valley creators and innovators began as hoodie-wearing outsider heroes.
But it’s no longer the Silicon Valley of Bill Hewlett and David Packard and their garage genius. Some number of the latter-day innovators have become richer and more influential than the sober-sided suits ever were. The original Google ethical mission statement, “Don’t be evil,” was dropped, and the parent company, Alphabet, now uses the decidedly thinner “Do the right thing.”
At the fulcrum of this shift is AI, artificial intelligence. A whole lot of Americans look upon it with suspicion, something that will radically alter economies and employment while giving them no say in the matter. They worry that it’s just about making even bigger piles of money for billionaires who, like the SP plutocrats of old, are able to dictate terms to politicians and world leaders.
Will the public go for Proposition 40? Billionaires are spending big to prevent it. And the latest UC Berkeley/Los Angeles Times poll shows it falling further behind.
In 1893, the San Francisco Examiner approached four California super millionaires — today’s billionaires — for advice on prospering in the state. They delivered a passel of Boy Scout platitudes. Stanford exhorted men to “engage in some useful calling which best harmonized with his tastes.”
And Collis Huntington, whom an L.A. journalist called “possibly the most hated man in California ... a rapacious tyrant,” piously decreed, “Do unto others as you would have others do unto you.”
These early plutocrats made their fortunes on immovable assets — gold, land, oil, the natural riches of California. Many of today’s billionaires believe that fortunes and talent and the culture that made them flourish are portable, and, if 40 passes, have threatened to take it with them.
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