Back in the 1930s, the Great Depression that followed the 1929 market crash had direct political repercussions. In the 1930 mid-term elections, the Democrats gained control of Congress, and in 1932 Democratic candidate Franklin D Roosevelt was easily elected president over Republican incumbent Herbert Hoover, carrying over 40 states. The Democrats finally gained control of both Congress and the Executive Branch after more than a decade of Republican rule.
The new Democratic chairman of the Senate Banking and Currency Committee, Senator Duncan U. Fletcher of Florida, immediately dismissed the Republican general counsel of the commission on the 1929 crash. He appointed Ferdinand Pecora, an assistant district attorney for New York. The Pecora Commission investigations after 1930 revealed a host of conflicts of interest in the financial sector in the years leading up to the 1929 crash, such as bank underwriting of unsound securities to save near non-performing bank loans, rampant insider trading and "pool operations" by speculators banding together to move a stock and to close out the pool at a peak price for profit, leaving the manipulated public with subsequent losses.
More shocking still, the Pecora Commission uncovered the embarrassing fact that JP Morgan and his fellow banking titans not only continued to reap huge profit from rescuing firms they helped put in distress while the economy fell into severe depression, but they were also able to avoid paying any income tax in 1931 and 1932 through tax loopholes on paper losses of distressed companies they acquired. These bankers were in fact buying up a country in economic distress on the cheap with their tax deductions.
Revival of populism: the Single Land Tax
The excesses of the Roaring Twenties revived populist calls for reform and even radical demands for revolutionary systems of taxation. The Robert Schalkenbach Foundation (RSF) was organized in 1925 to promote public awareness of the social philosophy and economic reforms advocated by Henry George (1839-1897), centering around the "single tax on land values" first published in The Christian Advocate in 1890. The Henry George Foundation of America was formed in 1926 as a non-profit entity by some of the leading luminaries of the progressive wing of the Democratic Party in Pittsburgh, Pennsylvania. George believed that exclusive private ownership of land (natural resources) created unwarranted special privileges for certain people and felt that keeping land out of production was destructive to the economy. He advocated shifting taxes from labor and capital onto the value of land and natural resources.
Riding on a wave of populism, George ran, though unsuccessfully, twice for mayor of New York, the first time in 1886 when he came in second ahead of a young Theodore Roosevelt. George died in the midst of his second run in 1897, aged 64. Between elections, he traveled the world promoting his vision of economic justice, influencing many reformers. In pre-revolution Russia, George's ideas were popularized by Leo Tolstoy, and in China by Sun Yat Sen, the leader of the revolution that overthrew in 1911 the 267-year-old Qing dynasty. George's grand daughter was the celebrated American choreographer Agnes George de Mille. ...You can read the rest of Roosevelt Braintruster Henry Liu's piece at New Deal 2.0.