Economic Update with Richard D. Wolff
Episode: "When US Govt Destroyed a Political Party"
Date: June 15, 2017
Host: Richard D. Wolff
Guest: Lisa E. Davis
Episode Overview
This episode of Economic Update centers on the economic and political mechanisms by which the U.S. government dismantled the Communist Party USA in the mid-20th century. Richard D. Wolff delves into historical case studies of systemic attacks on public welfare and labor rights, followed by an interview with author Lisa E. Davis about her book Undercover Girl, detailing the role of government surveillance, paid informants, and legal persecution in the destruction of leftist political opposition.
Key Discussion Points and Insights
1. Economic Updates: Public Education Crisis in Oklahoma
[00:55–13:40]
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Decline in Public School Funding:
- Oklahoma has not increased teachers' salaries since 2008, placing them 49th in the nation for teacher pay.
- Teachers are leaving the state for better opportunities; positions are now increasingly filled by "emergency certified" individuals with no formal training.
- Over 20% of public schools in Oklahoma now operate on a four-day week due to budget shortfalls.
- The transition to a four-day week saves money mainly by reducing operational days—less need for school meals and utilities.
“Oklahoma is a leader—in destroying public schools… You gotta scratch your head in stunned disbelief that this is called public education anymore.”
— Richard D. Wolff [03:55] -
Social Impact:
- Poor families are disproportionately impacted as children miss free meals and parents face daycare challenges.
- Participation in extracurricular activities now requires fees, penalizing less affluent students.
- Root cause is identified as relentless state-level tax cuts prioritizing wealth and business profits over public welfare.
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Economic Consequences:
- Undermining public education threatens the quality of the future workforce and, thus, long-term economic growth.
- Rich-poor disparities worsen as a result of these "fiscally conservative" policies.
2. American Workers Reluctant to Take Paid Vacation
[13:40–22:50]
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Key Findings:
- On average, U.S. workers take only about half of their paid vacation days.
- Fear of job loss, lack of support, and workplace culture are primary reasons for this phenomenon.
“It’s fear. It’s fear that if you are away from your company even for your paid vacation days, you will somehow jeopardize your job…”
— Richard D. Wolff [18:16] -
Comparison to Europe:
- European Union laws mandate at least 20 paid vacation days per year; American workers have no such legal guarantee.
- Lost vacation days benefit corporate profits, as employees work unpaid and increase productivity without added compensation.
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Survey Insight:
- 80% of respondents said they would take more vacation time if their bosses fully supported it.
3. The Myth of the Free Market: Energy Subsidies
[22:50–27:55]
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On Energy Policy:
- U.S. government has long subsidized key industries (railroads, computers, energy) whenever seen as crucial to national interests.
- Recent subsidies for solar and wind have angered oil and coal companies, who now lobby aggressively to rescind these supports.
“Is this a free market? The answer is: you must be kidding. This market is anything but free—it is the playground of massive amounts of bribery…”
— Richard D. Wolff [27:28] -
Political Manipulation:
- Big energy lobbies influence politicians (notably Donald Trump and Rick Perry) to protect fossil fuel interests.
- The result: policymaking driven by profit motives of competing capitalist blocs, not the public good.
Feature Interview: Lisa E. Davis on the Destruction of the Communist Party USA
Introduction to Lisa E. Davis
[28:34–29:50]
- Author, scholar, and novelist; her recent nonfiction book Undercover Girl recounts the story of Angela Calomedes, an informant instrumental in the 1949 prosecution and dismantling of the Communist Party USA.
Historical Context: FDR, the Left, and the New Deal Coalition
[31:59–35:51]
- Post-Depression Era: The Communist Party, Socialist parties, and the CIO united working-class power, pressuring FDR for New Deal reforms.
- After FDR’s death, elites sought to dismantle this coalition, targeting the communists as the "weak link."
- The use of propaganda generated a climate where "the word ‘communism’ becomes anathema and probably still is…”
— Lisa Davis [34:49]
Government Surveillance and Legal Assault on the Left
[36:05–41:00]
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J. Edgar Hoover’s FBI transitioned from criminal investigation to political surveillance, targeting communists, socialists, and other political opponents.
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The Smith Act (1940) criminalized advocating government overthrow—allowing prosecution of party members for conspiracy based purely on ideology.
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Angela Calomedes and other informants infiltrated the party, reporting on meetings and readings.
“They put them on the charge of conspiracy to advocate…the overthrow of the US government by force and violence. Conspiracy is good because it probably means you didn’t do anything—and advocating means you didn’t do anything, but you were talking and reading books, which was a no-no.”
— Lisa Davis [40:34]
The Role and Recruitment of Angela Calomedes
[43:39–48:32]
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Calomedes, a lesbian and the child of Greek immigrants, was recruited in 1942 and paid by the FBI to become a Communist Party member and informant.
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Her background: raised in poverty, sent to an orphanage, active in the New York Photo League (shut down by McCarthyism), and lived as part of Greenwich Village’s lesbian community.
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She was paid $25 a week (~$250-375 in today’s dollars) for several years.
“J. Edgar Hoover himself said, ‘I maintained the Communist Party because I paid the informants who were paying their dues and kept everything going.’”
— Lisa Davis [52:23]
The 1949 Smith Act Trial and Its Aftermath
[48:32–54:00]
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Calomedes was the only woman to testify for the prosecution; the government’s main targets were labor unions—especially the United Auto Workers in Detroit.
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Eleven defendants (party leaders) were convicted, imprisoned, and fined $10,000 each, bankrupting the party.
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The impact extended beyond the Communists: the Socialists and then the unions became subsequent targets, leading to the later decline of labor’s power in America.
“...this is the beginning of what happened to the Midwest...which is why people can go into the Midwest and promise the return of jobs that are not returning—because they went away a long time ago. And they killed off the Communists, then the Socialists, and then the unions.”
— Lisa Davis [53:19]
Broader Lessons & Modern Parallels
[54:00–55:59]
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Informants lied on the witness stand about being paid, further corrupting the process.
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The story is a warning: U.S. constitutional protections were subverted, and state power was deployed ruthlessly against political dissent.
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Surveillance and infiltration remain tools available today, updated for the digital age.
“There will be no socialism in America. This is America—there will be no socialism here, no matter what it takes.”
— Lisa Davis [54:50]
Notable Quotes & Memorable Moments
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On the Dismantling of the Left:
“As soon as they buried Franklin Roosevelt, they started... they’ve been trying ever since to get rid of social security, any benefits, labor unions that were very strong...”
— Lisa Davis [34:49] -
On the "Free Market" Illusion:
“Is this a free market? The answer is: you must be kidding.”
— Richard D. Wolff [27:28] -
On Constitutional Protections:
“It’s hard not to come away from reading your book without the fearful notion of what a government that decides to destroy a political opposition—what it’s able to do…”
— Richard D. Wolff [54:05] -
On Surveillance Today:
“We don’t really know, but we know that we are surveilled constantly. If you don’t know that, you’re not paying attention.”
— Lisa Davis [55:26]
Timestamps for Major Segments
- Introduction & Oklahoma School Crisis: 00:55–13:40
- Paid Vacation and Worker Exploitation: 13:40–22:50
- "Free Market" & Energy Policy: 22:50–27:55
- Interview Introduction (Lisa Davis): 28:34–29:50
- Backdrop to Communist Persecution: 31:59–35:51
- FBI Tactics & Smith Act Details: 36:05–41:00
- Life and Role of Angela Calomedes: 43:39–48:32
- Smith Act Trial & Legacy: 48:32–54:00
- Concluding Lessons & Modern Relevance: 54:00–55:59
Summary
This episode provides a vibrant and cautionary examination of how political and economic establishments have historically—and continue—to undermine leftist and labor movements in the U.S., using legal, economic, and covert tactics. The historical case of the Communist Party’s destruction underlines enduring dangers to democracy and dissent. Lisa E. Davis’s meticulous research offers compelling evidence of the perils facing those seeking systemic change, relevant to activists and observers today.