Peak Tea Party

Rick Santelli, that strange and distasteful little man who reports on the bond and currency markets from the floor of the Chicago Board of Trade on CNBC – America’s financial news channel, in spite of Rupert Murdock coming up with one of his own, one that no one at all watches – is not much fun to watch, even if you want to know where rates on the ten-year-note are headed. What’s fun to watch is the worried look on the faces of the other CNBC hosts, who have no idea when he’s going to go off on one of his long rants, screaming about Obama or the pathetic losers in America who aren’t rich, or the French, or almost anything else. He knows his stuff, about bond prices here and around the world, and currency exchange rates and economic trends, but seems to find all that too confining. He knows what’s wrong with the world, and he’ll be happy to tell you that. When he does the other hosts just look embarrassed. They don’t know what to say – he’s that family’s crazy uncle. There’s only one way to deal with it. “Thank you, Rick, and now, regarding durable goods…”

They move on, because Santelli can be dangerous to what is essentially a news organization. He did, after all, come up with the idea of the Tea Party – back in early 2009 he was the one who may have started it all with his rant about the Homeowners Affordability and Stability Plan and how the losers who took out mortgages they couldn’t afford shouldn’t get any help at all from the government. The government shouldn’t use taxpayer money to bail out such pathetic fools. It was fairly standard libertarian stuff, but it was condensed nicely into the basics, as he saw them – get rich, keep all your stuff, and sneer at those who aren’t rich, because everyone’s scorn was what they deserve. Even if it helps the economy, bail out no one, ever. The banks and the financial services industry had done nothing wrong at all, really. Let the total losers in life curl up and die. The good people will do just fine.

This was far too political for the rest of the CNBC team, who thought that their job was to report financial news, which is data and its market implications. Santelli, however, was suddenly out there suggesting a Chicago Tea Party, like that one in Boston long ago, to start a revolution to assure that tax revenues, if there had to be any taxes at all, would be spent on stuff for the good people, not the losers – and a movement was born, even if he didn’t really join it. It was the movement that holds that the government should not spend good money on anything at all for pathetic losers, as with universal healthcare or this kind of stimulus or that, or unemployment benefits or food stamps and so on. That stuff bored Santelli. He just kick-started the movement, and then went back to talking about European bank rates vis-à-vis our long-term treasury notes. CNBC did let him rant for a time – it was good for ratings – but then they reeled him in. They put him back to work, and now carefully ration his rants, which is a bit of a shame. CNBC is no fun anymore, but of course that’s just how they like it. Still, Santelli is a worry.

They needn’t worry. Santelli doesn’t matter any longer. The Tea Party became self-sustaining, and financed primarily by the Koch Brothers and their corporate billions. They helped the Republicans take back the House in 2010, with sixty new House members, who vowed to stop all spending on anything, except maybe Defense, no matter what the fuddy-duddy House Republican leadership thought was good for the country, or what even the public thought was good for the country. Sometimes it wasn’t even about spending, as with immigration reform and background checks for gun purchases. They’d say no. That was the government doing stuff. The government already does too much stuff – just look at the deficit, which is shrinking rapidly, but could balloon again, maybe, but really, we shouldn’t run a deficit at all. We all know the words to that tune.

In the Senate we got Ted Cruz and Marco Rubio and a few others from the movement, with the same position on the government doing stuff. Rubio co-authored a comprehensive immigration reform bill in the Senate, which passed there, but the Tea Party slapped him silly about that and now he denounces his own bill as often as he can. That hardly matters. The Senate immigration bill was never going to pass in the House – the 2010 Tea Party folks are still there, stronger than ever, and thus Rubio can also forget any presidential ambitions down the road. He’s on probation now. They’ll never trust him again.

The rise of the Tea Party – not a formal political party but capitalized throughout here because it might as well be – changed American politics. That strange and distasteful little man on a niche television channel really started something, even if he went back to being a financial nerd. Everything changed, except there are signs we have reached Peak Tea Party:

After a frantic few days, the House voted 221-201 to lift the debt ceiling until March 2015, removing the threat of a default until well after the November midterm election. The bill was supported by 193 Democrats and just 28 Republicans.

It’s a reversal for Speaker Boehner (R-Ohio), who, in 2011, said that when Congress raises the debt limit, it should also enact budget cuts of equal or greater magnitude. It’s also a clear sign of the House Republican Conference’s inability to move beyond fiscal fights and lays in plain view the leadership’s inability – or unwillingness – to corral votes for their priorities.

There’s no way to corral votes for their priorities, because the Tea Party Republicans have different priorities than the old hands in the party:

All of Republican leadership – Boehner, Majority Leader Eric Cantor (R-Va.) and Majority Whip Kevin McCarthy (R-Calif.) – voted for the bill. Leadership allies including Reps. Dave Camp (R-Mich.), Darrell Issa (R-Calif.), Peter King (R-N.Y.), Buck McKeon (R-Calif.), Devin Nunes (R-Calif.) and Peter Roskam (R-Ill.) also voted for the bill.

But Rep. Paul Ryan (R-Wis.), a potential 2016 presidential candidate who wants to chair the committee with jurisdiction over the debt limit, voted no. House Republican Conference Chairman Cathy McMorris Rodgers (R-Wash.) also voted against the bill, along with GOP Policy Chairman James Lankford (R-Okla.) and Rep. Greg Walden (R-Ore.), the chairman of the party’s political arm.

Not lifting the debt ceiling would result in the United States defaulting on its debt, throwing the world into financial chaos, and the old hands saw that as a disaster. The Tea Party crowd saw that as an opportunity. In return for lifting the debt ceiling they could get what they wanted – the end of all sorts of government stuff, starting with Obamacare. Hell, they could demand the resignations of Obama and Biden. The possibilities were endless.

No, they weren’t endless:

Republicans considered attaching language to change Obamacare, construct the Keystone XL pipeline, update the Medicare reimbursement rate and reverse recent cuts to military pensions. Each time leadership floated something new, the rank and file shot it down. On Monday, in a meeting in the Capitol, they settled on a 13-month debt limit increase alongside language to reverse retirement benefits for the military and create a fund to facilitate the long-term reform of the Medicare reimbursement rate for physicians. But later Monday, GOP leadership realized they wouldn’t have enough support. On Tuesday morning, Boehner announced during a meeting at the Capitol Hill Club that he would seek to pass a clean debt limit increase.

No ransom was good enough for the Tea Party crowd and Boehner just gave up. Screw it. Nothing will satisfy you Tea Party folks. I’ll just bring it to the floor and let it pass, with no ransom at all. There’s no point in throwing the world into financial chaos for two or three generations, and we’d catch all kinds of shit for that anyway.

Andrew Sullivan offers this summary:

This is the party that wants to be seen as an alternative. It is rather, an unpredictable cauldron of crazy now grasping for more than the House. Perhaps it will win the Senate on a wave of Obamacare hysteria and opposition. But its conduct in the House does not bode well for coherent governing. They’re for immigration reform but not really. They want to repeal Obamacare but their only alternative covers way fewer people, and makes coverage for pre-existing conditions dependent on continuous coverage in a labor market far from anything close to full employment. They oppose a deal with Iran but remain fearful of persuading Americans of the need for another war in the Middle East. They now agree the Iraq War was a disaster but refuse to take ownership of the mistake.

A party that wants to be seen as alternative also can’t be two parties that disagree with each other, as Politico notes:

The vote marks the latest example of Boehner relying on Democrats to pass legislation that a wide swath of his party doesn’t support. He also tapped Democrats to reopen the federal government, approve Hurricane Sandy relief funds and avert the fiscal cliff. Boehner’s allies argue he helped ease Congress into a clean debt limit increase without the typical intra-party conflicts that spook financial markets…

White House Press Secretary Jay Carney called the House vote a “positive step in moving away from political brinkmanship.”

Until then [when the current spending authority runs out], Republican leaders say they want to transform their image from the opposition party to the alternative party. Boehner and Cantor say they would like to pass their own health care reform bill and move legislation to reform education laws. Immigration reform is slipping lower and lower on the Republican agenda.

It seems transitioning from the opposition party to the alternative party is going to be difficult, be we all know who is to blame for that:

Boehner blamed President Barack Obama for the divisions in the House Republican Conference.

“You’ve all known that our members are not crazy about voting to increase the debt ceiling,” Boehner said Tuesday morning. “Our members are also very upset with the president. He won’t negotiate. He won’t deal with our long-term spending problems without us raising taxes. He won’t even sit down and discuss these issues. He’s the one driving up the debt and the question they’re asking is, why should I deal with his debt limit? So the fact is, we’ll let the democrats put the votes up, we’ll put a minimum number of votes up to get it passed.”

Yeah, sure, and in the Senate Ted Cruz is promising a filibuster to get something dramatic out of agreeing to avoid worldwide financial collapse, although it’s not clear what that would be. Abolishing the EPA and the Federal Reserve? Who knows? The Washington Post’s Greg Sargent sees only this:

The crucial point about this outcome, should it happen, is that it will be the direct result of the decision by Dems – in the last two debt limit fights – to refuse to negotiate with Republicans. That was a major course correction on Obama’s part in which he learned in office from failure. After getting badly burned in the 2011 debt limit showdown – which left us saddled with the austerity that continues to hold back the recovery – Obama recognized what many of his supporters were pleading with him for years to recognize: There was no way to enter into a conventional negotiation with House Republicans.

Now that this realization has driven Dem strategy through two debt limit fights, it may not be too soon to pronounce GOP debt limit extortion dead.

“The era of economic hostage taking and ransom demands should finally be behind us,” Senator Patty Murray told me today. “House GOP leaders have finally bowed to the reality that they need to put uncertainty and drama behind them and put the economy ahead of their party’s political tactics.”

We just saw the Tea Party peak:

Obama has been widely faulted for failing to bend Congress to his will through persuasion and LBJ-style logrolling. But that criticism failed to account for the structural factors that render the current situation unconventional, such as population distribution patterns and redistricting that cossetted away House Republicans in safe districts, insulated from broader currents of national opinion and/or party brand problems, and other incentives for refusing any cooperation with Obama, such as the promise of plaudits from the Conservative Entertainment Complex.

Recognition of these fundamentals was a prerequisite to getting Dems to deal effectively with the true nature of the House GOP debt limit extortion. Way back in December 2012, when Obama first announced there would be no more negotiations over the debt limit, it was plainly apparent that this recognition was what was driving Dems. What many failed to appreciate was that Dems had no choice other than to refuse to negotiate, because, with a conventional negotiation impossible, making concessions under those conditions would inevitably lead to another ransom demand later, making default and disaster more likely.

This pattern simply had to be broken for Obama’s second term to have any chance of succeeding. The key insight among Dems was that, even if a sizable bloc of House Republicans would never support a clean debt limit hike no matter what, due to the above structural factors, the GOP leadership could be compelled to allow one to pass with a lot of Dems if the political price of not doing so grew too high.

That’s what happened the first time Republicans caved on the debt limit in early 2013, and again this fall, after the government shutdown fiasco. Indeed, Dems held the line that second time explicitly because they calculated that forcing capitulation at that point would ensure that Republicans would not seriously stage a third showdown, since doing so in 2014 would extract too high a political price, effectively ending debt limit extortion for good.

Obama learned. Note the new structure. Adapt to it. And Steve Benen adds this:

Remember, last spring, Republicans expressed a tepid willingness to start a debt-ceiling crisis. President Obama said he wouldn’t negotiate on the full faith and credit of the United States; GOP members backed down; and Congress passed a clean debt-ceiling increase.

Then in the fall, Republicans again said they were ready to hold the debt ceiling hostage. Obama again refused to play along; Republicans backed down again; and Congress once more passed a clean debt-ceiling increase.

Which strategic genius in the GOP woke up one morning in January thinking, “I know, let’s try the same dumb idea again and hope for a different result”?

The question isn’t why House Republicans failed; the question is why they picked this fight knowing in advance failure was inevitable.

Maybe they didn’t realize that the Tea Party had peaked, although Sahil Kapur, Talking Points Memo’s senior congressional reporter and Supreme Court correspondent, is not convinced that’s so:

The emerging dynamic is one where the tea party can no longer hold the basic functions of government hostage to conservative policy reforms, but has effective veto power over major new proposals that require bipartisan deal-making. It’s an important shift from the last three years since the nascent movement helped the GOP win more than 60 congressional seats and re-take the House in the 2010 elections, spurring a party-wide lurch to the right.

That’s the key. Disregard that debt ceiling business:

A swath of new proposals by President Barack Obama and Democrats has run into a brick wall of GOP opposition, thanks to tea party opposition.

Even on initiatives that are broadly popular, as in the case of emergency unemployment compensation and raising the minimum wage, conservatives have successfully blocked any movement forward. Senate Republicans have repeatedly filibustered the restoration of jobless benefits, and both Senate and House GOP leaders oppose raising the minimum wage.

Heritage Action lambasted the push to renew unemployment benefits as “throwing taxpayer money at an ineffective and wasteful program.”

An initiative that Republican strategists say is imperative to stave off electoral extinction – immigration reform – isn’t going anywhere. Recently, Speaker John Boehner took a significant step toward action by releasing a pro-reform blueprint. But within one week, after a fierce backlash from tea party organizations, who foreshadowed a GOP civil war if leaders didn’t reverse course, he hit the brakes and signaled that the House wouldn’t take up reform. Some Republicans were dismayed.

Boehner threw in the towel on one thing, but there’s so much more to stop:

On efforts supported constituencies that Republican operatives say the party must perform better with, conservatives not only block them, they sometimes dismiss the very notion that they’re necessary. Bills like the Paycheck Fairness Act, which beefs up legal protections for women who face pay discrimination in the workplace, are stymied by Republican opposition. A Fox News host argued that many women who were paid less than men earned “exactly what they’re worth.” GOP leaders have also refused to support the Employment Non-Discrimination Act, which appeals to supporters of gay rights, a burgeoning constituency across the country. ENDA [the new Employment Nondiscrimination Act that now protects gays] passed the Senate recently and Boehner wasted no time before signaling that it was dead in the House.

Even initiatives that have enjoyed overwhelming bipartisan support in the past, like the Voting Rights Act, are now toxic on the right. Conservatives oppose fixing the part of the historic law that was struck down by the Supreme Court, designed to preemptively snuff out voter discrimination in the state and local governments where it’s likeliest to occur. Lawmakers recently introduced bipartisan legislation to rewrite and reform that provision, but Republican leaders have refused to sign on, amid opposition from conservatives who say the idea violates states’ rights and should be left alone.

The tea party movement has – so far, at least – blocked every one of these initiatives, with direct appeals to conservative voters to pressure Republicans not to compromise. Far-right voters may be a shrinking fraction of the national electorate, but they’re exceptionally active in the Obama era. Their tactics, such as threatening primary challengers and flooding lawmakers’ offices with phone calls, remain effective.

They lost one battle, but they didn’t lose the war, so one can hardly say they’ve peaked – and yes, that Fox News host did say that women who were paid less than men earned “exactly what they’re worth” – and if that becomes the new Republican talking point, straight from Roger Ailes, they can kiss the women’s vote goodbye, again. That this idea has come up does, however, show that these Tea Party folk are still feeling their oats. They don’t give a damn about the women’s vote. They’re riding high:

For three years, the tea party was successful at compelling Republican leaders to threaten self-inflicted crises, like government shutdowns and defaulting on the debt, in order to secure conservative policy reforms. Empowered by victory in 2011, when a despondent Democratic Party acquiesced to well over $2 trillion in spending cuts, including the sequester, the tea party forced a series of standoffs that culminated in the 16-day partial government shutdown last October.

That government shutdown was a disaster, and Boehner just gave up on them, but there’s always something else that can be shut down or defended or whatever, except something is shifting:

Tea party groups like Heritage Action and Club for Growth whipped the budget and farm bills, to no avail. For years, a “key vote no” from these groups was typically a death knell to Republican support for any legislation. That has changed for items needed to avoid major disruptions: some 70 percent of House Republicans voted for the budget and farm legislation.

That should have been a warning:

In December, Boehner angrily criticized tea party groups as having “lost all credibility” after they came out against the Ryan-Murray budget deal before it was finalized. “They’re using our members and they’re using the American people for their own goals,” snapped the normally mild-mannered Speaker. “This is ridiculous.”

But Boehner only took back some of his power – just enough to halt the spiral of self-defeating confrontations. The tea party wields the rest.

They do, for now, but that’s the thing about a movement, or a sports team, or your marriage peaking. The peak is the top. Even if the decline that follows the peak is slow, and sometimes hardly perceptible, the decline is real. It’s like the concept of peak oil – the observation that the world’s petroleum reserves are finite and we’ve now extracted the stuff that is easy and cheap to grab. Everything from here on out will cost a fortune to bring to market – shale oil, oil from tar sands, deep-water reserves in god-awful places, possible reserves in the artic where the cost of production is almost prohibitive, unless you can get six hundred dollars for a gallon of the stuff. We won’t run out of oil, but it will be just as if we had. There’s a reason oil-rich Iran is probably actually developing a nuclear energy program to power their country – the nuclear warheads are just a bonus for them – and a reason a number of the gulf Emirates are turning themselves into financial service centers and tourist destinations. Things reach a peak and that’s that. It happens.

That may be happening with the Tea Party. They just don’t know it yet, but they will, eventually, and then no one will remember Rick Santelli at all one day, as it should be.

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About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
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One Response to Peak Tea Party

  1. Rick says:

    “… back in early 2009 [Rick Santelli] was the one who may have started it all with his rant about the Homeowners Affordability and Stability Plan and how the losers who took out mortgages they couldn’t afford shouldn’t get any help at all from the government.”

    If Santelli was implying — and I think he absolutely was — that the people behind the recession are the “losers who took out mortgages they couldn’t afford”, rather than the banks that sold them those mortgages, he was wrong, and we need to remind ourselves about this urban legend.

    The fact is that, in the old days, there were always folks who wouldn’t have been able to repay a mortgage, but they applied anyway, just on the off chance they’d be approved. The difference is that, back then, the banks would turn them down!

    That all changed once bankers learned they could sell their loans to other institutions, who in turn bundled them with other, sometimes more risky loans, into complicated so-called “instruments” that Wall Street concocted to sell to rich people who often didn’t even know what they were buying.

    A lender no longer had to worry about whether a loan was solid once they started passing them on to someone else who didn’t seem to care either. Eventually, it was no longer uncommon to hear of cases where all sorts of unqualified — even unemployed — folks were lured into taking out mortgages, the applications of which the originators filled with lies to cover up the borrowers unworthiness, often without even letting the borrower in on the joke.

    The question then becomes, who is responsible for a bad loan — the borrower, who in previous times would have been turned down by the lender, or the lender, who had unlearned how to just say no?

    And before anyone brings up that old chestnut about banks having been “forced” by the government to stop “redlining” and start issuing loans to “unworthies”, you need to know that that theory was discredited years ago. It turns out that those “Community Reinvestment Act” (CRA) loans, because they were such a low percentage of the market and defaulted at a rate not that much different than your average mortgage, weren’t really a driver of the problem. (See “CRA and the Housing Bubble” for a discussion of this between people who worked in this area.)

    On that other matter, has the Tea Party peaked?

    No, I suspect that, unlike parts of the United Arab Emirates, the Tea Party isn’t quite ready to turn itself into a tourist destination. I suspect the Republicans problem is, without all those zany positions of the Tea Partiers, the party proper seems to have nothing to offer that the Democrats don’t, so I’d guess the zanies will continue to stand out like a sore thumb.

    But what I wonder is how this will all resolve itself. Since the Republicans can’t seem to make any headway as long as they have these minority Tea Partiers holding them back, will moderates someday just give up and leave the party, and maybe become Democrats? Or will they instead split away to form their own third party? And if that happens, how will they, on a practical level, make that work in a system that no longer has any room for any more than two parties?

    It seems to me that the Tea Party people are themselves unlikely to take over the party, but nor can the party go on like this indefinitely. Something’s gotta give, as the old song says. I’m beginning to think we are likely to see a sea change in our lifetimes.

    Rick

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