The Wall Street party, trapped in the madhouse

Wall Street and big business bankrolled the tea party in order to put tax cut and deregulation-friendly Republicans in control of Washington. Now, they’re reaping the whirlwind.

When you’re looking for strength in numbers, opening the doors to the madhouse might seem like an efficient way to give your side a numerical and adrenaline boost. But once they’re out, good luck controlling the crazies.

Big business and Wall Street types were only too happy to fund the “tea party movement,” creating a quasi-grassroots army that turned back the Democratic tide that rich folk feared would threaten their financial interests after 2008. Socialism! That’s what they feared, and what better to beat it back than a gang of John Birch Society-minded, Ayn Rand-loving, Constitution-mad libbing, low-information voters who could be programmed with right wing talking points and sent out to “take their country back?”

Well, now the Birchers have enough numbers in the U.S. House of Representatives to challenge the business lobby’s man in Washington, Speaker John Boehner — who is anything but a tea partier — and their Senate hired hand, Mitch McConnell. And they have, in Eric Cantor, a man cynical and self-serving enough to lead the mad person parade.

When McConnell says not raising the debt limit would destroy the GOP brand, he’s speaking for Wall Street, big business, and the traditional, blue-blood Republican Party. When Cantor grandstands and humiliates both Boehner and himself with “back of Air Force One” theatrics, his self-interested gambit is proving McConnell right. The Republican Party, what’s left of it, is no longer a functioning political entity; it is a carnival. And the carnies are threatening to destroy the economy in order to see their ideological fantasies made real. Case in point: the newest push by the House freshmen, who are demanding the passage of a balanced budget amendment that every economist who didn’t buy his or her degree on the Internet understands would turn nearly any recession into a depression.

How many highballs are those Wall Street execs downing these days, knowing the very thing they unleashed in 2010 in order to stop President Obama and the Democrats from raising their taxes, is not just threatening to sink their entire portfolios, they’re eager to do so?

The tea party caucus, from Peter King to Michele Bachmann to Cantor and on down to their debt ceiling denialist supporters, actually welcome default. These people want to see what happens if the U.S. fails to raise the debt limit by August 2nd. They are itching to bring on the disaster, to the extent they believe there would be a disaster at all, because some of these people have convinced themselves that everyone is lying — the economists, the Fed chairman, the president, the speaker of the House — they’re all just making the disaster stuff up. Like their battle to reignite the proliferation of styrofoam cups and incandescent light bulbs into regular usage and their denial of climate change (and even pollution), Republicans are turning willful ignorance into a near religion. Can a House bill bringing back the Malborough Man, unpasteurized milk and extra-polluting automobiles be far behind?

Even those right wingers who believe what 100 percent of those who know about this stuff tell them about how horrible the consequences of default would be (Moody’s is already warning the U.S. regarding our credit rating), don’t seem to rightly care. For the true zealots of the tea party right, anything that stops the government from spending — even if that means canceling Social Security checks and the military payroll, shutting down the FBI and Homeland Security, furloughing the entire federal workforce or shuttering federal prisons; because those are the kinds of things we’d have to do if the debt limit isn’t raised — is good news. So what if a few federal prisoners go free. Isn’t “freedom” what the tea party is all about?

These people actually want to see it play out. They’re filled with a near-rapturous zeal to dismantle the federal government, and they really don’t care what happens to their paymasters on Wall Street, or their allies in business, let alone the poor, the elderly and the other little people who would be crushed under the heels of a new recession, or worse.

And now, the blue bloods who put the tea party extremists in power are finding out that the pitchfork wavers they urged to storm the Bastille are clamoring at the gates, and they, our Wall Street friends, are Marie Antoinette and her soft, pudgy Louis.

Good times.

Still, at the end of the day, few believe the fire breathers will get their way. David Frum explains it, gloomily: there will be a deal, and nobody’s going to like it:

As we have said often before, when the face of the Republican Party on debt negotiations is Rep. Michele Bachmann, Rep. Eric Cantor, Sen. Pat Toomey or Sen. Jim DeMint, the party loses ground in the public relations battle. “Hell no, we won’t go” over time becomes a losing message. McConnell has said, “Yes, raise the debt limit, let’s dispose of all this Congressional-Presidential hostage-taking, and bring some stability to paying the nation’s bills.” McConnell’s suggestion avoids direct confrontation over spending versus taxes–it begins to change the subject.

We smell a deal in the works. It will be small, it will be disappointing to those of us who fear the fiscal future of the nation, but it will get the debt ceiling increased. The fact that it will be relative trivial will be, in the short run, of little moment. Market participants, who expect nothing useful from Congress in most fiscal matters, can breathe a sigh of relief that their financial engineering will be safe for another 6, 12, or 18 months. The debt default question evaporates until 2013. American debt as the “best house in a terrible neighborhood” will continue to be a safe haven while turmoil throughout the rest of the world continues.

Then in the midst of the most anemic economic recovery in America’s post-World War II history, Congress can revert to political manuevering and the American people can safely revert to concern over whether or not they or their neighbors will have jobs later this year.

The true dis-connect between both parties in Congress and the fundamental concerns of Americans in the work force will increase. Anger will continue to mount, demagogues will flourish, our national debt will increase, and loss of faith in America’s governance will expand. This cannot end well.

 

Related: you make the choices – try the Bipartisan Policy Center’s “no debt limit, what can we pay for” tool. Even if you pay out all of Social Security and Medicare, and military salaries, you would have no money left for Homeland Security, the FBI, federal prisons, defense contractor payments (boy would they hate that!), aid to needy families and much, much more. Try it. It’s scary.

Also related: tax hikes are coming. Get used to it.

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One Response to The Wall Street party, trapped in the madhouse

  1. Pingback: Sunday Aggregation: Of Debts, Defaults, and Bubbles | Desert Beacon

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