“Aligned Agenda’s”: The Tea Party and Wall Street Might Not Be Best Friends Forever, But They Are For Now
“Our problem today was not caused by a lack of business and banking regulations,” argued Ron Paul in his 2009 manifesto End the Fed, which outlined a theory of the financial crisis that only implicated government policy and the Federal Reserve, while mocking the idea that Wall Street’s financial engineering and derivatives played any role. “The only regulations lacking were the ones that should have been placed on the government officials who ran roughshod over the people and the Constitution.”
There seems to be some confusion about the relationship between the Tea Party and Wall Street. New York magazine’s Jonathan Chait says the two “are friends after all,” while the Washington Examiner‘s Tim Carney insists that the Tea Party has loosened the business lobby’s “grip on the GOP.” So let’s make this clear: The Tea Party agenda is currently aligned with the Wall Street agenda.
The Tea Party’s theory of the financial crisis has absolved Wall Street completely. Instead, the crisis is interpreted according to two pillars of reactionary thought: that the government is a fundamentally corrupt enterprise trying to give undeserving people free stuff, and that hard money should rule the day. This will have major consequences for the future of reform, should the GOP take the Senate this fall.
On the Hill, it’s hard to find where the Tea Party and Wall Street disagree. Tea Party senators like Mike Lee, Rand Paul, and Ted Cruz, plus conservative senators like David Vitter, have rallied around a one-line bill repealing the entirety of Dodd-Frank and replacing it with nothing. In the House, Republicans are attacking new derivatives regulations, all the activities of the Consumer Financial Protection Bureau, the existence of the Volcker Rule, and the ability of the FDIC to wind down a major financial institution, while relentlessly attacking strong regulators and cutting regulatory funding. This is Wall Street’s wet dream of a policy agenda.
Note the lack of any Republican counter-proposal or framework. The few that have been suggested, such as David Camp’s bank tax or Vitter’s higher capital requirements have gotten no additional support from the right. House Republicans attacked Camp’s plan publicly, and Vitter’s bill lost one of its only two other Republican supporters immediately after it was announced. So why is there a lack of an agenda? Because the Tea Party thinks that Wall Street has done nothing wrong.
The story of the crisis, according to the right, goes like this: The Community Reinvestment Act and other government regulations forced banks into making subprime loans, and the “affordability goals” of government-sponsored enterprises made the rest of the subprime that crashed the economy. The Federal Reserve pumped a credit bubble, as it always does when it tries to push against recessions. In other words, the financial crisis in 2008 was entirely a government creation, and could have been solved by just putting all the financial firms into bankruptcy. There’s no such problem as “shadow banking,” and to whatever extent Wall Street misbehaved, it was only the result of the moral hazard created by the assumption that there would be bailouts. Or as Senator Marco Rubio said in his 2013 State of the Union response, we suffered “a housing crisis created by reckless government policies.”
This narrative is an easy one to believe for people who distrust government, but it’s far from the facts. The CRA didn’t even cover the fly-by-night institutions making the vast majority of subprime loans. The GSEs lost market share during the housing bubble and subprime loans account for less than 5 percent of their losses. Low interest rates likely account for only a quarter of housing price shifts, and even then, low interest rates likely offset capital coming into the country from abroad.
The mainstream account of the crisis, as Dean Starkman pointed out in The New Republic, is that we’re all to blame—or, as Georgetown law professor Adam Levitin wrote in his recent survey of the crisis, that it was a “perfect storm.” Starkman argues that the Everyone-Is-To-Blame narrative is partially responsible for the lack of serious homeowner help in the Home Affordable Modification Program. As he demonstrates in his piece, “there’s a big and growing body of documentation about what happened as the financial system became incentivized to sell as many loans as possible on the most burdensome possible terms.”
The lack of any Republican policy on financial reform is the result of several factors. Mitt Romney thought it would be a liability to put forward his own agenda in 2012. By voting nearly unanimously against Dodd-Frank, Republicans were able to make this moderate, lukewarm response to the crisis look like a partisan takeover of finance (financial reform is hard and may not work, so all the better to have Democrats own the issue so they can be clubbed with it later). Rather than wage total war against Dodd-Frank through partisan outfits, the smartest minds on the right are weakening the law through law firms and K Street. And the conservative infrastructure has been solely focused on privatizing the GSEs completely.
This lack of policy has allowed the far right and Austrian School acolytes to occupy the intellectual space in the party. It’s the minority party for now, but all it takes is a few Senate seats changing hands before the Tea Party narrative becomes the prevailing one on the Hill—and nothing would delight Wall Street more.
By: Mike Konczal, The New Republic, March 21, 2014
“McConnell’s Tea Party Nightmare”: He Can’t Kill Them Because They Run His Party
OK, Sen. Mitch McConnell wasn’t brandishing a rifle at the Conservative Political Action Conference Friday in order to shoot Tea Party marauders. The unpopular Senate Minority Leader was just trying to avoid being booed by the crowd, using the most reliable prop on the far right, a gun (President Obama in handcuffs would probably work well too). But the embattled leader did go ballistic this weekend, figuratively, on his party’s restive far-right activists. The Tea Party is not going to be able to knock off GOP senators in red states, McConnell warned.
“I think we are going to crush them everywhere,” McConnell told the New York Times. “I don’t think they are going to have a single nominee anywhere in the country.”
Not surprisingly, McConnell is starting with his own Tea Party challenger, Matt Bevin. He released a new ad trashing not only Bevin but the Senate Conservatives Fund that’s backing him, charging the group “solicits money under the guise of advocating for conservative principles but then spends it on a $1.4 million luxury townhouse with a wine cellar and hot tub in Washington, D.C.” Wine and hot tubs, you know what that means – these folks are probably just uppity liberal hypocrites in conservative clothing!
But McConnell’s crusade comes a few years too late. Clearly the Tea Party is already the mainstream of his party. Just last week, a Washington Post-ABC News poll showed that Republican voters say a candidate’s Tea Party ties make it more likely they’ll support them, by a margin of nearly 2-1. Unfortunately for the GOP, Tea Party affiliation makes the broader electorate less likely to vote for a candidate by about the same margin.
Even some Republicans who the media oddly place in the “moderate” or pragmatic camp don’t belong there. Wisconsin’s scandal-challenged Gov. Scott Walker has bragged about being “the original Tea Party in Wisconsin.” In a popular CPAC session using Wisconsin as “the model” for union-busting and right-wing coalition politics, the RNC’s Reince Priebus credited “total and complete unity between the state party, quite frankly, Americans for Prosperity, the Tea Party groups, the Grandsons of Liberty. The [Glenn Beck-instigated] 9/12ers were involved. It was a total and complete agreement that …everyone was going to run down the tracks together.”
And while it’s true that Congressman Paul Ryan, endorsed in 2012 by the Tea Party Express as “the strong Tea Party candidate for Vice President,” has had tension with Tea Partiers since he partnered with Democratic Sen. Patty Murray to pass a budget, at CPAC Ryan downplayed the notion of a rift between himself and the party’s right, comparing intra-party debates to a “family reunion” among Irish-Americans. (Actually, nobody in my family wants to take lunches away from poor children, not even the Republicans among us.)
Now it is true that Tea Party challengers in three red states – Kentucky, Mississippi and Kansas – are having a hard time getting traction against reliably conservative GOP senate incumbents. One poll has McConnell up 42 points over Bevin; another has his lead at 26 points. Thad Cochran and Pat Roberts are likewise leading their Tea Party challengers.
But oddly, McConnell – and the Times – don’t even mention Georgia, where five extremists have been virtually tied for the lead in the GOP senate primary to succeed retiring Saxby Chambliss, competing for the opportunity to run against Michelle Nunn. The most extreme of the five, U.S. Rep. Paul Broun, just pulled ahead in the last PPP poll. Broun would abolish the IRS, the EPA and the Department of Education, and wants the U.S. to pull out of the United Nations. He’s called evolution and the big bang theory “lies from the pit of hell.” Interestingly though, Broun is the only GOP candidate with a (slight) lead over Nunn in an early head to head match up; the others trail her. Presumably, in a one on one race, Nunn and the Democrats would have a lot to work with battling Broun. He is an early contender to be the Todd Akin of the 2014 cycle.
“I know this: Politics doesn’t like losers,” McConnell told the Times, suggesting defeats in primaries in places like Kentucky and Mississippi would discourage Tea Party insurgents. “If you don’t have anything to point to, it is kind of hard to keep it going.”
But while McConnell has a big lead over Bevin, he’s trailing his Democratic challenger, secretary of state Alison Lundergan Grimes. It’s far too early to count McConnell out, but it’s worth asking whether the far-right’s animus towards McConnell will make him the ultimate loser in November.
By: Joan Walsh, Editor at Large, Salon, March 10, 2014
“Why Does The National Media Get Texas So Wrong?”: Ultra-Conservative Candidates Aren’t Fading Away
Tuesday, as Texas primary voters headed to the polls, Politico published an article titled, “The Texas tea party’s best days may be behind it.” Below the headline were photographs of Governor Rick Perry, the state’s junior U.S. Senator Ted Cruz, and Congressman Steve Stockman, who had decided to wage a last-minute, barely visible campaign again Texas’s senior U.S. senator, John Cornyn. The article focused on the Cornyn-Stockman race, and it mentioned a congressional primary in which incumbent Pete Sessions faced a Tea Party challenge from Katrina Pierson.
To anyone familiar with Texas politics, the article was baffling. It made no mention of the state’s most-watched (and most important) GOP primary, the race for the lieutenant governor nomination, and it made only a passing reference to the attorney general race, even though both contests featured bloody fights between so-called “establishment” and Tea Party candidates. The state’s hardest-right election force, the Empower Texans political action committee, also didn’t figure anywhere in the story.
Even after results poured in showing that for the most part Texas remains a dangerous place to skate too near the center, The New York Times headlined its recap with “Texas GOP beats back challengers from the right.” The Times reported that “conservatives inspired by Senator Ted Cruz largely failed to topple mainstream incumbents”—largely because Stockman and Pierson lost.
From these write-ups, you would never guess the significance of incumbent Lieutenant Governor David Dewhurst’s poor showing. Dewhurst, whose U.S. Senate dreams were toppled by Ted Cruz in 2012, managed only 28 percent, while his challenger, the pro-life, pro-Tea Party state Senator Dan Patrick, hit 44 percent. The two will run off May 27 but things don’t look great for Dewhurst. The lieutenant governor, who occupies the state’s most powerful office, has personal wealth that can provide whatever funds he needs, but Patrick’s fan base is larger—in addition to being a state senator, he’s a talk-radio personality in the state.
Results shook out similarly in the attorney general’s race, where Tea Party-backed state Senator Ken Paxton got the most votes and will run off against state Representative Dan Branch. You’d also have no idea that veteran state Senator John Carona, one of only a few moderates left in the Texas senate, had fallen to a Tea Party challenger, as did a handful of state representatives. Stockman may have garnered the most national attention, but he was never a serious contender. He ran a haphazard campaign that received little support from the state’s strong Tea Party network, despite his extreme rhetoric.
So how did Politico and the Times miss the big picture? Texas is complicated because there’s no binary opposition between “establishment” candidates and those affiliated with the Tea Party. Should we define “establishment” as Speaker of the House Joe Straus, who has himself a relatively moderate record but has presided over one of the state’s most conservative legislatures? Outside Tea Party groups have tried to topple Straus, yet he also commands support from Tea Party-backed state representatives. Or is the “establishment” closer to Governor Rick Perry, the state’s longest-serving governor, who gave one of the first major speeches at a Tea Party rally in 2009? Or is it David Dewhurst, who hung tight to Perry’s message, passed extreme measures, but then watched his political dreams crumble as Cruz rose to power by accusing Dewhurst of being a moderate?
There’s no clear leader of the Texas right. Cruz may be the current face of the Tea Party movement, but he’s busy gumming up the gears in Washington; when it comes to state politics, particularly in a dominant party with several different factions, there’s a lot more to consider than just Cruz’s endorsement. Ever since his “oops” moment while running for president, Perry’s iron fist has been slackening back home. And Empower Texans, the state PAC that frequently bullied elected officials with threats of a primary challenge, managed to annoy too many incumbents and is now facing ethical charges.
Incumbency is the least helpful method for judging whether someone is Tea Party or establishment. This is the Tea Party’s third election cycle. The candidates of 2010 are now veteran lawmakers, and many moderate Republicans have peeled off over the last four years. Plus, a number of prominent party members currently affiliated with the Tea Party predated the movement anyway. Arguing that the right is getting beat back because incumbents largely escaped unscathed misses the whole point. Many incumbents are Tea Party already.
In the attorney general’s race, for instance, three candidates ran. Ken Paxton, a state senator who, as a House member, challenged Straus for the speakership and earned plenty of Tea Party accolades, got the most votes and will run off against Dan Branch. Branch is a state representative from Dallas’s wealthiest suburb, and he’s been a loyal Straus lieutenant. That’s relatively straightforward until you throw Barry Smitherman in the mix. Smitherman came in last, but during the campaign he may have won the award for most extreme comments, including his promise for a “conservative crusade.” So is his loss a loss for the Tea Party? Don’t tell that to Paxton.
The Tea Party isn’t monolithic and it sure as hell isn’t represented solely by national fundraising groups like FreedomWorks or figures like Ted Cruz. There are rural Tea Partiers and suburban ones who are bound to have different views on issues like public schools or water policy. There are stylistic differences and substantive differences, from those who are more libertarian to those who are more business-oriented, and of course the social conservatives. They all hate President Obama, but that doesn’t mean they’re all going to look just like Ted Cruz.
The “movement” may no longer be the powerhouse it was in 2010, and certainly its splintering means there’s no central “Tea Party voice.” But Tuesday night’s results don’t show the ultra-conservative candidates fading away. Maybe by the May runoffs, the national media will see that too.
By: Abby Rapoport, The American Prospect, March 5, 2014
“A Target-Rich Environment”: Meet The Right-Wing Doctor Who Could Cost Republicans A Senate Seat
The upcoming U.S. Senate election in North Carolina just got a bit more interesting — and a lot more perilous for Republicans.
On Thursday, Republican candidate Greg Brannon received an effusive endorsement from Senator Mike Lee (R-UT), one of the leaders of the Tea Party’s delegation on Capitol Hill.
“Greg Brannon is dedicated to enacting a conservative reform agenda in Congress. He is willing to challenge the status quo and entrenched special interests. And he has pledged to work alongside myself, Ted Cruz, Rand Paul, and others in the Senate to change the way Washington works,” Senator Lee said. “Greg Brannon will be a strong voice for the people in the Senate and I am proud to endorse him.”
Lee is just one of many prominent right-wingers to support Brannon’s campaign. Among others, the obstetrician from Cary, North Carolina is backed by Senator Rand Paul (R-KY), media personality Glenn Beck, and several Tea Party groups (including the influential, big-spending FreedomWorks).
It’s not hard to understand why the right is coalescing around Brannon, who has spent much of his campaign working to establish himself as the most conservative candidate in the race. But it could create a problem for Republicans who are counting on unseating Senator Kay Hagan (D-NC) on the way to a majority in the U.S. Senate.
Senator Hagan is widely regarded as one of the most vulnerable incumbents in the nation, and she trails each of her Republican rivals in early polling of the general election. But if Brannon captures the Republican nomination, it could give Democrats an unexpected gift. Brannon’s march to the right throughout the campaign has created a target-rich environment for Senator Hagan to attack. Among other incidents, Brannon has:
- Been caught plagiarizing from Senator Paul’s campaign site (he later apologized and added proper attribution)
- Called for abolishing SNAP, arguing that food aid “enslaves people“
- Warned that interstate toll roads are close to “fascism“
- Falsely claimed that abortion is linked to breast cancer
- Been ordered by a jury to pay $250,000 in restitution after misleading investors in a tech startup
- Addressed a rally co-sponsored by the League of the South, a well-known secessionist group
- Served as president of an organization called “Founder’s Truth,” which routinely posted blog posts featuring conspiracy theories claiming that the Aurora massacre was a false flag operation, the TSA will soon force Americans to wear shock bracelets, and Intel hopes to implant microchips into your brain, among many others
It’s still far too early to declare that Brannon is the next Todd Akin, but it does seem likely that a matchup with Brannon would give Hagan the best chance to keep her seat.
Brannon would have to win the nomination first, however. North Carolina state House Speaker Thom Tillis currently leads the Republican field, boasting a 5 percent lead over Brannon in the Huffington Post’s polling average of the race. Tillis is also leading the money battle, with over $1 million in cash on hand, according to the most recent data. Brannon reported just $142,329, putting him at a big disadvantage. Still, given the typically conservative character of midterm Republican primaries, endorsements like Lee’s could give Brannon the boost he needs to claim victory in the May 6 election.
By: Henry Decker, The National Memo, March 7, 2014
“Right vs Far-Right In Texas Primaries”: ‘GOP Establishment’ Has Co-opted The Tea Party With Its Own Savage Rhetoric And Policies
Yesterday was arguably the first big Election Day of the 2014 cycle, with Texas holding Republican and Democratic primaries statewide. And with Gov. Rick Perry (R) stepping down after 13 years as the state’s chief executive, voters saw competitive contests up and down the ballot, creating frenzied races Texans hadn’t seen in a while.
As the dust settles, it appears most of the establishment candidates prevailed. This New York Times piece helped summarize the conventional wisdom about the larger implications.
Establishment Republican leaders on Tuesday defeated challenges from the right in a statewide primary election as conservatives inspired by Senator Ted Cruz largely failed to topple mainstream incumbents, and a race for lieutenant governor headed for a runoff.
Similarly, the headline from The Hill reads, “Top Texas Tea Party challengers flame out.”
With candidates like Sen. John Cornyn (R), Rep. Pete Sessions (R), and gubernatorial nominee Greg Abbott (R) easily dispatching rivals from the fringe, the notion that the GOP establishment reasserted itself certainly makes sense.
But it’s best not to push these assumptions too far. Ed Kilgore had an item on Monday – the day before the primary – about the likely results, which rings true two days later: “If no Tea Party insurgents … score a major victory, you will hear some observers declare the movement dead or dying, right there in Ted Cruz’s backyard. Others (myself included) will note that thanks to Cruz and following Rick Perry’s earlier lead, the ‘Republican Establishment’ in Texas has largely coopted the Tea Party movement with its own savage rhetoric and policies.”
If the top-line takeaway is that the GOP Establishment won and the Tea Party faltered, some might get the impression that more moderate conservatives prevailed over voices of extremism. That impression would be mistaken. Federal lawmakers like Cornyn and Sessions became some of the most conservative members of Congress in recent years as Republican politics in Texas became more radicalized.
In other words, yesterday pitted very conservative Republicans against hyper-conservative Republicans. That the former scored victories isn’t exactly a win for the American mainstream.
Looking ahead, Abbott, Texas’ attorney general, will face state Sen. Wendy Davis (D) in a high-profile match-up that’s likely to be a very expensive contest.
Also keep an eye on Rep. Ralph Hall (R), a long-time incumbent who was pushed yesterday into a May 27 runoff primary.
And perhaps most interesting of all will be the Republican runoff in the race for lieutenant governor.
Texas Lt. Gov. David Dewhurst (R) has been forced into a primary runoff and trails his challenger, sports broadcaster Dan Patrick (R).
Patrick leads Dewhurst by 43 percent to 28 percent with 24 percent of precincts reporting. The Associated Press has called that the race will head to a runoff.
In 2012, Dewhurst was the early frontrunner in the open U.S. Senate race, before he got crushed by Ted Cruz. As yesterday’s primary results helped make clear, his career hasn’t recovered well.
By: Steve Benen, The Maddow Blog, March 4, 2014
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