Universal Translator

Wednesday, July 27, 2011

Wall Street and the Teabaggers: Buyer's Remorse

If I could maintain the right level of detachment -- say, the kind that comes with depersonalization disorder -- I think I might be capable of enjoying a bit of schadenfreude at the expense of the House Republicans right now.  It appears that the Wall Street Republicans are trying to get some kind of deal done to raise the debt ceiling, and the Teabaggers are determined not to let them get away with it.
As TimF at Balloon-Juice observed about two week ago, this may be "a truly existential moment -- [the GOP] has to decide who is in charge, and halfway measures won't do. Does the party serve wealthy people, who mostly want low taxes and stability, or does it serve tea party anarchists?"
What makes it all the more delicious -- provided you can ignore the Sword of Damocles hanging over our heads -- is that it wasn't supposed to be this way.  So many people have been repeating and listening to the same Teabagger rhetoric for more than two years now that the idea the Teabaggers were supposed to be "anti-Wall Street" has seeped into our collective psyche.  But if you go back to the beginning of the movement it is clear that the Teabaggers were really created simply to do the bidding of their Wall Street Masters.  
Unfortunately, the Big Money Boyz created a monster too stupid not to be brainwashed by its own propaganda and now it is running amok and threatening to tear down the castle.  I'd laugh, but I don't think that's an appropriate response when watching a horror movie.
Let’s try and remember exactly how the “Tea Party Movement” got started.
By 2008 it had become clear that America’s Big Money Boyz had royally screwed the pooch.  First, they issued bonds backed by what turned out to be essentially worthless sub-prime mortgages; this meant that when the housing market slowed down those bonds began to default.  Now, that would have been bad enough, but these financial fuckwits went above and beyond the call of duty when it came to finding new and inventive ways to screw that pooch.
You see, they didn't stop with just issuing bonds based on sub-prime mortgages.  Instead, they then turned around and issued bets on whether those bonds would go bad or not.  (These bets are called "credit default swaps," they are a type of derivative instrument and were unregulated by any governmental agency.)  And the amount of money bet on the bonds was many times more than the underlying bonds themselves.  So if, say, a $100 million bond went belly-up, the final payout on all the derivative instruments based on that one bond might total in the billions of dollars.  When the housing market slowed and the bonds started defaulting, nobody had the money to make good on all the bets suddenly coming due, nobody could any longer be certain who was or was not solvent, and the financial markets started grinding to a halt.
Accordingly, in October, 2008 -- right before Obama won his election -- the federal government passed TARP:  the Troubled Asset Relief Program.  "In an attempt to create liquidity and un-seize the money markets" -- and funded with $700 billion -- this program charged the Treasury with buying up mortgage-backed securities like those derivatives the Big Money Boyz had issued.  Main Street wasn't happy about being forced to bail out the banks, but Wall Street loved the chance to get rid of these toxic debt instruments that it had bought but could no longer afford.
But a funny thing happened less than a month after Barack Obama was sworn into office.  Now that the Big Money Boyz had been bailed out, Obama proposed doing something for the Main Street people because they too were saddled with toxic debt instruments they had bought but could no longer afford:  their mortgages.  Unlike with Wall Street, Obama wasn't suggesting that the government step in and buy these mortgages outright, but he was proposing a program that might modify mortgages so that the banks got some of their money back and the Main Street people could stay in their homes.
But it turned out that these people were considered a lot more expendable than the Big Money Boyz, and that Wall Street wasn't prepared to be nearly as accommodating to the Main Street people as the Main Street people had been to Wall Street.
On February 19, 2009 Rick Santelli of CNBC was broadcasting live from the trading pit of the Chicago Board of Trade, surrounded by traders whose employers were even then being bailed out by the federal government.  When Santelli was asked his opinion about President Obama's plan to commit maybe $75 billion to help the Main Street people out with their mortgages, Santelli went ballistic:

I tell ya what, I’ve got an idea – you know the new administration is big on computers and technology – how about this, President New Administration:  how about you put up a website to have people vote on the internet as a referendum to see if we really wanna subsidize the Losers’ mortgages, or would we like to . . . buy houses in foreclosure and give ‘em to people that might have a chance to actually prosper down the road and reward people that could carry the water instead of drink the water.
(The traders -- just bailed out by the federal government -- start clapping and cheering.) 
(Santelli turns to traders.) 
How many of you people wanna pay for your neighbor's mortgage, that has an extra bathroom and can't pay their bills?  Raise their [sic] hand.
(Traders boo loudly.) 
President Obama, are you listening? 
We're thinking of having a Chicago Tea Party in July.  All you capitalists that wanna show up at Lake Michigan, I'm gonna start organizing it. 
You can watch this rant in its entirety here:

And that is what started the Tea Party Movement:  not a concern about the deficit, not a concern about bailing out the banks, not even a concern about taxes.  What started the Tea Party Movement was the concern that ordinary American citizens might get one tenth the help from Washington that the Big Money Boyz were getting.  What started the Tea Party Movement was an explicit call for class warfare -- and the declared enemy was those "Losers" who live on Main Street, whose homes should be stripped from them and given to Santelli's people, people who can "prosper."  Within hours of Santelli's rant a website called ChicagoTeaParty.com was online, featuring the above YouTube clip and billing itself as the home of the Chicago Tea Party.

Since then the Tea Party Movement essentially has been underwritten and shamelessly promoted by the usual Conservative suspects, including Rupert Murdoch and the infamous Koch Brothers, former House Republican leader Dick Armey, and Fox News.  In this clip, Rachel Maddow does a good job running down how these Big Money Boyz and other corporate citizens (Exxon, Phillip Morris) are behind this "grassroots" mobilization:

You can call the Tea Party Movement many things, but you can't call it a spontaneous uprising of grassroots activists.

* * * 

Despite what they may now claim, the Teabaggers have never really been concerned with making sure that America lives within its means -- only with making sure that other people live within their means.  These other people would be Santelli’s “Losers” who – in the Teabagger world – are mostly poor African-Americans who don't deserve to have homes and were only able to obtain mortgages because the Community Reinvestment Act forced banks to lend to them.  See herehere, and – especially – here for examples of this mindset.  
It is that mindset that brought the Tea Party people out in force before Obama even had the opportunity to accomplish anything in office, yelling that they were going to “take back” the country.  From whom?  Why from that exotic looking man now squatting in the White House, who they were sure wanted to take away their country and give it to “someone else.”  
(If you have any doubt that race is a central concern of the Tea Party Movement, check out this report by Imani Gandy a/k/a Angry Black Lady, who attended a Tea Party rally yesterday at the Los Angeles Convention Center where the NAACP is spending a week discussing issues important to the black community.  Even now, when the fiscal issues supposedly so near and dear to their hearts weigh most heavily in the balance, the Teabaggers just cannot resist race issues.  It’s like catnip to them.)
But the Big Money Boyz underwriting and supporting the Tea Party Movement understood all too well that no political movement succeeds by telling the rest of the world that it wants to make sure that “those undeserving ‘other people’” don’t get any assistance from the federal government, so the Teabaggers never talked about cutting social programs . . . just about “getting the deficit under control” and “reining in spending.”  And then, after a year and a half of sponsoring Tea Party rallies, busing Teabaggers to town hall meetings to scream about “Obamacare,” and basically aiming all of this displaced Teabagger hatred and fear at the Democratic party . . . the Big Money Boyz got themselves a landslide mid-term election.  Well done, I suppose.
Having served their purpose, the Teabaggers found that their deep pocket patrons no longer were interested in sponsoring their quaint little tea parties:
* * *
But, of course, it didn't end there.  Like Mickey Mouse in The Sorcerer's Apprentice, Wall Street is now finding that it can't simply switch off the Tea Party automatons they have brought to life.  Tea Party candidates overwhelmingly dominate the Republican House freshman class, and these people take their obligation to "rein in spending" seriously.  It was never explained to them that the rhetoric they were mouthing was just for the rubes, that they were expected to swing obediently back into line if necessary to protect their patrons' bond portfolios.
And now we begin to hear that Wall Street is sufficiently spooked to start taking a more direct interest in the debt ceiling negotiations, but it is anyone's guess whether they have the clout to rein in their own creations.  My sense is that anybody dumb enough to run on the Tea Party platform is too dumb to realize that earnestness isn't supposed to be something a politician actually feels . . . just something he is expected to project.  It may just be that the Big Money Boyz bought themselves a bunch of enthusiastic Jethros too obtuse to do what is necessary to save the Big Money Boyz's money.
It'd be funny if it weren't so scary.

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