Wednesday, September 15, 2010

Tea Party Reactions

My first reaction from the tea party rhetoric and electoral success is fear and sadness. The tea party agenda seems to be based on fear and ideological purity. Obama and Pelosi are their enemies who should be fought against not fellow Americans with whom to work and with whom to solve problems in the spirit of compromise. Its depressing because its seems like in many cases the Tea Party candidate will win in the generals as well (we'll see).

Why has the electorate after only two years from the conclusion of the Bush disaster, decided to return to something even further extreme? (Well, they didn't of course, Obama is still in the white house for at least two more years).

Well, the Democrats had the office in two of the most challenging political years in a very long time. And they just didn't have the office, they really had the office. With a pretty transformative president. I continue to believe that every single thing Obama did or attempted to do was pretty moderate considering the circumstances. But he did a lot, and collectively, it added up to something big.

After all, he was governing with overwhelming majorities in both the House and the Senate, so he had the political power to move a lot of agenda quickly. But not only that, I believe the circumstances demanded it. Of course, David Brooks imagines an alternative reality where he vetoes the expensive pork filled budget, passes a more modest stimulus and chooses to tackle energy instead of health care. I'm not sure how that would have worked. Largely, it would have kicked the health care can down the road (to when?) and the states would have received much less money from the stimulus resulting in much more drastic and more painful cuts at the state level.

Instead Obama spent a great deal of his political capital fighting the economic fire that started before he took office. Today is the two year anniversary of Lehman's bankruptcy by the way. But even with all of that political capital spent, he went after health care reform. Arguably, the times called for it. Pre health care reform (well we are still living pre-health care reform, it doesn't really take affect until 20140), we had a health care system that leaned far too heavily on an employer based system propped up with government subsidies and regulation. A recession with unemployment hovering around 10% for closing in on two years now, I think, shows you why this system was always a flawed historical accident. Consider, even with the subsidies, many companies (especially small ones) were not able to keep shouldering the burden of our broken health care system. It needed fixing. Obama's plan was an incremental step in a certain direction. Nonetheless, the bill took everything Obama and the Democrats had to get it passed and there's really nothing left going into the primaries.

Now, we have a landscape of angry voters who just want to throw the bums out. And with the Democrats holding the office and calling the shots for the past two years, they will pay the price for it. I'm not sure how avoidable this was. Unemployment would have been high no matter what the government did - much higher without the bank bailouts, marginally higher with the kind of stimulus Brooks proposes.

So, if the Republican party gets pulled toward the right. If the Tea Party anger gets a lot more representation in Congress, is this a bad thing? Not necessarily.

The Tea Party has spent a lot of time blaming the Great Recession on too much government. The Democratic party has blamed this Recession on an out of control and unregulated free market.

Actually, I think to some extent both sides have a point. Our government has grown and grown, through Democratic and Republican rule. The eight years of Bush were particularly bad and particularly corrupt. Throwing Bush out didn't change this fact, at least not enough.

We're spending too much and getting too little from our government and the poor and middle class and bearing the brunt of the consequences. Which is why people get so fed up when they see bank bailouts that help the ruling class (the bankers and the CEO's) while the lower class continue losing their jobs and their homes.

But its not just a problem of too much government, its also a problem of a broken government. They have too often been ineffective or absent failing to do the work that only a government is capable of doing. And a big reason for the Great Recession wasn't just out of control government, but more importantly, it was an out of control and unregulated financial industry creating an unregulated ponzai scheme of credit layered on top of layers of credit. The housing bubble was the underlying foundation, but the real problem was credit.

So, what should happen if the Tea Party gets more representation in our legislative body? For two years, the Republicans got away with obstructionist behavior because they really didn't have the numbers to truly obstruct. The Democrats didn't get everything they wanted, but they got a lot. After November, if the Republicans obstruct, government will grind to a halt and the electorate will notice. This is not what most people want.

I think the next two years will be telling. Can the newly designed Republican party compromise and work with the president?

If they can, we have a shot at creating a nice balance, moving toward a leaner more effective government that pursues necessary infrastructure projects but also creates space and empowers individuals and industry to innovate and create in the free market. If we succeed, we will be following the foundations America was built on proving that government and its citizens can work together in complementary roles.

So, yes, the Tea Party movement from the right might be just what we need. An angry and fired up legislative body that works to cut out the fat. But if they start going after real government meat (think schools and health care or financial regulation or the Federal Reserve) or if they simply refuse to work with Obama "the socialist", we will have 2 years of painful deadlock and Obama wins in 2014 and the Democrats gets some of those seats back.

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