It is by now the most conventional of conventional wisdom that the Tea Party Movement is either a stalking horse for Big Business Republicans or a group of naifs doing the leg work which will ultimately allow the Big Business Republicans (leveraging the Tea Party passions) back into charge of the Government. In the MSM, and most Liberals, imagination, the Tea Party is simply the mirror image of the typical Democrat interest group. The assumptions are that the Republicans are the party of Big Business and Social Conservatism and that whatever the protestations of the Tea Party members, they are all reacting out of an inchoate fear of the other (ie, they are racists) and are dedicated to seeing the United States return to halcyon days when people of color knew their place and rich, white people ran the world. That there is no evidence to support this matters not to an MSM that has perfected the ability to maintain a narrative long after the reality has shifted under their feet.
Consider what has happened since the financial meltdown started in 2008:
1) The housing market crashed, making a lot of middle class and working class people feel a lot poorer since their homes could no longer serve as nearly unlimited ATM's.
2) The banks had to be bailed out to the tune of many billions of dollars in order to prevent a second Great Depression.
3) Under Barack Obama, the largest stimulus in history was enacted in order to insure that the unemployment rate stayed below 8%.
4) The Federal work force expanded rapidly while private employment cratered.
It is worth asking, with all of the emergency measures pushed through by a liberal Democrat controlled Congress and Executive, cui bono? Here is where it gets interesting: Susanne Trimbath, who has been writing about this for some time, reviewed a movie that almost no one has seen and few will ever see:
Over the weekend I saw the documentary movie Inside Job with a friend who is not a financial markets expert. After the show, I told her I was relieved to see that the movie covered the majority of the causes of the collapse of the financial markets in 2008. Part of my relief was from thinking that everything would be better now that “everyone” knows the facts. Then my friend pointed out that there were only six people in the audience – obviously “everyone” wasn’t seeing this movie!
The movie did a good job of covering virtually everything I’ve been writing about at NewGeography since 2008. They did leave out the part where Goldman Sachs and other Wall Street banks were issuing mortgage-backed bond without writing mortgages. This is totally understandable. It’s very difficult to show what doesn’t exist in video. It’s easy enough to show homes in foreclosure -- but what pictures and video can you use to show that there aren’t any mortgages behind bonds, especially when the bonds that aren’t even printed on paper? The pictures of hookers, strippers and cocaine make the movie ominous enough and have a certain visual appeal that producers look for in a story.
Inside Job included lots of stuff on who is funding the academic studies being used to justify wrecking the financial markets. They present more on the serious academic fraud in the crisis than I was aware of. I first posted Tweets about Duke University back in June 2009. A couple of Duke University professors published a research report about a model they developed that justifies manipulating stock prices and corporate votes. What I Tweeted was: “It should be illegal to write this crap.” Duke University’s research center is funded by a wide selection of the bailed out financial institutions. Your tax dollars at work!
The point I try to raise -- perhaps loudly because it's a little self-interested coming from me -- is that the perpetrators of the financial crisis are funneling billions of dollars to the academics who will write anything they are told for the sake of continued funding. In the meantime, those who are willing to take the adverse position are relegated to the Daily Show (no offense, Jon).
Then I sat through Inside Job and I saw this segment on former Federal Reserve Board of Governors member and current professor at Columbia University Business School Frederic Mishkin. Before the crisis, Mishkin took money from the Chamber of Commerce in Iceland to write a report about the “Stability” of their banking system. The source of the funding was not disclosed in the published report (an academic no-no). Then, after Iceland's banks completely collapsed, Mishkin changed the name of the paper on his resume to the “Instability” of Iceland’s banking system. This was shocking to me, as I didn't realize how deeply the desire to deceive ran among these guys. Mishkin resigned from the Federal Reserve Board in the middle of the crisis – yes, even the rats will abandon a sinking ship.
There is so much in her article that you should definitely read the whole thing and, while you are at it, appreciate that none other than Matt Taibbi, writing from the reaches of the relatively far left at Rolling Stone, has been noting many of the same themes in his work. His latest is helpfully titled: Courts Helping Banks Screw Over Homeowners
There is no doubt that while the country has been doing poorly and a great many people have been suffering, the (select) very wealthy have been doing quite well. This is as true, perhaps more true, under Obama as it was under Bush. (In fact, during the recession the gap between rich and poor has widened; many of the middle class have found themselves sliding down the socio-economic ladder but they were never wealthy to begin with.) Charles Gasparino is one of those "fat cat bankers" who knows something about Wall Street and he is quite clear and blunt:
Obamanomics: Only fat cats prosper
For all of President Obama's rhetoric about "fat cat" investment bankers who gambled the country into economic decay, he sure seems to have a larger soft spot for big Wall Street than for average Americans.
After all, his latest push to "remedy" 9.8 percent unemployment for the masses is an extension of unemployment benefits. Meanwhile, his policies aren't just making Wall Streeters rich, as bonuses are expected to hit record highs this year. They're also likely (according to some insiders) to spark a hiring spree among bankers in the new year.
This divergence ought to be a big story -- but don't bet on it: The establishment media have been largely silent amid the multiple failings of Obamanomics. For two years now, most reporters have gone out of their way to blame the country's staggeringly high unemployment on the Bush policies that they claim led to the financial collapse and the broader collapse of the economy.
OK, Obama did inherit a mess -- but his policies to turn around the economy have utterly failed to deliver on promised outcomes. Remember the 8 percent unemployment rate we were supposed to get if we spent $800 billion on fiscal stimulus?
...
Perhaps worse, Obamanomics looks to have failed utterly on its signature promise to level the economic playing field between the rich and poor.
The Big Banks plan on going on a hiring spree next year.
Why? Obama's policies, insiders tell me, may be bad for the middle class -- but they've been pretty good for the banking class.
The bankers may not like parts of the new financial reform law (i.e., no more "proprietary trading"), but they love the fact that the White House has gone out of its way to support (some people think prod) Ben Bernanke's policies of 1) keeping interest rates at rock-bottom levels and 2) pumping the banking system with $600 billion in cash, known in economic circles as "quantitative easing" and in less formal circles as "printing money."
As usual, there's more, including some comments about Tax rates; (Megan McArdle also discusses the relationship between tax rates and government receipts in Fiscal Fitness, worth reading if you think the only issue in raising government revenues is taxing the rich.)
Before closing this brief recap of the current environment which is fueling the Tea Party, I would like to include some comments from one of the blogosphere's experts on finance:
We're toast, folks. Bernanke is doubling down, and the base inflation rate (low-to-mod income) is shooting through the roof.
Plus:
A) No increase for SS/Disability folks.
B) Severe governmental constraints.
C) Bad freight figures.
D) Declining profit-per-unit figures across a bunch of industries.
E) An inventory replacement cycle with a high sell-off factor.
This all adds up to a sudden, explosive burst of inflation. Companies that were tightly managing margins will abruptly raise prices, which will signal other companies to raise prices.
However the money is not out there to pay these prices, so you will suddenly see very concentrated falls in spending in more discretionary categories over the next three months, which will produce some job attrition.
Do not go to M_O_M's site if you want to sleep peacefully tonight; do go there if you know that avoiding reality will not make it go away.
All of this is meant to point out that under Bush we had a situation where the State Corporatists, once their grand Ponzi schemes and Las Vegas investment strategies (gambling) aided and abetted by a corrupt government epically failed, screwed Main Street. With the election of Barack Obama we now have a situation where State Corporatists, aided and abetted by a corrupt government leveraging an emergency (not to be allowed to go to waste) have upped the ante, epically failed, and are continuing to screw Main Street.
I must also point out that these kinds of stories are easily found, nearly ubiquitous, in the blogosphere and alternative media, but are conspicuously absent in the MSM.
This is the back drop for the development of the Tea Party Movement. The productive class of Americans who work hard, pay their bills, and sustain this country, have awoken to the fact that our government, by trying to do too much and control everything, has been failing at its most basic jobs. We have a cultural DNA that is suspicious of government, indeed suspicious of any large organization that purports to tell us how to run our lives, and wish nothing more than to return Power to the People.
More to follow...
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