I have been seeing a lot of commentary from the MSM blaming the Republican Tea Party Caucus (and S&P) for the market turmoil. It is a classic case of shooting the messenger. In the case of the Tea Partiers, it is more like shoot the cavalry: They were trying to rescue us.
These opinion leaders are wrong. What really happened is this: for many, many years our government bought votes with bread and circuses and borrowed the money to do it. It’s like showering your rich wife with diamonds and then you finally admit you borrowed against her trust to pay for it and the trust is broke. (I went over this in detail in my article, “American Exceptionalism and S&P.”)
Then after 35 years of irresponsible spending a few guys in Congress get up and say “no more” and they are the one’s castigated for “not having the country’s best interests at heart.” We are seen from abroad as a bunch of bumbling partisan children squabbling about inconsequential things while the District of Columbia burn. Why can’t these American yokels just give in, raise the debt limit, and avoid a default. Don’t these idiots understand that it is compromise that makes government work? How can they hold up the country for their own selfish agenda?
That view is incorrect and demonstrates a lack of understanding of how things work here and what the goals of the dissident Congressmen were. These “yokels” are trying to avoid becoming European, which is another way to say becoming another nanny state, a sick nanny at that. It’s not about avoiding a default or a downgrade (which happened anyway as we said it would), rather it’s all about trying to stop our fiscal insanity before we destroy the libertarian ideals our founders envisioned for America and its culture. Those ideals are what made this country great.
When the Tea Partiers did what they could to turn the ship around, they were just doing what all politicians do: when you’ve got the power, use it. That has been the mantra of American politics, perhaps all politics, since our founding. Compromise only occurs when the weaker party has the ability to deny the wishes of the majority. Franklin Roosevelt and his Democrats had a filibuster-proof majority and used that power to ram their socialist-fascist agenda down the country’s throat. They didn’t have to compromise. We were close to having a centrally planned economy as a result. Why didn’t the Democrats reach out to their Republican colleagues and compromise? Because they didn’t have to. The critics fail to mention that. Yet, when the Tea Partiers do it, it is somehow wrong and selfish?
I have no idea what the “agenda” of the Congressional Tea Partiers is other than the stand the took to prevent an increase in the debt ceiling. And I applaud them for holding out as long as they did. Unfortunately they got snookered by the Republican leadership who were able to divide and conquer. But that’s is politics.