Of the Tea Party, by the Tea Party, for the Tea Party

By Maureen Tkacik
August 19, 2011

By Maureen Tkacik
The opinions expressed are her own.

There is one thing more nauseating than watching our elected officials weasel their way through another Sunday morning rationalization of our ruinous economic policies: Watching the sole beneficiaries of those policies publicly distance themselves from those politicians on CNBC.

I am talking, generally, about rich people, although to be fair some rich people are more dishonest than others, as a tense Wednesday morning exchange between celebrity analyst Meredith Whitney and the network’s veteran correspondent Rick Santelli demonstrated. Delivering a meandering monologue assailing “children on both sides” of the aisle for…insufficiently gutting what remains of the social safety net, Whitney laid the blame for this failure on an unlikely constituency:

“Call it Tea Party, whatever you will, the fringe element is — I characterize (as) — freaked-out white men who are unemployed and have been unemployed for three years and they’re scared to death.”

To which Santelli retorted a few seconds later:

“Well you know the last person that said that was King George, and he said it about the colonists. Those were our Founding Fathers. You know what, you know what? How many muni, uh, areas have actually defaulted?”

Meredith, back in the studio, shaking head: “I don’t get it. Why is he so angry?”

Santelli: “Think about it. Think about it. Stick with munis.”

Santelli was, it’s worth remembering, one of the Tea Party’s Founding Fathers, having triumphantly launched the movement not a month after the Obama inauguration with a rambling sermon from the Chicago Board of Trade floor about his displeasure over the passage of a federal program supposedly intended to help underwater homeowners. (It ultimately helped virtually no one and cost virtually nothing.)

Meredith Whitney remembers: She has her own Rolodex full of Tea Party pundits and has probably done more than her angry male counterpart to advance its austerity agenda (which is what Santelli was getting at with the reference to muni defaults). I’ll detail that a bit later, but in this case sheer absurdity is the ultimate “tell.” Who else would have the nerve to go on TV with a claim so ludicrous as “The Tea Party comprises primarily frustrated jobless men hellbent on holding onto their unemployment benefits”? Only someone with a long history on Fox News. (Whitney met her husband on the set of a Fox business news show.)

Because while the campaign that brought them to power channeled the frustrations of some economically distressed voters, the Tea Party freshmen class comprises mostly millionaires, with a dozen or so reported to own assets valued into eight figure territory in financial disclosure forms:

  • Richard Hanna of upstate New York’s 24th district is worth between $11 million and $33 million amassed in the construction business.
  • Norfolk Marine-turned-Volvo dealer-turned-restaurateur-turned-congressman Scott Rigell of Virginia reports a fortune worth between $11.6 million and $48.2 million.
  • Nursing home operator and serial entrepreneur Rep. Jim Renacci of Columbus, Ohio has assets worth between $17.6 million and $39.9 million.
  • Nan Hayworth of New York and Diane Black of Tennessee are both former medical professionals whose husbands got rich in the health care business; Scott Hayworth (HHNW: $9.5 – $23.3 million) runs the dominant medical group in upper Westchester County and Black’s (HHNW: $14.7 – 84.1 million) runs the country’s preeminent drug testing lab.
  • North Dakota’s Rich Berg is a commercial real estate tycoon ($19.3 – $59 million) who served in the state legislature since 1985 before being elected to Congress.
  • Two oilmen in the freshmen class are also filthy rich: New Mexico’s Stevan Pearce ($8.4 – $38 million) and the Lone Star State’s Blake Farenthold ($10.4 – $31.4 million).

But treat those disclosures as “living documents” since this Congressional class has a record of underestimating its own wealth. Back in 2002 Pearce sold an oil services firm he had valued at $1 – $5 million for $12 million, then under-reported the value of that sale by about half. Berg’s forms list his interests in dozens of commercial real estate properties but left out 46,000 shares he owns in an oil services investment firm in which he is a director. (Among other things, Berg supports allowing oil companies to drill in state parks to pay for Social Security.) Last year an Ohio judge ruled that Renacci had under-reported his 2006 income by some $14 million.

Even the Tea Partiers who claim to be broke don’t apparently mean that literally; after reporting personal assets worth zero dollars, Tennessee’s Stephen Fincher made headlines for having received $3.34 million in federal agriculture subsidies in recent years; eventually he amended the form to include his cotton farm as an asset, estimating its value at $500,000. (South Dakota’s Kristi Noem has also collected more than $3 million in farm subsidies over the past decade, but her form only lists five assets worth somewhere between $33,000 and $145,000.)

It’s not hard to guess what these people see in Tea Party politics. Here is a movement united around an unfailing support of tax cuts for people like them, at a time in which poll after poll (23 polls, by one count) reveals the American electorate to be united by unprecedentedly broad-based support for doing the opposite. But there also more specific interests at play: the wealthier freshmen generally made their livelihoods in one of three economic sectors—health care/insurance, real estate and energy—whose profit margins not too long ago appeared particularly vulnerable to Obama’s policy goals.

  • Health care: 13 GOP freshmen hail from the business that comprises nearly a fifth of the nation’s economy and its one bonafide growth sector — which wouldn’t be such a bad thing if 43% of its annual revenues weren’t being paid by the government. Take it from the Tea Party governor whose hospital chain defrauded Medicare of about $1.7 billion. Here is an industry in which meaningful reform could clearly produce better care for more people at substantially lower costs; but meaningful reform in such businesses is rarely popular with the thousands of entrepreneurial individuals who have made fortunes mastering and exploiting the nuances of its dysfunctions.
  • Real estate and construction: all politics is real estate, so it is not exactly surprising that scores of Tea Party freshmen own a lot of houses. (Even Todd Rotika of Indiana, one of the famed faction of couch-sleepers too cheap to rent a place in Washington, owns three rental properties back home.) But in a crash, it’s noteworthy that so many men and women in the business would rally behind the Tea Party movement — again, founded in bitter opposition to the (overwhelmingly industry-supported) program designed to assist underwater homeowners.What is clear is that the housing nightmare was and remains the single biggest challenge facing the Obama administration, and any sane observer might have reasonably expected it to at some point acknowledge that by enacting policies that would be expected to have ramifications for the industry. (What happened instead is a mystery I’ll leave for another column.)
  • Oil and energy: here’s the Tea Party’s cash box — the movements biggest financial backers are also among the biggest oil barons in the country. Ten GOP freshmen have major interests in the energy (mostly oil) business, and they all managed to get elected on a “Drill Baby Drill” platform in the same year that witnessed the most devastating oil spill in recorded history, consigning green jobs, cap-and-trade and climate change to the dustbin for the foreseeable future.

Other freshmen have amassed wealth in agriculture (at least six have received federal farm subsidies), pro football (New Jersey’s Jon Runyon), defense and law. (Florida’s Dennis Ross served as general counsel to the Walt Disney Corporation.) But to return to the original point: where does Meredith Whitney get off depicting such rationally self-interested men and women as a bunch of loony out-of-work rednecks? One plausible explanation is the Tea Party itself, whose agenda Whitney has been tirelessly promoting since she left Oppenheimer, the firm at which she made her reputation, in 2009.

But whereas at her old firm Whitney distinguished herself as a rare “honest broker” amidst the obsequious cesspool of conflicted hacks by blowing the whistle on the financial system’s insolvency early, often and in granular detail that saved millions for any client wise enough to read her research, her bold pronouncements as the CEO of Meredith Whitney Advisory LLC have been vague, dubious and loudly smacking of short-sighted political opportunism. I refer, of course, to her wide-eyed prediction on a shamefully-sloppy 60 Minutes segment last winter that state and municipal bonds were headed for a spate of defaults, totaling between $50 billion and $100 billion in value, within the next year. The call had no basis in reality, nor had it anything approaching a historical precedent, nor had it anything remotely to do with Whitney’s realm of expertise.

But because municipal bonds are highly illiquid, low on media interest and held in large part by the sort of elderly, risk-averse investors likely to watch 60 Minutes, Whitney’s prediction roiled markets and generated loads of publicity. More importantly, however, it lent critical “independent” credence to the Tea Party-manufactured fiscal emergency occasioning the orgy of public spending cuts and crony capitalist privatization drives to which we’ve been treated ever since.

Whitney never misses an opportunity to praise the Tea Party agenda—look, here she is last month on CNBC castigating the blue states for being too eager to tax millionaires and “reticent to sell assets” and here she is a few weeks earlier defending one of their pet causes, the right of Big Finance to continue siphoning off of $30 billion a year in gratuitous “interchange fees” from customers and retailers; there she is postponing off an overseas trip to dine with Chris Christie—she just doesn’t usually refer directly to the “Tea Party.” She also rarely mentions her husband, the WWE wrestler-turned-conservative talk radio host, Fox personality and virility potion peddler John Layfield, in interviews. Like his wife Layfield claims to be nonpartisan, but he invariably toes the Tea Party line on TV, radio and Twitter, where some of his followers registered their dissatisfaction with his wife’s assessment of their cause (“Please ask Ms. Whitney to think before she shows her hatred of free heathens who do not worship Ivy League Elites,” was a typical Tweet.) Layfield’s old brokerage boss Robert Bonelli is an ardent Tea Partier who last year wrote a call-to-arms, Liberty Rising: A Treatise on the Restoration of Our Constitutional Republic.

More curiously, for seven months before she founded Meredith Whitney Advisory Group LLC, Whitney was registered with a firm called IRC Securities, which until recently went by the legal name Laffer Advisors for the famous Arthur Laffer, godfather of supply-side economics, prodigious right wing think tank scholar and co-author of the Rich States, Poor States survey, an annual production of the fearsome state legislature lobbying giant American Legislative Council that can be regularly relied upon to make the case for privatizing state services and slashing income taxes in favor of higher sales taxes and more casinos.

I have no idea what the nature of Whitney’s relationship with Laffer is, presuming (and it’s hard not to) there is one. For all I know they go way back—Laffer worked as an economic advisor in the Nixon White House when Whitney’s dad Dick P. Whitney was a key Commerce Department staffer during the early seventies, before the former defaced an historical napkin with his “Laffer Curve” and the latter went into venture capital. (Both also worked closely with the billionaire deficit alarmist Pete Peterson, who took over as Commerce secretary after the resignation of Martin Stans in 1972.)

But it’s probably always wise to keep an eyebrow permanently arched when Wall Streeters profess incredulity and/or ignorance toward the political process that has been so painstakingly gamed in favor of their own class interests. Just by way of example, CNBC blogger John Carney currently has an odd opinion column advising his Wall Street brethren to remember that while certain presidential candidates might strike them as “bizarre or fringy” it’s important to remember that they “aren’t usually running to be your president” but rather that of “another country that happens to share a legal system with us.”

If that message strikes you as vaguely disingenuous considering the unprecedented influence of money and corporate interests on electoral politics, consider the chosen topic of the keynote speech John’s brother Tim Carney delivered in January before an exclusive Palm Springs retreat for friends and ideological allies of the billionaire Tea Party benefactors Charles and David Koch: “Corporate welfare and bailouts, and the destructive influence of the Big Business lobby in Washington.”

I don’t need an invitation to a secret plutocrat retreat to point out what may be the single most destructive legacy of Big Business’s chokehold on the political system: its persistent success at hiding its true agenda from the public it spends such a fortune to manipulate behind “fringe element” platforms that distract the broader public from the long list of opinions they happen to hold in common: ideas like banning big bonuses at bailed-out banks (more than 70 percent, and even higher among Republicans) or ensuring the continued funding of beloved fixtures of American life from Medicare to PBS (69 percent oppose cutting off its funding) to even Planned Parenthood (57 percent of Americans support Planned Parenthood, a considerably higher percentage than those identifying themselves as “pro-choice.”)

There’s a reason no one ever coined the aphorism “unite and conquer.” Whenever two factions of American politics purport to be “teaming up,” one is usually simply allowing itself to be conquered by the other (wealthier) one. By the same token, perhaps the real reason Washington is said to have become more unbelievably, unprecedentedly, un-grownup-ishly partisan and divided with each new election cycle is because everyone is actually so likeminded on the issues—taxes, regulation, white collar crime, corporate predation—that really matter. (Which is to say: both sides agree that neither is served by making hay of any of those issues.)

The debt ceiling “standoff” was meaningful only inasmuch as the near-instant acceptance that the debt reduction measure supported by the vast majority of Americans (tax hikes) amounted to a “non-starter” so starkly illustrates the fraudulence of American “democracy.” That such Wall Street luminaries as Whitney and S&P took the opportunity to distance themselves from the Tea Party’s alleged radicalism merely shows how good they’ve gotten at playing along.

The Republican Party will be spared another 1996, in which the Republican Revolution almost unraveled in the intramural struggle to hold onto Congress while running a credible campaign for president, so that Michelle Bachmann or Ron Paul can become Barry Goldwater figures for the 21st century while another unctuous generation of arrogant Rubinites busies itself with the power trip of “governing” within the plutocracy’s narrow parameters.

Photo: A woman holds a sign with a message for U.S. President Barack Obama as dozens of Tea Party supporters rally near the U.S. Capitol against raising the debt limit in Washington, July 27, 2011. REUTERS/Jonathan Ernst

99 comments

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Great article. Thanks Maureen.

Posted by sal12241984 | Report as abusive

nice… but can u be “moe” concise? :)

Posted by robb1 | Report as abusive

Agree with much of what you say, but geez, not a surprise you are an under employed writer with that stream-of-conscience writing style. Edit yourself.

Posted by OracleOfMumbai | Report as abusive

This article was quite informative. I had no idea about this…

Posted by FoxxDrake | Report as abusive

Ms. Tkacik, most of Congress is comprised of millionaires regardless of party affiliation, therein lies the problem.

Posted by seattlesh | Report as abusive

this is maybe one of the stupidest things I have ever read, there is clearly a reasohn why she is underemployed

Posted by mickl | Report as abusive

It seems that the US is indeed becoming more like Italy.

Posted by Greenspan2 | Report as abusive

I don’t want to come off as snarky or petulant, but, it goes without saying that you’re absolutely right. But does it matter?

Anyone who has been paying any attention at all to the TP knows the truth — this is the same old bunch of right wingers in new garb. It’s Joe The Plumber writ large. What mystifies me is why does it seem to work? The richest, most reactionary types get the blue collar types to carry their water. And they love it. They call school teachers and cops making 50K a year elitists.

The real problem is that the American electorate is as stupid as compost. For example, Gov. Perry says that he wants to make the federal govt. inconsequential in people’s lives. The TP loves this sort of talk. But ask yourself this: why does he want to be the head of such an inconsequential body? I guess it’s not that inconsequential, after all.

Posted by IntoTheTardis | Report as abusive

Tardia, one has to wonder how a governor that wanted to secede from the US can make government consequential in people’s lives. Perhaps he envisions a monarchy with King Parry presiding and channeling god.

Posted by seattlesh | Report as abusive

I basically agree with your post IntoTheTardis, but I’d add that the American electorate is especially stupified by the fact that they can pick one of two options, both of which are nearly the same except for “accent.” You can fall down the tunnel of the Democratic “people’s party” myth, or you can get yanked up into the net of the Republican “family values and shining city” myth. Most people who see so well through the latter end up completely falling for the other “side.” Side, perhaps, as in “Side by Side.”

Posted by Rfairb | Report as abusive

Seattlesh, the Republicans started resembling the Tories since practically coronating Ronald Reagan as king and have been aspiring to royal court ever since. The God angle is just a Machiavellian ploy to manipulate the ignorant masses.

Posted by Greenspan2 | Report as abusive

Wow, you have to work really, really hard to think there are two parties. You are joking, right Maureen? You do understand they are the ying and yang of the same party, the Statist Party. Even if you are confused by the talk, the results should point you in the correct direction. If you enjoy being baffled, continue on with Go {R or D} Team! Blah blah blah.

The banksters are fine with it, as long as they continue to own all the players.

Posted by Gringott | Report as abusive

The blue-collar tea-partiers who made the take over of the U.S. House possible have no idea who they are working for. What we have there is a mob of senseless fanatics in the grasp of slick billionaires with a business agenda. Sadly, they seem to have won the recent battle to downgrade America as a means to achieve their ends. But I’m still not counting us hard-working patriotic Americans out.

Posted by march12 | Report as abusive

Tardis – Your comment “Anyone who has been paying any attention at all to the TP knows the truth” intersects with your comment “What mystifies me is why does it seem to work?” It works because everybody doesn’t know the truth. I’m not even sure if the majority is capable of understanding the truth, whatever it may be. We live in a culture were lies are glossed over as marketing and campaigning, ‘partisanship’ is considered ‘representation’, the ruling class has too much money and remains of touch with reality. They don’t even understand the day to day needs of the citizenry, nor do they want to. This happened with the French aristocracy long ago. It looks like it’s happening here, now. I’m certainly not arguing with you as you have very valid points. Thankfully people like Ms. Tkacik are willing to say it out loud. Thank you!

Posted by SeaWa | Report as abusive

Of course the TPers are fronted by the wealthy – they have been coerced (or propogandized) into believing that lowering taxes and less regulation will solve all the problems of America… that’s EXACTLY what the rich want. So what you have is maybe half of the top 1% funneling misinformation to a portion of the bottom 49% and from that comes your Tea Party. It’s not to say that these people don’t have real grievances and issues, but it’s been co-opted and taken over by hyper-wealthy and directed against anything constructive.

Posted by CDN_Rebel | Report as abusive

Hahahahahahahahahahah, listen honey, it’s a little larger than blaming someone else. American is going down the drain and taking feminism with it. Hope you know how to survive when there is no infrastructure. Do you know how to fish? Farm? Boil water on a campfire without matches? McMansions, day-spas, shoe stores and feminine doo-dads will be in short supply. Enjoy :)

Posted by DirteeHairee | Report as abusive

The real millionaires club is … well … the U.S. Congress. It’s been that way since the end of World War II. Of course the really big millionaires among them are still Demos. Maybe that will change in the future. Remember what one Afghan man said of his politicians, “It is good that the president and ministers are all rich. They won’t be inclined to steal as much while in office.”

Posted by OIFVetAtUSC | Report as abusive

Yes, these opinions may be your own, but they are also that of many misguided, misinformed, and those unwilling to see the truths of our society and government.

There truly are none so blind as those who will not see.

Posted by FearTheVoices | Report as abusive

Is Reuters a mouthpiece of the Communist Party? I know Obama is on the payroll of at least a few communists. What about Reuters’ Management?

Entrenched Management of ‘Green’ Publicly Traded Corporations, Be warned! The Guillotine is approaching. For whom the bell tolls? It tolls for ye!

Posted by amanpsingh | Report as abusive

OK, so there are rich politicians gaming the tea party. Not really much of a real surprise there as the keyword that gives it all away is “politician”.

The everyday people that identify with the tea party are (in my opinion) the 30/40 something average middle class crowds that realized back in high school that the contemporary dichotomy of economics and liberalism could never be paired. Now we are witnessing the predicitions become reality and it’s effecting core personalities by over-compensating in specific areas. This is a phenomena that politics appears to have on many people.

The middle class feels that the real burdens rise and fall with them. They pay the highest percentage of real taxes, and receive the least amount of government benefits. It’s pretty easy to understand why they might want something to believe in.

When you come to understand that your never-employed single parent neighbor whom has 5 children (from as many partners) enjoys more luxuries than you can provide for your family of 3 on a dual income, you begin to question the system.

When you realize that they were given a mortgage modification to cut their payments in half (while your family was denied) you really begin to question the system.

When you learn that their family was allowed to ring up 50k in credit card debt and was then automatically forgiven in chapter 7 but you don’t qualify for chapter 7 Bankruptcy even though the only debt you have is the mortgage on your home (ya know cuz our mortgage is still due at full pop – mod declined) you become disenfranchised and will look to anything that resembles fairness.

When politicians use the word “wealthy” and “taxes” together, the middle class gets worried because somehow the middle class appear to be the wealthy ones in everyones eyes but their own.

As for social issues such as gay marriage and pro-choice agendas, I bet alot of people would be surprised about how few “tea baggers” really oppose the key liberal social issues (minus immigration reform) and really are focused on financial stability for the future.

Posted by Baywatch | Report as abusive