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