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The GOP Is Losing Centrists

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March 23, 2010

David Frum’s Sunday afternoon blog posting, “Waterloo” has been receiving praise for its painfully accurate diagnosis of what ails (or should I say, “Ailes”) the Republican Party.  Among his important points were these:

We followed the most radical voices in the party and the movement, and they led us to abject and irreversible defeat.

*   *   *

The real leaders are on TV and radio, and they have very different imperatives from people in government.  Talk radio thrives on confrontation and recrimination.  When Rush Limbaugh said that he wanted President Obama to fail, he was intelligently explaining his own interests.  What he omitted to say — but what is equally true — is that he also wants Republicans to fail.  If Republicans succeed — if they govern successfully in office and negotiate attractive compromises out of office – Rush’s listeners get less angry.  And if they are less angry, they listen to the radio less, and hear fewer ads for Sleepnumber beds.

So today’s defeat for free-market economics and Republican values is a huge win for the conservative entertainment industry.  Their listeners and viewers will now be even more enraged, even more frustrated, even more disappointed in everybody except the responsibility-free talkers on television and radio.  For them, it’s mission accomplished.  For the cause they purport to represent, it’s Waterloo all right:  ours.

On the following evening, Frum appeared on ABC’s Nightline with Terry Moran and this exchange took place:

Moran:   “It sounds like you’re saying that the Glenn Becks, the Rush Limbaughs, hijacked the Republican party and drove it to a defeat?”

Frum:   “Republicans originally thought that Fox worked for us and now we’re discovering we work for Fox.  And this balance here has been completely reversed.  The thing that sustains a strong Fox network is the thing that undermines a strong Republican party.”

During the days leading up to the vote on the healthcare bill, the rallying tea party activists exhibited the behavior of a lynch mob.  Their rhetoric was curiously extreme and anyone with a neutral point of view on the issue had to wonder what was pushing those people to the edge.   Following up on Frum’s thesis, Thomas Frank of The Wall Street Journal seemed to have the right idea:

It is tempting to understand the tea party movement as a distant relative of the lowest form of televangelism, with its preposterous moral certainty, its weird faith in markets, its constant profiteering, and, of course, its gullible audiences.

Tea partiers fancy themselves a movement without leaders, but this is only true in the sense that, say, the nation’s Miley Cyrus fan clubs don’t have a central leader.  They don’t need one — they have Miley Cyrus herself.  And the tea partiers, for their part, have Rush Limbaugh, Glenn Beck, and the various personalities of Fox News, whose exploits were mentioned frequently from the speaker’s platform on Saturday.  But it was only after I watched an online video of Capitol Hill protesters earnestly instructing one another in what sounded like Mr. Beck’s trademark theory of progressivism that I understood:  This is protest as a form of fandom.

These are TV citizens, regurgitating TV history lessons, and engaged in a TV crusade.  They seem to care little for the give and take of the legislative process.  What seems to make sense to them is the logic of entertainment, the ever-escalating outrage of reality TV.

But maybe, one of these days, the nation is going to change the channel.

That change of the channel is exactly what the Republicans need to worry about.  Karl Rove’s trademark strategy of pandering to the so-called “base” of the party failed in 2006 and it failed again in 2008.  Nevertheless the GOP continues with a tone-deaf strategy, focused on the manipulated emotions of the tea partiers.

As I observed when I started this blog two years ago, a decision by John McCain to continue pandering to the televangelist lobby after winning the Republican Presidential nomination, would make absolutely no sense.  McCain now finds himself struggling against an ultra-conservative tea partier for the Republican nomination to retain his Senate seat.  He has again chosen to pander to the base and in the process, he has painted himself into a corner — boosting the chances for victory by the Democratic nominee in November.

The Republicans just don’t get it.  John “BronzeGel” Boehner’s decision to ally himself with the banking lobbyists has given another black eye to the Republican Party.   Although the voting public has become increasingly educated and incensed about the bank bailouts as a form of “lemon socialism” BronzeGel decided to give a pep talk to the American Bankers Association, advising them:

“Don’t let those little punk staffers take advantage of you and stand up for yourselves.”

Who is going to stand up for the taxpayers (and their children) who have been forced to support the welfare queens of Wall Street?  Certainly not the Republicans.  BronzeGel Boehner has promised to fight a protracted battle against financial reform.  In the process, he and his party are throwing the centrist voters (and the educated conservatives) under the bus.  What a brilliant strategy!



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Bait And Switch

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October 19, 2009

On Friday, October 16, Aaron Task interviewed Elizabeth Warren for his online TV show, Tech Ticker.  In case you don’t remember, Ms. Warren is the Harvard law professor, appointed to chair the Congressional Oversight Panel which has attempted to trace the money thrown into the infamous slush fund known as TARP — the Troubled Assets Relief Program.  Mr. Task questioned Professor Warren as to whether, after all this time, we can expect a full accounting as to where the TARP money went.  Professor Warren responded:  “No.  I think there is no chance that we will get a full accounting of it.”  She explained the reason for this is because former Treasury Secretary Hank Paulson never asked for an explanation “on the front end” (when the TARP bailout program began) concerning what the recipients planned to do with this money, nor was any documentation of expenditures requested.  As an aside, the folks at The New York Times were kind enough to put together this TARP scorecard, for keeping track of which institutions pay back the money they received.  Of course, these amounts do not include all the loans, “backstopping” and other largesse provided to Wall Street by the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC) and the Treasury.  For that information, we can look to this Bailout Tally Report, prepared by Nomi Prins for her book:  It Takes a Pillage: Behind the Bailouts, Bonuses,and Backroom Deals from Washington to Wall Street.

During the interview with Aaron Task, Elizabeth Warren expressed particular concern over the fact that former Treasury Secretary Paulson failed to put any restrictions on the use of the TARP bailout funds prior to their dispersal, despite the explanation to the taxpayers that this money would be used to remove the “toxic assets” from the banks’ balance sheets.  Worse yet, as she explained:  “The toxic assets are still there, by and large” because the TARP money was used by the Wall Street banks to “make bets”.  The bait-and-switch tactic used by Secretary Paulson was exposed by Professor Warren when she criticized how the banks used that money:

My biggest complaint would be:  That was not how Secretary Paulsen described what was going to happen with American taxpayer dollars.   . . . He said we are going to put money into the banks to increase lending —  specifically to increase small business lending because that is the engine of our economy . . .  I have a real problem when we describe to taxpayers their money will be taken and used one way and in fact it’s used another way.

Professor Warren also noted that nothing had been done to contain “systemic risk” after the financial crisis because those institutions requiring bailouts as they were considered “too big to fail” have grown even larger.  This subject was addressed by Rolfe Winkler of Reuters, who questioned whether these institutions, such as Goldman Sachs, are really indispensable:

Many of us didn’t like it — we thought banks like Goldman should have been recapitalized the right way, by wiping out shareholders and forcing subordinated creditors to eat their share of losses.  But that ship has sailed.  We socialized the risk while privatizing the profit because we were told we had no other choice:  The government had to guarantee the biggest banks’ liabilities because they were too unstable to survive bankruptcy or FDIC receivership.

If that’s true, why haven’t we seen any substantial reforms to reduce systemic risk?  Congress is kicking around new resolution authority to help resolve failed systemically-important banks.  But the goal should be reducing systemic risk to begin with.  Yet serious reform of the derivatives market — something that would reduce its size significantly — is nowhere on the radar.

Indeed, Goldman’s trading results suggest that market is coming back with a vengeance.  It’s playing in very risky markets with a capital structure that remains vulnerable yet is guaranteed by taxpayers.

*   *   *

Wall Street and its protectors at the Fed and Treasury tell us the bailout was necessary to protect the financial system, to protect Main Street.  That may be.  But Main Street still owns much of the risk while Wall Street gets all of the profit.

Elizabeth Warren’s reaction to the issue of what has been done with those profits — the huge, record-breaking bonuses paid to the people at Goldman Sachs and JP Morgan, was to describe the situation as so inappropriate as to leave her “speechless”.  Fortunately this sentiment is shared by a number of people who are already taking action in the absence of any responsible government activity.  The Gawker website has announced its initiation of what it calls the “Goldman Project” as a way of pushing back against this atrocity:

But what makes it eye-stabbingly, brain-searingly blood-boiling is the fact that Goldman’s employees are personally reaping the benefits of these subsidies to the tune of an average of $700,000 per staffer.  Being unjustifiably wealthy in boom times is not enough — when market forces of their own creation brought their company low, they turned to the taxpayers both to rescue the firm and prop up their obscenely acquisitive lifestyles.

*   *   *

.  .  .  we’re launching the Goldman Project, an ongoing attempt to track and publicize the multi-million second homes, $50,000 cars, $500 bottles of wine, and ostentatious living that we are subsidizing.  And we need your help: Are you Facebook friends with a Goldmanite who just posted photos of his lavish bachelor party?  Post them to our fancy new tag page, #GoldmanProject, or e-mail them to us.  Are you a realtor who just sold a $4 million duplex a Goldman banker?  Is your ex-boyfriend Goldman banker planning a year-end trip to Cabo to blow his bonus wad?  Shoot us an e-mail.  Likewise, if you catch any references to Goldman employees living large in the media, post them to #GoldmanProject to keep a running clipfile.

The folks at Gawker aren’t the only ones taking action.  When the American Bankers Association holds its annual meeting in Chicago on October 25-26, it will be confronted with a (hopefully) large protest led by a coalition of labor, community and consumer groups, called the “Showdown in Chicago”.  Visit their website and do whatever you can to help make this event a success.  The arrogant influence peddlers in Washington need to get the message:  Clean things up or get thrown out.



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