Apr 16, 2009

Tax Day Tea Party: it's all somebody's fault!

A popular theory in economic sociology goes like this: if an American civil war were to arise between the Haves and the Have-Nots, the middle class would side with the former because that is where its ambitions lie. In other words, as long as that carrot is being dangled out there on a stick, Joe Everyman will elect to reach for the rabbit food as opposed to beating the crap out of the guy who’s teasing him with the promise of riches.

Which brings us to this week’s Tax Day Tea Party rallies across the country. Spurred on by MSNBC reporter Rick Santelli’s on-air Rant of the Yearagainst … something or other … on the floor of the Chicago Exchange, these events were themed to showcase the rising dissatisfaction against … something or other … on the part of the US taxpayer. Not quite on point, for sure, for the point is elusive in these complex times.

Sure, we all know there’s a big mess out there --- but that is where the consensus ends and the blame game begins. The Haves (aka Larry Kudlow’s darling Investor Class) point their shaky finger, naturally, at the usual suspects: it’s all Barney Frank’s fault because he’s, well; Barney Frank! Or in a larger sense, the blame lies in the lap of ‘government’; with this week’s spin used by the right wing media mouthpieces being ‘financial industry misregulation.’

Mr. Santelli, to his credit, certainly isn’t one of those robot wingnuts. He understands markets, he can state a case using good old fashioned cause & effect logic and he is passionate in his beliefs without wrapping them around a cheap agenda. His daily segments have long been enjoyed in this corner.

But it’s when Santelli’s concern with the moral hazard aspect of possible homeowner mortgage relief (admittedly a legitimate conversation to be having) suddenly devolves into a scene where he’s leading a cheerleading section of bond option traders and saying “This is America” that has some of us scratching our heads. Quick: when was the last time you were out slugging down some brewskis with a bond option trader?

Let’s summarize what we think is their point, using a School Daze analogy:

Thirty years of influence pedaling by the local dope dealer industry has given the mischievous school kids at Rock & Roll High School both unlimited signed hallway passes to go smoke crack in the boys’ room (think: Glass-Segall) and has laid off all the truant officers so the kids can move that party to unsupervised latchkey kids’ homes (think: hedge funds and mortgage backed securities). The result: a few months later we find that we have a bunch of junkie kids running wild and constantly breaking into their neighbors’ houses: all hell is breaking loose in the ‘burbs. The citizenry suddenly wants a new school administration and it wants those truant officers back on the job; pronto.

But Citizen Santelli sees moral hazard here. After all, some kids took advantage of those loosey-goosey school policies and didn’t raise holy heck. Why, there are even rumors of a couple youngsters using that freedom to volunteer at the Senior Center! Why punish them because of the deeds of a few?

Memo to Santelli: did you miss the part about “all hell is breaking loose in the ‘burbs?”

What the counter argument solution to the problem posed by this admittedly-weak little scenario would be from the Tea Party bunch is unclear. Would they argue that a hands-off approach will eventually result in the junkie kids self-policing, growing up and becoming solid members of the community some day soon? Or is this just creating an exciting new market opportunity for entrepreneurial pursuit: gated communities, private armies and fortress-like home security systems? Who knows.

Indeed, finger pointing is a tricky thing. If you’re blaming the ‘big government’ scary monster, does that mean you’re sticking up for the AIG/Countrywide/CitiGroup/etc Den of Thieves? The concise argument has yet to be fine-tuned by the Haves to the liking of their traditional middle class allies, who (so far) are sitting on the sidelines and looking for a scorecard to help figure out this who-what-why of this Hindenburg.

Hence the fizzle factor of the Tea Party thing: it really wasn’t that big a success now, was it? For sure, the Limbaughs and O’Reillys latched on to the sound bite aspect of The Rant – of which I would wager Mr Santelli isn’t all that happy about. That, in turn, has rallied the usual suspects to the cause: the guys that spend all day flipping between sports talk and Fox News for their daily info fixes. You know who we’re talking about here: they can give you the career stats on a 5th-round linebacker prospect from Texas Tech but couldn’t begin to explain what a credit default swap is. But they think Ann Coulter is kinda hot, in a trashy sort of way. But that’s about all they’ve got so far.

Equally off-message, unorganized and inactive is the wild card of the political middle class; the left wing. Not since the Seattle uprising of a decade ago has this mishmash of various hopes and fears pulled together to make a stink. So where are they now that we need them, even if only for the street theater? Given the times, that question just might be the biggest mystery of all.

Meanwhile, the Have Nots show no interest in playing a starring (or even supporting) role in the Revolution. Hell; there’s not really even a Revolution going on anyways! Instead, they seem content either making it happen in the Underground Economy or flushing the pain away with regular fixes of dope, violence, junk food or network television.

They remain, as is usually the case in American history, invisible and politically orphaned.


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