Wednesday, April 15, 2009

Setting the record straight on the financial crisis, contrived populist anger and the "tea party" movement

According to right-wing pundits like Rush Limbaugh, Glenn Beck and the rest of the FOX news crew, we live under the most anti-american president in history. The people are being oppressed by a tyrannical liberal establishment, ignorant of the people's true will, blind of its countless injustices against the constitution and our way of living as we know it.

Neocons are accepting this ideology as gospel, and a new movement fueled by ignorance, logical fallacy and childish rhetoric is spreading across conservative airwaves like Pixy Stix at a kids' playground. As an American citizen, a purveyor of information for its people, and a journalist seeking truth in a world full of deception, I feel the need to speak out against this contrived populist movement. It really isn't that hard to do; when taking apart the conservative/tea partier's argument, it's actually very simple. It boils down to their dislike of tax dollars going to things like welfare and healthcare for illegals. This argument is quite hypocritical, as red states like Alaska and Arizona are the biggest recipients of federal money. Perhaps they should look to bluer places like Illinois and New York?

What led to such reactionary, ignorant, knee-jerk thinking takes root in lies from the right-wing media. I'm writing this post to hopefully remede this overabundance of bad information. Because there's so much ignorance being spread, I have lots fo ground to cover, and this post will be pretty lengthy. I'll segment it out as best as I can. I'll hyperlink my sources after writing this out, so if you're skeptical and looking for factual evidence behind my arguments, it's on the way. Have no fear.

Opening Statement
The global economy is real bad right now. Riots are erupting worldwide, as the mounting financial crisis fuels global panic.

In Iceland, the central government has been destabilized. Protesters in Iceland take the streets daily, as the country's economy continues to worsen with no sign of visible improvement. Latvians are storming their cities in violent riots. In Greece, police are still trying to quiet violent riots over economic crisis and chronic job loss. Other parts of Eastern Europe have been erupting in chaos with the mounting economic crisis; Bulgaria, Lithuania, and even France and Ireland are all marching in the streets because conditions have gotten so bad. The Chinese are also uneasy, as the US recession has caused us to not buy as many of their manufactured goods.

What caused all this?

Looking back in the late summer/early fall of last year, we saw the collapse of the subprime housing market. Bear Sterns, Lehman Brothers, Fannie and Freddie, Goldman-Sachs, AIG, the list of bailed-out banks goes on and on. When Bush's Treasury Secretary came into congress and told them if they didn't immediately give out $700 billion of taxpayer dollars in bailout money, the global economy would collapse. Congress passed along an allocation of $350 billion to go to these banks with basically no oversight. When these greedy bankers and CEOs ran off with everyone's 401k, pension, and tax money to expensive resort spas, were we really surprised?

When we give more money to the people who caused all of this mess in the first place, why do we suddenly expect them to be responsible with it? When you pay someone to keep doing what they've been doing (wrecking the economy and robbing the working class blind with predatory lending techniques) then they're going to keep doing it. These bankers made their millions through predatory lending. They were completely free to do so, thanks to republicans like John McCain who cried out for deregulation of wolfish financiers in the 1980s.

Those Behind the Savings & Loan Crisis of the Late 80's/Early 90's
When following the timeline all the way back to what caused the subprime lending crash, one will find one case of government corruption that stood above all the rest; the Keating Five. Bear with me here.

The Keating Five was named as such because five US senators were on the payroll of one such predatory lender; Charles Keating. Four democrats (Alan Cranston, Dennis DeConcini, John Glenn, Donald Riegle) and one republican (John McCain) accepted gifts and improperly intervened in the doings of Charles Keating, the chairman of the Lincoln Savings and Loan Association. Keating's organization was coincidentally being investigated by the Federal Home Loan Bank Board until the intervention of Keating's minions in the legislature. Consequently, the board backed off of its investigation.

Unlike the rest of the five, John McCain was the only one with close social and personal ties to Keating. In the five years from '82 to '87, McCain got more than $112,000 from Keating's company. In return, John and Cindy invested $359,000 in one of Keating's shopping centers in 1986, just one year before McCain met with regulators. Keating financed nine trips to the Bahamas for McCain and his family, along with his babysitter. McCain didn't pay for these trips until Keating came under investigation by the FHLBB in 1987.

So naturally, when Keating's predatory loan practices came under fire, McCain stood up for him and helped the deregulation that led to the Savings and Loan crisis, and the eventual subprime lending crash which, in turn, led to the global financial crisis we have now. History has shown that it only takes a corrupt senator like McCain to kick off a trend of economic downturn. As our pensions dwindle away, the bankers and lenders get to fill their pockets again and again. When our money ran out, they ran to the federal trough put in front of them by Paulson and Bush. for another great example of how deregulation can ruin an economy, look to Britain.

The "Tea Party" Movement
In 1773, Bostonians refused to take shiploads of newly-taxed tea back to Britain. The people of Boston had had it with the taxes they were getting hit with on their tea, so they decided to protest by deliberately throwing cratefuls overboard, very covertly, and in secret.

In 2009, another kind of protest is happening in the United States, courtesy of right-wing talk radio and cable TV news. However, unlike the protests in Greece, where rioters are throwing molotov cocktails at police barricades, or Iceland, with its recent loss of centralized government, the people protesting here don tricorn hats and petticoats. Some of them wave pitchforks to drive home the point. These people are protesting what they call excessive and wasteful government spending of tax dollars, and refer to Obama's spending plan and stimulus package as socialistic. When challenging the motives behind the tea party, here are some of the more choice responses I've seen from conservatives-

"Tea Parties speak to the erosion of our civil liberties and the erosion of our economic freedoms. Tea Parties speak to the ongoing assault on the First and Second Amendments. Tea Parties speak to the vicious attacks on our Constitution."

"Liberals like Pelosi, Reid, Spector, and all their ilk are afraid that the American public is going to realize that government produces nothing and all this stuff they are giving away will have to be taken from individuals."

"One freedom lost due to government spending....the freedom to have a road that is not filled with pot hole...cuz the government and the brainwashed libs are to dam busy spending my dam tax money to build art museums and o rbussing kids for an hour across town in the name of integration....or putting illegal immigrants through college...or buying them houses..."

"The kooks have been screaming for forty years; it's time to scream back! The major difference being that WE actually have something constructive to say!"

"BO is intent on destroying our economy and our military forces to fulfill his socialist dream."


“Liberty, yes! Tyranny, no!”

“Keep your socialistic dance! We don’t want to live in France!”

"Our President is NOT interested in the liberty and freedom of citizens of this country, but of CONTROL and HIS version of "fairness". This is the most ANTI-American President in our history."

To put this in perspective, here's some imagery of your typical tea party from a recent New York Times editorial-

"Not glowering sky nor mud nor threat of hailstones sufficed to deter about 300 souls from massing on the sodden village green in Northport, NY...The chief of the Northport Fire Department, which like many on Long Island is bristlingly equipped by compliant taxpayers with enough gear to protect small European principalities, kept watch from his official S.U.V. The Northport Police directed traffic as a search-and-rescue boat idled over by the marina. The New York State Department of Environmental Conservation, alerted to the possibility of tea dumping without permits, had sent two armed officers. And at the dock, a 41-foot Coast Guard boat from the Eatons Neck Station, with a five-man crew, kept its engines running in case anybody or anything was attacked, scuttled, dunked or sunk. Whatever trouble these rebels found themselves in, the federal, state and local governments had it covered...Too bad hardly anyone noticed. The crowd had gone to Skipper’s Pub, which was offering drink specials."

Why Conservatives are so Upset
Rather than focus their rage on the corporate thieves who ran off with their pension and 401k, or on Henry Paulson for manipulating congress into going along with the bank bailouts, tea partiers blame President Obama. The arguments aren't specific; just that too much spending is bad and that Obama is a socialist. They justify this accusation by comparing Socialism to Communism and Nazism, implying that Obama must be one of those things too. For those unaware of what socialism has done for this country, take a look at workers' rights, children's rights, unions, women's suffrage, improved safety standards, clean air regulations, public service programs, and the like.

Some are protesting the stimulus package, referred to as the "porkulus" by some. Conservatives disagree with the stimulus, as its filled with alleged "pork barrel" projects. Conservatives never define the word "pork," but given their anger at the spending plan and the stimulus, pork spending is evidently any taxpayer money spent on refurbishing public schools, rebuilding and repairing roads, constructing a comprehensive green energy grid, weatherizing homes, and saving public sector jobs that are rapidly being cut like teachers, firefighters, police officers, garbage collectors, street sweepers, and other municipal and state workers. 98% of the stimulus package is directed at these endeavors. If conservatives are right and the stimulus is nothing but pork, then public schools, roads, and law enforcement must not be very important.

All of a sudden, fiscal conservatives are crying for our country to return to Reaganomics and Milton Friedman's economic policy, when it was actually the irresponsibility of a GOP leader in the senate and Friedman-esque deregulation that got us here in the first place. These fiscal conservatives were nowhere to be found when Bush racked up our debt from a surplus to a $3 trillion deficit before his first year was done with. It reeks of hypocrisy that now of all times, when our money is actually being spent on us, that conservatives are crying out for reform. The CBO has estimated that by 2011, Bush's war in Iraq will have cost $3 trillion. Where were the fiscal conservatives for the past 8 years?

Obama's heavily-criticized tax plan in the budget actually cuts taxes for 95% of working-class Americans, while simply rolling back the Bush tax cuts on the top 5%. Interestingly, the tax rate on the rich was much higher under the Reagan, Nixon, and Eisenhower administrations. Where were the fiscal conservatives for the past 40 years?

The right likes to distance itself from the man they helped elect twice in a row by saying he wasn't a "true conservative," indeed, the true conservative champion was Ronald Reagan. However, those hating Bush and liking Reagan are contradicting themselves, as those two administrations were the epitome of everything conservatives adored.

Bush was just a Texas version of Reagan; a smirking politician who put a folksy face on corruption, environmental destruction, tax cuts for the top 5%, the unification of big government and special interest, sky-high deficits, deregulation leading to a leveling-off of middle and lower class wages while the rich lived lavishly, all packaged neatly in a smug cowboy package.

What this is really about is that the right has had their way since Reagan got elected; the American Dream came true. Now, that dream of wolfish capitalism and conservative history of taking government power away from the people and putting it in the hands of big business, and pushing the financial burden on the middle class and working poor has caught up with not just the United States, but the rest of the world.

Conservative ideology reigned supreme for forty years; Clinton's tenure of prosperity was a drop in the bucket when compared to the decades of right-wing ideology that held the people and the government in its grasp. Our mess right now was brought on by conservative policy, not three months of Obama's administration. It's up to the conservatives protesting today to realize this, accept their error, and work to reverse it. The tea party movement is a classic metaphor; the parrot sticking its head in the stand, dismissing all legitmiate challenges against their ideology as "liberal talking points," and slowly drifting further and further away from common sense.

Cleaning up the Mess Made by the Right
As history has shown since the Nixon administration, coddling the rich with trickle-down economics has and will always be a failed idea. Look to AIG as a prime example; when you give our money to the corporate elite, they keep it. If you want a tax cut that works, give it to the people who spend to survive; middle class Americans.

The right argues that a country can't spend its way out of a deficit. However, looking at the situation logically, spending is the only way a recession can be overcome. One example is when a government, like ours, spends money on such things outlined in the stimulus, like public works and infrastructure.

Proper spending spurs economic activity that creates jobs and gets money to consumers, small business, and contractors. As all of those keep that money going, stimulus spending is also a way of investing in infrastructure, like highways. In providing a solid foundation for economic growth, we'll eventually see it overcome the recession and eventually restore consumer confidence. People work more, buy more, and thus circulate the economy.

Right-wing ideology is a tyranny of dead ideas, so to speak. Shockingly, there are still millions of people who believe poor people are just lazy and need to try harder, and that one's wealth is directly proportional to the effort you put into your work. Being a hard-working full-time student and full-time journalist for radio and television making minimum wage, people like me can assure you that hard work does not a wealthy person make.

Obama has been our president for not even three months. To hold him accountable for decades of economic irresponsibility by opposite-minded individuals is disingenuous. It is unrealistic to expect one man to bring us out of the worst financial crisis since the Great Depression. Overcoming the recession will take more than one president and a congress, and it will most likely take longer than four short years. And what comes out of this recession will more than likely not be an improved way of the old system, but a completely new economic system altogether.

Spending tax money is necessary; taxes serve the purpose of providing for all that which one person cannot. Taxes fund things like roads, schools, airports, bridges, sewer treatment, universities, and the like. I'm not suggesting that we all accept that the government is doing the right thign adn turn on the blinders, but the exact opposite. Care about your country, learn about that which confuses you and do your research on everything the powers that be do and how you'll be affected. As always, the only solution is better education and information.


  1. There are a lot of people, and I mean A LOT advocating the abolition of taxes altogether. These people are literally children. They want an entire country with a functioning infrastructure, but they want to contribute nothing.

  2. Wow! Have you paid taxes?

  3. This article is very timely and relevant. As I quote Cameron Muir, an economist, "Home sales are unlikely to fall much further..That being said we expect home sales not to decline much further."

    But it's never too late, with the right business plan set up, it will lead to valuable outcome. This is what most counselors would give as an advise.

  4. When I worked at the factory those two summers in college to make money, I paid taxes. My current job is a workstudy, and I never filled out a W2, so this job is untaxed. Besides, I'm too broke to pay any taxes anyhow.