Joe Conason: Lies of the Tea Party

Mischaracterizations about the health-care bill and economic stimulus only fuel fear.

By Joe Conason | Published on 09.30.2010.

For Americans still suffering from persistent unemployment, falling incomes and rising inequality, politicians of either party probably generate little enthusiasm. Although political ennui is understandable, the disaffection and demoralization of Democrats have created a dangerous political vacuum that is being filled with misleading data, urban legends and outright lies.

Joe Conason
Indeed, the entire Tea Party movement was founded on false assumptions about the economic program that probably saved the country from a second Great Depression.

The nascent protests that came to be known as the Tea Party began as angry populist rants against the Troubled Asset Relief Program, that notorious “bailout” of drowning banks and insurance companies, and the American Recovery and Reinvestment Act, better known as the “stimulus program.”

Red-faced traders and furious housewives joined forces against what they wrongly called “socialism,” warning that our freedom was endangered, and that the nation might soon perish under burgeoning inflation and draconian regulation. They grew even more frantic when the Obama administration directed hundreds of billions of dollars in TARP funds toward the auto industry in loans and shares — more socialism!

The real reason behind the irritation of the traders and their spokesmen on cable television was simple enough. The government had restricted their usual obscene bonuses in recognition of the fact that they had been saved by taxpayer funds from their own gross misconduct — and should be not be rewarded for surviving on the teat.

As for the Tea Party housewives and their cohorts, the motives ranged from xenophobia to paranoia. But as the recovery lagged — and the Obama White House failed to communicate its aims and achievements — those typical symptoms of right-wing delusion showed up in a broader segment of the voting public.

In the meantime, the Republicans and their allies in the media managed to mischaracterize President Barack Obama’s health-care reform bill as both a “government takeover” and a gift to the health insurance industry, although in reality it was neither. Most Americans who say they dislike the bill have very little knowledge of its actual provisions — which are quite popular when polled individually.

The average voter is equally unlikely to know the essential facts about the preservation of auto companies, the stimulus package or TARP — which was approved with the votes of the same Republican leaders they may soon promote into the majority.

Nonpartisan experts both within and outside government have said for months that TARP not only saved the country from untold economic disaster, but that its repayments and warrants will end up as highly profitable investments. The auto industry isn’t quite as sure to prosper as the banks, of course, but there is a reasonable likelihood that the government will make money on those investments, too — while preserving a vital industry and millions of jobs.

As for the stimulus, economists across the ideological spectrum have contradicted the popular perception — promoted by Tea Party publicists — that the program didn’t work and may even have done harm. The Republicans insist that government can’t create jobs and that public expenditure only “crowds out” private-sector investment.

But contrary to that Chamber of Commerce mythology, the private sector is sitting on more than $3 trillion, in banks and corporate accounts, that is not being invested because of insufficient demand. Rather than the rampant inflation predicted by the Tea Party ideologues, we have seen no real inflation — because demand is still insufficient to reinflate the economy. The Obama stimulus program was enough to prevent the complete deflation that might have led to a depression, but not enough to begin a full recovery in employment.

The same conservatives who now claim that President Obama’s program didn’t work are those who once warned that President Bill Clinton’s program would lead to ruin — just before the greatest peacetime expansion in history. Believe them at your peril.

— Joe Conason writes for the New York Observer.

Lifter -

When TARP was actually first instituted by the GWB administration, weren't you one of the voices crying aloud how the Repubs had once more come to the aid of big business, and how the taxpayers were taking it in the a..?

Your post simply parrots what the truth is - the Obama administration saw the wisdon in GWB's and Paulson's program, and continued and expanded it.  Praise to them for doing so.

And your post also reflects the reality that GWB and paulson did NOT develop a program of gifts - simply investments that have already paid off handsomely for the tax payer.

I'm no Tea Partier either - I'm just an old fashioned conservative, but one who recognizes that gov't once in a blue moon does have a role in investing in industry, but also needs to get out, which TARP has done, once stability is restored.

FDR had similar wisdom during the Depression - I've never railed against him, because as bad as things were then, we were inching close to anarchy, and FDR saved the capitalistic system from possible collapse.  He also knoew, and did, that the gov't needed to get out once stability resumed, and the heavy hand of gov't was no longer appropriate.

What people fear from Obama is that this ancient wisdom is being re-fashioned, especially in the health care bill, to keep gov't involved in an industry where only a few reforms, such as eliminating pre-existing condition exclusions, were all that were really needed to solve 98% of the problem.