Until now I have avoided comment on the hundreds of tea parties held nationwide yesterday. I haven't missed the fact that certain pundits are having a field day with the tea-bagging comedy. I've enjoyed the laughs. Tea-bagging, though inherently juvenile, is still funny. But jokes aside it's time to examine the movement and yesterday's events.
My thesis is simple. The critics are mostly wrong. The demonstrations were real.
Tea Party critics have asked the following question: "If it's about deficits and spending, then why weren't these fools complaining during the last 8 years of Bush?"
Actually, we were. Fiscal conservatives have been complaining about the deficits under Bush and the growth of government spending for much longer than the last decade. The difference is that Bush had average deficits of $250 billion, while Obama's average will be $1.5 trillion for his 4 years. That's a factor-of-6 increase.
We understand the economy is weaker and federal tax receipts will inevitably be lower in a recession, leading to larger deficits. But not 6-times larger. The difference is the Obama stimulus as well as new structural spending programs. So let's break it down.
Approximately 10% of the stimulus is going to infrastructure spending. Ten percent. That's an infuriating joke. We do not believe the stimulus will multiply into the type of force needed to rescue our debt-laden, obese economy. It's a waste of borrowed money. We do not buy the Keynesian claptrap. And we will be proven right again. (Except then Krugman will say it was because we didn't spend enough.)
Peter Schiff was right about Krugman and Keynes. In some ways, for otherwise smart guys, Keynesians are idiots. As my Theo Panayotes used to say "I may be dumb, but I'm not stupid." For Krugman and the rest it's the reverse. They are not dumb but they got 'stupid' nailed. Decades of empirical evidence demonstrates that government stimulus spending does not work efficiently, if at all, yet they do not cease with their failed theory.
So the tea parties became an expression of anger against a borrowed and wasteful stimulus and an exploding annual deficit. There was also a third factor: the bailouts. Considering the focus of this site, I needn't explain the anger most people feel about using borrowed money to bail out failed private banks for their extreme leverage and risk, while management and employees made hundreds of billions in bonuses over the last decade. It is disgusting at it's core and makes some of us actually spew smoke. (A side note: I predict the bailouts will be the single most important issue to voters next Congressional cycle in 2010. Book it, Dano.)
I voted for Obama, but I am not beholden to a doctrine of blind faith. I was asked to speak at one of the tea parties and declined. And I did not attend any of the events yesterday. But I can fairly report, from having read close to 100 accounts of rallies large and small, that the Tea Parties were ultimately anti-deficit affairs. The political cross-section was wide. Though they were Republican promoted and dominated, there are millions of fiscally-conservative Democrats and Libertarians (yours truly), and their attendance was noticed yesterday.
Deficit and bailout politics make for strange bedfellows indeed. There is finally a growing chorus of taxpayers who have had enough of the fiscal irresponsibility of our federal government. And they have begun to find a voice.
Two trillion dollar annual deficits tend to have that effect on people.