Posted by: danielfee | March 25, 2013

Civil War 2.0: Round Five – The Tea Party

Round Five – The Tea Party

In previous posts I have demonstrated the continual argument throughout the nation’s history of the Federalists who supported a strong central government versus the Anti-federalists who supported strong state governments with a weak central government. Which brings us to today’s manifestation of the argument in the form of the Tea Party. What brought about the Tea Party movement? Much like the beginning of the nullification crisis, it was brought on by economic distress.

The “rant” by CNBC Business News editor Rick Santelli on February 19, 2009 from the floor of the Chicago Mercantile Exchange is considered by most observers to be the triggering event of the Tea Party movement. Ironically the Chicago Mercantile Exchange is the place where derivatives and futures contracts are traded. Derivatives, called collateralized mortgage obligations (CMO) or collateralized debt obligations (CDO), played the major role in the creation of the sub-prime credit explosion and housing bubble which lead to the “Great Recession” in 2008. So what was it that set Santelli off on his rant and started the Tea Party movement?

The day before the “rant”, the Obama Administration announced a plan to help homeowners refinance home mortgages. The Homeowners Affordability and Stability Plan was a proposed $75 billion program to help up to nine million homeowners avoid foreclosure. It was to be supplemented with $200 billion in additional funding from Fannie Mae and Freddie Mac, which had been nationalized in September 2008 as a result of the subprime mortgage crisis. These two mortgage giants had been initially founded in 1938 as government sponsored enterprises (GSE’s) that would buy loans from approved mortgage sellers, thereby allowing the secondary mortgage market lenders to expand. However, the GSE’s were converted to publicly traded companies in 1968 and operated that way until the housing crisis in 2008. The plan to purchase and more easily refinance mortgages was funded mostly by the Housing and Economic Recovery Act, which was passed on July 30, 2008, and provided for HFA guarantees up to $300 billion in new 30-year fixed rate mortgages for subprime borrowers if lenders write-down principal loan balances to 90 percent of current appraisal value. But neither the nationalization of Fannie Mae and Freddie Mac nor the passage of the Housing and Economic Recovery Act, both of which occurred during the summer of 2008 during the Bush administration, caused Mr. Santelli to go on a rant.

It was in March 2008 when the Bush Treasury Department first stepped in and began rescuing the financial markets when they provided the Bear Stearns investment bank with federal loan guarantees and arranged its merger with J.P. Morgan Chase. At that time Mr. Santelli did not rant. In September 2008, in addition to nationalizing Fannie and Freddie, the federal government stepped in to rescue the insurance giant AIG. AIG had failed because they wrote Credit Default Swaps (CDS), an insurance-like product that guaranteed that the CDO’s and CMO’s payouts to the investors would be made in the event that borrowers defaulted on their loans. However since this was an unregulated portion of the financial markets and there was no reserve requirement, AIG did not have the funds to pay the claims. So many financial institutions and investors would have been wiped out and failed without the government bailout of AIG. Did Mr. Santelli rant about the bailout of this loser insurance company or the loser investors who were rescued? No, he did not. Then in October 2008 the Wall Street banks received a massive $700 billion dollar bailout from Congress and the Bush Administration, known as TARP. In addition, the Federal Reserve opened the discount window and set up other bank bailout programs behind the scenes, which totaled trillions of dollars. Once again Mr. Santelli remained silent while the government assisted these loser banks. But according to Mr Santelli, a substantially smaller plan to help homeowners refinance mortgages was “promoting bad behavior” by “subsidizing losers’ mortgages”.

After the video of the Santelli’s “rant” went viral, Tea Party groups began to spring up around the country. By April 15, 2009, tax filing deadline day, the Tea Party had expanded and they were planning a tax day protest in more than 750 cities. Thanks in large part to the promotion by Fox News whose show hosts had initially planned to attend some of the events, the movement began to receive a lot of national attention. Many of the protesters carried signs which proclaimed that the letters T-E-A stood for “Taxed Enough Already.” Never mind that the American Recovery and Reinvestment Act of 2009, aka the stimulus bill which was derisively known as “porkulus”, was signed into law on February 17, 2009, and it contained numerous tax cuts. Approximately one-third of the total cost or $288 billion were tax incentives, with $237 billion for individuals and $51 billion for companies. But this did not matter. There was a new Democratic president in office so the pent-up anger at the federal government was unleashed with loud and angry protests of a tyrannical government.

The underlying anti-government sentiments which have always existed were revived and brought to the forefront again by Ronald Reagan in the 1980’s. This was the real lasting legacy of the Reagan administration and the seeds of today’s Tea Party movement. In two of his most famous and often repeated quotes Reagan said, “The nine most terrifying words in the English language are I’m from the government and I’m here to help” and “Government is not the solution to our problems, government is the problem.” If you spend any time talking to a Tea Party member, sooner or later you will hear them echoing Reagan’s quotes. This anti-government sentiment fed right into the deeply rooted southern culture that has historically opposed a centralized federal government. This is one of the reasons that Reagan has been elevated to the level of sainthood, particularly in the south. It was not an accident that immediately following his acceptance speech at the Republican National Convention in 1980, the first speech that Reagan gave was on “states’ rights” in the town of Philadelphia, Mississippi where three civil rights workers had been murdered in 1964.

So exactly who are these Tea Party members? The Tea party movement is a combination of economic and religious right conservatives. A Pew Research Center poll found that most people who agree with the religious right also support the Tea Party. But it also found that support for the Tea Party was not synonymous with support for the religious right. However as David Barton, the chief political correspondent for the Christian Broadcast Network put it, without the evangelicals the Tea Party movement would not be consequential. Mr. Barton coined the term “Teavangelicals” to describe the movement of the combined economic and religious conservatives. The Tea Party is overwhelmingly white (91.4%), a majority men (57.8%), older than forty-five (63.2%) and overwhelmingly Christian (85%).

If you look at the Tea Party by region, it should not be a surprise that their stronghold is found in the states that were historically the strongholds for the anti-federalist, nullifiers, confederates and segregationists. Prior to the 2012 elections there were 59 Tea Party caucus members in the House of Representatives, two-thirds of which were from the states of the old confederacy. After the 2012 elections, the Tea Party caucus membership dropped to 49 but it was still made up of two-thirds from the old confederacy.

What are the Tea Party’s core beliefs? There are many Tea Party organizations, each with a little different emphasis on what the movement stands for, but in general they all tend to agree on the following core beliefs:

  1. A constitutionally limited government

  2. Fiscal responsibility on taxation and spending

  3. Unregulated free markets

  4. Opposed to same-sex marriage

  5. Opposed to abortion in all or most cases

It should be noted that the more libertarian wing of the movement does not consider the last two to be part of their core beliefs. But as Mr. Barton said “the Tea Party libertarians may be vocal and active, but they simply don’t have the numbers if evangelicals stay home.”

If these are their core values, why wasn’t there a Tea Party uprising prior to February 2009? Abortion has been legal since 1973. Same-sex marriage is a relatively new issue, but it doesn’t seem to be the real issue that animates the majority of Tea Party members. The issues that are most often cited as top concerns are the budget deficit, national debt and that the federal government being too involved in the economy. However the federal government has always been deeply involved in the economy since the day Alexander Hamilton became the first Treasury Secretary. However it was in the 1980’s when the budget deficits and national debt really began to grow, except for the period during World War II. During the eight budget years of the Reagan presidency, the national debt increased by 186.4%. The top marginal tax rate was decreased from 70% to 28%, but Reagan signed tax increases into law every year from 1982 to 1987, and the net effect was a tax cut for those at the top and a broadening of the tax base by increasing fees, taxes and eliminating deductions which had much bigger impacts on the middle class and poor. But the result was federal revenues as a percentage of the economy (GDP) decreased from 19.6% in 1981 to 17.5% in 1983 although they did climb back to 18.2% in 1988 after the Reagan tax increases took effect. During the same period, government spending increased from 22.2% in 1981 to 23.5% in 1983 and then dropped back to 21.3% by 1988. The net results of decreased revenue and increased spending showed up in the near tripling of the national debt. But this fiscal irresponsibility did not cause a Tea Party uprising. Reagan had said what the right-wing conservatives wanted to hear on states’ rights in Mississippi; he opposed abortion rights, and was fully supportive of deregulating many industries, particularly the financial industry which led directly to the savings and loan crisis in the late 1980’s, requiring one of the first federal bailouts of the financial industry.

Early in the Bush-Cheney administration, then Treasury Secretary Paul O’Neil said the size of the proposed Bush tax cut would turn the budget surplus which had been inherited from Bill Clinton into a big budget deficit. Dick Cheney’s reply was “You know, Paul, Reagan proved that deficits don’t matter. We won the elections, this is our due.” Shortly thereafter, O’Neil was out as Treasury Secretary but his prediction was correct. Over the course of Bush’s eight budget years, the national debt increased by 105.1%. By FY 2008, the annual increase in the national debt exceeded $1 trillion dollars for the first time in the country’s history. In FY 2009, Bush’s last budget year, the national debt increased by $1.885 trillion. Once again there was no Tea Party uprising or “rants” from Mr. Santelli during the prolific spending and large debt and deficits during the years of the Bush presidency.

However as soon as President Obama was elected, there was an immediate change in the politics of debt and deficit from the conservative right. It was now an overriding concern and every new policy proposal or program that was put forth by the Obama Administration was viewed as increasing the deficit and debt. A relatively small program to assist underwater homeowners triggered the Tea Party movement. While the vast majority of economists said in 2010 that the American Recovery and Reinvestment Act, aka the “stimulus” bill, had worked to pull the U.S. economy out of its deep recession, the Tea Party and conservative think-tanks continued to argue that it was a failure and simply added to the debt with no results. However in September 2009, even the conservative Wall Street Journal said “Government efforts to funnel hundreds of billions of dollars into the U.S. economy appears to be helping the U.S. climb out of the worst recession in decades.” The results speak for themselves. In the Q4 FY 2008 the GDP was falling at an annual rate of -8.9%. By the Q4 FY 2009 the GDP had turned around to a positive 4.0% growth rate. What could have caused this turnaround? Consumer spending had not increased and the rate of job losses had decreased but in the 4Q 2009 we still lost almost 600,000 jobs. None of the complaints from the Tea Party relating to taxation and spending were being borne out in the statistics from Obama’s first year in office. At that point you could write-off their complaints as just typical partisan political budget arguments.

But by the summer of 2009, the Tea Party had a new issue to be outraged over – “Obamacare”. During the August congressional break, in town hall meetings all over the country, members of Congress faced angry mobs who were furious over the proposed Patient Protection and Affordable Care Act (ACA). It was during this period that the Tea Party rhetoric escalated to calling Obama a dictator and signs with Obama wearing a Hitler mustache were seen at numerous Tea Party rallies. They made claims that the government was taking over 20% of the total economy, claimed his proposal was unconstitutional and the talk of “states’ rights” and nullification began to resurface. After the ACA was approved by both Houses of Congress and signed into law, twenty-six states all led by Republican governors except one, joined in a lawsuit against the federal government claiming that “Obamacare” was unconstitutional. Many of these same governors postponed the implementation of provisions in the Affordable Care Act (ACA), such as setting up a state exchange on which their citizens will be able to purchase insurance. At first they argued that the ACA was unconstitutional and were waiting for the Supreme Court to declare it to be unconstitutional so that they could avoid implementing the Federal law. When the conservative Supreme Court ruled that the ACA was constitutional, these governors still refused to follow the federal law. Next they pinned their hopes on the 2012 election and a win by Mitt Romney who said he would repeal Obamacare on day one, thus alleviating their need to follow the law. But Romney lost in an electoral landslide. You would think that after losing their lawsuit in the Supreme Court and then losing their argument against Obamacare in the court of public opinion at the ballot box, these Governors would finally step forward and establish a state health insurance exchange for their citizens. But sadly no; many have already said they will continue to refuse following federal law, thus requiring the Federal government to set up the exchanges for their state as was provided for in the ACA if a state were to refuse to implement the law.

There is no doubt that once the state exchanges are set up by the federal government, these same Republican governors will begin complaining loudly about the imposition of the Federal government on their “state’s rights.” In addition, eleven states have already rejected the expansion of Medicaid coverage for their residence provided under Obamacare, even though the cost of that expansion was fully paid for by the Federal government for the first three years and then ninety percent thereafter. In the Supreme Court ruling, they determined that the federal government could not threaten a state with the loss of all of their Medicaid funding to force a state to accept the expansion. So to the detriment of the uninsured poor in their states, eleven Republican governors refused the federal money.

Essentially the Tea Party has revived the same nullification arguments that were put forth during the Nullification Crisis and by the “fire-eaters” prior to the Civil War. Some Tea Party state elected officials believed that they should have the right to supersede or nullify any federal laws they don’t agree with. In 1832, the nullification crisis was precipitated by the State of South Carolina when they adopted an Ordinance of Nullification declaring by the power of the State that the federal Tariffs of 1828 and 1832 were unconstitutional and therefore null and void within the sovereign boundaries of South Carolina. The following is a partial list of a few actions that are being taken at the state level making the same null and void arguments.

  • Two Tea Party lawmakers in Mississippi have proposed legislation to create a permanent committee charged with nullifying federal laws the state does not want to follow. Under the legislation, a committee of 14 state lawmakers would be authorized to stop any federal law from applying in Mississippi.

  • Republican Lewis Moore, the chair of the House States’ Rights Committee in Oklahoma’s House of Representatives, has asked the state’s attorney general for legal guidance on whether the state legislature can block the Affordable Care Act and other federal laws it considers unconstitutional. Under House Bill 1021 introduced by Rep. Mike Ritze,  any federal official who tries to enforce the law would be guilty of a felony and face a fine of up to $5,000. State officials would face potential misdemeanor charges and fines of up to $1,000.

  • In South Carolina, Rep. Bill Chumley has introduced a bill to “render null and void certain unconstitutional laws enacted by the Congress of the United States in taking control over the health insurance industry and mandating that individuals purchase health insurance under threat of penalty.” Lee Bright introduced similar legislation in the Senate, and more than two dozen Republican legislators, along with the state Republican Party, have expressed support for nullification proposals. Other proposals seek to nullify new gun laws the Congress may pass.

  • Sponsored by eight representatives and two state senators in Wyoming, a bill has been proposed that aims to nullify any federal laws banning assault weapons, high-capacity magazines, or requiring firearms to be registered. The bill states that any official, agent or employee of the United States government who enforces or attempts to enforce any act, order, law, statute, rule or regulation of the United States government upon a personal firearm, a firearm accessory or ammunition that is owned or manufactured commercially or privately in Wyoming and that remains exclusively within the borders of Wyoming shall be guilty of a felony and, upon conviction, shall be subject to imprisonment for not less than one (1) year and one (1) day or not more than five (5) years, a fine of not less than two thousand dollars ($2,000.00) and not more than five thousand dollars ($5,000.00), or both.

  • In Indiana, eleven Senators have co-authored a bill which provides that any federal act, order, law, rule, regulation, or statute found by the general assembly to be inconsistent with the power granted to the federal government in the Constitution of the United States is void in Indiana. It provides that a resident of Indiana has a cause of action to enjoin the enforcement or implementation or the attempted enforcement or implementation of a federal act, order, law, rule, regulation, or statute declared void by the general assembly. That a plaintiff who prevails in such an action is entitled to reasonable attorney’s fees and costs. That a person who knowingly or intentionally implements or enforces, or attempts to implement or enforce, a federal law that is declared void by the general assembly commits a Class D felony. And it finds that the federal Patient Protection and Affordable Care Act and the federal Health Care and Education Reconciliation Act of 2010 are inconsistent with the power granted to the federal government in the Constitution of the United States.

To date, eighteen states have introduced nullification bills relating to Obamacare and twenty states have introduced bills which they call Second Amendment Preservation Acts which would nullify any federal legislation that might be adopted with respect to gun control. A right-wing organization called the Tenth Amendment Center has prepared model legislation to nullify both Obamacare and any potential legislation relating to the Second Amendment. Here is the outline of their process to nullify Obamacare.

There are four main steps that can be taken to reject, refuse and/or nullify the Affordable Care Act on a state level. While each one of these steps alone won’t result in a nullification of the act nationally, they’re all an important piece of the puzzle. An act of resistance in one state leads to courage and doing the same in another. At the same time, some courageous types might get the notion that they can turn it up a notch and take a stronger stand in their state than you have in yours.

Step 1: Reject the creation of State Exchanges

Step 2: Refuse Medicare Expansion

Step 3: Health Care Freedom Act/Amendment

Step 4: Federal Health Care Nullification Act

A total of twenty-six states, most of which are Republican-led or Republican-leaning states, have rejected establishing an exchange for their states. This means it will fall upon the federal government to set up an exchange for those states. So almost all of the Republican-led states, with Idaho, Utah and Kentucky being the notable exceptions, followed step one.

So far eleven have also taken step two and refused the Medicaid expansion. According to the Tenth Amendment Center’s tracking, Republican legislators is thirty-nine states have taken step three by filing bills in their states and eighteen have taken step four by filing a proposed nullification bill.

But it is not just health care and guns where the states are trying to supersede the federal government. Virginia is close to passing a measure that would break ties with the nation’s monetary system. A proposal to study whether the state should adopt its own currency passed in a House voted 65-32 in early February 2013. It will now go to the Virginia Senate. Utah was the first state to introduce its own alternative currency when its Governor Gary Herbert signed a bill into law last March that recognized gold and silver coins issued by the U.S. Mint as an acceptable form of payment and required a study on adopting other forms of legal currency. In total there are thirteen state proposals circulating, all in Republican-controlled states seeking approval from their state governments to either issue their own alternative currency or explore it as an option.

In Arizona they adopted their own immigration law by approving the infamous SB 1070: Support Our Law Enforcement and Safe Neighborhoods Act. Other states soon followed with similar legislation, including: Utah, Alabama, Georgia, Indiana and South Carolina.

Following the 2012 presidential election, the rhetoric was ratcheted up further with threats of “secession” in many states. Residents in numerous states filed secession petitions on the White House’s website “We the People.” The eight states that reached the number of signatures needed in order to receive a White House response were: Florida, Louisiana, Georgia, Tennessee, Alabama, North Carolina, South Carolina, and Texas. Notice that all of these states were part of the old confederacy.

The response from the White House, of course, pointed out that the Founding Fathers’ intentions was to provide us with the “right to change our national government through the power of the ballot. But they did not provide a right to walk away from it. As President Abraham Lincoln explained in his first inaugural address in 1861, in contemplation of universal law and of the Constitution the Union of these States is perpetual.” The White House’s response added that the Civil War “vindicated the principle that the Constitution establishes a permanent union between the States.” It is a safe bet that this response did not satisfy the would be secessionist.

As discussions were beginning relating to new federal regulations with respect to gun safety in the wake of the Newtown massacre at the Sandy Hook Elementary School, the rhetoric against the federal government was ratcheted up another notch. Gun advocates began to claim that the purpose of the Second Amendment was so that citizens can protect themselves from a tyrannical government. Gun and ammunition sales increased significantly, especially for assault rifles and high-capacity clips immediately following the Newtown shooting. It appears that there are a significant number of people who are preparing for an armed conflict with what they perceive to be a tyrannical federal government for discussing gun safety measures they view as an “appearance of infringement” on liberty. Their argument sounds very much like the arguments of anti-Federalist No. 7.

What is the most galling part of the Tea Party rhetoric is that they profess to be the true patriots and lovers of the Constitution. Yet they are the descendants of those who opposed the Constitution in the first place, and of those who attempted to nullify federal law which was passed by the majority because they did not agree with the outcome. They are also the descendants of those who took the country into Civil War following the election of Lincoln, which cost 625,000 Americans their lives. And they are the descendants of the segregationists, who following the brief period of reconstruction, devised a “separate but equal” Jim Crow system in the south treating persons of color as second class citizens since they could no longer own slaves. Over time their party affiliation has changed as the Republican and Democratic parties switched positions following the civil rights battles of the 1960’s. Recognizing that President Lyndon Johnson had alienated a large part of the Democratic base when he signed the Civil Rights legislation, Richard Nixon’s political team devised what became known as the southern strategy in order to appeal to those who were bitter after another perceived loss and encroachment on their southern culture. That divide is alive and well today and its most vocal advocates are the Tea Party.

As with most radically ideological groups, they over estimate their popularity and level of influence. A New York Times/CBS News poll taken in 2010, at the height of the Tea Party movement, found that 84% of Tea Party members thought that “the views of the people in the Tea Party movement generally reflect the views of most Americans.” Only 25% of all respondents to the poll thought that was true. However minority ideological groups can drive the political discussion and wreak havoc on the majority and the nation. The question for the majority is just how far will we let them go this time? Will we let Civil War 2.0, which is a war of words occurring on the Internet and social media, devolve into an armed conflict of Civil War II?

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Responses

  1. I would add being pro-gun to the Tea Party agenda.
    I wouldn’t say the Libertarians in the Tea Party don’t have abortion in their platform. Rand Paul has introduced federal “personhood” legislation.
    Also, it’s Medicaid expansion, not Medicare.

    • Good catch. I had to search because I was sure I had said Medicaid, but you were right I found one place where I had Medicare. It has been corrected. On the gun issue, it it still too soon to determine if it is one of the Tea Party’s core values. I have not seen any polling that is specific to their views on background checks, straw purchases or assaults weapon ban. But it is probably a safe bet that they will be against everything. However this is probably a subset of their “limited government” principal since they don’t think the government should have any involvement in what ever they disagree with. The true Libertarians will blow off the social issues because they don’t want to get drawn into those arguments. There is a lot of cross over between the two wings of the Tea Party, but from everything I have seen and read I think there is still a distinction. As for Rand Paul he is a pandering politician looking at 2016 so I wouldn’t take his recent introduction of a “personhood” bill as one of his core principals. After all this is the same guy that was praying to Aqua Buddha. in college.Thanks for you comment.

  2. Terriffic series Dan, and right on point. The point you made earlier, about how the Tea Party is actually defending the Confederate Constitution rather than our Federal Constitution is entirely accurate, and rather chilling.

    • Thanks, I keep hoping that more people will see that we are heading down a very bad road and reverse course before it is too late. The 2012 election results looked like it could have been a turning point when the more level headed people in the Republican Party looked at their electoral problems and concluded that they need to become more inclusive and back away from the extremist positions. But it only took a few months before the radicals reclaimed their control over the party. Between right-wing talk radio, Fox News, and the Tea Baggers like Rand Paul and Ted Cruz, they are mow moving even further to the right extreme. When the Zimmerman trial gets ginned up into a racial conflict point for those on the right I see it as one more step in the process to reopen the segregation battles of the 1950’s and 60’s. I had a guy who has been a friend of mine for 25 years starting to parrot back the angry Fox News (O’Reilly) rants after the Zimmerman jurors spoke out. It is total non-sense that O’Reilly’s tries to place the blame for an unarmed black teenager walking home from the store being gunned down on the percentage of unmarried black women having children. Never mind that Trayvon Martin’s parents were married when he was born, and he was visiting his dad who was still in his life, and the main argument coming from the African-American community following the verdict was that the stand your ground laws must be changed. These facts totally escaped Bill O’Reilly. But that wasn’t what he wanted to convey to his viewers. If you listen to his rant and pay attention to “how he said it” and not the content of what he said the point was very clear. He wanted his viewers to become angry, resentful and fearful. And that is what I was hearing back from my friend. I see way too many people trying to revive and rewrite the confederate history and I find it very disturbing.


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