Teaparty Tempest & Financial Reform

The alliteration of TeaParty Tempest suggests that all this disaffection is just some passing storm. The radical right and Republicans making fruitless static. Not quite so. The problem stems from Yes We Can becoming more like We Dare Not as the Obama Administration continues to:
a)give kid glove treatment to Wall Street and the bankers who brought about the recession with no financial reforms whatsoever while giving slam dunk low interest rates and not getting any pledges of mortgage amelioration, more job sharing instead of job cuts; and less outlandish compensation and bonuses among the all elites not just the financial upper crust – all this despite the Too Big to Fail” Bailout and now the ongoing zero interest free cash available only to the banks;
b) nix any taking into account the bad players in the financial system. There have been no penalties for any of the major officers and directors at the big banks, investment houses, and hedge funds that got the financial system into “Too Big To Fail” $8-12 trillion dollar bailout. Instead of resignations or severe limits on their compensation, largely the same players are giving out bonuses in 2009 that are bigger than in 2007 – the last high water mark.
c)nixed repealing of the Bush tax cuts for the wealthy while the country needs all the spare cash it can get. The country buckles under huge deficits in the state and municipal governments which cannot deficit finance like the Feds;
d)tiptoe through the tulips on any meaningful financial reforms to prevent a repeat bubble. Instead, most of the bad players, bad investment practices, and bad compensation incentives have been left intact.
So it should not be a surprise that the Tea Party phenomena which in its early phases was largely a Republican organized [but not uniquely Republican supported] activity – has now morphed into a wider grass roots protest. Give David Brooks at the NYTimes full marks for identifying the nature and cause of the current movement:

Americans have lost faith in their institutions. During the great moments of social reform, at least 60 percent of Americans trusted government to do the right thing most of the time. Now, only a quarter have that kind of trust.The country is evenly divided about President Obama, but state governments are in disrepute and confidence in Congress is at withering lows. As Frank Newport of the Gallup organization noted in his year-end wrap-up, “Americans have less faith in their elected representatives than ever before.”

The TwoParties are Not Good Enough
But what I think David Brooks misses is the direction of the protest. It is not a shift against the Democrats and towards the Republicans [see recent Republican victims of teaparty activism]. Both parties have been found wanting. This is protest against all of the political and financial elites who are have forgotten the basic business/political ethic – the customer/voter is king.
Lets give Nobel Economist Paul Krugman at the NYTimes the last words:

The main reason for reform is to serve the nation. If we don’t get major financial reform now, we’re laying the foundations for the next crisis. But there are also political reasons to act. For there’s a populist rage building in this country, and President Obama’s kid-gloves treatment of the bankers has put Democrats on the wrong side of this rage. If Congressional Democrats don’t take a tough line with the banks in the months ahead, they will pay a big price in November.

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