Hijacking Libertarianism: The Tea Party Movement

After an outburst against President Obama's Homeowners Affordability and Stability Plan on the floor of the Chicago Board of Trade by CNBC on-air editor Rick Santelli, a number of protest movements were launched called "Tea Parties" in apparent reaction to this statement. The Tea Party Movement has only grown from there and is fast becoming a potent political force.

A recent poll by NBC and the Wall Street Journal found the tea party movement has an approval rating of 41% with Democrats having 35% and Republicans 28%. Such a high approval rating has led to speculation that the tea party movement could coalesce into a formal political party. There is a dispute over whether the movement will take over the Republican Party or form its own force, with many influential members pushing the former option.

One notable development is the number of political action committees being formed in connection to the tea party movement to help finance favored candidates. Much like the MoveOn.org group formed years ago to organized activists for the liberal wing of the Democratic Party the Tea Party Movement serves the potential to perform a similar important role for the conservative wing of the Republican Party. However, this return to the Contract with America type of Republican politics seems less motivated by a desire for real change and more a desire for greater political power.

Despite attempts to dismiss the idea, considerable evidence exists indicating the tea parties are establishment efforts to mobilize the masses in support of favored policies rather than a grassroots uprising. Notable was that very soon after Rick Santelli's call for a "Chicago Tea Party" protesting Obama's policies a site was launched to prepare for "tea party" protests throughout the country. This site, called chicagoteaparty.com had in fact been purchased in August the previous year by a major Republican talk radio host in Chicago. The radio host, Milt Rosenberg, was also responsible for pushing the connection between William Ayers and Barack Obama during the election. Another major player was Eric Odom who is tied into the "drill, drill, drill" campaign in 2008. He is also connected to the Sam Adams Alliance which, through looking at its board of directors, leads to the group behind this major front, Koch Industries, one of the largest private enterprises in the United States.

The Koch family, principally David and Charles the sons of Fred Koch pictured to the right, are essentially the George Soros of establishment conservatives. Among the groups the Koch family funds most notable with regards to the Tea Party Movement are FreedomWorks and Americans for Prosperity. Both groups have been essential to the organization of tea party protests across the country and were involved in other notable staged "grassroots" events in history.

Their professed belief in liberty and freedom or their claimed libertarianism are challenged after reviewing the politicians and policies they support. FreedomWorks strongly supports NAFTA and other free trade agreements which lead to the creation of supranational authorities accountable only to the bureaucracy. Indeed, the very means by which they push policy belies their distrust of freedom. Unlike libertarians in the Ron Paul Movement the organizers of the tea party protests espouse neoliberalism in conflict with traditional libertarian values, indeed members of the Koch-funded CATO Institute have criticized Ron Paul. Not only favoring the formation of supranational entities like NAFTA the forces behind the tea party protests support the currency manipulation of monetarism implemented by central banks like the Federal Reserve, which is itself owned and run by the large corporate banks under the auspices of an independent government agency.

By creating its own "libertarian" revolt the powers that be are able to manage and limit anti-establishment libertarianism by providing an alternative approved by them. The tea party astroturfing, in comparison to the real grassroots mobilization in support of Ron Paul and other candidates in the same vein, is able to rally the support of enough powerful interests to easily position them for influence in government. Most telling of the true libertarian nature of the tea party protests is the lack of any foreign policy position. The foreign policy views of tea party regulars like Michelle Bachman and Newt Gingrich clearly illustrate the lack of a libertarian foreign policy.

The drug policy of the movement also goes unsaid, because many of the same figures so ardently backing it also vigorously support the War on Drugs. Mandatory rehab is their most radical, and bipartisan, suggestion for ending the War on Drugs with full legalization seen as an extreme. Yet such a system would only amount to a difference in style rather than substance.


Just as groups like MoveOn.org serve to suppress the most radical of left-wing ideologies the tea party movement is being molded into a group that will keep the most traditional libertarians at bay. By cloaking establishment values under the ideal of liberty a vehicle to seize libertarianism and mold public perception of the ideology towards a form favored by the elite has been created. Much like the claims by Obama of implementing change the tea parties represent no new direction but a rephrasing of old talking points by the establishment.

U.S. AAA rating is meaningless

Today the U.S. House of Representatives passed yet another hike to the debt limit of the United States. As it passes to the Senate Bloomberg makes an important note:

Democrats abandoned plans for a bigger debt-ceiling boost following conflicting demands among their rank and file over proposals to reduce the government’s budget deficit. The bill passed yesterday means Congress will have to vote again early next year to raise the debt ceiling.

Without the new increase, the Treasury Department would hit the current limit by Dec. 31, lawmakers said, which would force the government to default on its debts.

With it passing the house by a scant four votes due to dozens of Blue Dogs voting against the increase its chances in the Senate are highly questionable. The fact it has been so close makes the potential for another increase being passed in February much lower. Debt actually went above the limit in real terms though the Treasury quickly assuaged fears by noting that it has a number of "accounting tools" that allow it $150 billion of additional slack. Amazingly rating agencies insist the U.S. has no serious risk of losing its AAA credit rating until 2013.

However, should the U.S. Congress fail to pass an increase in the debt limit this month or in February default will be inevitable. Once the debt limit is reached no debt can be raised to pay off liabilities or debts. Credit rating agencies always take into consideration the political situation in a country including whether there is sufficient political backing to reduce credit risk. A failure to raise the debt limit would entail an imminent credit risk and the narrow passage of this increase means such a failure has a high probability of occurring if not now then sometime soon. No budget proposal being contemplated would erase the deficits or reduce them by sufficient measure to offset the rapid growth in borrowing. With strong resistance to large increases to the debt limit this constant battle is likely to continue. Such political squabbling over this significant issue would justify at the least a one-notch downgrade for the U.S.

The UK had its outlook downgraded and the possibility of a downgrade was raised if the 2010 general elections do not lead to a majority victory for any party. Yet the near failure of the Democrats to pass the debt limit hike in spite of overwhelming majorities because of defections in their own party is not an apparent issue. Given this consistent failure to act it begs the question of why there seems to be such little action taken by the credit rating agencies? All three major credit rating agencies, Fitch, Moody's, and Standard & Poor's, are based in New York City and regulated by Securities and Exchange Commission. Since ratings agencies are paid by the issuer this means the three most influential credit rating agencies are paid to provide credit ratings by the same government that regulates them.

Given the great deal of controversy over the failure of credit rating agencies to give appropriate ratings to mortgage-backed securities how much assurance is there that a corrupt bargain does not exist? As the government could easily close down these credit rating agencies what incentive do they have to bite the hand that feeds them?