The Losers' Debt: What Occupy Wall Street Owes to the Tea Party
As the ranks of Occupy Wall Street swell, the inevitable comparisons to the Tea Party have led conservative agitators whose demonstrations catalyzed opposition to President Obama to deny any similarities between the two movements. They shouldn’t: Without the Tea Party, Occupy Wall Street wouldn’t exist.
That's not because the Don’t Tread On Me crowd was first to voice criticism of the economy, but because their success as advocates for the lenders of the world put the screws to our economy—and the very debt-ridden people whose voices are carried by Occupy Wall Street.
Pinning down the origins of the Tea Party isn’t easy, but a good moment is February 19, 2009, when CNBC contributor Rick Santelli launched into a screaming rant. His target? The Obama administration’s plan to help people with “underwater” mortgages—loans worth more than their homes after real estate prices plunged, leaving them hard-pressed to refinance and make their payments.
“Do we really want to subsidize the losers’ mortgages?” Santelli demanded. “We’re thinking of having a Chicago Tea Party in July, all you capitalists that want to show up to Lake Michigan, I’m going to start organizing.”
Now the “losers” are back: Check out We Are The 99 Percent, the Tumblr blog giving voices to the people behind the Occupy Wall Street protests: Nearly everyone talks about debt, from underwater mortgages to student loan or unpaid medical expenses.
One of the critical features of our recession is that high consumer debt is holding back recovery: People are too busy scrimping to pay their obligations (in part because real wages haven’t gone up in the last decade) to spend the kind of money that helps pull an economy out of recession and create jobs.
The Obama administration has taken repeated stabs at fixing this problem, including the ultimately hapless mortgage loan modification program that Santelli called out, mortgage refinancing initiatives, attempts to decrease student debt, and health care reform designed to help make care more affordable.
Plagued by poor execution and underestimating of need, none of these efforts have resulted in success yet. Part of this failure can be laid at the feet of President Obama and the Democrats, but the Tea Party’s Republican-adopted campaign against government intervention in the economy has doubtless postponed recovery and kept the government from taking basic actions to force the financial sector to share the painful costs of irresponsible lending.
Most ironic for a movement that proclaimed opposition to financial sector bailouts (a cheap and effective policy that should have been followed with radical bank reforms), the Tea Party’s largest influence in Washington was helping empower Republicans who promised to undermine any and all restraints on the behavior of the largest banks.
Equally problematic, the Tea Party turned the political agenda toward deficit reduction when the times demanded action on jobs. Their thriving opposition to action by the Federal Reserve to ease pressure on the economy has made it harder for the central bank to adopt policies that would ease the burden of debt by raising inflation.
Perhaps worst of all, by associating debt with irresponsibility, the Tea Party forgot the social conditions that led to the amassing of this record debt, especially fraud and irresponsible lending in the financial sector and growing inequality. This in turn denied the basic interconnections in our economy. The Tea Party refuses to see that beggaring their neighbors is a step toward beggaring themselves.
Now the indebted, tired of waiting, have come back to haunt our culture, reminding us loudly that the excesses of the past decade still hang over their heads, and that the promise of the United States—you can work your way out of your troubles—isn’t true when you can’t get a job.
So thank the Tea Party for the crowds in lower Manhattan: A lost decade of growth teed up a gut-punch recession for Americans who didn’t realize the instability of the foundation they built their lives on. When the Tea Party scrambled to oppose reasonable public action to alleviate these problems, the conditions were set for the organic explosion of the people who found themselves on the short end of the stick.
For all the conspiracy-mongering, disorganization and misguided proposals floated by Occupation Wall Street, we can hope they’ll be as influential as the Tea Party, for one sad reason: Unlike the fantasies of the Tea Party, the problems faced by the self-proclaimed Other 99 Percent are all too real.