What If the Tea Party Had Been Around During the Financial Crisis?

The Tea Party crazies are at it again in Washington, making John Boehner and Eric Cantor look like flexible moderates by comparison. While Boehner and Cantor want to avert a government shutdown—which is the last thing the GOP needs right now—extremist members of the House stand ready to bring the federal government to a standstill starting October 1 unless Obamacare is delayed for a year and Pentagon spending is increased. On top of that, these same Republicans want to again force Democratic concessions in exchange for raising the budget ceiling, which the Treasury will bump up against later in October. 

We've seen this movie before—part comedy, part horror flick. But this time around, the consequences are likely to be more serious. As the Times reports:  

Just five scheduled legislative days stand between the House and a government shutdown that has loomed for months. As of now, Republican leaders appear to have no idea how to stop it. 

Boehner is so hog-tied by the hardliners in his own caucus, that he's seeking Democratic help to avert disaster. “I like John Boehner,” Harry Reid said. “I do feel sorry for him.”

This is another moment where we're reminded that elected leaders really have to govern—namely, resolve problems and keep the trains running on time. Congress is not a think tank panel discussion. 

That reality is especially worth reflecting upon this month, five years after Lehman Brothers collapsed and Congress began debating an emergency bailout for Wall Street. 

It's easy to forget now, but conservative hardliners came very close to sinking TARP. And if TARP—with all its well-known flaws—had not been enacted, there's a pretty good chance the U.S. would have entered what Mark Zandi and Alan Blinder called "Great Depression 2.0," with millions of additional jobs lost and unemployment spiking into the teens.

When the first version of the bailout came up for a vote on September 29, two weeks after Lehman's meltdown, only 65 House Republicans voted for the legislation and the bill failed—sending the markets into a nose dive. Another version of the bill passed a few days later with 91 Republicans voting for the bill. Remember, this was legislation promoted by a Republican White House. But it wouldn't have happened without Nancy Pelosi. 

Of course, we know the rest of the story: The vote for TARP became a scarlet letter for Republicans as the Tea Party rose to prominence. 

Today, if another financial crisis occurred and another bailout was required, the House would kill it. That's a scary thought, even more scary than the very real prospect this fall of both a government shutdown and a halt to the Treasury's borrowing powers. 

Among other things, the recklessness of conservatives when it comes to the economy raises the question of why big business continues to see the GOP as its ally? Yes, Republicans carry a lot of water for business on all sorts of regulatory and tax issues, but that stuff is minor in comparison to the overall stability of the economy. 

The Tea Party doesn't care about ensuring a stable economic system. They care about ideological purity. And that's a mindset that you want far, far away from the halls of power. 

Comments