The recent Tea Party hysteria has been an embarrassing study in Republican confusion. It’s not easy to distill a theme from the anti-government grab-bag of complaints, from “Stop Socialism,” to “Hands off My Medicare,” and from “The Fed is the Problem” to “Obama Kills Babies.” As near as I can tell from the speeches and signs, any institution that existed prior to the crisis (except fundamentalist churches) is destroying America, and any institution which is trying to use government power to solve the crisis, whether a capitalist bastion like the Federal Reserve, or those dirty commies in Congress, is also destroying America.
If you try to make sense of these protests in terms of the old 20th century divide between liberal democracy and socialism you risk having your head explode. In spite of all the blather from the AM radio crowd, this is not about decent hardworking Americans working to protect their capitalist economy. This is about decent, hardworking Americans wasting their energy to protect a dead, rural, notion of American identity against the growing power of global capitalism.
More than two centuries later, we still can’t get past the battle between Jefferson and Hamilton, between agrarian independence and the urban profit machine. The battle is made more comic/tragic by the fact that few of us know which side we are on. This battle is so old and has taken on so many forms that we have mostly lost track of its origins. But its shape is still the same.
Hamiltonian capitalism needs intelligent regulation in order to maintain transparency in markets and keep shirkers, moochers, and frauds from bringing down the system. It needs central banking, roads, airports, canals, environmental protections, and other infrastructure. Jeffersonian rural life just needs a national defense, a few courts, and a place to sell my cotton.
We Republicans, who, at least according to our websites, are the defenders of free market capitalism, are doing everything in our power to cripple our financial institutions. We fought government efforts last year to avert the collapse of the financial system – a collapse brought on in large part by our refusal to use the tools of government to impose reasonable rules in the financial marketplace. We fought the stimulus package. We are fighting efforts at job creation, efforts aimed at using capital markets – small business loans, to foster business development.
We are fighting efforts to bring even the most limited transparency to the derivatives markets that brought our banking system to its knees. Now our Congressional leaders are waging a campaign to eviscerate the Federal Reserve, the last institution independent from Congress which can help rebuild the broken capital system. If there were any real socialists left in our political system, they would be cheering us.
We call ourselves capitalists, but act like 19th-century, populist Democrats. Why? It’s not nearly as much fun to face the difficult questions of how to protect Jeffersonian values in a Hamiltonian world as it is to hunt for conspiracies. When politics is entertainment, Beck and Coulter set the agenda. Plus you get to go to a (tea) party. How cool is that!
Jeffersonian-style limited government is to capitalism what salt water is to your goldfish – not so good. As a political party we need to decide whether we love capitalism or hate it. Sound, vibrant markets require intelligent regulation. When they work properly they provide the fuel for innovation and business growth that has made America a financial superpower. We can’t have the power of capitalism with a Jeffersonian attitude toward regulation.