Thomas Frank's "Pity the Billionaire'

In What's the Matter with Kansas?, Thomas Frank set out to explain why voters in his native state, once a bastion of agrarian Populism, had so consistently supported policies and politicians apparently inimical to their interests. In his newest book, Pity the Billionaire, he extends the question to the country as a whole.

It's a question worth asking. In 2008, the Republican Party seemed to have been sentenced to a long term in the wilderness. The public elected its first black president and seemed to have given him a mandate not seen in a generation.

It also installed a Democratic Congress with substantial majorities in both houses. The departing president, having left behind two failed wars and a financial crisis unparalleled since the Great Depression, was widely regarded as the worst in American history.

Liberals weren't the only ones prepared to write off the Grand Old Party. Even Republican spokesmen and pundits declared the party intellectually as well as politically bankrupt. Reaganomics was dethroned; financial deregulation was a disaster.

To save the global economy from collapse, a Republican White House had to forswear all its party's fine principles about moral hazard and instead underwrite every major bank and brokerage house in the country. Even Alan Greenspan, the poster child of laissez-faire capitalism, made his mea culpa (sort of).

Rage against bailouts

Yet only two years later, the Republicans retook the House of Representatives; and today, four years after their debacle, they have a good shot at recapturing not only Congress but also the presidency, despite a lackluster candidate whom many Republicans regard as a fourth-string quarterback. Frank wants to know how this turn of events came about. So do many of the rest of us.

Frank notes that the Republican revival came not from within the party establishment, but from a fringe group largely outside it (though cannily encouraged and in part funded by Daddy Warbucks types like the Koch brothers). This group, of course, was the Tea Party, which coalesced around the deep-rooted public resentment that followed the massive bailouts of 2008-09 and emerged as a sudden political force in 2010.

In Frank's view, the Tea Party was populism gone awry and swiftly co-opted by the Republican Party's talk-radio and think-tank flanks. The Tea Partyers were furious at corporate malfeasance, but equally so at the sub-prime borrowers who had squashed their home equity flat. They— the hard-working, normally silent majority— felt they were left holding the bag while the Obama administration coddled fat cat bankers and deadbeat borrowers alike.

Frank identifies the Tea Party mindset as utopian capitalist. As Thomas Jefferson yearned for a republic of modest freeholders, so the Tea Party ideal is that of the small businessman and the small banker who serves his community, provides jobs and recycles his profits in the local economy— Jimmy Stewart in It's a Wonderful Life.

Co-opted rage against Wall Street

As it happens, such businessmen and bankers got short shrift from the Bush and Obama administrations, which were both single-mindedly concentrated on protecting the too-big-to-fail behemoths. But the mere existence of government programs (however toothless) to help sub-prime borrowers was enough to stoke Tea Party rage. It is always easier to resent those a rung above or below you on the economic ladder than to imagine the fortunes of the immensely wealthy or the utterly destitute, and thus to focus on what seem unfair marginal advantages.

Of course, the Tea Partyers beat the drum loudly against Wall Street, as did their favored politicians, the Class of 2010 that took control of the House of Representatives. Exhibit A was Paul Ryan, who famously published an article in Forbes entitled "Down with Big Business." In fact, nearly 40% of the new representatives were small businessmen themselves, a sizable upsurge.

And what did they want? Not a clawback of TARP subsidies and executive bonuses, but simply a removal of governmental controls in general— for, in the new mythology of the Tea Party, it wasn't lax control of derivatives and hedge fund speculation that had crashed the economy, but interference with the God-given, self-correcting laws of the market.

Picking favorites

This philosophy is what Frank calls "utopian capitalism," an ideology essentially unchanged since the sociologist C. Wright Mills described it in the 1950s, and still presenting itself, in Mills's words, as "the very latest model of reality." For the small businessman, government regulation is typically experienced as intrusive and costly (worker and product safety standards, pollution controls, etc.), while tax abatements and other subsidies are simply taken as his due. The high road to prosperity is thus getting government off the back of all business, large or small.

Bailing out the casino capitalists was therefore not a desperate ploy to unfreeze world markets, but just another example of the government picking favorites at the expense of the little guy— favorites who would never have gotten into a position to threaten the global economy if the government hadn't rigged the system to encourage their misbehavior in the first place.

Naturally, big business rode this stew of half-truths and magical thinking all the way to the bank. It had found the exact ideological cover it needed to combat re-regulation of the market.

Rugged individualists

As Frank sees it, then, the Tea Party movement essentially consists of free market true believers, cynically exploited by business elites and professional operatives such as former Congressman Dick Armey and radio host Glenn Beck (the latter a particular bête noire of Frank's). They are economic although not religious fundamentalists, whose belief system is rooted in the search for simple explanations of complex economic systems and a return to the rugged individualism of an imagined American frontier.

Frank's case is convincing if not quite complete. I suspect the Tea Party is a more complex and variegated phenomenon than he perceives.

The other half of the story, however, gets far more cursory and less satisfactory treatment. The Republicans could not have picked up the ball had the Democrats not so obligingly dropped it.

As Frank points out, "The bailouts combined with the recession [sic] created a perfect situation for populism in the Jacksonian tradition, for old-fashioned calamity howlers, for Jeremiahs raging against the corrupt and the powerful." Yet no Democrat heeded the call, and it was left to the Glenn Becks and the Rush Limbaughs to express— and attempt to channel— popular outrage.

Obama's frustrating choices

Frank found it "frustrating" when Obama turned to Larry Summers and Tim Geithner for guidance on economic policy, and "maddening" when he continued the Bush administration's cushy bailout terms. Worse yet was Obama's decision to risk his political capital on a health care reform package that combined the worst of special-interest protection for hospitals chains, insurers and drug manufacturers with a spectacularly intrusive mandate to purchase private health insurance. Nothing could have played directly more into populist suspicions of collusion between big business and big government at the expense of individual liberty.

Frank's question is why Obama and his advisors proved so tone-deaf. That question misses the larger point of why the Democrats ran Herbert Hoover instead of Franklin Roosevelt in 2008. (This is not my figure of speech; Frank says, "Obama chose the path of Herbert Hoover.")

Frank's only explanation is that the Democrats were enamored of "technocratic" solutions to the economic crisis, and thus ceded populist and "idealist" rhetoric to the Republicans. But Obama certainly employed populist rhetoric in the 2008 campaign, and he has returned to it periodically (although with steadily diminishing returns) to shore up his supposed liberal base. No doubt we will hear more of it in the months to come, at least to select audiences.

Half the story

Frank thus has half the story of the past four years about right, at least the part of it focused on the Tea Party phenomenon. He points out— correctly I think— that the Republican Party is as fractured and intellectually incoherent as it was four years ago, perhaps even more so. The Democrats, though, may be in even worse shape.

If Republicans seem to stand for several contradictory principles— for example, anti-business populism and pro-business deregulation— the Democrats appear to lack any story line at all. Why this is so must be someone else's book. Frank has turned a very shrewd eye on those whose politics he does not share, but a largely blind one on his own camp.