Pity the Billionaire: The Hard-Times Swindle and the Unlikely Comeback of the Right

by Thomas Frank

  Capitalism was a simple thing, once you stripped away the complexities with which progressives had saddled it over the years—so simple that Beck actually painted a picture of it, titled Capitalism, that he offers for sale as a lithograph: a red rectangle with smokestacks attached, peacefully pooting out little dollar signs. There are no human figures complicating the picture, and no cars or power lines or anything else surrounding the object. Just a basic shape in red with its name underneath: Capitalism. In its bricklike simplicity it’s a sort of counterpoint to Beck’s tangled world of conspiracies and disaster schemes—his serenity space, maybe, whence he travels mentally to escape from what must be his constant anxiety. Serene, soothing capitalism.

  The problem that confronts us isn’t how to fine-tune the controls; it’s how to get back to that tranquil place. The only system that works is the real system—the true system, the system God made.9 With the economy in ruins, our mission was to recover that authentic state of pure capitalism, rediscovering in the process what the Founders really meant and what the Constitution really instructed us to do. It was as simple as one of those self-help recovery books where we come face-to-face with our honest selves: we had to take our country back, purge the body politic of compromises and alien ideas.

  They Are Us

  It is strange for the free market’s reputation to have bounced back so quickly after its devotees came close to ruining us all, but it is doubly strange when you consider the nature of free-market fandom. Aside from the occasional Steve Forbes, the conservatives who are proclaiming their market-love these days are not tycoons or economists or bankers; they are average people.

  And the markets that the people love, according to the newest conservatism’s way of thinking, love the people right back. According to the populism of the revitalized Right, markets are democratic systems, with consumers and investors making their desires known through the channels of supply and demand. When markets are allowed to function without interference, this form of populism holds, they are essentially elections, perfectly articulating the will of the people. That’s why those who participate most intimately in the market’s doings—like Rick Santelli’s bond traders—wear the halo of common-man averageness (they are the “silent majority,” you will recall), while those who regulate markets from the outside are invariably “elitists”: autocratic eggheads thwarting the will of the people with their iron fists.

  A reverse Marxism like this appeals to the country’s winners for obvious reasons: it casts their success as the thundering approbation of the public, while depicting their traditional enemies—especially those parasitical government bureaucrats—as arrogant know-it-alls. That’s why the idea’s origins are found in the literature of wealth: management books that tell bosses they are liberating humanity when they outsource the work to China; investment guides that extol the stock-picking genius of the small-town grandma; and those grand historical tracts that retired bank presidents like to write, assuring us that free markets are fueling popular uprisings in all countries.

  When I first started writing about market populism many years ago, it was almost exclusively a faith of the wealthy. To write about it was to write about propaganda. Average people, I thought, no more believed that the corporations of America were democracies than they believe that a Pontiac is “fuel for the soul.”

  But then came a near-catastrophic failure of the economic system, and market populism, the sole utopian scheme available to the disgruntled American, went from being a CEO’s dream to the fighting faith of the millions. One reason for this is that utopian capitalism can look pretty good in a time of disillusionment and collapse. It is a doctrine that seems to have all the answers. We were suffering, it held, because our leaders had broken faith with American tradition, meaning the laissez-faire system that prevailed before the dawn of organized labor and the regulatory state. The system we thought of as everyday American practice—“capitalism”—was, it told us, an “unknown ideal” that we had never really lived up to. Our elected officials had never been pure enough; our business leaders had always sacrificed principle to grab at subsidies; government’s presence had grown and grown—and now, the story went, we would have to shape up if we wanted to prosper again.

  That we don’t have a pure market system in America is not some unique revelation vouchsafed to the Tea Party awakening. For decades, the idea has been a staple of the Left, where the limited-capitalist model is generally understood as a good thing. The state is involved in the economy in thousands of ways, the libs say, because it has to be. A complete free market would be a disaster, something not even the business community itself wants to try. As a famous labor historian wrote in 1975, “Not a single major American industry could survive today without government.”10 The real problem, from the liberal perspective, is that government doesn’t go far enough; it merely doles out public subsidies of one kind or another while shareholders of private companies walk off with the profits, in the now-familiar scenario of socialized risk and privatized gain. The bailouts are a perfect example, the liberal critic says: the system allowed investment bankers to gamble however they wanted and then took over the losses after the bankers’ bets went bad.

  The revitalized Right simply turned this argument upside down. Yes, government has its finger in every segment of the economy, and that’s what is to blame for everything that has happened. Market forces have never been truly free, and therefore they bear none of the blame for our current predicament. And so the obvious answer arose from a thousand megaphones: Get government out of the picture completely! Smash what’s left of the liberal state! Until the day free enterprise is totally unleashed, capitalism itself can be held responsible for nothing.

  Glenn Beck stages an allegory of the true faith in his 2009 book, Arguing with Idiots, in which a Founding Father in a powdered wig argues with a Soviet soldier over issues of the day. One of them asks whether the financial crisis was brought on “by a failure of capitalism, or by an abuse of it by the government?” The answer is simple, and Beck’s Founding Father character enlightens us: “Under true free-market capitalism, the government would have no involvement in homeownership whatsoever.”

  They wouldn’t encourage it through artificially low interest rates, Fannie and Freddie, tax breaks, or a “Community Reinvestment Act,” but they wouldn’t discourage it either.* Rates would be set by market participants, based on risk, reward, and a clear understanding that making bad loans would result in bankruptcy.†

  Do you see how awesome that would be, reader? Without regulation, everyone would live in harmony with nature and the intent of the Founders, and nothing like collateralized debt obligations would ever be invented. Bubbles would never happen. Bankers would never build systems that rewarded them for making bad loans—their rational self-interest wouldn’t let them! To get back to Beck:

  But we’ve done the complete opposite of that. The housing market is manipulated by the government every step of the way. So while some may argue that we need more regulation to prevent those future “excesses,” I would argue that it’s the existing regulations that created those excesses in the first place. In other words, what has failed isn’t the idea of free markets, it’s the idea that a market can be free when it’s run by an increasingly activist government.11

  In order for markets to deliver us to our destiny, we had to become mindful of their freedom. And ordinary people by the millions heard the call. In October of 2010, Glenn Beck exhorted his host of alienated followers to donate money to the U.S. Chamber of Commerce—the biggest, baddest business lobby in all of Washington, DC—on the grounds that “they are us.” Ordinarily, of course, gifts to the chamber are denominated in the hundreds of thousands and are made by enormous corporations, but such a deluge of small donations followed Beck’s appeal that it crashed the chamber’s servers.12

  CHAPTER 5

  Making a Business of It

  A handful of Washington’s leading conservative institutions had seized the o
pportunity of the Santelli “rant” to stage the first Tea Party protest, and other organizations immediately scrambled on board. Certain groups could legitimately claim to have been partying since the beginning, like Grover Norquist’s Americans for Tax Reform and whatever establishment Newt Gingrich was heading at the time. Outfits financed by the Koch oil billions, like Americans for Prosperity and FreedomWorks, were also quick to get on the bandwagon.

  Once the Tea Parties looked like they might take off, just about everyone on the Right grabbed at the opportunity. The Fox News Channel, for example, presented the emerging protest campaign as if it was the network’s own reality show. People from the Cato Institute were not hard to find at Tea Party conventions, nor were the folks from the Heritage Foundation. Ed Meese, attorney general in the Reagan administration, started the Conservative Action Project, supposedly an organization in which the new Tea Party groups could come together with existing movement leaders; its “only paid staff member,” according to a Washington Post story in February of 2010, was Patrick Pizzella, a former associate of Jack Abramoff.* And today there is no more fervent Tea Partier than Richard Viguerie, the direct-mail genius of the seventies who remade himself with “ConservativeHQ,” a website aggregating news from around the right wing.

  There are former Bush administration office holders, like John O’Hara, late of the U.S. Department of Labor, who published the first book about the Tea Party movement. There are lobbyists, like Dick Armey, formerly of the DLA Piper firm and now the figurehead at the Koch-backed FreedomWorks pressure group. There are the free-market policy wonks, like Phil Kerpen of the Koch-backed Americans for Prosperity grassroots group, whose policy interests tend toward arcane corporate regulatory matters—opposing “net neutrality,” fighting proposed credit-card rules and suchlike—but who also writes essays celebrating the Tea Party’s “true populism” and boasting of the fear it brings to the hearts of “powerful elites.”1

  Pelf and Populism

  As the Tea Party grew, becoming the official populist response to the economic disaster, opportunists both political and economic saw the gathering crowds and the spreading outrage as their very own ship, sailing benevolently into port. Indeed, the categories of “politics” and “profit” became so thoroughly scrambled on the resurgent Right that by September of 2010 it was possible for Mike Pompeo, a Republican candidate for Congress in Wichita, Kansas, to describe the political movement itself as “a restoration of the great American entrepreneurial spirit.”2 There were so many entrepreneurs, and they swung into action so quickly in the wake of the protests, that you sometimes wondered if their affluence wasn’t the object of the agitation all along.

  The most famous example was the National Tea Party Convention, held in Nashville in February of 2010, which featured an appearance by Sarah Palin and charged attendees $549 each. What’s more, the sponsoring organization turned out to be a for-profit outfit headed by a man who was reportedly trying to set up a kind of Facebook-style web empire for wingers. “What was celebrated here in Nashville,” wrote the journalist Will Bunch, after cataloging the trinkets for sale there, “wasn’t so much the coming out of the conservative movement as the commoditization of it.”3

  The commodification continued wherever the movement pitched its tent. There were Tea Party cigars, $125 per box, perfect for those moments when you want to relax and “contemplate what has gone wrong and how to fix our government.” An outfit called 912 Citizens, Inc. offered for sale a silver coin commemorating the movement’s big Washington, DC, rally of September 12, 2009; it could be yours for $59.99.*

  The commemorative coins on sale at the September 12 rally the following year were of some baser metal, but they were painted in full color; I picked one up at the Liberty XPO held at the Shoreham Hotel in Washington for a mere sixteen dollars. At that same trade fair, I perused a collection of tiny tea bag jewelry, countless T-shirt designs, bumper stickers that deliver “stinging slogans,” a self-published book offering success tips distilled from Army field manuals, and a “hand signed lithograph” of American soldiers, with a wordy homage at the bottom proclaiming the man-at-arms’ superiority over various civilian occupations.

  This robust synergy of politics and profit extends to the highest reaches of the right-wing revival. It is, to name but the most obvious case, the signature approach of the movement’s snarling sweetheart, Sarah Palin, who gave up her elected post as governor of Alaska in order to indulge in a series of cash-in opportunities: books, speaking gigs, TV shows. Let someone else do the scut work of governing.

  Then there’s Glenn Beck, who has gone from being a TV performer able to cry on cue to a one-man brand in a few short years. For example, his nightly forecasts of onrushing doom dovetailed nicely with the paranoid marketing strategy of his gold-vending sponsor—an outfit for which he also cuts commercials.* Another product of Beck’s preternatural opportunism is the 9/12 Project, whose putative object was to promote a vague civic togetherness of the kind Americans supposedly felt on September 12, 2001, along with a passel of antigovernment sentiments that the TV host associated, inexplicably, with that occasion. The “project” did much to inspire a large rally that took place in Washington, DC, in the fall of 2009. But to me the 9/12 effort always looked like something knocked together in a hurry in order to slap a proprietary claim on the then-emerging Tea Party—to brand the larger movement as a project of the empire of Glenn.*

  And from the ever-shrewd Richard Viguerie there came an expensive DVD set revealing “Fundraising Secrets for Tea Party Leaders.” Not only was he charging $297 for the DVDs—hopefully yielding a profit for Viguerie’s outfit—but the declared goal of the instruction was to teach you to take advantage of the right-wing ferment to raise money for your own outfit. “Not since the late 1970s has there been a more favorable climate for you to launch a conservative organization,” the entrepreneur Viguerie enthused in his advertisement for the DVD set. “The fundraising winds are at your back … and those winds are now blowing at hurricane force!”4 It was entrepreneurship squared, with every party to the transaction an acknowledged mercenary: Viguerie would sell you the secrets of fund-raising so you could get started as a political entrepreneur in your own right.

  I bring all this up not because I think Tea Partiers are uniquely covetous but—the very opposite—because the marketing of discontent is so typical of the way modern right-wing movements unfold. Viguerie, for example, introduces his website with a salute to political entrepreneurship from Benjamin Franklin: “It is incredible the quantity of good that may be done in a country by a single man who will make a business of it.”

  “Making a business of it” is exactly right. That is the formula that gave modern conservatism so many of its most notable institutions and adventures: the direct-mail revolution of the seventies, when it first became obvious that fearmongering was a profitable enterprise; the Iran-Contra episode, with its galaxy of panic-slinging fund-raising stars; the archipelago of Washington think-tanks and pressure groups that, for a modest consideration, will supply foot soldiers for your corporation’s war with unions or environmentalists or consumer advocates; the careers of Jack Abramoff, Tom DeLay, Grover Norquist, and the rest of the gang; and, of course, the entrepreneurial brilliance of the K Street Project.5

  And why shouldn’t conservatives sell their services? They are cadres for capitalism, after all. When disgruntled activists criticized the 2010 National Tea Party Convention for crass commercialism, its organizer returned fire by calling those critics “socialists.”6 While his insult missed the mark, his sense of having been unfairly criticized was accurate enough. Viewed in the context of the last forty years, there is nothing strange about those who understand conservative politics as a career opportunity. Nor is there anything contrary to conservative principle in regarding grassroots movements as ready-made roundups of suckers. On the contrary; opportunism is one of the factors that has made conservatism so fantastically successful.

  Still, the appear
ances can be off-putting, and the resurgent Right often struggles to reconcile such naked enthusiasm for gain with its self-image as the simon-pure voice of the common people. Yes, the movement loves capitalism, but even prophets of the profit motive do not like to think of themselves as exploiters or corruptionists. Markets must triumph everywhere, they tell us, but spondulics must never mix with statesmanship. This is why a Tea Party coffee-table book that includes dozens of pictures of protest signs praising capitalism also begins with a foreword (written by the action star Chuck Norris) complaining that “the Constitution has been ousted by cash” and that “the Bill of Rights has been bartered for corporate bonuses.”7

  It is another undecidable muddle, and the movement resolves it by simply having it both ways. Take lobbying, for instance, the most basic activity of commercialized politics. Tea Partiers think of lobbying as unspeakably dirty, an industry so repugnant that it can only be understood as a branch of the liberal empire. That’s why few on the right are willing to embrace Abramoff or DeLay as one of their own anymore, regardless of those men’s successes as political entrepreneurs. On the other hand, lobbyists like Dick Armey, who are not stained with felony convictions, are welcome in the movement’s leadership. And no stigma attaches to the Tea Party Express, supposedly a mobilizer of the millions that was actually set up as a fund-raising operation by a well-known California political consultancy.8

  Mass Individualism

  The opportunism I am describing extends all the way to the newest Right’s lowliest precincts. The movement’s trademark expression may be the rally in the town square, but Tea Partiers are not mass men. Attend such a rally, and you will notice that just about everyone seems to be angling for a moment in the spotlight, with shocking homemade placards or outrageous costumes. At a 2010 rally in Denver, a guy who stood a few feet away from me blew an old army bugle every time he heard from the podium a sentiment of which he approved. At the 2010 Virginia Tea Party Convention, I watched a man amble through the lecture sessions with a snake flag actually draped over his shoulders. Other men thought it was appropriate to show up wearing pistols strapped to their belts, even though the event was held in the safe, civilized, and almost antiseptic premises of the Richmond Convention Center. And, of course, people dressed in colonial garb—sometimes Revolutionary War reenactors or professional impersonators of Founding Fathers—are a well-known attraction at Tea Party events.