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

by Thomas Frank

  Beck is also a master of the politicized brand extension. During his heyday of 2008–11, he and his staff authored no fewer than ten books and booklike objects (three nonfiction humor books, two novels, one self-help book, one original audiobook, one children’s book, and two works of commentary on the Federalist period), and also launched Beck University, where you can take in Beck-approved lectures such as “Presidents You Should Hate.”

  * The shoddiness of the whole thing was apparent from the 9/12 Project’s symbol: the familiar old rattlesnake, only cut into pieces like the one in the famous 1754 cartoon by Ben Franklin. What this chopped-up snake was supposed to represent, weirdly enough, were the movement’s “Nine Principles”—there were nine chunks of reptile carcass, see—and its “Twelve Values,” which were clearly indicated by the twelve rattles on the viper’s severed tail.

  * Perhaps because it understands politics to be such simple stuff, the conservative resurgence often chooses to express itself via children’s lit. Glenn Beck’s 2009 book, Arguing with Idiots, for example, includes a page of verse called “My Papa is a Capitalist”; it instructs kids about the power of incentives. In 2010, the Tea Party Patriots issued a coloring book that was supposed to carry the message of the Tea Party to the fat-crayon set, and the political entrepreneur behind the online “Patriot’s Club,” a kind of politicized Boy Scouts, offers “Patriots Qualification Cards” to kids who can declaim the Pledge of Allegiance, sing “My Country Tis of Thee,” and learn sundry “survival skills.” Sign up at http://www.fortpatriot.com/patriotsclub/.

  * “Capitalism is NOT the problem; Ivy League politicians ARE” is one of the ready-made protest slogans that blogger Bruce Bexley suggests in The Tea Party Movement: Why It Started, What It’s About, and How You Can Get Involved (NP: Seattle, 2009), one of the first bound works to appear on the subject. The quote can be found on here.

  * There are also a few famous examples of uncivil behavior, like the time in March 2010 when a protestor allegedly spit on Representative Emanuel Cleaver and threw a racial epithet at Representative John Lewis. And the e-mails I received from Glenn Beck’s fans after I became one of the anchorman’s targets were far more vicious than ordinary letters to the editor. On the other hand, such bullying bravado was nowhere in evidence when a Tea Party rally that I attended in Denver drew a heckler with a bullhorn. On that occasion, the conservatives did nothing but wave their signs and call on the police to intervene.

  * Item number one of Kirk’s rights: “Protect secret ballots in union elections.” Now, protecting workplace democracy seems like a strange concern for small businesses, which traditionally are sworn enemies of labor unions. Then you remember that the “card check” bill, which would have allowed workers to replace ballots with signed cards, would have made it much easier for workers to unionize. Therefore, it had to be opposed by any rhetorical means necessary. And so, in the funhouse mirror of contemporary conservatism, the greatest foes of workplace democracy became its biggest champions.

  * Representatives of the NFIB were much in evidence during the 2010 crusade. At a Tea Party gathering in Wisconsin, for example, a local NFIB officer assured the disgruntled that the federation stood shoulder to shoulder with them in the fight against “un-American socialistic behavior.” “NFIB believes exactly what you do,” he told the throng: “We need to stop big government.” Fortunately for the world, his speech has been preserved on YouTube: http://www.youtube.com/watch?v=jA5ftE4B0lQ.

  * Democrats are no different. Although Barack Obama is often understood as the satanic antithesis of entrepreneurship, his own 2010 statement on Small Business Week declared small businesses to be “the engine of our prosperity and a proud reflection of our character. A healthy small business sector will give us vibrant communities, cutting edge technology, and an American economy that can compete and win in the 21st century.” Read more at http://www.whitehouse.gov/sites/default/files/2010smallbusiness_web.pdf.

  * Although I have never seen it mentioned in any reporting on the Tea Party, small-business people have special reason to be aggrieved in the particular economic situation of the last few years. As a class, entrepreneurs tend to borrow against their houses far more than other social groups; this is how they finance their businesses. When real-estate prices collapsed, many of them found themselves underwater and closed off from an important avenue of credit. This has undoubtedly made the spectacle of the Wall Street bailouts that much more galling. See Mark Schweitzer and Scott Shane, “The Effect of Falling Home Prices on Small Business Borrowing,” a commentary dated December 20, 2010, and posted on the website of the Federal Reserve Bank of Cleveland: http://www.clevelandfed.org/research/commentary/2010/2010-18.cfm.

  * Another famous example of clumsy regulatory overreach was the Consumer Product Safety Improvement Act of 2008, which was designed to get lead toys out of the market, but which was so poorly written that it seemed to threaten the existence of thrift stores.

  * According to the theory, the Community Reinvestment Act of 1977, which encourages banks to stop discriminating against borrowers by neighborhood (not by race), was responsible for the financial crisis. However, this theory has been repeatedly and convincingly refuted. Among other things, because: the CRA was a toothless bit of legislation, because banks were almost never punished for not living up to it, because most of the lenders making bad loans weren’t covered by it, and because—even if it had been enforced—it did not require banks to hand out risky or fraudulent loans. In fact, according to chapter 6 of the Financial Crisis Inquiry Report, loans made under CRA commitments were generally prime loans which have performed well over the intervening years. For a detailed debunking of the myth, see William K. Black’s epic smackdown, “Wallison and the Three De’s”: http://neweconomicperspectives.blogspot.com/2011/02/wallison-and-three-des-deregulation.html.

  * The most remarkable statement of right-wing anticorporate sentiment that I have seen came in an anonymous 2010 confession by a DC political consultant who was working for the Tea Party. He described the targeted mail he was planning to send that fall, which would steer clear of the culture wars and zero in on public anger at the bailouts:

  Designing a thank-you note from an imaginary Wall Street executive to working-class taxpayers is so much more rewarding than most other messaging campaigns. With new variable-print technology, the postcard can be personalized and won’t look as though it was printed overnight at Kinko’s.

  Dear [insert name],

  I received my Troubled Asset Relief Program check from you and other taxpayers and wanted to personally thank you for your money. I will now be able to keep the third car and vacation home by [insert name of nearby vacation area].

  “Rogues of K Street: Confessions of a Tea Party Consultant,” Playboy, June 2010, p. 102. Italics in original.

  * It is hard to believe that anyone took these protestations seriously. After all, Beck’s website also sells such hyperpartisan items as “Gloat Fest 2004,” a CD of the host doing an hour of end-zone celebrating on the day after George W. Bush was reelected.

  * The book has little to do with actual Obama administration corruption, as it was published only a few months after Obama took office. Instead it details the shady histories of the administration’s appointees, highlighting the many lobbyists who were nominated and the many “czars” the administration hired, and suggesting that Michelle Obama’s father may once have held a patronage job in Chicago.

  * Geithner is a New Yorker. He is not particularly macho. He was also a Republican for much of his adult life, which would exclude him by definition from the machine politics of Chicago.

  * The book they read is Douglas Hyde’s Dedication and Leadership: Learning from the Communists, a 1966 work by a former officer of the Communist Party of Great Britain.

  * Before Roosevelt, according to Shlaes, “the forgotten man” referred to the average taxpayer, who was forcibly enlisted in whatever altruistic project government was undertaking. She extends the phras
e to encompass such pitiable billionaires as Andrew Mellon and Samuel Insull, the real victims of the thirties.

  The larger object of Shlaes’s 2007 book, The Forgotten Man, is to document the conservative article of faith that Roosevelt’s New Deal did not help the nation recover from the Depression. The author uses two measurements of the national economy to accomplish this goal: the Dow Jones Industrial Average and unemployment numbers. The first metric had little to do with the economy as average people experienced it; the second metric is actually rigged against Roosevelt—Shlaes counts people who held temporary government jobs as having been unemployed. The author thereby makes a mystery of the enthusiasm for FDR felt by the millions of people who were saved by jobs with the WPA. As for the standard yardstick of economic well-being—GDP growth—Shlaes does not mention it at all.

  On the chance that anyone gives a damn about what actually happened in the thirties, here are the numbers. GDP shrank dramatically from 1929 to 1933, then abruptly reversed course in the year after Roosevelt took office. “Real GDP increased 11% in 1934, 9% in 1935, and 13% in 1936,” writes the economist Christina Romer—and those percentages, incidentally, dwarf the growth levels of the eighties, nineties, and zeroes. In fact, Romer continues, “the growth between 1933 and 1937 was the highest we have ever experienced outside of wartime.” (Romer, “Lessons from the Great Depression for Economic Recovery in 2009,” a paper given at the Brookings Institution on March 9, 2009. Romer was then the chair of Obama’s Council of Economic Advisers.) See also the critique of the book by historian Eric Rauchway in Slate, July 5, 2007.

  * Many if not most of the monumental things that were “built” in that period were constructed with the help of government public works programs. In fact, the very pictures over which Beck enthused so emotionally were taken by photographers employed by the Farm Security Administration. The Depression generation achieved all of this by the use of Beck’s bête noire: massive deficit spending.

  * Second bizarre coincidence: Two years before Beck launched the 9/12 Project, the right-wing blogger Michelle Malkin announced her own “John Doe Movement.” The idea was for ordinary people to report suspicious characters they thought might be terrorists; such alert citizens were, Malkin wrote, “9/12 people.” Talk of a John Doe Movement disappeared soon afterward, but while it lasted the idea was apparently to bring together average Americans from all walks of life in a common purpose and, like Beck’s 9/12 Project, it featured a mosaic made of dozens of snapshots. See Malkin’s 2007 essay, “John Doe in Post-9/11 America,” and her “John Doe Manifesto.”

  * The steel man is Hank Rearden, who invents a superstrong, superlight metal. Atlas Shrugged is, in large part, the story of Rearden’s travails at the hands of the government, which first tries to buy his patent, then takes his patent away and permits others to manufacture his metal. Despite being beloved by his workers, Rearden suffers a climactic mob attack on his factory.

  The 1935 Little Orphan Annie episode features the chemist Eli Eon, inventor of an indestructible substance, Eonite, which he begins to produce with the assistance of the business genius Daddy Warbucks, who is also beloved by his workers. Eon and Warbucks turn down offers to buy their patent, and then are set upon by a gang of business rivals, labor leaders, and a Huey Long–style demagogue who want a piece of the Eonite action.

  When Warbucks is urged to fight back with propaganda of his own, he gives this succinct Randian reply: “I’m a worker—a producer—a business man—I’m not a cheap politician—what did any politician ever produce?” Eventually, Warbucks’s enemies incite a mob which destroys the Eonite factory and kills Eli Eon. Warbucks had aimed to bring “prosperity and happiness” to the world with Eonite; the fake altruism of the leftists destroyed that dream.

  It is almost precisely the lesson taught by Atlas Shrugged. And yes, it appeared in the funny pages first. See Harold Gray, Arf! The Life and Hard Times of Little Orphan Annie, 1935–1945 (New Rochelle, NY: Arlington House, 1970). The quotes from Warbucks are found in the strip for August 8, 1935.

  * “Atlas Shrugged was a throwback to Socialist realism,” writes the Rand biographer Jennifer Burns, “with its cardboard characters in the service of an overarching ideology.” (Burns, Goddess of the Market [New York: Oxford University Press, 2009], p. 179.)

  The novel’s similarity to the proletarian style is no accident. As a student in the Soviet Union, Rand absorbed a politicized communist pedagogy, and once she had escaped to America and embarked on a life of fighting communism, it was as though she resolved to do it by mimicking what the hated Reds said and did. “I loathe your ideals,” says the Rand alter-ego character to a Soviet commissar in her 1936 novel, We the Living. “I admire your methods.” (See Burns, Goddess of the Market, p. 16, and Anne Heller, Ayn Rand and the World She Made [New York: Anchor, 2010], p. 87.)

  In later years Rand wrote a “Manifesto of Individualism” that was supposed to be the answer to The Communist Manifesto and expressed her longing to write novels that functioned as propaganda. Her goal, according to biographer Burns, was to “become the right-wing equivalent of John Steinbeck,” author of the 1939 migrant-labor classic The Grapes of Wrath. In a letter to a friend in the forties, Rand wrote, “It’s time we realize—as the Reds do—that spreading our ideas in the form of fiction is a great weapon.” In her later days, presiding over a cult of followers, Rand went on to enforce a line of political and aesthetic orthodoxy as rigid as anything to come out of the CPUSA in its heyday, with “show trials” for people suspected of doctrinal schism and excommunication for those who showed insufficient contrition. (Burns, Goddess of the Market, pp. 61, 95, 92, 182.)

  * The names of the book’s heroes fall into three general groups.

  1. The Dens and the Dans: Hank Rearden, Ragnar Danneskjöld, Ken Danagger, Quentin Daniels, Francisco d’Anconia.

  2. The Aggs, Oggs, and Acks: Dagny Taggart, Judge Narragansett, Owen Kellogg, Hugh Akston.

  3. The Hard Aitches: Richard Halley, Lawrence Hammond, Dr. Hendricks.

  * At one point in the novel, Rand has John Galt, the leader of the strike, assert that capitalists “have never been on strike in human history.” But as the economist Thorstein Veblen pointed out in 1921, sabotage and malingering are in fact precisely how capitalism works in most industries. Were manufacturing plants simply to run all the time at full blast, for example, prices could not be maintained at profitable levels; overproduction would soon put the manufacturer in question out of business. “So it appears,” Veblen wrote, “that the continued prosperity of the country from day to day hangs on a ‘conscientious withdrawal of efficiency’ [the IWW’s definition of a strike] by the business men who control the country’s industrial output.” The business class is always on strike to some degree; for them to operate in any other way would be to court their own ruination. (Rand: Atlas Shrugged [1996 Signet edition], p. 677. Veblen: The Engineers and the Price System, reprinted in The Portable Veblen [New York: Viking, 1948], p. 436.)

  * Rand’s great train wreck is obviously a metaphor for political intervention in the economy. It is well chosen because train accidents were, in the nineteenth century, the source of countless lawsuits, regulations, investigations, and anti-business rhetoric.

  However, train wrecks attributable to passengers are extremely rare; in fact, after phoning experts and wearing out my eyes reading up on the subject, I was able to unearth only a single real-life instance in which obnoxious passengers were responsible for putting an entire train in danger: an 1882 incident in which someone pulled an emergency cord, stopping a train and causing a crash in Spuyten Duyvil, New York.

  The train wreck that is the central event in Atlas Shrugged, for its part, seems to have been based very loosely on an actual disaster that took place in 1910 on the Great Northern Railway near the Cascade Tunnel in Washington State; Rand adapts the story in such a way that the responsibility for the accident is shunted to one of the victims himself. For more on this story, please see note 21.


  * Perhaps that is why the worst offender, Glenn Beck, relies upon theatrical props to establish his trustworthiness. For much of 2009, his set featured a red telephone which he said was a direct line to the White House; if Beck got anything wrong, all the administration had to do was call him up and correct him. The phone never rang; ipso facto, Glenn was right. During his infamous attack on George Soros on November 8, 2010, Beck actually claimed that viewers could be certain that he was getting his facts right because his image continued to flicker across their TV set: “I could not say these things about the most powerful man on planet earth [i.e., Soros] and stay on the air if they were not true,” he said.

  * A good example of the reduction to simplicity—and a good demonstration of how simplicity can help us understand—can be found in Charles Ferguson’s 2010 documentary about the financial crisis, Inside Job, where the narrator intones, “After the Great Depression, the United States had forty years of economic growth without a single financial crisis. The financial industry was tightly regulated.” Regulation ended; crisis ensued.

  * It did replace the management at General Motors, however, and it put a venture capitalist in charge of its auto bailouts, giving some idea of where manufacturing stands in relation to high finance in the modern-day Democrats’ worldview.