Why We Got Ayn Rand Instead of FDR: Thomas Frank on How Tea Party 'Populism' Derailed a New New Deal


Editor's note: In late 2007 and early 2008, the house of cards came crashing down around us, and all of the economic doctrine we'd been fed by the pundits and politicians of both parties over the past few decades was laid bare for all to see. The deregulated cowboy capitalism that was supposed to release unbridled prosperity had led instead to widespread economic pain – hardship that would spread globally and remain with us to this day.

It was a moment ripe for a populist uprising. Many observers expected the pendulum to swing back from the rightward lurch authored during the “Reagan Revolution” – perhaps a new New Deal would emerge as America elected its first black president in a dramatic rejection of George W. Bush's business-friendly ideology.

But something happened on the way to this much-anticipated swing back to the left. Instead of FDR, we got Ayn Rand. Rather than calling for programs that might alleviate some of working America's suffering, we saw the emergence of the Tea Parties, which demanded that ordinary Americans feel every bit of pain they had coming to them – and also that we leave the Wall Street hustlers who had precipitated the crash alone.

It was an ahistoric reaction to a recession caused by Big Finance, and it captured the imagination of author and columnist Thomas Frank. In 2005, Frank wrote the now-classic book, What's the Matter With Kansas? in which he detailed how the “Backlash Right” used social issues to hoodwink many Americans into voting against their economic interests. It was a classic bait-and-switch – they voted for politicians who promised to overturn Roe v. Wade, and got tax breaks for the ultra-rich, deregulation for Wall Street and trade deals that took down barriers to corporate offshoring.

In the aftermath of the crash, Frank returns to the topic to discover that the “New New Right” had once again offered Americans a bait-and-switch, but of a different kind. The result is Frank's new book, Pity the Billionaire: The Hard-Times Swindle and the Unlikely Come-Back of the Right. AlterNet is proud to bring you this excerpt from the book. 


An appropriate metaphor for the conservative revival is the classic switcheroo, with one fear replacing another, theoretical emergencies substituting for authentic  ones, and a new villain shuffling onstage to absorb the brickbats meant for another. The conservative renaissance rewrites history according to the political demands of the moment, generates thick smokescreens of deliberate bewilderment, grabs for itself the nobility of the common toiler, and projects onto its rivals the arrogance of the aristocrat. Nor is this constant redirection of public ire a characteristic the movement developed as it went along; it was present at the creation. Indeed, redirection was the creation.

Drawer of Water, Hewer of Bullshit

The call that awakened the rebellion came not from some itinerant IWW organizer but from a TV “rant” delivered on February 19, 2009, by one Rick Santelli, a business reporter standing on the floor of the Chicago Board of Trade— a reporter ranting, let us be clear, not against the traders who surrounded him but on their behalf. In retrospect, there would be few better examples of the spirit of inversion that drives  the conservative revival.

Rick Santelli had criticized many aspects of the bank bailouts over the preceding months, but on that day in February when he had the ear of the nation, the part of the  TARP that drew his disgust was, significantly, the element designed to help homeowners modify the terms of certain underwater mortgages, making payments more affordable and thus preventing foreclosures. It was the only part of TARP that was intended to directly benefit individual borrowers rather than institutional players, and thus it was supposed to help make the program popular. Instead, it brought down the wrath of this man Santelli, who found it inconceivable that such an initiative was even under consideration. “This is America!” he yelled, working himself into a rage.

And in Santelli’s trading-floor “America,” such a program was “promoting bad behavior,” “subsidiz[ing] the losers’ mortgages” with public money that, were it directed to society’s winners, would presumably be spent on better, shinier things. Santelli’s outrage at these “losers” was inexhaustible, incandescent. They “drink the water” while others “carry the  water.” Raising his arms and turning to his friends, the Chicago traders, he asked, “How many people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills?

Boo, went the traders: Down with neighbors! To hell with their extra bathrooms, their arrogant water-drinking, their hard luck.

The next step, should government proceed along the mortgage-modifying paths of tyranny, the reporter reported, would be communist Cuba. But before Big Brother clapped us in statist irons, he’d have to deal with Rick Santelli, friend of the trader and scourge of the thirsty. Santelli was going to defy the Obama administration with a “Chicago Tea Party,” and he invited “all you capitalists.”

Over the following days, the question that seemed to transfix commentators was whether or not Santelli’s instantly famous tirade had been scripted or sincerely felt. But what interested me was the elephantine perversity of the moment. The country was then teetering on the edge of economic disaster; one reason it so teetered was due to the bonus-driven doings of people like the traders who cheered for Santelli. And one reason so many of us teetered along with it was that business-news outlets like CNBC had almost entirely failed to warn us about the mounting problems in investment banking and mortgage lending. But this CNBC host and his trader friends  weren’t the villains; they were the guys with a grievance.

One point remained. Who were these disgruntled traders, the body politic for whom Rick Santelli was the eloquent voice?

Well, he told a CNBC colleague, they were “pretty straightforward...a pretty good statistical cross-section of America, the silent majority.”

Of all the capsized reasoning Rick Santelli used on that fateful February day, this was the most perverse. Traders may come in different shades and prefer different foods, but by definition they represent only one walk of life: they are people who buy and sell abstract commodities. They make nothing. They move nothing (except prices). They are the financial industry distilled down to its grasping essence. And if we are to judge by Trader Monthly, traders are a “cross-section of  America” only if “America” is a place where truculence and bullying are the great national virtues and financial legerdemain is considered the noblest way of earning a living.

To others, however, the equation of traders with America, with We-the-People, was the wisest thing to pass Rick Santelli’s lips that morning. By sheer force of assertion, Santelli erased the stigma that had marked financiers ever since the start of the downturn. Now we could see, as one Tea Party organizer wrote later, that those traders were “simply working people who wanted the freedom to continue working and to enjoy the fruits of their labor in a fair way.”  

As for Santelli himself, his oneness with the common man had been established even before his great moment in February. According to a Washington Post profile of the TV personality that was published in November of 2008, Santelli “is usually perched in a lower corner of the TV screen and is filmed from above, shouting up from a trading pit at the Chicago Board of Trade. It gives his rants a classic plain-speaking-little-man-against-the-system feel.”  

And so the inversion was complete. The business reporter who speaks for the “working people” of the derivatives pits was a “little man” standing up to “the system” in classic '30s fashion.

Santelli’s rant caught the insurrectionary spirit of the times. Public choler at the powerful was blowing out the  stops in those first few months of 2009, and the reporter’s outburst was an immediate sensation, replayed millions of times by the angry YouTubing multitude. The instant comparison was to Howard Beale, the populist anchorman character in the 1976 movie Network, raging against the system while the cameras rolled.

That the broadcaster was, in point of fact, speaking on behalf of the system and against the claims of the average people who were its victims was a subtlety Americans found easy to overlook. It was a time of confusion, and just about wherever you looked, the frustrated expressions of the powerful were being characterized as spontaneous eruptions of the American everyman, taking matters into his own hands.

Conditions were right for grand-scale perplexity of this kind. Who knew, for example, what a credit default swap was? And who could explain the process by which such an instrument had brought the mightiest economy on earth to a standstill?

Amid the tides of bewilderment, though, one piece of deviltry stood solid and unmoving, a sort of Gibraltar of populist outrage: the TARP bailout bill. Now, here was a villainy people could understand. It would be costlier, Americans were told, than the entire Vietnam War, or the Louisiana Purchase, or just about anything else. And it was unmistakably bad: the bailouts were the avenues by which our government obligingly moved the financial industry’s losings over to the taxpayers.

In different times, TARP might have become the rallying point of a revitalized Left. After all, the bailouts were clearly of a piece with the misbehavior that had come before:  the deregulation of the banks, the bonus culture, the wrecking of the supervisory state. Business-friendly conservatives had been behind each of these, and then business-friendly conservatives had knitted together the TARP for the same rotten reason: to give the bankers what ever they wanted. Reformers might have depicted the TARP as the final chapter in the great book of fraud, the episode in which Wall Street used the captured state to transfer its debts to the public.

But it was the Right that grabbed the opportunity to define the debate, using bailouts to shift the burden of villainy from Wall Street to government. For them, the TARP was the only part of the crisis story that mattered— not the derivatives or the deregulation— and its conservative-Republican parentage made no difference. (That congressional Democrats voted for it, on the other hand, was deeply meaningful.) They were the sole rightful opponents of the TARP, conservatives insisted, because they opposed federal interventions in the market, and bailouts violated strict laissez-faire orthodoxy—their orthodoxy. Bailouts allowed government to decide who won and lost; they replaced the forces of competition with those of administrative fiat; and they puffed up the deficit, to boot. And so the Right staked its claim, making the TARP into the outrage that lifted a thousand snake flags.

“Let the Failures Fail”

The first of those snake flags was hoisted at a Tea Party rally in Washington eight days after the Santelli broadcast, and it was as perfect an example as any of the Right’s ability to capitalize on public confusion. That original Tea Party rally sure didn’t look spontaneous or grassroots to me when I showed up. In fact, it had every appearance of being one of those staged protests that happen all the time in Washington, in which a handful of people from a pressure group pose with signs for the media. I had heard about the plans for the gathering not from some radical handbill picked up on a street corner, but in an online message from an editor at the American Spectator, a sturdy pillar of right-wing Washington. The rally was to be held at the park across the street from the White House, the traditional staging ground for phony right-wing protest going back (at least) to the days when Jack Abramoff ran the College Republicans.

This was no act of defiance by the little man. It was astroturf of the most ersatz kind; plastic grass with extra vinyl content. The event was swarming with well-known conservative movement personnel. The blogger Michelle Malkin took a turn with the megaphone, as did Joe the Plumber, the itinerant proletarian, who was there to show working-class America’s faith in the cynical idealism of billionaire America. Lots of people were in suits, and some were wearing name tags from the Conservative Political Action Conference, which was going on a few subway stops away.

The protestors denounced deficit spending and bailouts and the item that had triggered Santelli’s explosion: the possibility that government might help people modify their mortgages. Where communities once used to rally to help out a foreclosed-upon neighbor, the prototypical populists now wanted to see that uppity neighbor get evicted from the oversized home the rascal had no business buying in the first place.

The symbols, costumes, and confusion that the nation would soon come to know so well were all pretty much present at that first gathering: the snake flags, the three- cornered hats, the Constitution worship, even the epidemic of spelling errors. And, of course, the small-minded vindictiveness that for years now has masqueraded as brave back-talk to arrogant authority. Photographing Tea Party protest signs would soon become something of a cliché, but on that first occasion, a woman proudly held up for my camera a homemade declaration of befuddled outrage that read as follows:

Can anyone on

Capital Hill read?

If so read the


As Americans

we do not have the right:

To a house

To a car

To an education

Americans have a right

to persue happiness

not to have it given to


There was talk about the conflict of “freedom versus tyranny,” as though the real danger Americans faced was not economic collapse but some bid to crack down on personal liberty. And there was a slogan, a cry of existential anxiety from the bitter '70s— or, rather, a confused homage to  Rick Santelli— as speakers began one after another to repeat a famous line from Network: “I’m as mad as hell and I’m not going to take this anymore.”

“Anymore”? Barack Obama had been in the White House for a little over a month at that point, and yet already their suffering at his hands was more than they could bear. “They’re” not going to “take this”? For decades, politicians had catered to every short- fused demand that economic conservatives raised. This was a group that had been singularly well served by the political system; they had received exactly the deregulated world they now said they wanted.

But “mad as hell”? Oh, that note rang true. Even I could be roped into that sentiment. And for everyone who was livid about the financial crisis and the bailouts, those first-generation Tea Partiers had a simple proposal: “Let the Failures Fail.” That was the slogan I saw on one protest sign, and I have probably heard some echo of it hundreds of times since then. “Let the failures fail.”  

Here, in one sentence, was a key to the amazing success the Right would shortly enjoy. They had an answer to the bailout outrage, and it was not modulated by lawyerly subtleties or votes-taken-with-nose-held, like the House Democrats who had voted for the TARP. “Let the failures fail”: it was a line that would allow the revived Right to depict itself as an enemy of big business, rooting for the collapse of the megabanks. The Tea Partiers may have looked ridiculous in their costumes, but their central demand was anything but.

The Bad Neighbor Doctrine

Not all “failure” is the same, however. What the newest Right has in mind is something philosophical, something both personal and sweeping. It demands liquidation across the board,  a sort of deserved doomsday for the borrowing-based way of life. But in the great die-off it delights in imagining, the real culprits of 2008 have a way of disappearing from view.

If we watch closely, we can see the cards being switched. Whenever our tea-partying friends warm to the subject of  letting-the-failures-fail—and they do so often—sooner or later they inevitably turn from the bailed-out banks to those spendthrift “neighbors” identified by Santelli, those dissolute people down the street who borrowed in order to live above their station. These are the failures who need to be made to fail. It is always personal. Here are conservative warriors Dick Armey and Matt Kibbe, in a chapter of their “Tea Party Manifesto” called “Bailout.”

Many of us knew instinctually the bailout was wrong. We understood that in order for capitalism to work we need to be able to not only keep the potential gains from the risks we take but also accept the losses that may come. With profit comes the potential of loss. Many of us had a neighbor or heard about someone who had been living too high on the hog for too long and were wondering why we were now supposed to pay for it.

At other times, the failure they long to see is cosmic failure, a “day of reckoning,” as Senator Rand Paul likes to say: failure as nature’s response to the hubris of big government, failure as our richly deserved punishment for our bad values. According to the former Fox News personality Glenn Beck, failure is a way of atoning for American materialism. Failure is a morally necessary and even a healthful thing, he  wrote in a 2009 bestseller, “a necessary step in achieving success— a step that safety nets and bailouts attempt to take a shortcut around.” These bailouts are, in fact, an offense against nature and Republican virtue itself, an extension of the same selfishness that saw consumers go into debt and “politicians and the media” assure “us that America is about having the most stuff, the nicest cars, and the biggest homes.”

So let a thousand failures fail. Let all the losers go down. Government that handed out the bailouts, banks that received them, greedy neighbors that took out mortgages, and everybody in between: Let them all fall flat. Let the jobless go  without unemployment benefits. Let the farmers go without subsidies. Let depositors in failed banks walk away empty-handed. Let the dollar fail, too, and let those who didn’t hoard gold coins for retirement in their own private hidey-hole suffer the consequences.

For decades, goes the sweet, scolding refrain, we’ve been living beyond our means. We thought we could waft to riches on flowery beds of ease, but now the bill has come due. The  country is “broke,” as Glenn Beck and countless other conservatives love to remind us; we can no longer defy the “Laws  of Nature.” The thrifty and productive can no longer support the profligate. Only those who sow get to reap. Life is harsh, and Americans need to get used to it. A few years down the road, this dogma would lead the rejuvenated Right to attempt actually to bring catastrophe down on the nation, via the federal debt-ceiling showdown.

But in the meantime, it was an attractive moral doctrine; a sweeping condemnation of a society that has lost its way, that worships false gods, that has become besotted with affluence. But the cult of failure appealed for another, subtler reason. It allowed the resurgent Right to shuffle the bitter mood of the moment and generate an outcome that was more to its liking— to deflect public anger from the obvious targets. 

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