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October 31, 2014

Tea Party Populism is Dead. The GOP is Back in Bed with Wall Street

“The rise of the Tea Party insurgency in 2009 and 2010 came with an oft-overlooked benefit for the Republican Party and conservative movement. Not only did the insurgency provide energy to the anti-Obama wave in the 2010 midterms, but it helped blur the lines between the parties in a way that was deeply beneficial to Republicans in a time of deep anti-Wall Street sentiment in the electorate. Backed by the upsurge in Tea Party populism, the party of Mitt Romney and Phil Gramm was remarkably able to cast itself as the party of Main Street against those banker-bailing, crony-capitalist Obama Democrats. Never mind that candidates under the Tea Party banner were being fueled by the financier-backed Club for Growth, that Scott Brown was powered more by a surge in financial industry contributions than Tea Party backing in his upset victory for Ted Kennedy’s seat, that Wall Street spending in 2010 swung sharply behind the GOP—all that mattered was embracing that nebulous Tea Party aura.”

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“Wall Street’s heavy investment to keep Brown from taking the gavel is striking given that Brown is not exactly William Jennings Bryan or Huey Long, notes Dennis Kelleher, a former senior leadership advisor to the chairman of the Senate Democratic Policy Committee who now runs a pro-financial reform organization, Better Markets.* But even though Brown is not a firebreathing populist, he’s considered unacceptable by the banks. “Wall Street doesn’t like anybody who doesn’t agree with them almost all of the time, or someone who is smart enough and stand-alone to question them,” says Kelleher. “If you’re not viewed as one of the boys who’s going to go along with them, they’re not going to like you.” And the money to stop Brown and the anonymous pot shots against him are coming from a specific sector of the financial industry, notes Kelleher. “When you see complaints, it’s almost always coming from the handful of too-big-to-fail banks,” he said. “The big regional banks, the community banks aren’t criticizing Sherrod Brown… When you get to the core people who are complaining, it’s the handful of too-big-to-fail banks.”

“The irony, adds Kelleher, is that breaking up these banks, as Brown and others suggest, would make the country’s financial system more robust. “If instead of having a bank with $2.5 trillion under management, you have three banks with $800 billion, is the country really worse off? You’d have greater competition and greater diversity of products,” he said. “Even if it stayed a $2.5 trillion bank and was regulated in such a way that the bank is not a threat to the country, the country would be better off. But the bank executives and their bonuses would not be better off, and that’s why you have the anonymous vilification of Sherrod Brown.”

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Read the full New Republic article Alec MacGillis here.

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