Joe Conason: The GOP’s Dubious Populism

Republicans' recent reactions to politics and policy are anything but populist

By Joe Conason | Published on 02.04.2010

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The most revealing moments in President Barack Obama’s State of the Union address were not in his remarks, but the reaction to them by those listening on the Republican side of the aisle.

Joe Conason
Joe Conason

When he proposed to recover a “financial responsibility fee” — in plainer English, a bank tax — from the largest and most heavily leveraged Wall Street firms, the Republicans sat on their hands and scowled, while Democrats cheered and whistled. And when he warned that the Supreme Court’s latest decision would open the political process to mega-corporations and their foreign owners, the Republicans were so enraged that they have since accused him of lying.

On both counts, the politics and policy are subject to reasonable disagreement — but the facts support the president. More importantly, however, is what both issues say about the continuing character of the Republican Party at a time when its leaders are counting on the “conservative populism” of the “Tea Party” movement to revive the party’s fortunes.

Consider the possibility of unchecked foreign influence in U.S. political campaigns, a change that would seem certain to irritate the self-styled super-patriots of the Republican right. Although Supreme Court Justice Samuel Alito appeared to mutter that the president was “not right” during the speech — and was then echoed by every right-wing commentator, from The Washington Times to the Wall Street Journal — nonpartisan observers believe that Obama is indeed correct.

“With the corporate campaign expenditure ban now being declared unconstitutional, domestic corporations controlled by foreign governments or other foreign entities are free to spend money to elect or defeat federal candidates,” said J. Gerald Hebert, executive director and director of litigation at the Campaign Legal Center in Washington.

Fred Wertheimer of Democracy 21, a longtime reform advocate, explained why that is true, despite existing legal prohibitions against any contribution or expenditure by a “foreign national” to influence a federal, state or local election.

The current statute defines a foreign corporation as any firm that is “organized under the laws of or having its principal place of business in a foreign nation.” So a company organized in Germany or headquartered in China would still be subject to the existing ban on donations.

“But there are domestic corporations — those organized under state law in the United States — which are and can be controlled by foreign interests,” Wertheimer noted. Until the Supreme Court overturned the ban on corporate spending in the Citizens United decision, those foreign-controlled companies were subject to the same restrictions as U.S.-owned firms. By striking down that prohibition, the court’s Republican majority freed any foreign-controlled domestic company to spend its funds directly to influence our elections.

At least some of the founders of the Tea Party movement found this development disturbing — and that may be why the Republicans reacted so angrily when the president mentioned it. The same may be said of the new tax on big banks, which Republicans have vowed to reject even though it is designed to recoup the costs of the bailout that was so unpopular among their “populist” constituents.

Again, the facts are simple enough. The legislation that established the Troubled Assets Relief Program — with many Republican votes — required the president to claw back the program’s hundreds of billions of dollars through a dedicated tax. As designed by the Obama economic team, that tax falls solely on the largest financial firms and penalizes them according to the degree of leveraged risk those firms have taken on. Its designation as a “responsibility fee” is not merely a way to avoid uttering the word “tax,” but recognizes that the economic and social costs of the recession must be charged to those companies and their irresponsible (and sometimes illegal) practices.

Again, the Republican response is anything but populist, unless that term has lost all meaning. Michael Steele, the Republican National Committee chairman, and an array of the party’s elected officials marched to the microphones to parrot the same arguments articulated by the bankers: They’ve already paid back the money! They’re going to pass the tax on to their consumers! And a recession is no time to raise taxes anyway!

The new GOP idols, Scott Brown of Massachusetts and Marco Rubio of Florida, were the most eager critics of any attempt to tax the bankers.

The more Republicans claim to change, the more they remain the same. The more they wrap themselves in dubious populism, the more they will defend the wealthy and powerful, without respect to national sovereignty and the national interest.

— Joe Conason writes for the New York Observer. Click here for more information, or click here to contact him.

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» Dumb Article on 02.04.10 @ 07:35 PM

They’ve already paid back the money! They’re going to pass the tax on to their consumers! And a recession is no time to raise taxes anyway!

Please tell us why truthful statements such as these are not supported by conservative populism? The author obviously does not understand the Tea Party movement, because a tax is a tax is a tax.

Tax the banks, you are taxing the people indirectly. The Dow took a downward trend the day Obama announced this and has been plunging ever since because people understand this and the effect on the economy.  Also, the Tea Party movement is loosely organized and it does not have “founders”. I am an Independent and this just makes me want to support Republicans.


» local on 02.05.10 @ 08:57 AM

The Tea Party has a founder and fundraising organization headed by Dick Armey. He works for the same firm that represents AIG and many large banks. He was lobbying on their for them during the crisis. He and others were successful at stealing taxpayers funds and now are out in front of the tea party protest.

Secondly, the banks did not pay back all of the money. When AIG created large numbers credit default swaps in their financial products division the holders were the large banks including Goldman,JPM,Bank of America and Wells. The paper was basically worthless but the government paid these firms 100 cents on the dollar. A very large gift of payoff. Goldman alone made $10 billion. In addition as part of the TARP funding we, the US taxpayers, we given large quantities of stock warrants but the big banks were allow to retire them at below market value which costs the taxpayers billions. Note that Warren Buffet still owns his Goldman warrants.This cost the taxpayers billions. Finally, both Goldman and Morgan Stanley were given commericial bank status immmediately to gain access to free money without any of the normal regulatory requirments or oversight or fees that comes with the conversion process. Given all of this a small bank tax is in order because we have not been paid in full and they clearly have enough money to pay bonuses of billions of our hard earned tax dollars.


» Tomahawkdeb on 02.05.10 @ 11:57 AM

Granted, the bailouts cost the taxpayers billions of dollars and that really stunk (stank?), but forcing the banking organizations to pay back even more money now does nothing to help the little guy.  The banks are going to pass the costs on to the little guy in the form of fees.  The bankers will still get their big bonuses and the little guy will take it in the shorts yet again.  What brainiac came up with this scheme?  Oh, that’s right, the Nobel winner.  Oops, that was for being a peaceful guy, not an economist.  I’m no economist either but I at least understand that little bit of how business works.  The White House thinks this move will make them look good to the American people…...and it will to those who continue to blindly follow.  Maybe they’ve got it right, though.  If they don’t recognize that they’re being pinched yet again, they won’t feel the pain.


» AN50 on 02.05.10 @ 12:22 PM

You know Tomahawdeb, the difference between you and Local is you know and understand your limitations. Local, blinded by his ideologically driven intellectual narcissism cannot see how pathetic his lack of economic understanding is. Local, I like you; seriously, I admire your willingness to speak up on your convictions. You sound like a genuinely nice person who really does want good for all. But, my friend you’re out to lunch on this stuff and the source of your obfuscation is your belief in the liberal/progressive ideology. Punish the PEOPLE who screwed up AIG, not the company and all its innocent workers, the cheated investors or their customers and clients. I too abhor greed, selfishness and cold-heartedness. But these are human behaviors and it is the humans behaving badly that need to be punished not companies. Companies have one purpose, to make money. Adding a “punishment tax” to a company just adds cost to the bottom line, meaning some poor shmuck will lose their job and the least important customers will pay more for their service. Call out the CEO’s and punish them personally, leave the business alone.
What is truly amazing is you call out the SCOTUS for re-affirming a corporation’s individual protection, because in your words they are just a business entity, then you want to punish them for the behavior of the people running them just like they were a person. Doesn’t work that way my friend.


» local on 02.05.10 @ 02:50 PM

AN50, once again the name calling only shows your insecurity. You believe that all corporate taxes will be passed along and I do not. Goldman Sach’s tax payout rate in the last quarter was less than 1% while they netted over $4 billion and are paying their executives 100s of millions in bonuses. They can afford at the very least to pay the tax payers what they owe, the $10 billion from the CDS and $3 billion from the undervalued warrants.

Then it sounds like you are okay with the British model of taxing executive bonuses at these institutions at over 50%? What you do not seem to get yet is that they and others would not exist if the taxpayers did not bail them out. Now less than a year later they are business as usual. That should be the real tea party issue not this fake crap about our taxes going up when for most people they have actually gone down and are at historically low levels. These companies contributed greatly to our debt and the economic situation we find ourselves in today. The teaparty demonstration should be in front on Wall Street firms in lower Manhattan.

By the way your logic of connecting the SCOTUS decision to this issue is kindergarten at best. Please go back and study the real implications of the decision before you do your usual Beck impression. It centers around tipping the level of influence too far in the corportus favor and taking the voice away from the people.


» AN50 on 02.05.10 @ 06:38 PM

Wow, Local I really expected a better response. Do you understand what I am talking about?


» JAX on 02.05.10 @ 07:21 PM

What you have described is already occurring.

Indian tribal governments, funded by South African and Asian investors are funneling millions into the political coffers of federal and state politicians in exchange for promises to maintain their tax free “Indian” largesess’ exempting their tribal gambling casinos and business and allowing them to operate without complying with all the laws that everyone else must abide by and giving them the right to construct mega gambling casinos in practically every community in the United States. 

  Then there is the total legal immunity they have for any and all misconduct no matter how egregious and outrageous it is. Any customer and employee in such a casino or business has no legal rights, cannot sue for anything that happens to them and are not protected by any state laws enacted to protect customers, workers and the local community environment and quality of life.

The McCain-Feingold Campaign Finance Limitation and Reporting Act exempted Indian tribes and they are now opening huge Indian corporate networks in virtually every facet of the economy, routinely paying off politicians with imunity in order to gain special favors while funneling vast somes of money into the pockets of a few including the foreign investors that financed them. ( for example the Seminole tribe of Florida purchased the Hard Rock cafe hotel and casino chain last year for nine hundred fity million dollars ($950,000,000). These poor downtrodden “Indians” still collect millions in federal welfare and grant monies paiod for by the taxpaying public and their tribal officials live in mansions within gated communities and have, maids, gardeners, chauffers etc.

So where is the clamour and outrage over this political scandal?  Corporations are bad guys but Indian tribes and their many corporations and huge “political contributions” aren’t? What about Unions who routinely make vast contributions of money to the same politicians!


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