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The Tea Party is still driving the bus in the US

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This article from the New York Times gets it totally wrong:

The Tea Party might not be over, but it is increasingly clear that the election last month significantly weakened the once-surging movement, which nearly captured control of the Republican Party through a potent combination of populism and fury.

Leading Congressional Republicans, though they remain far apart from President Obama, have embraced raising tax revenues in budget negotiations, repudiating a central tenet of the Tea Party. Even more telling, Tea Party activists in the middle of the country are skirting the fiscal showdown in Congress and turning to narrower issues, raising questions about whether the movement still represents a citizen groundswell to which attention must be paid.

What? This whole meme about Tea Party impotence is absurd. Without the Tea Party, there would be no fiscal cliff to begin with. Hello? Who do you think was driving the bus in 2011 on the debt ceiling debates as far as the Republican Party goes? It was the Tea Party. And their agenda of reducing the size of government is what is driving the deficit reduction agenda and the fiscal cliff. Mainstream Republicans like Mitch McConnell and John Boehner, the Republican heads in the Senate and House of Representatives respectively were running up deficits under George W. Bush a decade ago and have not changed stripes. Even Paul Ryan voted for the Medicare prescription drug giveaway and the foreign wars under George W. Bush. The only one pushing deficit reduction in the US is the Republican Party. And the only group within the Republican Party whose chief aim is deficit reduction – in order to reduce the size and scope of government – is the Tea Party. Do you think we would have a fiscal cliff, talking about deficits without the tea party? Of course not.

The Times gets this part right:

The House members elected with Tea Party backing in 2010 forced onto the national agenda their goals of deep cuts to spending and changes to entitlement programs, embodied by the budget blueprints of Representative Paul D. Ryan of Wisconsin, who became Mitt Romney’s running mate. And some of those lawmakers led the revolt last week that prompted Speaker John A. Boehner to cancel a House vote on a plan to avert a year-end fiscal crisis by raising tax rates on household income above $1 million.

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The point: It’s total nonsense to act like the Tea Party has been marginalised. What has actually happened is that the Tea Party have changed the political agenda in the US and now their aims – deficit reduction and smaller government even in the face of massive private sector deleveraging – are seen as mainstream political views, just as they are in Europe.

About 

Edward Harrison is the founder of Credit Writedowns and a former career diplomat, investment banker and technology executive with over twenty years of business experience. He is also a regular economic and financial commentator on BBC World News, CNBC Television, Business News Network, CBC, Fox Television and RT Television. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College. Edward also writes a premium financial newsletter. Sign up here for a free trial.