THE BLOG
04/11/2010 05:12 am ET Updated May 25, 2011

The Tea Party Dumps Economic Populism: Where are the Progressives?

The Tea Party sprang to life in response to the financial crash that sent our economy into a tailspin. Until recently, it balanced two tendencies: hatred of big government and hatred of Wall Street. The combination (in the form of the bailouts and stimulus programs) provided a perfect target as economic hardship hit millions on Main Street.

But as the Tea Party becomes more structured and holds conventions like the one this past weekend featuring Sarah Palin, you can see its economic populism slipping away. Sure, there will be attacks against Wall Street's privileged, but those are for show, not substance. Increasingly it is all about the bedrock conservative principles: smaller government, fewer taxes and a strong military. Jobs and Wall Street will become secondary issues even though millions of grassroots Tea Partygoers are still motivated deeply by these concerns.

Of course this is terrific news for Wall Street which has just awarded itself $150 billion in record bonuses while more than 28 million Americans are without jobs or forced into part-time work.

You won't hear the Tea Partyites calling for a new Consumer Financial Protection Agency or windfall profits taxes on bonuses. Instead they will rant about government interference in the economy and high taxes.

I mean, you can't make this up. Wall Street goes on a gambling spree, wins big, and then crashes the economy. The federal government bails out the elites. Then Wall Street -- still on the government dole -- makes record profits and bonuses. And just when efforts for financial reforms inch forward in Congress, a grassroots movement emerges against government regulation and taxes, including those on Wall Street.

The underlying anger about the crash, the giveaways to Wall Street and the lack of jobs are still there. The means the field is open for a progressive populist movement. But where is it?

There are some progressive financial reform groups pressuring Congress to enact good legislation. There have even been a couple of mobilizations at banker meetings and at Ben Bernanke's house. But overall, progressives have been AWOL when it comes to building a mass-based populist movement or anything close to it. (Except in Oregon: see "Watch out Tea Party, Progressive Anger is Alive and Well" )

Why is that?

Here's what I've heard from progressives: We're too old, too comfortable, too hooked on the Internet, too invested in the stock market, too invested in Obama, too demoralized; that the activists among us are too close to the Democrats, too far from the grassroots, too concentrated on health care reform, too concentrated on global warming, too besieged by other issues like racism, gay and lesbian rights, abortion rights, union survival, and on and on. You'd think that being a progressive activist was a liability rather than a major plus during this upheaval.

One colleague provides a very different line of inquiry. He argues that most progressives he knows actually have bought into neo-liberalism without even knowing it. He believes they have developed a deep and unquestioned faith that markets will right themselves with a nudge or two, and solve most of our most pressing problems.

I've spun this idea around to mean the following: Progressives see the current economic crisis as an aberration to an otherwise sound economic system. As a result, all it will take is a few financial reforms and more stimulus to get us back to normal - "normal" meaning we can return to our favored issue areas and continue the critical battles we have been fighting on social issues, the environment, racial equality etc. In short, there's no compelling reason to stop what we're doing in order to build something fundamentally new.

But what if American capitalism has radically changed? What if the old version -- a system of markets moderated by government to produce a decent standard of living for most of its citizens -- is gone?

IMaybe our system has morphed into a new billionaire bailout society where wealth is ever more concentrated, where economic life is every more dependent on large financial firms that must never be allowed to fail, and where public funds are ever ready to back up the financial arrangements of the super-wealthy.

A few reforms might not right this ship. Instead we may be facing a long dark decade of sky-high unemployment, repeated recessions and jobless recoveries. These problems are likely to be compounded with years and years of political gridlock as both parties feel pressured not to interfere with markets. Without a new movement I doubt we'll see real controls that break up too-big-to-fail banks, limit obscene Wall Street salaries, and end casino finance. In our new billionaire bailout society we will not have enought jobs for all who need them.

I would love to be wrong. Maybe markets will bloom and new green jobs will flourish as we solve global warming and bring economic sustainability and security to our society. But look around you. We have the worst income and wealth distribution since 1929. We have the highest sustained unemployment since the Great Depression. Congress is gridlocked. And to top it off, a right-wing, anti-government, anti-regulation populist movement is gaining ground.

Let's face it. When the crisis hit, we weren't prepared. The time to have acted boldly was a year ago when bankers where on their knees begging for money. That was the moment to break up the big banks, slap on meaningful salary caps and windfall bonus taxes - and then use that money for job creation. That's when we really had the chance to put a progressive mass movement on the streets to counteract the lobbying clout of Wall Street. That moment has passed and it's painful to see it fade away.

If this analysis is correct, we'll get more chances and relatively soon. The billionaire bailout society doesn't give a damn about jobs. It can mint new wealth without even loaning out money. The disconnect between Main Street and Wall Street is profound and ever growing, as is the space for creating a new progressive populist movement.

I can't provide you with a cookbook for organizing it. But I do know there are tens of thousands of progressive activists hard at work right now on their particular issues. They have more than enough talent and experience to build a national populist formation. But first they have to decide that taking on the billionaire bailout society is the most important work they can do, (the way a previous generation threw themselves into stopping the Vietnam War.)

We may not have a choice. The lethal combination of Wall Street's economic domination and the Tea Party's hatred of all things government is likely to overwhelm most other progressive causes. Building a progressive alternative to the Tea Party may be our only way out.

Les Leopold is the author of The Looting of America: How Wall Street's Game of Fantasy Finance destroyed our Jobs, Pensions and Prosperity, and What We Can Do About It Chelsea Green Publishing, June 2009.