03/02/2014 09:27 pm ET Updated May 02, 2014

Wall Street's Tea Party

Governor Jan Brewer's veto of a bill that would have allowed discrimination against gays on religious grounds is only the latest example of the tension between the corporate and fundamentalist right. She acted because business elites feared that the measure would be bad for the state's economy.

The alliance between the fundamentalist far right and the business elite was always a bizarre marriage of convenience. The Wall Street gang tends to be relatively liberal on social and lifestyle issues, the very issues where the conservative base detests godless liberals. Many Tea Party Republicans, meanwhile, embody a kind of rightwing economic populism that doesn't have much use for investment bankers.

Until now, the likes of Karl Rove and the Koch Brothers have held this bastard alliance together. But despite the wishes of Wall Street to defend business-friendly GOP incumbents, the Tea Party faction is mounting credible primary challenges against at least five entrenched Republican senators, most notably Minority Leader Mitch McConnell of Kentucky, Lindsey Graham of South Carolina and Thad Cochran of Mississippi.

There are also huge divisions around immigration policy, an issue on which the Wall Street Journal editorial page makes common cause with the Dreamers. The corporate Republican Party wants immigrants as a source of cheap labor, while the Tea Party faction wants mass deportations and the right to shoot border-crossers on sight.

Now the corporate paymasters are demanding an even greater say in Republican politics, to the fury of the socially conservative base. In principle, this could widen the split between the Wall Street and the Tea Party wings of American conservatism.

Yet the marriage endures, despite its awkward moments, because these two groups need each other. Though they tend to be mutually contemptuous, the rightwing base needs Wall Street's money just as much as Wall Street needs the fundamentalist votes.

It's comforting for liberals to believe that the Republican coalition will come apart. I've been reading pieces with titles like "The Coming Republican Crack-up" for three decades.

Will the Republican alliance hold? My guess is that it will -- unless Democrats and progressives can offer something better to downwardly mobile America.

Think about it. The Congressional GOP blocks all policies offered by Democrats that might actually help working people. Then, Democrats look like inept stewards of government, and are left only with the social issues that drive the fundamentalist working class base into the arms of corporate conservatives.

The corporate elite has even persuaded the conservative working class to support tax breaks for the richest as long as a little trickles down to regular people. Why? Because ordinary people are not convinced that government will spend the money wisely, and because they need every penny of dwindling incomes.

History displays plenty of examples where capitalism run amok leads to rightwing populist reactions. It's easier for economically threatened working people to scapegoat blacks or immigrants or gays than to take on the elusive responsibility of financial elites. This is particularly the case when government seems deadlocked as a source of help, and the nominally center-left party is in bed with Wall Street.

In Europe's upcoming parliamentary elections, far-right nationalist parties from France to Norway are poised to pick up the most seats. The European establishment has only itself to blame. As financial abuses caused mass suffering, elites could think only of the well being of the bond market. In America, bailing out Wall Street took precedence over saving Main Street.

There is a name for an alliance between capitalists and angry working people who displace their economic frustrations into social and cultural rage. It's called fascism.

Despite occasional outbreaks of cultural tolerance on the part of the Chamber of Commerce, such as the Arizona tempest, for the most part cultural rage on the part of the white working class suits financial elites just fine. It takes the minds of the common people off of financial abuses that they wouldn't understand anyway. Better for them to bash gays and immigrants.

The antidote to fascism is strong democracy, in which working people grasp their own economic self-interest and a left party passes laws that harness the economy to common purposes. It's been a long since we've had that in America. That's why the right is making gains despite the fact that demographic and economic realities should favor the left.

Robert Kuttner's new book is Debtors" Prison: The Politics of Austerity Versus Possibility. He is co-editor of The American Prospect and a senior Fellow at Demos, and teaches at Brandeis University's Heller School.

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