The Heroes of Wall Street: How Democrats Got Their Pockets Picked

It's hard to read Thomas Frank's new book, "Pity the Billionaire," without being astonished at what utter nincompoops Democrats are.

This surely was not Frank's primary intent. The book is subtitled, "The Hard-Times Swindle and the Unlikely Comeback of the Right," so it's pretty clear where Frank coming from. But the obvious subtext is how, in a two-party system, Democrats allowed Republicans to pull off the greatest cross-dressing scam since RuPaul became America's Drag Queen.

Frank is a journalist and polemicist best known for his 2004 book "What's the Matter with Kansas?" that explored how Republicans in his home state had used social issues to persuade people to vote against their own economic best interests.

In "Pity the Billionaire," he examines how Republicans -- with help from some Democrats --created policies that led to the financial collapse of 2008, the Great Recession, massive income inequality and the gutting of the middle class. And then the Democrats sat back as the GOP reinvented itself as populist defenders of free-market capitalism.

"Now there is nothing really novel about the idea that free markets are the very essence of freedom," Frank writes. "What is new is the glorification of this idea at the precise moment when free-market theory has proven itself to be a philosophy of ruination and fraud. The revival of the Right is as extraordinary as it would be if the public had demanded dozens of new nuclear power plants in the days after the Three Mile Island disaster; if we had reacted to Watergate by making Richard Nixon a national hero."

For Frank, a key moment in this bizarre turn of events came on Feb. 19, 2009, less than a month after President Barack Obama's inauguration. The TARP bailout bill proposed by President George W. Bush and endorsed by candidate Obama had been passed the previous fall. The new president had just signed the $787 billion economic stimulus bill.

On that day, CNBC business reporter Rick Santelli stood on the floor of the Chicago Board of Trade and began ranting about the unfairness of it all. Not the bank bailout, mind you, but the 6.3 percent of the TARP program intended to help people modify their underwater mortgages.

As it turned out, this program hasn't been particularly successful because banks refused to go along. But on that Feb. 19, Santelli was incensed at the unfairness of it all -- that "losers" with bad mortgages might be helped and that the salt-of-the-earth traders who were cheering him on were being punished for being successful and prudent.

Santelli's rant went viral on the Internet. So-called Tea Party rallies began to be held. "Your mortgage is not my problem," read a sign at one of them.

Self-promoters seized them as a way to cash in -- a fine conservative tradition, Frank writes -- and the right-wing foundations funneled money to them. What could have been, and should have been, populist outrage against the people whose greed brought the house down was subtly turned into protests against "elitists" (i.e., Democrats) who were attacking "free markets" (i.e., cracking down on banks and health care costs).

The Tea Party, Frank says, became defenders of a Darwinian version of free markets intended to "trample the weak."

Frank spends a great deal of attention on the various absurdities peddled at the time by Glenn Beck on Fox News -- "bogus populism shores up ironclad elitism and ... bogus enlightenment serves the most grotesque form of dupery."

But Beck and his ilk could not have gotten away with it had (a) people been more discerning about what they were hearing and (b) had Democrats mounted some kind of response.

As to (a), Frank quotes from one of the Tea Party's favorite movies, "Network," where the mad-as-hell-not-going-to-take-it-any-more newscaster Howard Beale explains, "We deal in illusions, man. None of it is true. But you people sit there day after day ... we're all you know."

As to (b), the question of where the Democratic response was, that's still a mystery. Aside from perhaps Elizabeth Warren, architect of the Consumer Financial Protection Bureau and now a U.S. Senate candidate in Massachusetts, no Democrat has been particularly successful in articulating where the blame belongs.

Until recently, Obama floated above it all, finding common cause with Wall Street and health insurance firms, trying to compromise with people who were elected not to compromise, playing his preferred "long game," avoiding intemperate language.

This allowed the GOP to retake control of the House and pass themselves off as defenders of the average guy. And anyone who has the temerity to point out how stupid you'd be to fall for that is labeled an "elitist." As the British political scientists David Runciman has noted, "There is nothing voters hate more than having things explained to them as though they were idiots."

Republicans understand that. Democrats aren't very good at it. If they hope to avoid catastrophe in November, they'd better figure it out.