Does it taste like fruitcake, yet?

By Steven Pearlstein
Washington Post Staff Writer
Tuesday, September 21, 2010; 11:38 PM

One unfortunate side effect of a dramatic shift in the political winds is that the party that suddenly has momentum thinks it can claim vindication for every nutty notion spouted by its leaders.

So it is with the success of "tea party" conservatives in the Republican primaries and the latest polling results pointing to big GOP gains in the upcoming congressional elections.

Any pollster will tell you that these developments are driven by widespread anger and anxiety about the state of the economy and a growing skepticism that politicians of either party have the will or the ability to do something about it. Views on specific policies and issues, by contrast, have changed very little.

That hasn't stopped Republicans and their allies, however, from declaring that all Americans are suddenly demanding to cut every tax, dismantle every federal agency and leave it to the free markets to regulate business behavior. Oh - I almost forgot - we now apparently also believe that global warming is a hoax.

I can't quite tell whether all this is merely cynical posturing or genuine delusion, but right now I'm leaning toward the latter.

Let's start with the Republican congressional leaders.

Over in the House, Minority Leader John Boehner is pushing the idea that two years of record budget deficits have badly hurt job creation and economic growth. I don't know where Boehner learned his economics, but the last time I checked the textbooks they still say that deficit spending by the government actually increases employment and economic activity. To believe otherwise is to believe that hundreds of billions of dollars in tax cuts and stimulus spending somehow disappeared from the economy without a trace.

Indeed, anyone who argues, as Boehner does, that it would be economic folly to raise taxes during a recession is a card-carrying Keynesian. In the world outside of the Republican cloakroom, it doesn't matter whether it's the government or a household spending that extra dollar - each generates at least an extra dollar of economic activity somewhere in the world. To the extent that the stimulus money has been spent or invested here in the United States, it is axiomatic that it has generated or protected jobs.

Boehner's delusion finds company on the other side of the Capitol, where Senate Republican leaders Mitch McConnell and Jon Kyl claim popular support for their whacky theory that tax cuts, in and of themselves, don't add to budget deficits.

"There is no evidence whatsoever that the Bush tax cuts actually diminish revenue," McConnell declared, speaking for himself and "virtually all" of his Republican colleagues. The Republicans must be unaware of the warehouses full of reports by the nonpartisan Congressional Budget Office issued over the past decade that are chock full of just that sort of evidence. Or perhaps they're holding out for more definitive evidence, like a voice from a burning bush.

Then there's the man of the hour, Sen. Jim DeMint of South Carolina, who has been busy trying to drive the last remaining moderates from the Republican temple. Writing recently on The Post's op-ed page, DeMint said the country has finally awakened to the fact that President Obama and House Speaker Nancy Pelosi have tried to "push the United States to the left of Europe." Clearly this is not someone who has spent much time in France.

But there's good news, writes a triumphant DeMint. "Americans quickly realized that if this country was going to survive, they needed to elect people who would respect, not ignore, the limits of government prescribed by the Constitution." In DeMint's political fantasy, there are millions of Americans out there ready to take up arms to limit the reach of the Commerce Clause and protect the sanctity of the Tenth Amendment.

Let's not forget that rising star of the conservative movement, Rep. Michele Bachmann of Minnesota, who took to the airwaves to declare that "before Obama, 100 percent of the private economy was private," but now 51 percent of the American economy is under the ownership or control of the federal government." Eat your heart out, Vladimir Putin!

And how do you think the beleaguered private sector has responded to this unwarranted and unconstitutional government takeover of the economy? Profits are booming and publicly-traded share prices are up 70 percent!

For Obama, however, there is no pleasing Wall Street or the business community, no matter how many banks and insurance companies and car companies are rescued from the consequences of their lousy business judgments.

The Blackstone Group's Steve Schwarzman, the "king" of Wall Street with a net worth estimated at roughly $5 billion, recently whined about Obama's proposal to tax his private-equity management fees as ordinary income, rather than the discounted capital gains rate paid by investors who actually have their own capital at risk. In the histrionic way in which the business community now criticizes the administration, Schwarzman likened it to Hitler's attack on Poland. He later apologized for his intemperance.

Then this week, Skybridge Capital's Anthony Scaramucci showed up at a televised "town meeting" with the president, complaining that he and his hedge fund buddies were tired of being treated as political piñatas by the administration. It shows you how thoroughly disconnected Wall Street is from the rest of the country that Scaramucci actually thought he could elicit an apology from the president or some sympathy from the public. Obama quickly turned the tables on his former Harvard law school classmate, getting the biggest applause of the session when he noted that much of the public felt that he hadn't been tough enough on Wall Street.

So let's get real, shall we? It's a lousy economy, voters are angry and the party out of power is probably going to make gains by capitalizing on that discontent. In trying to govern a large and diverse democracy, the only thing more dangerous than ignoring this anger is reading into it some tectonic shift in public attitudes about the role of government in the economy. That was the Democrats' mistake in 2008, and it is shaping up as the Republican folly of 2010.

© 2010 The Washington Post Company