What is the Tea Party? It is clearly a protest against the current forms of governance. Both political parties have been flummoxed by this movement. The initial response by the Democrats was revulsion followed by unsuccessful attempts to paint the movement as "Astroturf" promoted by Republicans. Mainstream Republicans initiallly dismissed the group as "fringe elements" of no lasting importance.
Both of these responses were serious miscalculations. We warned of this possiblity in an earlier post. We also warned that the group was driven by a disenchanted middle class, not a Libertarian fringe. There is no cohesion for the Tea Party except a distrust of government and many institutions. In many ways, it is a decentralized political insurgency.
Insurgencies, as in the case of Al Qaeda, are difficult to combat. The major parties are organized for setpiece political combat. Consequentially, they are vulnerable to hits in unexpected ways in unexpected places. There is no better example than the "hit" on ACORN by James O'Keefe and Hannah Giles. Unlike Al Qaeda, the Tea Party is not illegal. That just makes it even tougher for the major political parties.
The Democrats have suffered the most initial damage. Or so it would seem. Core Democrat constituencies are sympathetic to the Tea Party, and recent elections have exposed vulnerabilities in the Democratic majority. But the unseating of Republicans in 2006 and 2008 was driven by many of the same middle class voters. In other words, this discontent has been bubbling for some time. It was just unnamed before.
After a lot of initial fumbling, Republicans have very recently hit on a strategy that may absorb much of the Tea Party energy. I'll call it "an indifferent embrace." Mainstream Republicans are now suggesting that Tea Party voters will enter Republican primaries and influence the selection of Republican candidates in the general elections. It is likely that this is a ploy, but it may be that the ploy will play into the hand of the Tea Party. The Tea Party could take over the Republican Party with a fairly broad based independent constituency. This could be very bad news for both major parties as we now know them.
It is also potentially good news for the Hedge Tax. Ultimately, what matters is that the government is more responsive to the voters and less responsive to special interests. There is no better mechanism than constitutionally driven Tax Reform that will permanently restore the power of the voters.