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Mises Institute: What were the origins of what is now called the Tea Party movement?

Yuri Maltsev: As we explain in our book, the modern Tea Party movement began with a fundraiser by Ron Paul supporters on December 16th, 2007 (the 234th anniversary of the pre-revolutionary Boston Tea Party) and a backlash against the policies of President George W. Bush. This Tea Party fundraiser was followed by an even bigger one, the unprecedented Ron Paul “money bomb” of November 5th.

The rising trend of anti-government protests saw a huge surge in February, 2009 after the famous impromptu speech by CNBC commentator Rick Santelli against the federal government’s bailout of irresponsible borrowers in the country’s ongoing mortgage crisis. “The government is promoting bad behavior,” he declared, standing on the trading floor of the Chicago Mercantile Exchange in Chicago. Turning to the traders working behind him, he said, “This is America! How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills?” The video of his rant went viral that same day and bolstered an already-planned round of protests in at least 40 cities across the country on February 27, 2009.

The Tea Party’s early popularity drew condemnation by figures of the left like Chris Matthews, Keith Olbermann and Paul Krugman who penned a column entitled “Divided We Fail,” and also by established figures of the right like Trent Lott, Lindsey Graham, and even Glenn Beck, whose name later became synonymous with the movement.

MI: Has the character of the Tea Party changed over time?

YM: Once the Tea Party proved resilient to criticism from both sides, numerous existing organizations and political careerists sought to join it, represent it, and/or influence it. There were pre-existing groups with over-lapping messages, other outraged groups searching in good faith to make themselves heard, and, of course, political opportunists seeking to either radicalize or co-opt the movement. A tenuous and perpetually shifting alliance formed between much of the Tea Party and parts of the Republican establishment. Three and a half years after Ron Paul’s Tea Party, Beck’s “Restoring Honor Rally" represented the most visible and publicized shift in the perception of Tea Party ideology toward social conservatism and a hawkish foreign policy.

The common ground remained issues of lower taxation, smaller government, and respect for the U.S. Constitution. It was this phase of the Tea Party which by most accounts, defined the midterm elections of 2010.

Before 2008 most political pundits operated under the illusion that there were almost no swing voters left, but as the elections have now proved, there are still plenty of them out there. The socialist left, united behind Obama, found the disaffected in 2008 and turned many former non-voters into enthusiastic supporters. Even more dramatically, the Tea Party showed in 2010 how formerly apolitical people could become dedicated activists. Lacking any central direction, the Tea Party threw into prominence many inexperienced individuals, and attracted the support of a motley crew of minor political careerists. Naturally the media had fun with the spectacle.

The Tea Party remains active today despite its disappointing election impact in 2012. A recent CBS-New York Times survey indicates that a quarter of Americans support the Tea Party. Some Tea Party groups continue to fight for libertarian ideas, but no longer work beneath the Tea Party banner because it carries too much baggage.

Like the later Occupy Wall Street movement, the Tea Party movement politicized many Americans who had formerly preferred to stay out of politics. In earlier years, Teddy Roosevelt, George Wallace, Ross Perot, Patrick Buchanan, and Ralph Nader had all accomplished something similar, with varying degrees of success, but relying on cult of personality. While there are great differences both within and between these movements, they both represent discontent with both parties and the political system. It remains to be seen whether this lays a foundation for positive change or simply offers fertile ground for demagogues. The political dialogue does seem to have shifted favorably. It is no longer unusual to see libertarian views, even radical ones, in mainstream publications.

MI: There have been numerous attempts to compare Tea Partiers and Occupiers.

YM: Almost half of Americans in 2013 identified themselves as supporters of one movement or the other. Contrary to popular perceptions, the Tea Party movement attracts more white-collar support than blue-collar, and the largest contingent of Occupy Wall Street supporters isn’t young but rather middle-aged.

In a very broad sense, both movements have something in common, a long list of grievances and complaints. Both are products of discontent with the status quo and a desire to affect the national conversation. Neither tends to offer specific ideas and solutions. As in all the most powerful populist movements in history, it is common for members to know what they are against rather than provide specific detailed solutions to the problems or agree on detailed programs provided by others. Both groups are critical of the big government and totalitarianism of the Obama administration.

MI: The IRS has been accused of treating Tea Party groups differently.

YM: In spite of their similarities, the government has treated Occupy and Tea Party groups differently. In May 2013, the report by the Treasury Inspector General for Tax Administration described in detail the use of “inappropriate criteria” to screen political advocacy groups by the Internal Revenue Service (IRS). An IRS unit for tax-exempt organizations created the “Be On the Lookout” list for Tea Party organizations. These groups faced lengthy delays and demands for disclosure of private information in consideration of their applications. This led to both political and public condemnation of the agency and triggered further investigations.

At the time of the scandal, former IRS commissioner Doug H. Shulman told the House Committee on Oversight and Government Reform that the IRS was dangerously underfunded. The same argument was presented by the IRS official report: “The IRS Is Significantly Underfunded to Serve Taxpayers and Collect Tax.”

At the time of the harassment of the Tea Party groups the “underfunded” IRS spent over $50 million on conferences including $4 million for an August 2010 gathering in Anaheim, California, for which “the agency did not negotiate lower room rates, even though that is standard government practice, according to a statement by the House Oversight and Government Reform Committee. Instead, some of the 2,600 attendees received benefits, including baseball tickets and stays in presidential suites that normally cost $1,500 to $3,500 per night. In addition, 15 outside speakers were paid a total of $135,000 in fees, with one paid $17,000 to talk about “leadership through art,” the House committee said. “An additional $50,000 was spent to produce videos, including one in which IRS agents were instructed how to line dance and a training video that replicated the set of Star Trek.

MI: But aren’t many Tea Party groups in fact highly political and not educational?

YM: Most figures on the left question the non-partisan status of the Tea Party and no doubt they are right. Earl Blumenauer pointed out that many of the libertarian and conservative groups have taken positions on highly charged political issues. “Let’s stop this charade of pretending to be just social welfare organizations. Admit they are political and treat them as such,” Blumenauer said.

We can see no flaw in this line of reasoning. It’s very difficult to define what does and what doesn’t qualify for defense of the public good and social welfare. The government, however, selected the Tea Party based solely on its attitude to the socialist agenda of the Obama administration.

All kinds of blatantly leftist groups get the tax exemptions these Tea Party groups were seeking. The leftist organization Public Campaign receives “major funding” from the pro-Obamacare alliance Health Care for America NOW! which is comprised of the national trade union center AFL-CIO and labor unions AFSCME, SEIU, and the “progressive” activist organization Move On, among others.

News of the IRS victimization helped both to re-energize the Tea Party and to revive its popularity in the country. Tea Party members held rallies at all 50 statehouses, regional IRS offices, and federal buildings to protest the IRS, drawing media attention.

Although they’re not in the headlines at the moment, the Tea Party will continue to be a force in American politics not just from its current inertia, but because economic reality will return political discourse to the issues of big government and free markets which have always been the Tea Party’s core. Economic reality will also likely refocus the Tea Party on its original message and away from the compromises it made on matters of social conservatism and hawkish foreign policy.

[Maltsev and Roman Skaskiw are co-author of The Tea Party Explained: From Crisis to Crusade, released in October by Open Court Press. Dr. Maltsev spoke with the Mises Institute about the new book and the Tea Party.