Jim DeMint And The Tea Party Got It Right

Reading financial markets has always been an an iffy proposition. Ask 6 market analysts and you may get 6 different answers. The day Obama signed the debt limit bill into law the Dow gave up 265 points. Just the week before politicians were telling a skeptical public that the markets would surely falter if a debt ceiling deal wasn't reached soon. The usual explanation for a sell off when the deal was reached would have been that the market often buys on the rumor and sells on the news, the implication being that the smart asses made their money and got out. But the debt bill signing had been proceeded by selling so one assumes the smart people were selling in anticipation of the of the news. How much does Wall Street's opinion differ from Main Street's? My guess is they are on the same page. Neither thought much of the news. From the above chart notice that all Americans by a margin of 46 to 39 percent thought the debt agreement was a bad deal. The Tea Party supporter were sour on the deal by better than 3 to 1.

The Tea Party had a plan. That plan passed the House. When it reached the Senate it was tabled by a party line vote. Cut, Cap, and Balance would have prevented the Standard and Poor downgrade. Even if the constitutional amendment part had failed the bill would have made meaningful cuts, $100 billion in the first year, and imposed real spending caps in future spending. Jim DeMint and the Tea Party were right. Harry Reid and Barack Obama were wrong. As Jason Chaffetz said you could see it coming a long way off.