DAVID SHUSTER: The goal for every candidate in a presidential primary is to fire up their base. A major talking point for this batch of Republican candidates has been that the way to get the economic firing again is to shrink the government and have less regulators watching over businesses.
In our number-one story — apparently, being a conservative means having a short memory. It was three and a half years ago when the world's economy began to collapse. Due to an overall lack of oversight, gigantic banks were buying and selling crap investments which held a false assurance of quality. It took a desperate move by a Republican president to prevent a total collapse, by bailing out banks who, we were told, would otherwise go bankrupt and collapse the world's economy. It seemed like everyone understood the need for strong regulation as a measure of defense from banks.
Listening to the candidates over the last few months, it seems like that lesson has gone out the window.
(Excerpt from video clip) SANTORUM: What I pledge to do is — on day one, I will repeal every single regulation that costs over 150 — $100 million that the president has put in place. I will replace some of them with lower-cost regulations, but a lot, I will just get rid of. . . We repeal all of those regulations, repeal them all, and there are a lot of them.
(Excerpt from video clip) GINGRICH: Lower taxes, less regulation.
(Excerpt from video clip) ROMNEY: I will reduce federal regulation. He thinks that a bigger government, more intrusive government, with more regulation, a government that takes from some to give to others, a government that racks up debt higher and higher and higher —
SHUSTER: Joining us to delve into the mind of the right wing is journalist and author of "Pity the Billionaire," Thomas Frank. And Tom, thanks for your time tonight.
THOMAS FRANK: It's a pleasure to be here, David.
SHUSTER: So, Tom, how does the right go from in 2008 needing a vast increase in government influence in business to prevent an economic collapse to now saying we need more deregulation and less government.
FRANK: Oh my God, if only we had had, an intrusive federal government back in, you know, the mid — the middle of the last decade, you know, maybe if they had done something about those predatory lenders or maybe if they had regulated credit default swaps in even the slightest way. You know, any of these things, if they had just done any of them. If they had kept Glass-Steagall on the books, we wouldn't have had too-big-to-fail banks. If only they had done those things.
But they have now — you know, we had this catastrophe, we had this disaster and now these guys have persuaded themselves, David, if you pay really close attention to their rhetoric, that the real problem is that we didn't deregulate all the way. We didn't go all the way to the free-market utopia, you know, up there in the sky. And if we can just press on to that, you know, then everything will be fine. The market will work perfectly.
SHUSTER: And how did we get there? Because, I think a couple of years ago, we all would have thought even the Republicans would sort of move toward some better regulations of the financial industry.
FRANK: It sure looked like that was the way things were going in 2008. It sure looked like that. You know, instead of moving to the center and coming around to the sort of the reasonable course that you have described, the Republican Party took a sharp turn to the right.
And this is the part of the story that really blows my mind, every time I think about it. They did this not, you know, by saying, you know, "Let's forget about the hard times that we are in." They did it as a sort of hard-times movement, by pretending to be a populist movement, by, you know, mimicking a social-protest movement from the 1930s.
SHUSTER: How much of this anti-regulation, small government talk is being funded by corporations who are the true benefactors of this policy?
FRANK: Well, an awful lot of it. I mean, look at — look at who is funding these, the presidential campaigns, of course? But, also, I mean, look at the tea party movement. This is sort of the main actor in this — in this broader shift to the right, or was the main actor a short time ago, and that, you know, at least two of the large organizations behind the tea party movement were set up by the Koch brothers, who are these two billionaires and these fellow Kansans of mine — they live in down in Wichita — but across the board, this movement was largely — was set up by sort of D.C. conservative establishment. Now, it became something larger than that over time. But that really is where it started.
SHUSTER: The Occupy movement, the impact they have had, essentially, on both parties, have they changed the narrative a little bit or at least reminded people, "Wait a second — Washington does the bidding of the corporations through K Street and all of these sort of lobbies and what not and that has to change."
FRANK: Exactly. What you just said, that's the really simple and obvious way of understanding it. And yet, for some reason, that has been so difficult for Americans to get their head around. We imagine all of these different sort of, you know, conspiracies and these kind of baroque, you know, mechanisms that government is grasping for power and victimizing AIG and doing these terrible things to Goldman Sachs and, you know, "Boo hoo hoo, pity the billionaire." Right? This is what these guys are saying.
And every now and then, it's very refreshing to have something like Occupy Wall Street come along and remind us of the incredibly obvious truth of the matter.
SHUSTER: Well, Thomas Frank — it's a terrific book, it has gotten great reviews. The book is "Pity the Billionaire," a terrific look at what happened in 2008 and how we got from there to now, and Thomas, again, who would have figured that we would be on this political path, especially on the right?
FRANK: Exactly. Well, thank you for having me, David.
SHUSTER: Thomas, always a pleasure. Thomas Frank, and that is our show for tonight.
