Here we go again: Financial markets are plummeting thanks to the threat of a government shutdown and, beyond that, another debt ceiling crisis. One of the great bull markets of recent years is being derailed by a bunch of extreme conservatives in Congress.
But Wall Street shouldn't just blame the Tea Party for ruining a good thing. It should blame big donors from its own ranks who are bankrolling groups like the Club for Growth who are also responsible for the crisis. As I have noted here before, the Club has been fanning shutdown brinksmanship by urging members of Congress to toe the far right line on Obamacare. This is no passing suggestion, given that the Club has been a main funder of primary challenges to moderate Republicans.
So the story here, in part, is the Club for Growth vs. stable financial markets and an ongoing economic recovery. That's pretty ironic given the group's name. But it also points to an important internecine conflict within America's wealth elite. In fact, there are a quite a number of very rich people who are every bit as crazy as those hardliners now in charge of the House GOP caucus.
Financial leaders who have helped orchestrate the present crisis through donations to the Club for Growth include John Childs, a private equity leader who was one of the Club's biggest donors in 2012, an election cycle that showcased the Club's fearsome power to knock out incumbents. Tech and hedge fund investor Peter Thiel was an even bigger donor to the Club in 2012, and thus deserves even more blame for what's happening today.
We can also blame Rob Arnott, who heads a large financial research firm, and was another huge donor to the Club in 2012. I hope the clients of Arnott's firm, Research Affiliates LLC, understand that he bears some responsibility for the declining values of their investment portfolios right now.
And shame on James Simons, the math wizard turned hedge fund billionaire. Simons and his family have been huge donors to the Democratic power. So it was pretty dismaying to see that Simons' hedge fund, Renaissance Technologies, gave $600,000 to the Club in 2012.
The list goes on. Finance leaders are among the top backers of libertarian economic groups like the Club. Not the smartest choice of causes, I'd say, since deregulation has helped crash financial markets twice in the past 15 years and libertarians on the Hill are now threatening to precipitate what could turn into another market meltdown.
Yes, it's a bunch of extreme heartland Republicans who are careening us toward crisis. But make no mistake: Both they and many of their colleagues are running scared in the face of big money from wealthy donors.
