Initial Thoughts on Mitt Romney Picking Paul Ryan
As you likely know by now, Mitt Romney has chosen Paul Ryan as his running mate. It’s an interesting pick, but a risky one in my opinion. Ryan is best known for the Ryan Plan to slash the size of government. I’ve already made my peace on the Ryan Plan – I think it’s a dangerous ideologically driven proposal that shrinks government spending during a balance sheet recession and risks turning us into Japan. And this is the core problem I have with Ryan. He just doesn’t understand our monetary system despite chairing the House Finance Committee. He says all the things that sound right in theory (and better in a political speech), but are just totally wrong in reality. For instance, he has repeatedly stated why he thinks the USA is at risk of becoming Greece and appears to have no idea why his policies will actually turn us into Japan. Regular readers know precisely why Japan and Greece are polar opposites – one is a currency user like a household and the other is a currency issuer.
But most voters won’t approach this from the same perspective I will, which is almost entirely based on an understanding of the inner workings of the monetary system and the economics of the two candidates. Instead, they’ll view this as a move that energizes Romney’s base and gets conservatives excited. That’s all well and good, but I think it’s a dangerous play. The winner of this election will be the one who wins independents like myself (I am actually a registered Republican, but vote like an independent). I could be swayed to Romney’s side. But I could also be pushed away. Ryan’s economics definitely push me away, but I’ll wait to pass judgment until I see how the duo unfolds together and battles with Obama/Biden.
The bottom line is that this looks like an attempt by Mitt Romney to clarify his message. He’s a conservative who is willing to do anything to satisfy his base. Adding a smart, articulate, likable guy to the ticket is certainly a better move than picking another boring old while guy, but I am not sure this is going to push him over the hump (which is incredible to say because Obama should be getting his clock cleaned with the unemployment rate at 8%+). This move has the potential to push independents away and that’s an enormously risky move. It will be particularly unpopular for those who don’t like the healthcare components of the Ryan Plan (hello Florida, good bye Presidency!).
And the biggest problem Mitt Romney might have for himself now – Paul Ryan is more Presidential than he is. The main thing this pick might tell us is who’s going to be the next big conservative figurehead for the next 15 years.
As always, I’d love to hear reader input on the pick.
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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106 Comments
as a few others have opined, I am more concerned about the Supreme court pics the next 4 years than I am about the economy.
Yes, that should be the primary motivator behind the choice between Rep. and Dem. Though I run a business and am fiscally conservative, I see a far greater threat to my way of life by the right wing appointments. The Bush v Gore and the super pac decisions were the tipping point for me. These guys are dangerous.
This is the funniest thing I’ve read in a while.
In our political system, politicians get more votes on what they give to various constituents more than what they take away. Small gov’t may appeal to many in discussion, but go to individual groups who want this thing or that thing, and Ryan’s platform is not a strong selling point. That said Romney was not energizing the electorate and Ryan is respected by fiscal conservatives. Now at least Romney can point to a reason to vote for him as opposed to a reason not to vote for Obama.
Is there any other reason to d*&n the Republican party? They cannot win fairly, and they *know* it. So they will try to *steal* elections. D*&n them!
For all their talk, they are fascist bastards cloaked in democratic costumes. That their own people don’t denounce their heinous tactics says it all. Fail. Go to hell. Now. Quickly.
http://openchannel.nbcnews.com/_news/2012/08/11/13236464-new-database-of-us-voter-fraud-finds-no-evidence-that-photo-id-laws-are-needed
This is a sick bunch of bastards who want to rule, not by majority, but by tyranny. American already has too many prisoners. But obviously it needs a few more.
The one thing I’m absolutely sure about is that both Romney and Ryan are good people as are Obama and Biden, Bush and Cheney, etc,,,. They may or may not be misguided with their analysis for progress for America, but that does not make them evil. Your tone does not help the debate. You and people like you on both political spectrums are part of the problem.
I could have left this comment on a dozen different post, I’m not sure why I picked on you!
Lance,
I just read all of your other comments. You are much more pragmatic than what my initial knee jerk reaction was to this comment. Sorry!
Cullen,
I am surprised a comment like this by “Lance” is allowed to stand on this site. It’s embarrassing.
I don’t/can’t read every comment. But yes, it’s offensive and should be rebuked.
I actually agree 100% with Lance. And look at Cullen’s commentary. Romney and Ryan are 180 degrees away from reality / effective policy in their positions. But we live in a nearly Fascist state where black is white and good is bad. It matters little that Ryan and Romney want us to go in the wrong direction at full speed. Better, in some circles, to look at how they stack up with regard to conventional wisdom. We are unmoored; we lack a tether to reality.
Fortunately, Obama is now shaping up as the winner. Romney has a political tin ear. He personifies the greedy rich bastards that are now anathema to most voters, if I read the popular mood correctly.
As usual, I should add that I may be the one who is full of shit, and that I appreciate Cullen’s wonderful blog and open-minded tolerance of occasionally mean-spirited assholes like myself…
“mean-spirited assholes”….You know, the nice thing about you MMTers is that the world you envision (though extreme in political views IMO) is a better one than the world we have today. Unlike the one the Rothbardians envision where mercenaries police our streets….
You gotta love the ‘Detroit Dans’ with all their manufactured outrage. A Statist to the bitter end.
The case against Romney? He’s a succesful guy with too much money at a time when too many people don’t have enough. Reason enough to vote for Barry so he can keep spreading dependency.
Four more years!
Jim Malmstrom
https://home.wellsfargoadvisors.com/james.malmstrom
I’m independent favor lower taxes & neither like Democrats nor Republicans but calling ‘statists’ is just demonizing & hypocritical when you work for Wells Fargo, who got bailed out by the government with billions of dollars of gov bailout money …say thanks to Uncle Sam for keeping your job
Cullen wrote before & I agree that mixed-capitalism is best for innovation, increased produciton, & competition.
The gov plays a role in funding new innovations & technology & promoting competition (this is how gov invented & funded antibiotics, nuclear power, computers, GPS, etc)
Have you read MMR’s of how economics functions? or it’s grandfather MMT?
As a finacial professional, you should analyze the facts/evidence from official Federal Reserve data below that proves how Mises & economic libertarians with the gold-standard based economic theories as demonstrably wrong & false (see charts below)
1. Oil/energy prices cause inflation, NOT federal deficits -evidence/facts here: http://rodgermmitchell.wordpress.com/2010/04/06/more-thoughts-on-inflation/
2. http://www.RodgerMitchell.com Daily Economics Verifiable EVIDENCE by CEO/MBA economist at http://rodgermmitchell.wordpress.com/2009/09/07/introduction/ &
http://rodgermmitchell.wordpress.com/2011/07/09/why-bank-lending-leads-to-recessions-a-counter-intuitive-finding
3. http://pragcap.com/the-most-destructive-monetary-myth-in-the-usa PragmaticCapitalism.com’s fact-based intro on how modern currency systems work -Modern Monetary Realism vs. the most destructive myths of false outdated gold-standard based theories most politicians/economists operate under
4. Seven Deadly Frauds of Economic Policy http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf by Bank CEO/economist Warren Mosler or click for here for shorter summary of Modern Monetary Economics 101
5. http://MoslerEconomics.com -Daily Insightful & Most Accurate Verifiable Economics Analysis by bank CEO/economist Warren Mosler
6. http://MikeNormanEconomics.blogspot.com One of the BEST Daily Analysis by Chief Economist & FoxBusiness-Bloomberg contributor expert Mike Norman, formerly of S&P
The election is a farce. First, the makeup of congress wont’ change that much. Maybe GOP gets senate control? Still, congress will be divided, and the same nonsense will continue, i.e. very little will get through and what does get through will be watered down bigtime. So I wouldn’t worry too much about Ryan actually getting anything that resembles his plan through a divided congress. Second, and most importantly, Wall Street will continue to “own the politicians” and our society. The power of the financial sector, and the money they spread around to the politicians, has us all by the you-know-whats. Third, the Fed will still be meddling and far too powerful.
Bottom line: there will be no significant change for a very long time, and I think it’s likely that we are in for very serious trouble in the not too distant future. I see no evidence that people will bring about change until and unless they are forced to. If the credit crisis didn’t do it – what will?
Yes, but someone has to win the election which is the point. Neither side can effectively change anything so they campaign to get elected knowing that the crap they’re selling is nonsense.
But winning elections is the name of the game and selling budget deficits and National Debt hysteria gets you into office on the Republican side just like a commie under every bed used to when I was a kid. And, of course, the Republicans will steal granny’s Social Security check and she will have to move in with you worked for the Dems.
None the less, the political standoff is military spending v.s entitlement expenditures and no solution is possible for the foreseeable future.
Which brings me to looking forward to Reid proposing to President Romney to slash Social Security to save the military cuts that Ryan and his ilk have guaranteed.
But there is hope. Gridlock is not a bad word at this moment in history as it keeps these hacks from destroying the economy that made us the premier empire in world history.
And, I have to admit, it does make me wonder how many more millions on the welfare roles, social security, and government payrolls, will decide to start voting and put an end to “fiscal conservatism” just so they can continue to buy Chinese trinkets and over priced gasoline!
Cullen,
Can you name any Senators or Congressmen who seem to understand the realities of our monetary system?
Our health care system is a mess in many respects and it’s frustrating to hear little from the GOP besides “repeal Obamacare”.
You’re right that the Democrats will attack Ryan about the Ryan-Wyden plan to reform Medicare. I found this article from National Review helpful in expaining the plan:
http://www.nationalreview.com/articles/313757/grasping-medicare-distortion-yuval-levin
I’m pretty particular about people “understanding the monetary system”. Does anyone in Congress understand MR in the way I would want them to? Probably not. At least I don’t know of anyone who does.
I can appreciate that many people in the United States, and the world at large, will not have the same understanding of monetary policy as you. However, there is no denying that America has some very difficult decisions ahead with respect to fiscal policy.
Romney’s selection basically says that the time for this debate is at hand. We should welcome this, and put aside yet another fruitless, acrimonious discussion on gay-sex marriage, guns, religion, evolution and so on. It is time for America to solve its problems like adults. It is not a question, for example, of big vs small government, but effective and efficient government. It is not a question of ideology but common sense.
Right now, common sense is being emasculated by people who are gaming the system. Crony capitalism and crony government go hand-in-hand. We need a Roosevelt – you might think it is FDR, I would tend to say it is Theodore.
I can’t speak for Romney or Ryan, but I suspect the latter (and maybe the former) believes (but would never say in public) that the longer-term benefits of monetary and fiscal austerity (i.e., a stronger currency and a smaller government) far outweigh any shorter-term, and presumably temporary, damage to the economy.
Romeny’s history would lead me to think he would not be for austerity. He’s been something of a Keynesian in practice but never in preach.
Romney picked Paul Ryan to secure the Tea Party vote. I do not see the pick as anymore complicated than that as to why he was chosen.
I do not see Romney as being able to “control” Paul Ryan at all.
As someone wrote the other day Paul Ryan is a Sarah Palin but with a penis…..
Interesting times ahead.
I think he’s better described as Palin but with a slightly bigger penis.
America the next Greece? That is just moronic and belies the fact that not only does he not understand what ails America, neither does he understand what ails the Euro Zone.
Yeah, there was a high risk that the tea partiers were going to defect to Obama.
No, there was a risk they would vote for Ron Paul instead of Romney.
Cullen,
A few days ago I shared a video in the Ask Cullen column from the AICPA regarding deficits. You stated optimistically that the MR view on debt and deficits will eventually become mainstream. Today, Paul Ryan is announced on the Romney ticket and even on your site we see comments about “fiscal conservatism” and a “far too powerful, meddling Fed”. I guess I just don’t share your optimism regarding the ability of MR or any PK economics for that matter to come to the mainstream forefront. I know you don’t speak for your commenters and I am not at all trying to be critical of what is being posted on this site by you or any others, just have a feeling of despair that we are coasting into Japanese territory for the next 20 years yet its clear how it can be avoided. In my opinion, you do a great job analyzing, dissecting and presenting the monetary system, but HOW do we get this message out to the public and will MR ever present policy prescriptions that we can urge our representatives to implement?
I don’t know Joe. I think MR has taken a really important step in presenting economics that is as close to scientific & apolitical as it gets. But we’re talking about a school of thought that is literally 6 months old. So we’ve got our work cut out for ourselves. Even more unfortunate is my mentality which is rather unmotivated on getting the message out. That is, in an effort to stay apolitical, I also don’t want to be ideological in presenting and spreading MR. So I’ve probably impeded any impact it can have on the world by intentionally not being ideological and prescriptive in its presentation. It’s kind of a lose lose. You either present an ideology and shut yourself off from half the world. Or you present an unbiased view and the world ignores you because you sound like you don’t have solutions to our problems….
As McCain had to have Palin to secure the fundamental base of the GOP, I suspect that Romney is being forced to do the same. The far right and Tea Parties must now be pandered to if the GOP is to make it to office. Rather similar to the Left needing the green vote.
It has a small whiff of desperation and I think shows that Romney can not win the Office by his own hand.
Obama and Co must be pleased.
Ideologues seldom make it to the top spot. And Ryan is certainly an Ideologue.
As several people have pointed out there are obvious tactical reasons to choose Ryan, bolsters the ticket as ‘more conservative’ and he helps lock in more of the Tea Partiers.
As an independent- I made a sort of ‘oooof’ sound when I heard about this.
Me too.
I think Obama should try and take pride that unemployment is only 8.3%, a Herculean feat in the face of this Congress. I’m having a hard time trying to see how its deliberative obstructionism isn’t anything other than sacrificing the economy for political gain.
The impact of a Ryan-esque federal budget is not forgone. Too many floating variables of the important kind. Pay more attention to Schiller’s “Animal Spirits” if you want true insight. Presidents are figureheads, their primary role is to inspire or dampen Schiller’s “Animal Spirits”.
Congressional policy on taxation and entitlements will play a role in the long-term fiscal health of the country, but in 4 and 8 year increments, it’s impossible to say what the election of a given president is going to do to GDP.
Some factors:
Too many houses built during boom, that problem is being rectified as we speak, big multiplier coming riding new home construction.
Ex-pat corporated cash coffers offer an interesting twist.
The Internet.
Middle-Eastern Turmoil.
Bank Reserves.
China.
Continued proliferation of service centric economies, juxtaposed with manufacturing economies, each with profoundly differing political structures.
Immigration and demographics. Baby-boomers… who dat?
The list of factors to put into your models is too large. I defy anyone to predict the future accurately on a repeatable basis. I love those who use hindsight to say “I told you so”. Every prediction for our future currently exists, someone will be right, but probably only once.
Ruminations?
PS – The Marxist/Capitalist posts on the other article were hilarious. Really?
Read “The Progress Paradox” by Gregg Easterbrook if you want insight into why we think we are always a bit worse off than we used to be, but why we are enormously better off as a result of capitalism. People are crazy.
Lots of good comments.
But I’ll stay away from the subject here – don’t like politics in any form.
In fact – that is what keeps me coming back to this site – politics is a rare thing here.
Cullen, since we’re talking politics, i would love to know your analysis of the “Reaganomics” of the 80′s and its success. Have you ever written about it?
Regards
Never written about it. But Reagan ran huge deficits. So the traditional view of Reagan as a small govt guy is not entirely accurate….Reagan understood the MR idea that a flow of spending can be beneficial. Especially when it’s maintained by the one entity that can always keep the flow going….
Hear you, thx. I really think (hope) that Romney-Ryan is just rhetoric, how could any politician these days be elected by saying more deficits anyway, regardless of party or even country. Once elected, i really think (hope) Romney-Ryan will play the Reagan card, making sure the increase in deficit come from tax cuts rather than more spending, that would lift the mood…
Paul Ryan voted for both Bush tax cuts. He voted to go to war with Iraq. He voted for Medicare Part-D. Now he’s upset that the debt is so high. Maybe he should take it up with the laws of accounting.
http://mediamatters.org/blog/2012/08/19/ny-times-paul-ryan-mythology-skips-past-his-def/189436