Romryanomics–prosperity for the well-off fueled by austerity for the rest

by Linda Beale

Romryanomics–prosperity for the well-off fueled by austerity for the rest

I’ve put off writing about stilted robo-Romney’s choice of the perpetual-smily-Ryan as veep about as long as I can, I suppose.  So let me talk about it in broad terms in this post.  In the next posts, I’ll discuss more methodically the vacuous “Romney program” and the toxic “Ryan path to prosperity” with particular attention to what they have said specifically (or not, in Romney’s case) about what they want to do with the tax system.

Both Romney and Ryan come from well-to-do families with the privileges of financial support, status and connections that adhere thereto (see this story on Romney–by the way, a donated inheritance is still an inheritance and donations of that magnitude earn other privileges for the elite; and this story on Ryan–whose wife also inherited millions including oil and gas interests), yet support the neoconservative economic mythology that wealth is wholly based on merit and that the way to have a good economy is to make sure the wealthy, who are deemed to be the (mythic) “job creators” are happy.  This leads them to support austerity for the middle class and seniors coupled with deregulation, privatization, militarization and tax cuts–Romryanomics 101.

Key to the Romney program (or what can be derived from a description of generalities-without-specifics that can’t be scored by economists plus Romney’s statement earlier that he would sign Ryan’s budget proposal into law if passed by Congress plus his Monday statement that “his own plan for Medicare is ‘very similar’ to Ryan’s”, per this story ) and the Ryan so-called “path to prosperity” (see, e.g., the LA Times story) is privatization of, and spending cuts to, Social Security and Medicare, along with spending cuts to everything else that serves the public good (environmental programs, parks, etc.) and vulnerable minorities in this country and isn’t part of the military-industrial-financial complex.  That is, social welfare programs that have made the difference between poverty and dignity for American seniors will be undone by some level of privatization and benefit cuts, to accomodate unmerited tax cuts for the wealthy and increased spending on the military (notice the echos of Bush’s Iraq-war buildup in the talk about being tough on Iran and extraordinarily friendly to Israel coming from the campaign).

Of course, this program of tax cuts, militarization, and deregulation has already been tried–those are the ideas that failed to deliver a robust economy under George W. Bush, who had an anemic recovery from 2001-2004 in spite of the $1.3 trillion in tax cuts over ten years enacted in 2001 and the continuing tax cuts carried out in 2003 and 2004.  Nor did Bush’s imperialistic militarization through two preemptive wars deliver a robust economy.  Instead, the rash of financial speculation and finanialization of the economy pushed us into a deep financial crisis and the Great Recession.  Those ideas will upend the recovery from that recession that has been underway under Obama.

Both Romney and Ryan have personally benefited from the kind of government that recognizes the importance of public-private cooperation in institution and infrastructure building, yet pontificate that government is always less efficient than private enterprise.  That rhetoric is used to justify stifling innovative programs like supporting experiments in environmentally sound energy development, but it doesn’t come into play as far as continuing to ladle out tax-code largesse to the profitable oil and gas extractive industry or coddling financial institutions through deregulation (Romney, for example, supports dismantling Dodd-Frank, an already timid effort to rein in financial speculation; Ryan voted for TARP and against Dodd-Frank, positions that garnered Republicans a haul of financial industry contributions).  That approach will continue the George W. Bush trend of the financialization of the economy and likely land us in another, even worse, systemic financial crisis.

Both had ancestors that benefited greatly (in terms of prestige and in terms of economics) from their involvement in and with government.  Romney’s father George, of course, was a well-known governor of Michigan –and  a wealthy corporate CEO in the auto industry that benefited hugely from the government shift from investment in railroads to investment in roads.  Ryan’s family reaped its riches at the public trough–involved in the kind of public-private partnerships that made the transcontinental railroads possible (and built enormous wealth for the railroad builders) and the interstate highway system possible (and built enormous wealth for the highway builders).  See Libby Spencer, Ryan family fortune built on taxpayer money, (Aug. 14, 2012);  Sally Kohn, Paul Ryan didn’t build that! (Aug. 14, 2012) (noting that  the Ryan family, starting with his great-grandfather building railroads, has profited from government contracts over more than a century, including “at least 22 defense contracts … since 1996”).
Romney likes to think of himself as a successful businessman who can lead the country by supporting business.

But Romney is mainly a vulture capitalist.  His private equity firm bought companies that were doing well and providing good US jobs, loaded them up with debt so that outsize profits could be made for the Bain “investors” (himself included), and –if it helped them make even more outsize profits–enjoyed firing the “excess” workers. Private equity firms don’t produce anything.  While the right applauds the so-called “creative destruction” that tears existing companies apart to sell off the pieces for more or to enable firing the workers and breaking a union contract, those activities don’t add to a sustainable economy.  They  mostly look for companies they can take over, with no regard for the workers’ lives or the communities in which the companies exist, in order to capture what economists refer to as “rent” profits, usually through loading the companies up with debt.  Some of the companies thrive or just survive, but many of the workers don’t, since cutting workers is a favored cost-cutting measure.  Some of the companies go bankrupt, leaving all the workers in the lurch and usually without promised pensions.  Some of the companies turn to outsourcing workers in order to make enough to pay off the debt.  There’s not much in vulture capitalism that bodes well for a vulture capitalist as president.

Ryan likes to think of himself as a principled thinker who will push for what he considers appropriate policies (no matter, apparently, their impact on vulnerable seniors or middle-class Americans).  As Ryan’s 2005 speech to the Atlas Societymade clear, he has been an avid follower of Ayn Rand, the alpha-male praising, privileged-innovator(“producers”)-elite loving, anti-societal cooperation, anti-altruism,  radical libertarian, free-trade “objectivist” author that has been called the “Goddess of the Market” (see Jennifer Burns, Goddess of the Market: Ayn Rand and the American Right).  Ryan even told the Weekly Standard in 2003 that  “I give out ‘Atlas Shrugged’ as Christmas presents, and I make all my interns read it,” he said. “Well… I try to make my interns read it.” Rachel Weiner, What Ayn Rand says about Paul Ryan, Washington Post (Aug. 13, 2012).  Lately, though, he’s been trying to distance himself from Rand, perhaps because he finally learned that her brand of radical libertarianism derived from atheism rather than theism.  Kate Sullivan, Veep nominee Paul Ryan renounces former fascination with Ayn Rand, NY Daily News (Aug. 14, 2012).

cross posted with ataxingmatter