News analysis: Paul Ryan's Hayekian roots lead to 'Ryanism' approach; Dems, GOP differ on philosophies
With the addition of Wisconsin Rep. Paul Ryan to the Mitt Romney GOP presidential ticket, pundits predicted that the "incredibly boring" and "strikingly petty" race would finally become about something bigger.
"Once Mr. Ryan entered the race, everything changed: the issues, the substance of the candidates' speeches, perceptions of Mr. Romney and President Obama, the role of a running mate," Fred Barnes wrote at The Wall Street Journal. "The economy remains a central issue, as do Mr. Obama's overall record and Mr. Romney's past one. But now the looming fiscal crisis, Medicare and the size and role of government are front and center of the campaign. The presidential contest has been elevated into a clash of big ideas and fundamental difference."
David Davenport of Forbes wrote that the big question being debated now is, "Do Americans want the Romney-Ryan less government formula of tax cuts for economic growth, along with spending and entitlement cuts and debt reduction? Or do they prefer the Obama-Biden approach of letting tax cuts expire, and promoting more government spending and infrastructure programs to spur economic growth?"
The debate over the role of government in the economy is one of differing philosophies developed by twentieth century economists John Maynard Keynes and Friedrich Hayek. Keynes believed unemployment could be affected by aggregate demand, and that if the private sector wasn't buying things, the government ought to step in to buy things and employ people.
In contrast, Hayek believed that the price system, or free markets, could coordinate people's actions into the spontaneous order of the market system. Fiddling with the market could have unforeseen consequences, such as increases in the money supply that could make credit artificially cheap and lead to busts.
Romney, on the other hand, reportedly falls more on the Hayekian side as his economic plan calls for a flatter, easier tax system and a small, simpler government.
Ryan is a student of thinkers like Ludwig von Mises, Ayn Rand, Milton Friedman and Hayek, holds a degree in economics and political science, is known as a political wonk and is a proponent of smaller government. However, a New York Times article by Adam Davidson suggested that while many of Ryan's proposals, including his Roadmap for America's Future, have Hayekian roots, other parts of his budget plan would not fall under that label.
Peter Boettke, an economist at George Mason University, said that for Ryan to be truly Hayekian, he would need to apply the "generality norm," where any government program that helps one group must be available to all. If applied, Boettke told The New York Times, that principle would eliminate all corporate and agricultural subsidies and government housing programs, and it would get rid of Medicare and Medicaid or expand them to cover all citizens. Likewise, private companies should be allowed to compete with the government by offering an alternative Postal Service, road system and perhaps even a private fire department.
"Though he talks like Nobel Prize-winning economist Milton Friedman, some of Ryan's most high-profile votes seem closer to Keynes than to Adam Smith," Matt Lewis wrote at The Daily Caller.
Ryan came under fire recently for requesting stimulus funds for Wisconsin business after fighting against the 2009 stimulus bill. During his career in Congress, Ryan also voted for the $700 billion bank bailout, loans to help the auto industry and the expansion of Medicare.
- Fly a flag for Cody: Army confirms Utah man...
- Mitt Romney talks IRS, AP records, Benghazi...
- 'Star Trek: Into Darkness' does $70.6M but...
- 2 men arrested in killing over iPad in Las Vegas
- Republicans try to link IRS scandal, Obama's...
- White House insists Obama was not involved in...
- LDS missionary 'stable' following hit-and-run...
- Small Fla. city wonders who won $590.5...
- Mitt Romney talks IRS, AP records,... 63
- Journalists push back against Obama... 21
- White House insists Obama was not... 19
- House chairman sees IRS targeting as... 16
- Associated Press CEO calls records... 13
- Republicans try to link IRS scandal,... 12
- President Obama walking a familiar path... 11
- Tea party looks to take advantage of... 10