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Monday, 13 August 2012 22:00

Is Paul Ryan Just Another Bailout Politician?

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Many Washington conservatives swooned when presumptive GOP presidential nominee Mitt Romney picked seven-term Wisconsin Congressman Paul Ryan as his vice presidential running mate. Florida Senator Marco Rubio called Ryan a “courageous reformer.” Rush Limbaugh suggested he was “the last Boy Scout.” Jeffrey H. Anderson of the neoconservative Weekly Standard magazine labeled Ryan “the ideal running mate.”

And while Ryan has picked up some flak from political leftists for critiquing the deficit-spending-forever policies of the Obama White House, Ryan has a big-spending, pro-bailout past. Ryan practically begged his fellow Republicans in the House to vote in favor of the 2008 TARP bailout of the big banks in his speech on the House floor September 29, 2008:

Madam Speaker, this bill offends my principles. But I'm going to vote for this bill — in order to preserve my principles, in order to preserve this free enterprise system.... I believe with all my heart — as bad as this is — it could get a whole lot worse, and that's why we have to pass this bill.

(See the YouTube video at the bottom of this article.)

Ryan's appeal to House Republicans to pass TARP — a key grievance of the Tea Party movement that emerged after the vote — included a promise that none of the money would be used to pad the bank accounts of incompetent bank executive fatcats. “And we also made sure that the executives of these companies that made these bad bets don't profit from this rescue recovery plan,” Ryan said.

Of course, Ryan's promise on the House floor didn't pan out. In fact, billions in bailout funds went to executives in firms bailed out by taxpayers, in the form of “bonuses” for allegedly excellent work. “Nine of the financial firms that were among the largest recipients of federal bailout money paid about 5,000 of their traders and bankers bonuses of more than $1 million apiece for 2008,” the New York Times reported June 30, 2009, summarizing a report by the New York Attorney General's office. 

The Times noted, “At Goldman, just 200 people collectively were paid nearly $1 billion in total, and at Morgan Stanley, $577 million was shared by 101 people.”

But the TARP vote wasn't the first — or the last — time Ryan voted for a bill that “offends my principles.” Ryan also voted for the 2008 auto bailout after the TARP vote and, much earlier, voted in favor of the $18 billion airline bailout in 2001. While the federal government is not authorized under the U.S. Constitution's enumerated powers to bail out anyone, from the richest to the most destitute, what does it say about a man who favors taxpayer bailouts for super-rich banks, airlines, and auto manufacturers? Certainly it is not that he is a constitutional purist, or a fiscal hawk.

This is not to emphasize that Ryan is any different from his running mate Mitt Romney, who also backed TARP. Or, for that matter, President Obama and Vice President Biden, who both voted for TARP as senators in 2008. But it does reveal that Ryan is no fiscal hawk. Ryan has received some favorable comments from Washington conservatives for having adult conversations about how the federal government needs to start balancing budgets and engaging in entitlement reform. And he has indeed put forth a budget proposal that would cut spending and deficit levels compared to Obama's budget estimates. But Ryan's budget proposal would not balance the budget until some time between the years 2030-40, meaning that the Ryan plan would continue deficit spending at least another 20-25 years — assuming there are no emergencies such as wars or other negative events that skew the long-term estimates.

Ryan's appointment may have caused many conservatives to swoon over his reputed fiscal credentials, but that swooning comes only from the uninformed and those with highly diminished expectations.

Photo of Rep. Paul Ryan: AP Images


4 comments

  • Comment Link Gordon Freeman Wednesday, 15 August 2012 08:28 posted by Gordon Freeman

    @Remnant

    Yes I formulated my sentence very poorly because I was using Paul first name instead of Ryan which then became a reference to Ron Paul instead.

    I agree this is not a surprise, and that they do have similar views.

    @Madaleine

    But would you not agree that being a regular working employee it would be better to have the freedom to choose instead to have the funds you pay into risky unstable government accounts, into private accountable banks accounts instead? The Government may decide not pay you back and they control the courts, the private banks have no such power, even if their broke.

    Being a normal worker with maybe 10% above median income, I pay 35% in income taxes yet the government decided last year that I was not worth returning my already invested money, because I had two years where I only worked 50%, and because of this they decided to steal all the funds I had already pay in.

    How people think government social security is the answer is insanity, I have nothing against paying taxes for services I use and benefit from directly. But paying a huge portion of my income for a service the government later decide they dont want, and not pay it back is theft through force.

  • Comment Link REMant Tuesday, 14 August 2012 16:14 posted by REMant

    Well, actually Ryan and Romney have more in common with Uncle Milton than does Rep Paul, and Mr Freeman should know better. It has long been my impression that Ryan and Romney shared similar economic views and his pick came as no real surprise except that as VP he is likely to have a great deal less voice in policy.

  • Comment Link Madeleine Tuesday, 14 August 2012 15:58 posted by Madeleine

    I owuld not vote for a man who does not knwo what an entitlement is, Welfare is an entitlemnt , Medicaid is an entitlemnet, not Socila Security and not medicare. Taliong moneuy out of our Medicare and Social security that does noty belong to you is stealing, not an entitlement. When Obama took 750billion out of meidcare he tyook part of our ayment money, he left a 5% hole in our payments money, so he closed one doughnut hole and opened a bigger one. The average retired person pays into all of these thigns , especially social security, most of thei rworking life, the expectation is to supplement a retirement fund or pension plan if you have one, or at least have money ot live on when your working days are over, it was a great safety net for the elderly and it still is. Obamas health plan will definately hurt seniors and Ryans will put the nail in the coffin. I doin't know what Unions have to do with this, my Union never asked me or told me who to vote for but since Unions funds are made up of their investments they need ot know whats going on. I find it amazing that people now think that social security should be gotten rid of , that medicare is not needed and that Unions are no good , take away all of those things away and you will have millions of people in the street and on their knees and homeless as Thomas Jefferson predicted and as George Soros is hoping for. Not everyone is on easy street with a 401K or is self employed and I am starting to dislike those people very much, they can't seem to understand why everyone isn't self employed or independently wealthy, that si not the way life works. If people knew they were ogingot wind up like this , like welfare recipients then they would have gone on welafare at 65 instead of paying into it for years. Now I don't think they take Amerticans in Welfare, just illegal immigrants and immigrants, free Medaid carsd as usual. Bill Clinton was crtowing aobut how wonderful it was that he got all of the people off welfare, yes, the Americans, so he could put in all of the immigrants he brought in for the vote, we have been robbed every way you can rob uis and now we have this little twit coming in here and cutting corners on seniors and sick people? I think not.

  • Comment Link Gordon Freeman Tuesday, 14 August 2012 08:16 posted by Gordon Freeman

    Mr. Eddlem you know that Mitt Romney is no Ron Paul, to any conservative who has followed Paul in the last 3 years this is no shocking news. And he is to my own dissapointment no disciple of "Uncle Friedman" as mr Paul called him in an interview.

    Taking the great mr Friedman approach and slash public spendind, eliminate government waste by eliminating the failed institutions, negative income tax and so on would eliminate the debt in matter of years and bring prosperity unequalled ever before in the history of man.

    But you would never get elected promulgating this tax plan. Or even Ron Pauls plan, the Unions are too strong. The media is portraying the moderate Ryan plan as extremist and to quite self proclaimed conservative New Gingrich; "the Ryan plan is right wing social engineering"....

    So if you ask me, the only realistic solution to ending the debt, even if it is in 40 years, is the Ryan plan. More important than debt however is creating predictability for rate of inflation and taxation level.

    To quote Richard Nixon

    "... I dont care what Milton Friedman says, he is not running for president!"

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