At first glance, Mitt Romney’s choice of Paul Ryan as his running mate pick is baffling. For months, a key component of Romney’s strategy has been policy vagueness -- avoiding specific, attackable proposals and keeping the focus on the unpopular incumbent. Now he has chosen a running mate with his own detailed, and easily attacked, fiscal plan.
I can only conclude that this pick was not primarily about electoral politics. Romney realizes that V.P. picks rarely make or break the election, and he probably believes Ryan would help him be a more effective president.
Josh Tyrangiel's interview with Romney in this week’s Bloomberg Businessweek is telling. Asked what he liked best about working at Bain, Romney said:
I’m not sure people would think of me in this light, but frankly what I enjoyed most about Bain & Company, the consulting firm, was the analytical process of solving tough problems. If a client invites you in and is ready to pay a lot of money for your counsel, it is not because you know their business better than they do. Of course, they know their business better than I ever would. But they’re looking for someone to understand their business challenges in a new light. And that presents an analytical challenge which is steep and exciting. And I love the thinking and the analyzing as much as anything. I also enjoyed working with a team of people to arrive at ideas and solutions, and also to see ideas and solutions implemented. The experience at Bain Capital was similarly analytical, to decide which business ideas really had economic merit and which did not. And then to do your best to make sure that the team was in place to execute its vision.
Paul Ryan reminds me of people I know at Bain and McKinsey who thrive on those sorts of analytical teams. The other possible picks for vice president do not.
Months ago, I wrote that Romney should pick New Jersey Governor Chris Christie because he needed a partner who can work effectively with Congress. Ryan also fits that bill.
And a major fiscal adjustment is likely to be the most important economic policy made during the next administration. Ryan is the most important Republican policymaker on fiscal policy in Washington, and he could lead the Romney administration’s efforts in the area.
The key question is, would Ryan be a good fiscal czar? The answer isn't obvious. Ryan’s brilliance, and the soundness of his fiscal plans, is vastly overrated on the right. But it’s become fashionable on the left to say he’s a charlatan, which isn’t right either.
The various incarnations of Ryan’s plans for fiscal reform suffer from a lot of the same problems as Romney’s fiscal plans: excessive vagueness and blanks left in the hard parts. For example, Ryan’s last budget had $389 billion in unspecified Medicare savings over the next decade, on top of President Barack Obama’s proposed cuts, while repealing some of Obama’s cost control mechanisms.
But Ryan has also been willing to go out on a limb for useful but unpopular fiscal ideas. One is Medicare premium support, which unfortunately he has proposed to phase in extremely slowly. Another is a Value Added Tax, which was a key component of his first two “Roadmap” fiscal reform plans.
What worries me most about Ryan is that he is a true believer in immediate fiscal and monetary austerity. In the House, Ryan has been a leading advocate of near-term spending cuts to shrink the deficit. Ryan responded to the second round of quantitative easing by accusing the Federal Reserve of “debasing the currency” and raising fears about inflation.
I can imagine Ryan being a good partner for Romney on long-term fiscal policy. But on short-term policy -- probably the more important issue -- any advice he is likely to give Romney is bad.
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