Thursday, February 4, 2010

Why it's difficult to take Paul Ryan seriously

Before he was calling for balancing the budget on the back of poor seniors, Paul Ryan was denouncing what he called "Crony capitalism." Thomas Frank has visited this topic before (Ryan's less than robust response is here). It comes up again in an interview with Real Clear Politics.

My question: How do you square Ryan's "crony capitalism" with votes such as the deficit financed Medicare drug benefit (which included huge payoffs to pharma), his vote for TARP, his vote for the auto bailout, and that's just for starters?

RCP: You've criticized the administration for "crony capitalism" and its use of TARP funds beyond its initial purpose. What is your and the GOP's stance on "too big to fail"?

RYAN: I think this current bill moving through Financial Services basically solidifies the "too big to fail" system in place. A good idea I've seen is a paper put out by economists Luigi Zingales and Oliver Hart on a better system that's market-based that prevents "too big to fail." So what I'm basically saying is, we need to prevent "too big to fail," not make more firms too big to fail, which is exactly where I think the administration is going. Not only are they basically nationalizing the housing financing sector, but they're basically putting the biggest financial institutions in this country, deeming them "too big to fail," and that will give them access to cheaper credit then their smaller competitors, which in my opinion is Exhibit A in crony capitalism.

Republicans messed this up too. We have to remember that we're also to blame for having practiced crony capitalism. But where we are right now -- it's a systematic expansion of this doctrine. For us, it's easier to fix because we just have to rededicate ourselves to our principles. For Democrats, they would have to repudiate theirs, because crony capitalism sits nicely with their philosophy. You can sort of see an alignment here where big business and big government find a common agreement and that is a very big danger to our free market system. So we need to go back to being pro-market, instead of just pro-business. And there is a difference.

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