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Home Publications Blogs Beat the Press Does Paul Ryan Want to Change the Relationship Between Americans and Their Government or Give Money to Rich People?

Does Paul Ryan Want to Change the Relationship Between Americans and Their Government or Give Money to Rich People?

Wednesday, 13 March 2013 04:48

Ezra Klein looked at Paul Ryan's latest budget and told readers:

"Ryan’s budget is intended to do nothing less than fundamentally transform the relationship between Americans and their government. That, and not deficit reduction, is its real point, as it has been Ryan’s real point throughout his career."

Well, that is one possibility. There is another option: Paul Ryan wants to makes rich people richer. I think the evidence supports the latter view.

Let's look at some of Ryan's trademark policies. Ryan repeatedly has proposed replacing Medicare with a voucher system or "premium support" as he likes to say. Note that Ryan has not proposed just eliminating Medicare and telling people when they turn age 65 (or 67) that they are on their own. 

What's the difference between handing people a voucher to buy insurance from private insurers and giving them access to a government-run Medicare system when they turn age 65? Over Medicare's 75-year planning period the difference is tens of trillions of dollars in additional money for private insurers and the health care industry, according to the Congressional Budget Office (CBO). 

As CBO and many other independent analysts have documented, using private insurers raises rather than lowers costs. We can believe that Representative Ryan is ignorant of this research or alternatively we can believe he knows and understands the findings, but still wants to use private insurers anyhow.

We can tell the same story about Ryan's plans to privatize Social Security. He has never suggested that workers would hit retirement and the government would just tell them they are on their own. Instead he has proposed that the government would require that they put a portion of their wages into an account run by the financial industry. This would raise the cost of running Social Security by a factor of 20 or 30 since the administrative costs of private accounts are far higher than the administrative costs of Social Security. This implies a transfer of trillions of dollars from workers to the financial industry. Again, we can believe that Representative Ryan is unaware of the evidence or we can believe that he knows what the research shows and does not care.

There are many ways in which the government interferes in the market to redistribute income upward. The most obvious is patent and copyright protection. In the case of the pharmaceutical industry alone, patent monopolies raise the price of drugs by more than $250 billion a year above the free market price. The total amount of money transferred as a result of government-granted patent monopolies could be as much as $1 trillion a year, more than a fourth of the federal budget.

Again, it's possible that Representative Ryan doesn't know anything about patents and copyrights. Alternatively he may not care about these forms of government intervention in the market because they have the effect of redistributing income upward.

The list of such policies can be extended at some length. (Yes, this is all a plug for my book, The End of Loser Liberalism: Making Markets Progressive.) The point is that we can believe that Representative Ryan has a philosophical commitment to reducing the size and importance of government. Alternatively we can believe that Ryan primarily wants to give more money to rich people.

Arguably the evidence supports the latter view. Needless to say, even if Ryan's mission was to redistribute income upward, he would not present his case this way since there are not enough rich people to win elections. A politician seeking to get support for policies that redistribute income upward will get much farther claiming to support a free market and getting government out of the way. If Ryan's agenda is in fact redistributing income upward the media do him a great favor when they describe it instead as a commitment to free market principles.  

Comments (19)Add Comment
written by Chris Engel, March 13, 2013 6:01
I'm struggling to believe that Paul Ryan is intelligent enough to have such a deep motive in public policy such as to give money to rich people.

I think he's just a dopey Randite who thinks government is evil and wants to privatize everything.

Do you really think he's even remotely well-read on the post-WWII history and political-economic struggles in Asia and Latin America? Do you think he really even understands the consequences of his policies will be the completion of the 30-year-process of turning the US into an oligarchical plutocratic banana republic?

I have a different hypothesis on the behavior of Paul Ryan. I think he's just a young, stupid, inexperienced, and incredibly naïve useful idiot of the plutocrats.

Here's why: he does not come from a wealthy family. There's no indication that he would directly benefit from policies that would so clearly redistribute wealth upward. Sure, there's the typical exit opportunities of all Congressional officials, but he doesn't have some 9-figure nestegg that he's focusing on growing.

I think he truly just doesn't understand basic economics, or how our monetary system works. This is supported by the introduction form Ryan's budget as published here:

http://www.docstoc.com/docs/148338915/GOP Budget

I can't bring myself to believe he's intelligent enough to be setting up all these ideological claims and total hysteria over the future (something he's been completely wrong about repeatedly) just to line the pockets of aristrocrats, a group of which he's not a member.

So I think I have to go with Ezra's explanation that this is really just about Ryan's wish-list of how he wants society to look like and to reform government in general by starving the beast.

If perhaps he was better educated or had more personal wealth at stake, maybe I would buy the argument that he's just an evil giving-money-to-the-rich jerk, but I don't think he's intellectually or morally capable of taking on such a position.
written by foosion, March 13, 2013 6:23
@chris, we don't know his motives or how much he knows, we only know what he proposes and what the effects would be. He supports (or at very least doesn't oppose) govt when it redistributes to the best off and opposes govt when it goes the other way. For example, govt enforced monopolies (patent and copyright) are massive govt interference in the economy, as Dean notes, yet we hear nothing from this so-called anti-govt crusader.

Speculation as to whether he'll get a plum lobbying job or think tank job after congress can only be speculation at this point. We can only observe what Ryan says and does.
written by bakho, March 13, 2013 6:29
Giving more government money or tax cuts to wealthy people is not popular policy. They need to disguise what they are doing. Privatization and giving money to the wealthy go hand and hand. Republicans hate social programs that they see as giving government money to supporters of Democrats. They don't see social programs as benefitting the whole country. Block grants allow for privatization at the State level.

Republicans can't get rid of social programs entirely because they are popular. What they can do is "Privatize them" which enables them to give patronage to their Big$$ supporters. Through Privatization, Republicans can divert money that would have gone to help middle class people into the pockets of their wealthy donors. This is the whole point of transforming the relationship between people and their government. Republicans insert a "Privatized" Middle Man to skim money from the people they don't like and into the pockets of people they do. It transforms the relationship and forces people to deal with a corrupt middle man. This erodes support for the program while shifting the blame for poor performance away from the governing party when that party is the GOP.

The Health Care Battle was all about the Privatized-Voucher Special Interests against Single-Payer Public Interest.
written by liberal, March 13, 2013 7:08
The most obvious is patent and copyright protection.

No, the most obvious is land ownership in the absence of a high ad valorem tax on land.

Where do you think the term "rent" came from?
written by liberal, March 13, 2013 7:14
Chris Engel wrote,
Here's why: he does not come from a wealthy family.

Is that really true? I'm sure that, at a minimum, his extended family is quite wealthy. And everything I've read indicates he's never held a real private sector job, aside from the usual youth summer employment type thing.

I do agree with your contention that Ryan is probably unintelligent enough that it's not clear whether he's purely evil.

Though in that case Dean's point still stands, since there's no reason to resolve this ambuity in favor of "stupid, not evil."
written by liberal, March 13, 2013 7:20
bakho wrote,
Giving more government money or tax cuts to wealthy people is not popular policy.

Actually, it is. The biggest government transfer which also happens to be predominantly "upward" is a regime or no or low land value taxes. And if one tries to point this out to even pretty liberal people, one is countered with a plethora of lies and rationalizations.

Even Dean doesn't appear to understand this.
written by David, March 13, 2013 8:43
If it's so obvious, liberal, then why is it so difficult for others to understand what you're talking about? Self-interest? Self-preservation?
Complementary/supporting ideologies
written by Amit, March 13, 2013 9:10
I don't think it's an either/or choice for conservatives like Ryan. Essentially, they are acting in their own (short-term) economic self-interest by proposing policies that make them (and their wealthy supporters) richer. To rationalize this greed that comes at the expense of others, they believe (strongly) in ideologies like laissez-faire capitalism that support their goals in any meaningful way, even if macroeconomic theory says they're wrong.

No one wants to appear inconsistent to themselves, so we all believe in ideas that enable us to justify our actions to ourselves. There is really no contradiction in Ryan's beliefs, just a complementarity.
written by skeptonomist, March 13, 2013 10:03
There is no evidence that the Republican party as an institution really wants to cut Medicare and Social Security. George Bush expanded Medicare with Part D, remember? (apparently the media can't remember that far back). Real cuts in these programs would be political suicide, if they were actually attributed to Republicans. Republicans will go through the farce of passing Ryan's budget, knowing that there is no hope of its being approved by the Senate or Obama - and also knowing that the public does not take it seriously. Apparently the only people who take this "budget" and Paul Ryan seriously are in the media.
Is Paul Ryan a Market Fundamentalist, Redistributionist or Fascist?
written by Last Mover, March 13, 2013 10:33
From WaPo:

It is Ryan’s unusual ideology, and not the specific state of our finances, that justifies this budget. Ryan’s view is that the federal government is strangling our community. When the federal government provides health care for the poor and the middle class, it muscles out states, communities and families that might otherwise fill some of the gap. When bureaucrats set up Obamacare’s exchanges, they stifle the essential ingenuity of the private sector. When government does too much to provide for individuals, they are robbed of the bracing necessity of providing for themselves. When the government taxes success to alleviate hardship, it undermines and stigmatizes those who should be leading society.

This statement by Ezra Klein seems to claim Paul Ryan is a fascist more than a free market fundamentalist. Specifically, taken at his word that wholesale privatization of government services would actually reduce costs rather than explode them, then Ryan cannot possibly believe the usual economic criticism of government by the right and left - that the objective is to achieve monopoly rent seeking on behalf of the private sector - because rent seeking by the private sector does explode costs, exactly what Ryan has been denying, avoiding and lying about behind the disguise of "deficit and debt control".

In light of Dean Baker's point that Ryan's motive is actually to redistribute income and wealth to the rich rather than to privatize government services in the interest of economic efficiency, where does this leave Ryan in terms of economics and politics at the highest level?

The only conclusion is Ryan can't possibly believe in free market fundamentalism, unless he believes free markets dominated by overwhelming market power and market failure rather than competition are supposed to produce less at higher prices.

That leaves fascism, defined as a private sector specifically designed to serve the government for designated objectives well beyond ordinary rent seeking. Hmmm ... it seems conspiracies of government takeover of America are coming full circle back to the very ones spouting them.
written by Chris Engel, March 13, 2013 11:32
Last Mover wrote,

That leaves fascism, defined as a private sector specifically designed to serve the government for designated objectives well beyond ordinary rent seeking. Hmmm ... it seems conspiracies of government takeover of America are coming full circle back to the very ones spouting them.

Great comment as usual, LM.

To supplement your point, it's worth mentioning that within Paul Ryan's plan the Pentagon gets its normal increases and isn't cut at all.

It's the way he views valid government, which seems to be driving this budget. Specifically, he invokes Ayn Rand and Milton Friedman and others in pushing his view that society's key institutions should be corporate owned, not state run, in his mind, and the state's role is limited to military and courts and such.

In his budget he doesn't touch Military spending, he doesn't touch law and order spending in general (maintains perpetual increases) and shifts more income and wealth into the hands of plutocrats.

It's almost a replay of the kind of stuff we've seen in Central and South America, namely fascist corporatism.
written by Union Member, March 13, 2013 11:51
Of the people, by the people, and for the people is what another Republican from Ill. said is the fundamental relationship of Americans to THEIR government.
Nothing realizes this ideal more than Social Security; it is justice personified. And, it is a blind justice. Working people pay their entire lives into the Social Security Trust Fund, yet at any point in time, they never know who recieves it, whether they are poor or well-off, what race they, if they believe in God or not, or even if they adhere to the cult of "Free Markets" or not.
Someday, this country will live up to the true meaning of its creed and have a single-payer affordable health-care system.
Paul Ryan is Hoover, minus the compassion
written by David, March 13, 2013 12:22
Hoover would be aghast on the amounts we waste on the military. But the modern GOP has all but abandoned conservatism.
E.K. not P.R.
written by Ellen1910, March 13, 2013 12:28
The title of this blog isn't "Beat the Republicans"; it's "Beat the Press." The subject of this entry isn't Paul Ryan; it's Ezra Klein.

Ezra Klein is on his way to joining Robert Samuelson in Dean's doghouse. What say you? Does he deserve to be there?
written by Union Member, March 13, 2013 12:58

Paul Ryan is just a press secretary for Pete Peterson and whoever else is looking to commodify human beings.
there's room for both
written by watermelonpunch, March 13, 2013 1:05
I think it's true what EK says about Ryan's vision. I think he's a wet behind the ears kook myself.

But I also think any reporter or columnist is remiss to mention how Ryan supporting, or not opposing government when it interferes in the market to the benefit of redistributing more wealth to the wealthy.

Regardless of PR's stupidity or brilliance, vision or convenient cover lie...
That is a FATAL FLAW to Paul Ryan's political assertions, and should be pointed out at every opportunity.
To miss it, or ignore it, is gross negligence.
Past Commodore
written by Alan MacDonald, March 13, 2013 1:44

Dean, I hate to correct you on your otherwise excellent and insightful article, of "What Ryan's Budget Really Says: 'I Love Rich People'", BUT.....

"What Ryan's Budget Really Really Says: 'I Work for the EMPIRE'"!!!

Yes, Ryan's Budget is berry berry good for the rich people ---- because they are part of the ruling-elite's disguised corporate/financial/militarist/media and political Global EMPIRE, which hides behind the facade of its 'bought and owned', modernized, and DUAL-Party 'Vichy' sham of faux-democratic and totally illegitimate government ----- just as the earlier Nazi EMPIRE tried less successfully to hide behind its crude and only single-party Vichy facade regime of Marshall Petain in 'captured' and "Occupied" France c. 1940.

Most everything that brain-dead and useless; limousine-liberal, faux-progressive, fund raising, feel-good 'action groups' like CAF (Campaign for Americans Future) and the rest of this ilk actually accomplish in asking good-willed (but uninformed) people to sign petitions (and help fund CAF) is as misdirected, ineffective, uninformed, and useless in attacking the actual CAUSE (the disguised Global EMPIRE), as it would have been for the French resistance movement to ask their fellow Frenchmen to sign petitions to the Nazis 'demanding' that they stop summary executions, or to ask the French to fund (CFF Campaign of France's Future) so that you could start a boycott of German wines!

Talk about the dumb leading the dumber!!

Dean, there are, unfortunately, only a few highly informed public intellectuals like; yourself, Chris Hedges, William Blum, Michael Parenti, Kevin Zeese, David Harvey, Naomi Klein, Glenn Greenwald, et al, and a very few principled progressive web-sites like; Common Dreams, truthdig, OEN, Empire Burlesque, et al, and real anti-Empire action groups like Code Pink, who understand the overarching and CAUSAL cancer of the disguised Global EMPIRE --- which has taken over our former country.

I plead and pray for a broadening awakening of even a small percentage of Americans --- before it is too late.

Today we still have some time, and the solution is not really that hard --- and can be done in an entirely non-violent way by simply EXPOSING THE EMPIRE.

If only 10% of the American people wrote, talked, discussed,
debated, publicly exposed, and 'called-out' this Empire as an EMPIRE it would collapse of its own deceit.

We are only held hostage by this disguised Empire because it is
able to remain hidden, camouflaged, disguised and unrecognized --- and thus able to get away with its deceitful posing as a normal and acceptable democratic Republic --- when, in fact, it is a disguised Global EMPIRE.

Merely shining light on this vampire of EMPIRE will kill it in an

Best luck and love to the fast expanding 'Occupy Empire'
educational and revolutionary movement against this deceitful,
guileful, disguised EMPIRE, which can't so easily be identified as wearing RedCoats, Red Stars, nor funny looking Nazi helmets ---- quite yet!

Liberty, democracy, justice, and equality
Violent/'Vichy' Rel 2.0

Alan MacDonald

Sanford, Maine

We don't merely have a gun/fear problem, or a 'Fiscal Cliff'
problem, or an expanding wars problem, or a 'drone assassinations' problem, or a vast income & wealth inequality problem, or a Wall Street 'looting' problem, or a Global Warming and environmental death-spiral problem, or a domestic tyranny NDAA FISA spying problem,
or, or, or, or .... ad nauseum --- we have a hidden EMPIRE cancerous tumor which is the prime CAUSE of all these 'symptom problems'.

PS. BTW, "If your country is treating you like shit, and bombing abroad, you need to wake-up and look carefully --- because it may not be your country, but a Global Empire only posing as your former country."
written by Chris, March 13, 2013 3:21
The only way Ryan can get enough public support for his policies is by duping the public re what they are all about. The problem is that millions upon millions of people are easily duped. Read comments on Yahoo News stories if you doubt what I say. Therein lies the problem.
Ryan's in-laws are wealthy !
written by H-Bob, March 13, 2013 6:17
Ryan married into a wealthy family (like Mark "Appalachian Trail" Sanford and John McCain) read somewhere that people who marry wealth generally are more conservative than those born to wealth.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.