If you thought Ryan's fiscal policy was bad, wait til you see his monetary policy

"Sound money", raising interest rates and Ayn Rand: he's got it all.

Now that Paul Ryan is coming under the sort of scrutiny which a member of the House of Representatives never gets – even a rising star saying all the right things – his reputation as a serious man with serious thoughts is falling apart.

Take the re-examination of his proposal, in 2008, to redefine the mandate of the Federal Reserve. Not problematic in itself; lots of people want to redefine the mandates of central banks. The most popular demand is insisting they switch from targeting low inflation to targeting nominal growth.

But Ryan wanted to change the Fed's mandate from its current dual requirement, to aim for low inflation and full employment, to one which only requires low inflation. He already clearly disapproves of fiscal stimulus, but it appears that he disapproves of monetary stimulus as well.

And in 2010, his explanation to Ezra Klein of how he would use monetary policy to help the economy was bizarre and plain wrong:

There’s a lot of capital parked out there, and we need to coax it out into the markets. I think literally that if we raised the federal funds rate by a point, it would help push money into the economy, as right now, the safest play is to stay with the federal money and federal paper.

As Mark Thoma puts it:

Basically, they are telling us that if a recession hits and they have their way, nothing will be done. Not a thing. No fiscal policy response (except perhaps austerity to make it worse), and no monetary response (except, if Ryan has his way, interest rate increases based upon a misunderstanding of how the economy works that would also make things worse).

Brad Plumer explains how the real heart of Ryan's monetary policy "isn’t quite a return to the long-abandoned gold standard, but it’s a roughly similar concept": anchoring the value of the dollar to a basket of commodities.

This is wingnut thinking, which Plumer argues can all be traced back to Ryan's love of Ayn Rand's terrible novel Atlas Shrugged:

In the passages that Ryan has highlighted, Rand’s characters lament that statists have destroyed all “objective standards” for currency by abandoning the gold standard and boosting the supply of paper money in order to assist the “looters and moochers.”

None of this is new; the writing was on the wall four years ago. But whereas proposing complicated-sounding economic measures is enough to get you a reputation of sorts in the House of Representative, it oughtn't be enough to maintain that reputation once you hit the big leagues. But Paul Krugman argues that the real reason for the Ryan pick is his uncanny ability to do just that:

Whence comes the Ryan reputation? As I said in my last post, it’s because many commentators want to tell a story about US politics that makes them feel and look good — a story in which both parties are equally at fault in our national stalemate, and in which said commentators stand above the fray. This story requires that there be good, honest, technically savvy conservative politicians, so that you can point to these politicians and say how much you admire them, even if you disagree with some of their ideas; after all, unless you lavish praise on some conservatives, you don’t come across as nobly even-handed.

And yet, implausibly, the Romney/Ryan ticket could, in the very short-term, be the best economic choice America has. Joe Weisenthal makes the case:

The biggest threat to the U.S. economy is the fiscal cliff. As Morgan Stanley's Adam Parker explained in a note today, there's a very plausible scenario where 5 percent of GDP is lopped off, and corporate profits get absolutely shredded. And this assumes that the debt ceiling is passed without creating a gigantic shock to the economy.

The best scenario for avoiding a fiscal cliff mess is to see Mitt Romney elected. As we argued back in early April, the surest way to get Republicans on board with ongoing deficits is for them to be the party in power again.

History seems to be pretty clear on one issue: Parties out of power favor austerity. Parties in power favor stimulus.

Weisenthal goes on to quote Josh Barro trying to guess Ryan's role in Romney's economic plan:

Conservatives are never fully going to trust Romney. If he comes to them with, say, economist Glenn Hubbard’s proposal to throw about a hundred billion taxpayer dollars at restructuring underwater home mortgages, they’re likely to resist.

But what if Vice President Paul Ryan makes the pitch? Won’t House Republicans be much more likely to conclude that mortgage bailouts actually are conservative?

I’m not suggesting that Ryan is going to throw conservatism entirely under the bus. Romney surely wants to do some things that Republicans in Congress will love and others they will be resistant to—only part of his economic plan is secret. So both sides of Ryan’s skill set will come into play.

In the end, even when a scenario is presented in which Ryan is actually good for the economy, it all comes back to his surface appeal. The man looks competent; he looks like a conservative, like someone who can be trusted, who has thought through his opinions, and hasn't based economic policy on a 55-year-old sci-fi novel.

He isn't, of course. But when's that ever stopped anyone?

Paul Ryan meets a baby. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Jeremy Corbyn's fans must learn the art of compromise

On both sides of the Atlantic, democracy is threatened by a post-truth world. 

Twenty years ago, as a new and enthusiastic Labour MP, I wrote an article for The Observer in praise of spin. I argued that if citizens are to be properly informed and engaged in their democracy, politicians - and in particular governments - have a duty to craft their messages carefully and communicate them cogently. It was a controversial notion then but less so now that we have entered the era of post-truth politics. In the old days, we used to "manage" the truth. Now we have abandoned it. 

We’ve probably come further than we think, for when truth is discarded, reason generally follows. Without a general acceptance of the broad "facts" of any matter, there can be little basis for rational debate nor, therefore, for either the consensus or the respectful disagreement which should emerge from it. Without a commitment to truth, we are free to choose and believe in our own facts and to despise the facts of others. We are free too to place our faith in leaders who make the impossible seem possible. 

We condemn the dictatorships which deny their citizens the right to informed and open debate. But in our own societies, unreasoned and often irrational politics are entering the mainstream. 

The politics of unreason

In the UK, the Leave campaign blithely wedded brazen falsehood to the fantasy that Brexit would cure all ills – and millions of voters enthusiastically suspended their disbelief.  “We want our country back” was a potent slogan - but no less vacuous than the pledge to “make America great again” on which Donald Trump has founded his election campaign. On both sides of the Atlantic, people want to take back control they know they never had nor ever will.

Both campaigns have deliberately bypassed rational argument. They play instead to the emotional response of angry people for whom reason no longer makes sense. Since the time of Plato and Aristotle, democracy’s critics have warned of the ease with which reason can be subverted and citizens seduced by the false oratory of charismatic leaders. Trump is just the latest in a long line of the demagogues they feared. He may not make it to the White House, but he has come a long way on unreasoning rhetoric - and where he leads, millions faithfully follow. He has boasted that he could commit murder on Fifth Avenue without losing votes and he may well be right.

But if Trump is extreme, he is not exceptional. He is a phenomenon of a populism of both right and left which has once more begun to challenge the principles of parliamentary democracy.

Democracy in decline

All over Europe and the United States, consumer-citizens are exasperated by democracy’s failure to meet their demands as fully and as fast as they expect. If the market can guarantee next day delivery, why can’t government? The low esteem in which elected politicians are held is only partly the consequence of their failings and failures. It is also evidence of a growing disenchantment with representative democracy itself. We do not trust our politicians to reflect our priorities. Perhaps we never did. But now we’re no longer prepared to acknowledge their unenviable duty to arbitrate between competing political, social and economic imperatives, nor ours to accept the compromises they reach - at least until the next election.

We have become protesters against rather than participants in our politics and, emboldened by hearing our chosen facts and beliefs reverberating around cyber space, have become increasingly polarised and uncompromising in our protest. 

The Trumpy Corbynites

Which brings us to Labour. Despite the obvious political differences between Jeremy Corbyn and Donald Trump, there are striking similarities in the movements which have coalesced around them. For many of their supporters, they can simply do no wrong; each criticism provides further evidence of a corrupt establishment’s conspiracy against them; rivals, including those who share many of their beliefs, are anathematised; unbelievers are pursued across the internet; inconvenient facts are reinterpreted or ignored; rational, civil debate is shut down or drowned out. 

There are other similarities in these insurgencies: both mistake slogans for policies and mass rallies for popular support; both are overwhelming and quite possibly destroying their own parties – and both, ultimately, are movements without practical purpose.

Trump may give vivid expression to his followers’ grievances but, other than building a wall along the Mexican border, his plans for government are obscure. Similarly, while Corbyn and his supporters know what they’re against, they have not yet articulated a clear vision of what they’re for, much less how it can be achieved. For many of them, it is enough to be "anti-Blairite". 

But in disassociating themselves from a Labour prime minister’s mistakes, they are also dismissing their party’s achievements under his leadership. Their refusal to acknowledge the need for compromise may well enable them to avoid the pitfalls of government. But government’s potential to bring about at least some of the change they want does not come without pitfalls. In wanting it all, they are likely to end up with nothing.

The art of compromise

Democracy cannot be sustained simply by what passionate people oppose. And though movements such as Momentum have important roles to play in influencing political parties, they cannot replace them. Their supporters want to be right - and they often are. But they are rarely prepared to test their principles against the practical business of government. The members of political parties want, or should want, to govern and are prepared, albeit reluctantly, to compromise – with each other, with those they seek to represent, with events -  in order to do so. Parties should listen to movements. But movements, if they are to have any practical purpose, must acknowledge that, for all its limitations, the point of politics is power.

We have to trust that the majority of American voters will reject Donald Trump. But closer to home, if Labour is to have a future as a political force, Corbyn’s supporters must learn to respect the historic purpose of the Labour party at least as much as they admire the high  principles of its current leader. There isn’t long for that realisation to take hold.

In the UK as in the US and elsewhere, we need to rediscover the importance of common cause and the art of compromise in forging it. The alternative is a form of politics which is not only post-truth, post-reason and post-purpose, but also post-democratic. 

Peter Bradley is a former MP and director of Speakers' Corner Trust, a UK charity which promotes free speech, public debate and active citizenship.