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With Romney-Ryan, GOP Becomes Grand Old Private-Equity Party
The ticket Republicans will nominate in Tampa next week is uniquely connected to the "vulture capitalist" constituency, and uniquely committed to protecting the interests of today's robber-baron class.
Paul Ryan grew up in a wealthy family with a Republican bent and all the right political and corporate connections.
He could easily have made his way into the private sector -- doing business with family and friends, as have generations of wealthy Ryans.
But Paul was always the starry-eyed, perhaps wild-eyed. idealist. He read Austrian economic texts and far-right authors with a passion, committing to memory the writings of Friedrich Hayek, Ludwig von Mises, Milton Friedman and his intellectual heartthrob, Ayn Rand. Reading Rand, the newly-minted Republican vice presidential contender once said was "the reason I got involved in public service."
Ryan has since tried to distance himself from Rand's extreme atheism and even more extreme attitudes regarding the least among us. But his older brother, Tobin, told reporters: “Paul can still quote every verse out of Ayn Rand.”
Rand's greed-is-good thinking plays well with hedge-fund managers, private equity players and the "vulture capitalist" class that enjoys taking a break from pillaging to plod through novels about, well, guys like them.
But, as the youngest Ryan child, Paul got a little mavericky. Much as he talks up the private sector, Paul Ryan forged a career in the public sector. He's worked as a congressional aide and congressman -- with brief breaks as a conservative "think tank" associate and a speech writer for Jack Kemp's 1996 presidential campaign -- since leaving college.
But older brother Tobin followed the more tradition route for sons of privilege.
As Fortune magazine notes, Tobin Ryan is a full partner with Seidler Equity Partners, a California-based "private equity investment firm that partners with visionary executives to grow their businesses." Before he went to Seidler, Tobin worked with a politically-connected Wisconsin-based private equity firm, King Capital (founded by former Republican Party of Wisconsin chairman Steve King, who served as finance chair for Paul Ryan's congressional runs). He also put in a stint with Bain & Company, the consulting firm where Mitt Romney says he "enjoyed working with a team of people to arrive at ideas and solutions" for what Texas Governor Rick Perry described as "vulture capitalist" interventions.
Tobin Ryan joined the Bain & Co. team after Romney moved to the private-equity firm that the consulting firm spawned, Bain Capital. But the connection has raised eyebrows, and spawned plenty of headlines, in the financial press.
The Ryan brothers are, in Tobin's words, "very close." Indeed, they live "about a three-wood away from each other" in the town where the Ryans have for decades been a preeminent (construction and contracting) business family. Tobin, a frequent media spokesman and surrogate for his brother, refers to Paul's first U.S. House race as "our first campaign."
"So we've now got a former private equity executive running for president alongside the brother of a current private equity executive,"" observes Fortune senior editor Dan Primack.
And Paul Ryan, like Mitt Romney, is politically committed to the aiding the masters of the universe who run the private-equity empires that now so dominate the U.S. economy.
The "Roadmap for America's Future" budget plan that Ryan wrote in 2010 -- the document that, arguably, launched into orbit as a Republican star -- pledges to change tax policies to create "an enhanced investment climate."
Specifically, Ryan proposed to:
* eliminate taxes on "interest, capital gains, or dividends" and estate taxes
* allow investments to be "fully deducted immediately" by corporations
" eliminate the corporate income tax entirely" and replace it with "a single-digit consumption tax" that businesses and investors would calculate themselves.
* repeal the alternative minimum tax, which was designed to assure that millionaires and billionaires who take advantage of tax-code loopholes will have to pay something
How good would a Romney-Ryan administration be to the private-equity constituency?
According to a study by the chairman's staff of the Joint Economic Committee of Congress, most working Americans who earn under $200,000 a year would see their taxes go up under the latest version of the Ryan budget. By the same token, Mitt Romney -- whose income is "comprised of interest income, capital gains and dividends" -- would pay less than one percent of his income in taxes.
The Romney-Ryan approach, forged and advocated for by candidates with personal and family ties to private-equity concerns, will yield great benefits for those very wealthy Americans who understand private equity as a personal reality.
But as the Joint Economic Committee report says, "House Budget Committee Chairman Rep. Paul Ryan claims that the policies outlined in his budget will reform the broken tax code and put 'hardworking taxpayers ahead of special interests.' In reality, the Ryan plan gives the largest tax cuts to the wealthiest Americans and will pay for those tax cuts by raising the tax burden on middle-class workers."
Indeed, the report concludes, "The richest households would receive the greatest benefit from these changes. The top 0.1 percent, for example, would receive an estimated average federal tax cut of close to $1.18 million per taxpaying household in 2015."
America's robber barons have had to wait for more than a century -- since Teddy Roosevelt went rogue and joined the anti-trust campaigners -- for a Republican ticket that would truly represent their interests.
But every indication is that the Romney-Ryan ticket will be of, by and for the private-equity managers who have become the masters of America's economic universe.
The Romney-Ryan ticket rejects not just the American faith of Democratic presidents such as Harry Truman and Franklin Roosevelt but of Republican presidents such as Dwight Eisenhower and Teddy Roosevelt.
"The absence of effective State, and, especially, national, restraint upon unfair money-getting has tended to create a small class of enormously wealthy and economically powerful men, whose chief object is to hold and increase their power," Teddy Roosevelt warned at Osawatomie, Kansas, in 1910. "The prime need to is to change the conditions which enable these men to accumulate power which it is not for the general welfare that they should hold or exercise."
That remains the prime need.
Now, unfortunately, the party of Teddy Roosevelt is preparing to nominate a ticket that is passionately at odds with the principle that the general welfare must prevail over the passions of men 'whose chief object is to hold and increase their power."