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January 25, 2011

Paul Ryan, a man with a plan

K.E. Campbell
Rep. Paul Ryan (R-WI), chair of the House Budget Committee, will give the Republican response to the State of the Union address tonight.  The Congressman's colleagues in both parties, according to The Hill, describe him as "knowledgeable, charismatic, friendly and good-looking." Depending on how he does tonight, Ryan's political stock could set new highs.

Rep. Ryan, currently serving his seventh term, has put forth a detailed plan to tackle the federal deficit and to salvage Social Security and Medicare, a proposal that liberals are doing their best to discredit via a disinformation campaign.

The more I learn about Rep. Ryan, the more apparent it becomes why he is the Democrats' new whipping boy: he's a bright, formidable foe and a strident critic of crony capitalism, which, as Timothy Carney wrote, is the "unhealthy collusion of Big Business and Big Government that has always been the essence of Obamanomics."

According to Carney, author of Obamanomics, this president and Democrat leaders have been advancing crony capitalism by disguising it as progressive reform. In a May 2010 article, Rep. Ryan expressed similar sentiments

From an ideological perspective, big government can combine with big business to advance a more progressivist society. For self-described "progressives," the agenda is straightforward: expand government; co-opt big business; direct the capital markets from Washington to pursue "social justice." Think Fannie and Freddie by much higher orders of magnitude.

Rep. Ryan understands the difference between being anti or pro-business and anti or pro-free market. He champions a pro-market rather than a pro-business approach. Crony capitalism is anti-free market. This president is anti-free market. Leaving aside the question of whether Barak Obama is also anti-business, there is no question he is "pro" certain big businesses: the ones that support him and his agenda. Exhibit A is General Electric. (According to Carney, GE has spent more than any other company on lobbying the Obama administration: $65.7 million.)

Rep. Ryan believes that crony capitalism is "wreaking havoc on economic recovery" and that our current government is stifling entrepreneurship and growth by stifling competition. In an article in Forbes magazine in late 2009, he wrote that "we all stand to lose as crony capitalism drains the life from our economy; but we all stand to gain from the fruits that genuine, vigorous, free market competition provides." Rep. Ryan elaborated:

Big businesses' frenzied political dealings are not driven by party or ideology, but rather by zero-sum thinking in which their gain must come from a competitor's loss. Erecting barriers to competition is a key to maintaining advantage and market share. With Washington leading the way, it makes sense for the [big businesses] to redirect their resources to their lobbying shop and government affairs office. They're far less interested in expanding the economic pie than with making certain that they get their slice.

Entrepreneurs in a free market succeed "by providing customers with better products, more reliable service, and lower prices than are available elsewhere." They create wealth. Crony capitalists, on the other hand,

get ahead through subsidies, special tax breaks, regulatory favors, and other forms of political favoritism. Rather than providing consumers with better products at attractive prices, crony capitalists form an alliance with politicians. The crony capitalists provide the politicians with contributions, other political resources, and, in some cases, bribes in exchange for subsidies and regulations that give them an advantage relative to other firms. Rather than create wealth, crony capitalists form a coalition with political officials to plunder wealth from taxpayers and other citizens. (from J. Gwartney, J. Hall and R. Lawson, "The Decline in Economic Freedom")

In his campaign against crony capitalism, Rep. Ryan is really onto something. He has a tiger by the tail. Look for established members of both parties to try to shake him loose.

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