Paul Ryan’s Fatally Flawed Economics

Mar 19, 2014

Former vice presidential candidate and House Budget Committee chair Paul Ryan last week set off the latest round in the ongoing saga of race and the Republican Party when he uttered words that obscured the truth about racial and economic inequity in America. The trouble started seven days ago in response to a question on right wing radio about his own experience as a young man. When asked, "Who taught you how to work?" the GOP standard bearer veered off course into an riff that oddly fused the racial euphemism "inner city" and the topic of joblessness: There’s "a tailspin of culture in our inner cities, in particular, of men not working and just generations of men not even working or learning the value or culture of work" he said.

Although Congressional Black Caucus Chair Marcia Fudge said that Ryan should be "ashamed," Ryan’s not likely swayed.

Given the cringeworthy nature of Ryan’s comments, it’s easy for economic progressives to ignore what he said and move on. But given Paul Ryan’s position–chair of the House Budget Committee–and his youth and ambition, he’s likely to influence American economic policy for at least a generation. With that in mind, let’s take a closer look at who he is, what he said, and what it might mean.

Paul Ryan’s Beliefs

The Wisconsin representative– like his party–has a history of pathologizing those on the most precarious rungs of the nation’s economic ladder even as he pursues the very policies that will keep them there. Ryan has served as the primary architect of the Republican party’s budget and economic policies since 2010. As I have written before, these center on vast giveaways to the wealthy paid for by debt and dramatic reductions in economic opportunity programs centered on health, education, transportation and housing.

The core document that reflects his thinking, "A Roadmap for America’s Future"–like his radio comments–cites the need to terminate a "culture of dependency" caused by the economic fairness efforts of Franklin Roosevelt and Lyndon Johnson. His new poverty report reverberates with the same points (PDF). Somehow Ryan manages to overlook the fact that in the wake of Johnson’s Great Society and Civil Rights programs, poverty in the black community fell by half and the black middle class doubled.

But that’s a key problem with Ryan’s ideas. They can be light on evidence and long on ideological social engineering. The people behind his thinking reveal why.

During the radio interview, Ryan cited the work of researcher Charles Murray whose 1994 book "The Bell Curve" argued that whites form a "cognitive elite" of high IQ holders. Murray believes that the inherent advantages of this "cognitive elite" explain why non-whites have lower levels of wealth. A key takeaway from Murray is that the difference in intelligence between whites and everybody else is result of their social habits and values. "The Bell Curve" is clearly one of the reasons why Ryan believes that culture is the key to everything.

Data Point to Another Story

The irony is that this attachment to cultural arguments as a way to explain economic differences between whites and everyone else demands that Republicans abandon one of their key beliefs: faith in market economics. That’s because economics doesn’t measure culture it measures results. And a core tenet of economics is that broad-based outcomes have systemic origins. In other words, if people of color are doing less well economically it’s because there are widespread barriers to them doing so. The existing evidence is compelling.

As I have written before lower levels of education, the mass application of disproportionate school discipline for boys of color, and extensive incarceration are key drivers behind the 50 percent unemployment rate for young black and Latino men in urban areas across the country. Moreover the economy is still short eight million jobs from where we need to be to get it working for everyone.

Additionally there are nearly 10 million long-term unemployed and "discouraged" workers in line for whenever those jobs come back. The bottom line here is that work begets a culture of work, and there are not enough jobs to go around.

In fact, while Ryan is busy exhorting "inner city" (read: black and Latino) communities to change their culture he’s been busy rewriting the economic rules of the road in favor of the One Percent. Ryan advocated the nation’s dangerous flirtation with default in 2011 in a bid to rescue the Bush Tax Cuts. Had he and Mitt Romney won the White House the wealthiest Americans would have received the lion’s share of $5 trillion in tax cuts while the working poor would have had to bear the brunt of $10 trillion in spending cuts. 

While Ryan works to get the wealthy more, the working poor find it harder to get ahead. Sequestration–championed by Ryan–cost tens of thousands of poor children a shot at early childhood eduction and more than 100,000 working poor families with decent housing that they could afford. Sequestration lived up to its name and wreaked havoc across the board. It also cut economic growth by 30 percent and prevented the creation of close to 2 millions jobs. America is stuck economically with historically marginalized communities falling behind not because of "culture" but because of many of the policies that Ryan advocates.

It’s important to point out that Ryan and his party are not alone in pointing to cultural reasons as a cornerstone for economic disadvantage in communities of color. President Obama cited the "negative reinforcement" that young men of color receive and the need to give them a "sense that their country cares about them" as motivating factors behind his initiative "My Brother’s Keeper." But as I laid out there are concrete actions that can be taken at the federal level right now to improve the prospects for young black and Latino men. 

What the entire political class in Washington should grasp is that historically marginalized communities need more results and less stigmitazation. Policies from both parties since the 1980s have rolled back much of the economic progress that communities of color made in the aftermath of far-reaching economic changes in the 1960s. These are the very changes that Ryan castigates.

On a hopeful note, Paul Ryan and the Congressional Black Caucus agreed late last week to meet in order to discuss these and other differences. Perhaps this a start to ensuring that communities of color get the real economic help they need. Though unscheduled, it should take place sooner rather than later. The persistent gap between cultural perceptions and economic realities is too big to ignore, and too many are continuing to live out the consequences.