When bankers heard over the weekend that Republican presidential nominee Mitt Romney had selected Paul Ryan as his running mate, most likely cheered the news. The Wisconsin congressman is, after all, the Capitol Hill antithesis of Barney Frank. He's the Republicans' standard-bearer for limited government in all its forms and has gone into greater depth than anyone else in his party in laying out a plan for limiting it.
Given the mountain of regulations that bankers are struggling to digest under Dodd-Frank (which Ryan voted against), that message is undoubtedly music to the ears of many financiers. It also explains why Ryan has had strong financial backing from banking and insurance lobbyists as a Wisconsin congressman and head of the House Budget Committee.
Yet for bankers there's a lot about Ryan's selection to dislike. On the fringe, for those who believe healthy banks have suffered for the sins of their irresponsible, bailed-out brethren, there's Ryan's grudging support for the Troubled Asset Relief Program. In explaining his backing for Tarp, even as two-thirds of his Republican colleagues initially rejected it, Ryan argued that if the financial system had been permitted to collapse in 2008, "we would have had a big-government agenda sweeping through this country so fast that we wouldn't have recovered from it."
The Jamie Dimons of the world will be no more thrilled by Ryan's support for a Volcker Rule that effectively resurrects Glass-Steagall. "If you're a bank and you want to operate like some nonbank entity like a hedge fund, then don't be a bank. Don't let banks use their customers' money to do anything other than traditional banking," Ryan said last year.
More important, on the big-picture stuff, Ryan's supporters and detractors agree on one thing: His presence on the GOP ticket is going to further polarize the country, assuming that's possible.
That means in the run-up to the November balloting the story line is clearer than ever. Obama-Biden will portray themselves as the champions of working families and will position their rivals as conniving to give the rich more tax breaks while depriving the rest of us of Medicare and Social Security. What Ryan adds to the ticket, in the words of Obama campaign aide David Axelrod, is a "right-wing idealogue."
The Romney-Ryan campaign, by contrast, will try to cut a profile of favoring American enterprise, small government and deficit cuts while painting its Obama-Biden antagonists as having failed to revive the economy and pandering to big labor.
It's just one pundit's opinion (mine), but Romney's bid to shake up the presidential race by selecting a young, polarizing firebrand doesn't seem to bode well for the GOP or its financial industry backers. Adding an ideologically extreme running mate to energize the base certainly didn't work out too well for John McCain when he hitched up with Sarah Palin four years ago.
Instead of a sign of strength, Romney's selection of Ryan appears to be a recognition by the former turnaround artist that his own campaign is lagging in the polls and itself needs a turn-around, as The New York Times' Nate Silver points out.
It's easy to understand why Romney is running scared. Most polls indicate the race is close but was leaning marginally in President Obama's favor before the Ryan selection was announced, with relatively few undecided voters to woo. So yes, Ryan will fire up the already converted for a few days or weeks. But they were going to vote for Romney regardless. The ones Romney needs to win over are the voters whose rather conflicted attitude was summed up in a quote I recall hearing from a rank-and-file voter in the last election: "I don't want the government messing with my Social Security!"
Once the initial hoopla passes, Ryan's addition to the GOP ticket appears likely to harden attitudes, conflicted as they are, but do little to move the needle that now indicates Obama's chances of getting reelected in November are better than even. For bankers who think a Ryan in the White House would be great for the industry, there's always 2016.
Neil Weinberg is the editor in chief of American Banker. The views expressed are his own.
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