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Why Paul Ryan Is Bad News for Bankers

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.


QUESTION: Do you think Paul Ryan will change the outcome of the presidential election? Share your views in the Comments box below.


(31) Comments



Comments (31)
Mr. Weinberg - Perhaps your articles should appear under the heading "Political Commentary" just to alert the readers? Paul Ryan studied our fiscal problems and came out with a detailed proposal - he invited others to provide input. What have we received from the Obama Administration? I cannot wait for the debates: Obama vs. Romney and Biden vs. Ryan. One final thought, the press said that the Wisconsin recall election was a toss-up - how did that end up?
Posted by jpodvin | Friday, August 24 2012 at 11:02AM ET
Paul Ryan may be a conservative, but at least he's not a liberal left winger who continues to apply the same failing government spending policies which have buried our country with unsustainable levels of never ending debt and government bureaucracy.

Yes he, along with Judy Biggert, (my misguided Republican Congressional Representative from the western suburbs of Chicago), both mistakenly supported TARP and they were wrong to do that, truth be told. Any sensible politician must now admit that TARP only perpetuated our TBTF/TBTM failed, moral hazard banking model as evidenced by the rapid growth of our toxic trillion dollar banks who refuse to materially lend more than 1% of their balance sheets to our critically important, job creating small businesses.

However, to say Ryan is "a polarizing firebrand" or "ideologically extreme" is simply not accurate. Irrespective of the fact that liberals use that kind of inflammatory language to fan the flames of political divisiveness, it fails to describe Ryan's true ideology.

Ryan, like Judy Biggert, got duped into TARP by corrupt big bank lobbyists, Wall Street mavens and our former Treasury Secretary who initially mis-interpreted our banking problem as a liquidity crisis and was later forced into re-characterizing it in the form of an ineffective, TARP capital solvency fix.

Yes, Ryan and Biggert were both wrong for supporting TARP, as I vehemently argued in Biggert's Westmont office to no avail with her Chief of Staff. Just because they got in line with the democrats to bail out the big banks does not make them right wingers. If anything, they voted more like democratic bureaucrats then "polarizing" or "ideological" right wingers.

What needs more light is Ryan's detailed, articulate style and focus on supporting job's producing, small business. Trickle down economics only works in this economy if tax cuts and less regulation makes it into the hands of job creators, not jobs exporting multinational corporations or TBTF/TBTM banks refusing to materially lend to small business.

Coming from the land of cheese could only help the Romney/Ryan team relate more to middle america and small business. Romney would be wise to promote Ryan's connection to mid-west values. Ryan's constituents in Wisconsin have seen first hand what bloated government bureaucracies have done to destroy healthy job growth.

The reference to Palin pales in comparison to Ryan's articulate and concise style. There simply is no relevant comparison between these two politicians. Ryan's vision will connect more with middle class voters once they stop and actually listen to what he has been saying about how we can create jobs.

Yes, even my liberal democratic cheesehead neighbors will listen and possibly vote for Romney as long as Romney stays the course in the direction of Ryan values. After all, its all about jobs and Ryan has articulated more meaningful plans to support jobs producing small business than any polarizing and pretentious failed jobs plan that has come out of the liberal Whitehouse for four very long and painful years.

Give Ryan a listen, what do we have to lose...other than the opportunity to create more jobs?

Dale R. Kluga
Cobra Capital LLC
Darien, Illinois 60561

Solutions that work(R)
Posted by d. kluga | Wednesday, August 22 2012 at 3:27PM ET
Mr. Weinberg Have you seen the latest Newsweek article on the President??
Get a clue when liberal magazines post this most thorough beating of the president that I've ever seen! perhaps you want to re-access you projections!
Posted by hedger | Monday, August 20 2012 at 4:51PM ET
Neil Weinberg has written well and soundly from his perspective. While I disagree with some parts, I do respect his thoughtfulness and care not to become extreme. There are part to his narrative where he comes close to
Countering his own previous statements. He probably needs someone with an objective and logical slant in the other direction to iron out some seeming indecision in his very intelligently created Post.
Posted by hedger | Saturday, August 18 2012 at 8:03PM ET
Mr. Blackwell,

I think your readers have a keener eye for good analysis than you do. Mr. Weinberg's article is baffling and he uses poor logic to draw his conclusion. He starts the article by pointing out Mr. Ryan's backing of TARP and the Volcker Rule, both received stronger backing from Pres. Obama and his party than the GOP. Mr. Weinberg then criticizes Ryan as being polarizing and a "right-wing ideologue". How does someone go from having the same views as the democrats to a right-wing extremist in two paragraphs?
Posted by LRSmith | Saturday, August 18 2012 at 5:27PM ET
I found the article to be fair, but am no fan of Mr. Ryan. For all his talk of fiscal conservatism, he voted for all the unfunded Bush spending programs (tax cuts, Tarp, Medicare Part B, etc.). During his lengthy tenure in the House, he has never introduced any meaningful legislation. His social conservatism wrankles me, as I do not feel Congress has any business legislating against contraception or LGBT issues. He proposes draconian cuts to all discretionary spending programs, cutting them to just 3.75% of GDP, which is less than we pay now just for defense. What's more, he proposes some 20.0% in additional tax cuts. Under his proposed budget, it is estimated that Mr. Romney would pay less than 1.0% federal income tax on his 2010 income. His plan for Medicare proposes nothing to help curtail the rising costs. It simply cuts benefits. With no cost containment, the block grants he proposes cannot hope to keep up as recipients age. It is my opinion that he is a liability to Mr. Romney. Worse, though, is the fact that he is a bigger liability to the United States, as his votes have already contributed to our massive deficit. His proposals could only make things worse.
Posted by MJR | Thursday, August 16 2012 at 3:35PM ET
As bankers we all know that our banks will be destroyed if the current irresponsible economic policies - which members of both parties have supported - continue to be pursued since either government default or hyper inflation will ensue in the not too distant future if nothing is done. Other than a few people like Rep. Paul Ryan none of our political leaders are leveling with the American public about how dire the country's fiscal shape is. So, whether or not one agrees with anything else he believes, on this one point his is a very important voice whose views need a wider hearing if we want to save our country and our banks from impending ruin.

If you don't believe that our politicians have made huge fiscal promises they cannot deliver, please read this:

According to an analysis by economists hired for USA Today: the federal government has accumulated "$61.6 trillion in unfunded obligations.". Now add in the actual national debt of over $15 trillion and compare that to the wealth of the country. According to the Federal Reserve Bank's economic analysis unit the entire net worth of every man, woman and child, corporation, non-profit and unit of government other than our federal government is $55 trillion. Our national debt and the future cost of the entitlement programs is over $75 trillion, far exceeding the net worth of the country, exceeding even the total assets of the country!

We could tax *every* dollar of wealth away and it wouldn't be enough to close the gap. We've done a leveraged buy-out of the United States and screwed our children.

Posted by Stephen Lange Ranzini | Thursday, August 16 2012 at 7:47AM ET
Axelrod? Seriously. Was Hugo Chavez unavbailable for comment?
Posted by danbaren | Wednesday, August 15 2012 at 12:42PM ET
I read this opinion piece today and my immediate reaction is that Mr. Weinberg was exactly regurgitating the Obama Administration's position in his commentary - couched of course in terms of "reasonableness". And I wondered if my extremely negative reaction to his thoughts might go uncommented upon by the readership of AB - I didn't have to worry!

The only thing I can say is that Mr. Weinberg is living on a different ideological planet than the industry he serves in his role at AB - what a shame! His comments fall into the category of the AB editorial earlier this year saying that Elizabeth Warren was a moderate and that we should just stop picking on her and being obstructionist to good regulation.

Yeah right!


R. Martin
Posted by rmartin47 | Tuesday, August 14 2012 at 10:36AM ET
Another example of why Neil got the assessment about right:
It seems as if some of the "readers" here don't actually read. When I was in banking, every time the American Banker ran a story the bankers did not like, they huffed and puffed about canceling their subscriptions. No wonder some many of them get blindsided by new events!
Posted by Lawrence Baxter | Tuesday, August 14 2012 at 9:58AM ET
The views of this editor help to explain why this publication has dropped in quality so rapidly--and why my long-time subscription is going to end in a few weeks. It has been sad to see what has happened to American Banker.
Posted by dvanhoos | Tuesday, August 14 2012 at 9:03AM ET
The great thing about the choice is that it shifts the focus of the campaign from a contest of likeability and dueling trivialities to a set of enduring policy problems and choices to be made. Democrats are making a mistake in trying to paint Ryan as an unthinking ideologue and licking their lips over his candidacy. If Ryan can keep the focus on the economy, the Obama campaign will not be able to hold the lead without trying to explain why the economy took so deep and lasting a nosedive.
Posted by Edward Kane | Monday, August 13 2012 at 5:47PM ET
REALLY? Quoting David Axelrod, who thinks the CFPB is the best thing since sliced bread? REALLY?

By the way,My preteen granddaughter knows more about budgeting than the current administration.
Posted by time traveler | Monday, August 13 2012 at 3:47PM ET
Our economy is a mess - a rash of reactionary moves ( Dodd -Frank) are slowly strangling our growth along with a regulatory tidal wave choking industry after industry. Small businesses across the country are not hiring and not expanding as there are so many uncertainties. ie OBABACARE
Forget all the distractions -- As Mr. Clinton onces said "IT IS ABOUT THE ECONOMY STUPID!"
Posted by Watchdog1 | Monday, August 13 2012 at 3:33PM ET
Neil, your analysis seems balanced, clear-eyed and generally right to me, even though it has triggered the usual knee-jerk and shallow reaction from the bankers here.

While I agree with you that if bankers really understood what Ryan has been saying they would not be quite so enthusiastic, I would suggest that Ryan will soon have to change his views or at least fudge them quite substantially. This is because the bankers who are funding Romney and Ryan are far smarter than these commentators and they will not like one bit the formula Ryan has hitherto supported.

Someone stated above, Ryan might have answers that the country needs, but not what the country will want to hear. Substitute "contributors" for "country" and you get closer to the truth. There is no way the publicly subsidized behemoth banks will want to hear his message and the last thing they would want is to have free market principles apply to them. It is the reason that Romney has remained remarkably quiet on the banks, even though he could have gone after Geithner and the Treasury Department. Follow the money.
Posted by Lawrence Baxter | Monday, August 13 2012 at 2:47PM ET
This was so lame. Almost as lame as Blackwell's "clarification."
Posted by Hondo77 | Monday, August 13 2012 at 1:27PM ET
I am sort of stunned by what comes across as a fairly partisan commentary here. As a true independent with a longstanding involvement in the banking industry, I'm looking at what each ticket is offering. Of course something needed to be done to prevent a new Great Depression so I'm glad Ryan, even as a so-called fiscal conservative, was willing to put ideology aside and support what he (and I think most of us) thought necessary. That isn't to say it all was handled well, but that's a separate issue that could be part of the campaign. And to support the Volker Rule (or some variation) is somehow anti-banking? Sorry, Mr. Weinberg, but that's a pretty narrow in perspective as well. Yes, Ryan could be polarizing but at this early stage, that's not a foregone conclusion. Many/most of us hope the two parties might start speaking honestly and actually address the nation's long-term problems. Move out of the Beltway for a few years and then tell us what you think.
Posted by Westcoaster | Monday, August 13 2012 at 11:43AM ET
So, as bankers we should be afraid of a politician that is preaching fiscal responsiblity and common sense reforms that strengthen our economy? Dont we preach that daily to our customers? we should be scared of Ryan because he beilieves in a simpler, traditional banking model? the very model that survived the crisis and has been the consistnet provider of credit to small businesses in this country. Ryan only looks overly conservative because Obama and the Democratic party has moved so far to the left.
Ryan would probably make a good banker and he appears to be a wise choice as VP.
Posted by blacha | Monday, August 13 2012 at 11:36AM ET
Nothing more to add other than to echo what my colleagues have said here. Adding someone to the ticket who proposed fiscal responsibility is not a bad thing. Remember, it's not what the country wants to hear, but what it SHOULD hear.
Posted by BankerBud | Monday, August 13 2012 at 11:29AM ET
Echo the comment that comparing the idiotic Palin pick with the Ryan pick makes no sense. Ryan obviously likes to study how to limit the growth of our federal government, abhors the Pelosi/Frank/Durbin belief that the federal government should throw money at all problems.. Ryan does not come from the No Nothing/Tea Party wing of the Republican party, and whereas his exact plans may not be called upon, he will help lead us towards Simpson-Bowles type solutions. He is an honest, conservative student of public policy and makes Romney look good. He changed my vote!
Posted by MGrayson987 | Monday, August 13 2012 at 11:26AM ET
tk101 - couldn't agree with you more.
Posted by nancylees | Monday, August 13 2012 at 11:21AM ET
Rob, I value the AB for its industry reporting, insight and quality opinion pieces. Unfortunately, this piece offers none of the above.
Posted by tcufrog | Monday, August 13 2012 at 11:17AM ET
Mr. Blackwell: Wish I could believe the part about "without prejudice to any side." That is not the case with many of the journalist who work for your publication. Yes, you have both sides but many times it is consultants/third parties/outside viewpoints that give the balance.
Posted by no political hacks preferred | Monday, August 13 2012 at 11:13AM ET
It feels like we need to clear up a few things about American Banker.

1) We are not pro-big government, pro-Obama or pro-CFPB. We are not anti-big government, pro-Romney or anti-CFPB. We write articles analyzing situations, and post commentary from staff and others expressing opinions. But as a paper, we do not endorse any opinion.

2) For the record, I don't think Neil here is expressing an anti-Romney view. What he's trying to say is that he thinks the Ryan pick doesn't help Romney politically, and may show signs of desperation on Romney's part. Others, I'm sure, disagree, but let's not turn this into something it isn't. He isn't saying he dislikes Romney or supports Obama. He's just analyzing the political landscape.

3) Please remember this: American Banker is not a pro-bank publication. It's not an anti-bank publication either. Bankers are our readers, and we value your input. But we are, at all times, trying to tell you what you SHOULD hear, not necessarily what you WANT to hear. This is an important distinction. If you want an echo chamber for your political or worldview, look somewhere else. If you want a discussion about the hot topics and challenges facing banking -- given without prejudice to any side -- you won't find a better place than American Banker.

Rob Blackwell
Washington Bureau Chief
American Banker
Posted by rblackwe | Monday, August 13 2012 at 11:08AM ET
More and more, I find myself wondering just who or what the "American Banker" publication supports - banking or the big government? You repeatedly post articles that declare the impending death of community banking, the need to give the CFPB a chance and more incredibly inane positions, such as the one taken in this article and headline. You are either clearly out of touch with your subscribers, or are trying desparately to nudge them toward a particular political outcome, which begs the question: Why do we even subscribe any longer? Perhaps providentially, I noticed an email message in my box this morning informing me that my subscription is due to expire. Hmmm.

I love my industry and want it to survive and thrive with limited interference from a government that has neither the ability nor the inclination to regulate it in a fair and common-sense manner. However, I love my country even more, as I suspect is also the case with most of your subscribers. Is Paul Ryan a polar opposite to Barack Obama and Joe Biden? Absolutely. This is an election in which people are going to have to CHOOSE what kind of future we want for this country. Big government or more freedom, as was the dream of our forefathers? It seems clear that "American Banker" has endorsed the former.
Posted by Johnny Tremaine | Monday, August 13 2012 at 10:59AM ET
I could not disagree more with this take. As a community bank CEO, a ticket that supports small business development has absolute primacy in the factors needed to turn this economy around.
Posted by Jeff Szyperski | Monday, August 13 2012 at 10:53AM ET
Likening the Paul Ryan pick to the Sarah Palin pick by John McCain is a stretch to say the least. Palin had not an ounce of policy (or experience) credibility to add to the ticket. Ryan has, at the least, put forward solutions to the budget woes facing the country. We can debate the merits of those solutions, or we can be lazy like Mr. Weinberg and jump on the Axelrod bandwagon by branding Congressman Ryan a right-wing ideologue.

The next time you write an opinion piece, you might consider adding some opinions of your own, rather than regurgitating what you heard on the Rachel Maddow show last night.
Posted by tcufrog | Monday, August 13 2012 at 10:48AM ET
There is no one candidate that has demonstrated they have all the answers.....I don't think any VP candidate as every swung an election in the end in favor of their party's nominee for President. With that being said, I think Paul Ryan is good for this country, he has strong values, a strong family man, and I believe he has a genuine interest in trying to "fix" some things in this country that are broken....unfortunately Americans are losing faith in their government, perhaps Ryan can be a symbol of hope and renewed faith.....
Posted by banker50 | Monday, August 13 2012 at 10:44AM ET
Romney's selection of Ryan is bad for which banks? It looks to me as though Mr. Weinberg is talking his book so to speak, his book being his support for big banks. It has been very clear to most of us in the hustings that regulatory and east of the Hudson thinking has been dominated by TBTF banks with little or no attention being paid to the Foundation of a Free Economy--COMMUNITY BANKS! Excuse me, Mr. Weinberg, what's wrong with "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. . ." I submit to you that the majority of your readers (and most importantly the majority your subscribers)and their bank directors agree with Paul Ryan.

Jon Bruss
Fortress Partners Capital Management, Ltd.
Posted by jcbruss | Monday, August 13 2012 at 10:42AM ET
Weinberg echos the "Republican establishment" that is afraid of conservative views and doing what is right (in other words, always caving in to pacify). The track record of the Republican establishment is abysmal. Dodging and weaving plays right into the hands of Obama et al. The fact of the matter is that there is no negotiating with the left because they are dealing with their own hatred of this country. I am pleasantly surprised that Romney chose Ryan because I didn't think that he would do that, continuing the course of trying to pacify. This country needs strong leadership; it certainly doesn't have that heading up Washington now. That is what it will take to get people to see where Obama is taking this country.
Posted by cooperpop | Monday, August 13 2012 at 10:33AM ET
What a small minded conventional wisdom take - pathetic.
Posted by tk101 | Monday, August 13 2012 at 10:33AM ET
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