Tuesday, April 23, 2013

Economics, Labor, Capital, Recession and Blame

With an economic collapse followed by years of economic weakness, there is, of course, much discussion surrounding the idea of blame.  Who is at fault, and what did they do to create the mess in which we, as an economic society, find ourselves?

Before one can assign blame, one must understand the environment in which all actions take place.  That environment is - and will be for as long as scarcity exists - one that is inextricably linked to economic theory, thought and calculation.  Economic calculation is a means of making decisions for allocation of resources (eg, time, effort, money, lumber, knowledge, etc.).  Economic thought is a means of determining and understanding economic theory, which is, itself, a means for explaining the outcomes of economic calculations individually and in aggregate.

Such economic calculations are constantly occurring, and are occurring in every decision that is made.  When one decides to buy shoes, they have carried out a rational calculation regarding the worth of the shoes versus the worth of the scarce resources that are given up to obtain them.  In fact, even when one buys items without regard for price, they are acting rationally and have made the calculation that the act of weighing the cost and benefit is, itself, not worth the effort of doing so; so an economic decision has been made, not based on the scarcity of money, but the scarcity of time, energy and effort.

Various factors influence the outcomes of these calculations and decisions, and, at times, can be countless and unknown.  A person's decision not to buy a pair of shoes in New York City might be, unknown to them, influenced by an electrical fire in Taiwan that happened to cause a shut down of the production line that makes the shoe (which happens to be the newest, most desirable hit pair of shoes at the time) more expensive.  The decision-maker had no knowledge (and likely never will) of the fire.  But the pertinent portion of that knowledge was conveyed to him through a higher price.  The price system, therefore, is among the most important factors - and is really itself just an efficient combination of potentially countless factors - in making economic decisions (and the price is not always monetary; the same concept holds for the decision to study or work out).  A price is a measure of relative value of one currency, good, service, effort, etc. versus another currency, good, service, effort, etc.

Just like with shoes, price is a major factor in both sides of decisions regarding labor and capital.  A worker will decline to expend (sell) their effort, energy and knowledge if the price offered by a potential employer (buyer) is not enough for them to value the pay over the various benefits of not working.  The same holds true for the other side of the transaction.  It also holds for capital.  If an investor calculates his expected return relative to the risk to be insufficient, that capital will go elsewhere.  Capital will not invested in hiring workers or any other means of production if the return on that production falls below the desired return, given the risk involved.  This holds for decisions to invest in a company as whole, as well as the individual decisions that said company continuously makes, whether it be hiring, buying trucks, or building a warehouse.

So, what about our current problems?  Many people are out of work, and people want to work.  The truth is, people don't want to work.  They want the fruits of that work.  That is, they want the wealth it brings.  If one could get the same return sitting on the beach as they would going to their job, many would choose the beach.  This is why, so often, people strive to obtain a job doing something they love (like flying) and would do in their spare time regardless of wealth.

Because we can't, generally, accumulate wealth by sitting on the beach people seek work, because they understand that working is the most effective way to accumulate the desired wealth.  Many are without the work they seek, and the price system is a gold mine of knowledge regarding why this is so.  Simply, there are many factors that make the price of hiring a given worker rise above the level at which a given employer values the work enough to pay the price.  And, remember, this price is subjective.  So the level at which a certain price is too high is a spectrum, rather than a single point.  That is, one employer, for various reasons, may get enough value to make it worth hiring a widget maker at a given price while their competitor might not.  This can be caused by differing costs elsewhere in the production process, different thresholds for risk and reward, or a number of other factors.

The employer (just like the buyer of a pair of shoes) is always seeking the lowest cost to benefit ratio in purchasing labor.  On the other hand, the worker is always seeking the the very same, except the cost and benefit are reversed.  Both employer and worker compete against fellow employers and workers respectively.

As mentions, the price, relative to the value of the labor dictates whether a decision is made to hire.  The price, to the employer, includes more than what is directly paid to the worker.  Every worker hired has a tax imposed (up to a certain level) of about 15%.  This effectively raises the price of every worker by 15%.  It is hard to calculate how many people are priced out of a job by that 15%, but it is safe to assume that there is a number and that it is not insignificant.  And this is but one cost associated with hiring.

Others are priced out of jobs by legal minimum prices (wages) and by varying levels of de facto minimums.  The minimum wage creates situations in which people become unemployable, and thus unable to develop on the job skills.  While it may be a relatively small number of people, it is a real number and they are the most vulnerable.  The de facto minimums arise out of programs aimed at preventing poverty.  With the various benefits provided, one might choose, correctly, to limit the level and type of work they are willing to do because the risk of not doing it has been so heavily mitigated, and the marginal value of certain levels and types of work has been minimized to such a degree that it is not worth doing.  How many people are priced out of work by various minimums?  Hard to say.  But the number is likely significant.  And the decisions involved in not working or not hiring are made economically and rationally and based on various influencing factors.  The governmental factors mentioned can logically be understood to lessen the value of both working and hiring and, therefore, hamper the degree to which both occur.

Further impediments to growth in hiring relate to stifling of competition.  The costs discussed do that to a large degree.  But then there are various regulations and requirement imposed in every area of the economy that, whether aimed at helping customers, workers, etc., have the effect of helping the largest competitors most of all.  Mitt Romney, during his campaign for president, said he didn't think that you should be able to start a bank in your garage - that is, he felt certain regulations should exist to prevent individuals, companies, etc. from operating a bank.  This protects established banks from competition.  It gives them a more permanent and defensible seat in the banking world, and allows them the opportunity to operate in ways that they otherwise couldn't.  And this is a giant gift directly from government.  And it is a giant blow to start-ups, competition, growth and hiring.

All of these issues discussed (and others, like the amount of credit being funneled to the government, rather than productive investments through treasury bonds) are governmental creations that have clear causal links to the current weak growth and weak employment levels.

Many of these issues can, to a degree and in an environment of stronger economic prosperity, be overcome.  But they are, no doubt, greatly hampering our recovery.

But what are we recovering from?  Why did the economy crash, and who is to blame?

The answer lies in the market for credit.  Credit is what drives much of the economy.  It allows a person or business to borrow money, invest it, and create a return that is greater than the cost.  So investments are made when the profit goes above and beyond the expense (the interest).  Before economy crashed, the price (interest rate) of credit was very low.  So people, businesses and governments, rationally, utilized it heavily and investment grew, so the prices of the various things in which this money was invested grew.  The price was low, because the bank, created by government, with the sole control over the creation of new credit, the Federal Reserve, kept it's rate low to increase the flow of credit.  Eventually (as becomes necessary when the supply of money creates rapidly rising prices throughout the economy) this interest rate began to rise.  Investments (like homes and their derivatives) became less appealing due to the change in the price of the capital used to make the investments.  That is, the risk reward began to swing toward risk.  Because of this, the prices of those investments fell as demand fell.  Making matters worse, the higher cost of money meant that much of the debt became impossible to service, as the price increased beyond the return on the investment it funded.  And with all the credit that had been issued, much of which was now bad debt that could not be repaid (with collateral that is worth less than the debt) the house of cards collapsed.  On the bright side, this should have allowed for the rebuilding of a sturdy frame where the house once was.  Instead, as the collapse cascaded down, the weak base of cards was already being rebuilt to prop up investments that had proven to be bad.  So, instead of the bad debt clearing and the economy being rebuilt we have the same malinvestment being propped up by new debt that was supposed to fix the economy, but instead has been funneled, largely, in to government.  Making matters worse, since the rates are so low the risk/return ratio of investments in productive investments, especially in a weak economy, is just not as appealing to many investors as higher paying but risky derivatives as well as government bonds which are thought to be nearly risk free.

So who or what is to blame for the economic recession and following weakness?

The blame does not lie with corporations or small businesses, it does not lie with welfare recipients or the poor, it does not lie with the Koch brothers or the environmentalists, it does not lie with AARP or any other lobbyists, it does not lie with the 99% or the 1%, it does not lie with workers or CEOs or the greed of any of them. 

The blame lies with a small number of individuals who have, whether well-intentioned or not, taken it upon themselves to centrally plan countless aspects of the economy and the market.  Many of them will speak endlessly about the virtues - the benefits - of what they do.  And these virtues are great motivators for individuals to give of their vote and support for them.  And there certainly are benefits.  Rarely, though, do these individuals stress the cost.  I have listed a fraction of the costs.

Put simply, voters, Americans and individuals must ask themselves -- Is it worth it?

Is THIS - the economic crash we suffered through and the continued poverty and economic stagnation - an acceptable cost of the various benefits and promises offered by politicians?

Wednesday, February 6, 2013

Breitbart.com: The Vision of Andrew Breitbart

Andrew Breitbart started his career under the guidance of Matt Drudge.  Both were similar in their natural ability to harness the pulse of society and present it in a way that is nearly impossible to duplicate.  Both, based on their work, seem to have been very similar in their political beliefs.  That being, as Breitbart has said:

"a Reagan conservative, with libertarian sympathies" -- http://en.wikipedia.org/wiki/Andrew_Breitbart
Breitbart had big plans for Breitbart.com before his death.  It was to be, like the various websites that were merged into it (BigJournalism, Big Hollywood, etc.).  One of those components, Big government was launched with Mike Flynn, of Reason Foundation (a libertarian leaning organization) as editor-in-chief.

BigGovernment and the other associated websites had, as their biggest success, the drive and ability to expose secrets, past dealings, hypocrisy and failings of government, fraudulent or otherwise in addition to bringing to light the the ills of media and other organizations that act in concert with various big government actors.

When the TEA party burst on the scene, Breitbart was there.  And he was a major supporter and purveyor of their message of small government.  He, like the TEA party, certainly must have understood that the message alone was not enough to be effective.  The message must be a means to advance influence, not an end.

The message must be used to advance ideals.  This is done by building a coalition of support.  In 2010, the Breitbart supported TEA party utilized the masses of conservatives that held their economic and government beliefs, but also utilized the republican party and libertarians to deliver and build support for this message.  Such massive ground level support coupled with the reach of the republican party and fueled by the bad taste of Obamacare saw a large scale victory for the small government movement in the House and Senate wins for republicans, many of them TEA party affiliated, and a renewed national focus on limiting government size and control.

That was a major win, but it was just one battle in a large war.  That "war" the Breitbart was fighting was against Big Government, Big Journalism and Big Hollywood.  What these groups have in common is a progressive, liberal mindset with progressive, liberal goals.  They were the "enemy".  And those that fought the march toward bigger government and cozier relationships between government and media were "allies".

Organizations from CPAC to GOProud to Reason Foundation all supported and were supported by Andrew Breitbart.

At the time of his death, Breitbart was preparing for, arguably, the biggest battle in that "war".   The fight against the election campaign of Barack Obama.

Breitbart.com and those that continued to carry the torch of Andrew Breitbart took this task head on.  And while it didn't succeed (and might have been more successful had Andrew been involved) they were focused and stuck to his goals and vision.

And while folks like Ben Shapiro are spot on in terms of their gun rights arguments, much effort must be put in to keeping that Breitbart from slipping.  Since the election, more and more attention has been focused on battles against allies, rather than the main enemy groups.  Rather than drawing attention to the failings of democrats and big government liberals and progressives, a portion of the focus has been moved to republican leaders, folks like Karl Rove, and, just today, a negative article about Rand Paul, an ally with heavy support from the libertarian and TEA party factions of the wide tent of Breitbart supporters.

I don't think that the vision of Andrew Breitbart has been lost, but the current situation requires a strengthening of focus.  It needs to be understood that the republican party, the TEA party and the libertarian party represent large groups of supporters of the Breitbart message.  That support is a necessary means for more effectively achieving the goal of smaller government.

Those potential allies have not made it easy on the Breitbart team.  Certainly the tactics of Karl Rove and even John Bohner have been harmful.  But the solution should be to embrace and "use", for lack of a better word, those people and their supporters to build bridges and coalitions of support for common goals.

The same goes for Rand Paul.  His foreign policy, while not completely in line with the conservative leaning folks, is one in line with smaller government.

Breitbart.com is a very powerful and wide-reaching messaging tool, but that messaging and vision must create alliances, even with those who have made alliance difficult, if the goal is to succeed in reigning in government growth and spending.  That vision is alive and well and in a position to act in a very positive way if managed properly and used to build a strong force for small government and its many, massive benefits to liberty, freedom and quality of life.  The Breitbart message is a key player in the transition to smaller government and must succeed.

Wednesday, December 5, 2012

What Drives Growth? Investment or Consumption?

Hypothetically, suppose an individual, we'll call her Jane is unemployed and takes a chance on the lottery.  She wins $500 and has to decide what to do with it.  She decides, she is going to be generous and use it in a way that is best for the economy.  Here question is, should she go out and consume, splurge on a new laptop to play on facebook, twitter and whatever other leisure uses that a computer can be used for?  Or should she invest the money?

So she thinks about the economic consequences of each.

If she buys a $500 computer, she can have a lot of fun, and her spending will provide revenue to HP computers.  That is certainly good for the economy, right?  Because their profit goes up.

Then she considers possible investments, and gets an idea.  She would "invest" in a computer, and use it to do some contract work designing software for small businesses.  The very same one she would have bought to spend her leisure time on.  HP still gets the same $500, so they, their investors, and everyone down stream from that purchase gets the very same benefits.  So the economy gets the same benefits either way, and she benefits, because she can generate herself some income that she can spend to help the economy even more.  She also realizes that this is much better for herself as well.

As she develops her skills, her customer base grows, and their orders and demands grow.  She soon realizes that she cannot handle it all herself.  She asks her sister, who she trains, to join her.  She buys another computer, and the two of them continue to attract new customers and make enough money to cover their expenses with a little left over.  Soon, that leftover capital gives her an idea.

If she hires 2 more programmers and a marketing professional, they could expand further.  So she makes those hires and buys 3 more computers and a printer for the marketing materials.

the businesses is really running great, she is making a good living, and she feels bad.  She sought to benefit the economy and those around her, but has, instead, made herself modestly wealthy off of her $500 win.

This doesn't last long, as she soon realizes, she has done both.  While maximizing her business returns, and thus her own earnings, she has bought 5 computers and a printer, and now, including herself, employs 5 people.  She has grown the economy by 5 jobs, 5 computers' and a printer's worth of earnings for HP and created products that allowed other businesses to grow.

That is a lot of economic benefit, she realizes, and is extremely excited and quickly gets back to putting all her effort in to growing her business.

So investing the $500, led to the various benefits throughout the economy and for herself.  Buying a computer for fun would have done far less.

Clearly, investment is the bigger driver of growth.  One would think that economic policy would be set in ways to maximize investment and production.  Right now, it is the opposite.  Work and investment are punished.

Monday, November 26, 2012

Warren Buffett Outs Himself as a Political Shill

In his most recent New York Times Op-Ed, Warren Buffett makes even clearer what I, and many others, have known for some time.

He is a political shill.

He begins with a hypothetical situation:

SUPPOSE that an investor you admire and trust comes to you with an investment idea. “This is a good one,” he says enthusiastically. “I’m in it, and I think you should be, too.”

Would your reply possibly be this? “Well, it all depends on what my tax rate will be on the gain you’re saying we’re going to make. If the taxes are too high, I would rather leave the money in my savings account, earning a quarter of 1 percent.” Only in Grover Norquist’s imagination does such a response exist.

That would be precisely my response if the investment were, as are all investments more risky than leaving the money in my federally insured bank account; and the return on the investment was just beyond the threshold of return I had marked for the level of risk involved; and an increase in taxes would lessen that return enough to bring the return below that threshold.  This is not an unthinkable scenario, nor is it predictable as it relies on individual tastes.

Between 1951 and 1954, when the capital gains rate was 25 percent and marginal rates on dividends reached 91 percent in extreme cases, I sold securities and did pretty well. In the years from 1956 to 1969, the top marginal rate fell modestly, but was still a lofty 70 percent — and the tax rate on capital gains inched up to 27.5 percent. I was managing funds for investors then. Never did anyone mention taxes as a reason to forgo an investment opportunity that I offered.

That is because investment returns, as he has pointed out were very high.  But in assuming that the tax rates caused this supposed boom, or that they did not hinder it, he is committing the same logical fallacy that his literary pal Paul Krugman often employs.  Correlation, unfortunately, does not equal causation.

So let’s forget about the rich and ultrarich going on strike and stuffing their ample funds under their mattresses if — gasp — capital gains rates and ordinary income rates are increased. The ultrarich, including me, will forever pursue investment opportunities.

But giving more of the return on those invested funds to the government is quite similar to (and likely worse than) stuffing it in a mattress.   Higher taxes means less after tax income to reinvest.  The difference is stuffed in the mattress of the government.

And, wow, do we have plenty to invest. The Forbes 400, the wealthiest individuals in America, hit a new group record for wealth this year: $1.7 trillion. That’s more than five times the $300 billion total in 1992. In recent years, my gang has been leaving the middle class in the dust.

A huge tail wind from tax cuts has pushed us along. In 1992, the tax paid by the 400 highest incomes in the United States (a different universe from the Forbes list) averaged 26.4 percent of adjusted gross income. In 2009, the most recent year reported, the rate was 19.9 percent.

Well this is a complete contradiction to his earlier points, and is quite devastating to his argument.  The low tax rates of recent years, he is rightly pointing out, have left him and his wealthy friends with more capital to invest.

The group’s average income in 2009 was $202 million — which works out to a “wage” of $97,000 per hour, based on a 40-hour workweek. (I’m assuming they’re paid during lunch hours.)

I am sure he can personally attest that these folks do not work 40 hour weeks.

Yet more than a quarter of these ultrawealthy paid less than 15 percent of their take in combined federal income and payroll taxes. Half of this crew paid less than 20 percent. And — brace yourself — a few actually paid nothing.

That is because these ultra-wealthy are measured by wealth, not income.  So when they lose money, regardless of the rate, some will not pay any taxes.  Nice red herring though.

But the reform of such complexities should not promote delay in our correcting simple and expensive inequities.

And now his true aim comes to light along with a clear tie in to the Obama rhetoric.

Our government’s goal should be to bring in revenues of 18.5 percent of G.D.P. and spend about 21 percent of G.D.P.

Buffett is smarter than the politically guided arguments he is making.  He has let his political allies and their class war rhetoric cloud his logic to such a degree that, in his effort portray the rich just right, he has contradicted his own argument.  He said at one point in the article, "It’s nice to have friends in high places".  Ironically, one very obvious explanation for Buffett's political writings is the very real possibility that the financial benefit his political friendships (one, thanks in part to him, in, arguably, the highest place) will be far greater than the cost imposed by such a tax increase.

In short, he is a shill and a crony. 

Wednesday, November 7, 2012

2013: Lots of Taxes Coming...

In the very near future, we have a lot of tax changes that, of course are current law and have been for a while.  So while they are not tax hikes, they sure will feel like it.  Whether you know a punch to the jaw is coming does not change the fact that it hurts, nor does it change the damage that it does beyond whatever preparations are made to brace for it.

That said, in 2013 we have a 3.8% surtax on investment income for those earning more than $200K (this is for individuals) per year.  This is on everything from interest, dividends, capital gains, real estate, etc.  This, combined with the increase in marginal rates, puts the top income tax rate at 43.4%.  Additionally, the top rate for long term capital gains will go from 15% to 20%.  Add the investment surtax, and the top marginal rate for capital gains earnings becomes 23.8%.  This is over a 50% increase.

Boo hoo, those poor rich folks, right?  Like they need more money, right?

Ignoring the effects throughout the economy, rich or poor, that this destruction of capital will have, it is not just "the 1%" that will be hurting.

If nothing is done, the effects will be much greater on the poorest and the middle class.  These are the folks much less capable of absorbing such an impact.

First, the payroll tax will go up by 2%.  That, plus the fact that employers are paying more in Medicare taxes means less take home pay. 

(side note: if this tax went up even more, to the level it would need to be to adequately fund Social Security and Medicare, there would probably be a stronger push to reform the programs)

Next, the bottom capital gains rate (individual gain of 35K or less) goes from 0% to 10%.  This impacts the small business owner who sells his company, or sells a rental property for a net gain, or someone with a small investment portfolio that they rely on to supplement their income/retirement.

Next, the bottom tax bracket (individual taxable income below $8,700) goes from 10% to 15%.  A 50% increase.  Add in the payroll tax increase, and some one with that income (or that portion of anyone's income), will see a 70% increase in tax expense.  Every other bracket will also see an increase except the second one (income between $8,700 and $35K for individuals).

Will anything be done, legislatively, to stop this?

Should anything be done, legislatively, to stop this?

Thursday, September 20, 2012

The Question...

Much has been made of the recent video from a Romney fundraiser and the statements he made about the 47% of Americans that he thinks we vote for Obama no matter what.

Much of this discussion has lacked any reference to the context.

So to add some context, here is the question that he was answering when he made those comments:


For the last three years, all everybody's been told is, "Don't worry, we'll take care of you." How are you going to do it, in two months before the elections, to convince everybody you've got to take care of yourself?

-- http://www.motherjones.com/politics/2012/09/full-transcript-mitt-romney-secret-v...

And Mitt's response, broken up for my own comments (from the same website):

There are 47 percent of the people who will vote for the president no matter what.

While I think this number is high, he is right that there is a large percentage of people that will vote for Obama no matter what, just like there is a large number who will vote for Romney no matter what.

All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it. That that's an entitlement. And the government should give it to them.

Many think that he, here, is saying that that whole group fills all of these characteristics.  I think, based on the way he is saying it, he is throwing out a condensed lists of some of the attitudes that are held among the percentage of voters that will vote for Obama no matter what.  It would be like, if someone was discussing government workers, and said "they are the teachers, the firefighters, the policemen and women...".  He is saying that, among that group are people who believe these sorts of ideas regarding the role of government.

And they will vote for this president no matter what. And I mean, the president starts off with 48, 49, 48—he starts off with a huge number.

Again, I think the number is high, but there is a number.

These are people who pay no income tax. Forty-seven percent of Americans pay no income tax.

These are two completely separate statements, and I quoted them together to point this out, because many think he is saying that this 47% is the same as the "47,48,49% that he referenced earlier.  Again, he is listing another quality that is common among that group that will vote for Obama no matter what.  Many in that group pay no income tax, and indeed, will not be swayed by a proponent of lower income tax.  That the actual percentage number (47%) used is the same is merely coincidence and not meant to make the groups synonymous.

So our message of low taxes doesn't connect. And he'll be out there talking about tax cuts for the rich.

See above.

I mean that's what they sell every four years. And so my job is not to worry about those people—I'll never convince them that they should take personal responsibility and care for their lives.

This one gets back to the question asked, which wondered, how he would convince them they have to "take care of yourself".  He is pointing out that IN THE CONTEXT OF THE CAMPAIGN, a campaign with the goal of obtaining the votes to win the election, it is not his job to worry about getting those votes.  It, further, is not his job, in the context of the campaign, to convince them of the idea of taking care of yourself, rather than, as the questioner asserted, having government "take care of you".  So this isn't about convincing specific individuals that they should care for themselves, but more about the belief held by many Obama supporters and Obama himself that government help is a necessary part of life.

What I have to do is convince the 5 to 10 percent in the center that are independents that are thoughtful, that look at voting one way or the other depending upon in some cases emotion, whether they like the guy or not, what it looks like. I mean, when you ask those people…we do all these polls—I find it amazing—we poll all these people, see where you stand on the polls, but 45 percent of the people will go with a Republican, and 48 or 4…

Here he is pointing out that there is a group in the middle, that is not committed to either side, and as the tape cuts off, he seems to be starting to say that he, too, has a large group of people that will vote for him no matter what. 

It seems that when context is added, much of what he said makes more sense and the "explosiveness" is mostly lost.  It becomes clear that the point being made is one about a distinction between more or less government "support", not one about not caring for a large portion of the population.

Wednesday, August 15, 2012

The Ryan Pick

Last weekend, Mitt Romney announced his selection of Paul Ryan as his running mate.  The selection and announcement, shrouded in secrecy, was a great display of the Romney campaign's attention to detail, which is hopefully a preview of what a Romney presidency might look like.  The process included a walk through the woods, a couple drives to Chicago and air travel that went completely undetected by the media, all in an effort to make sure everything went completely as planned.

The inevitable question is whether he was the best pick.  While he was not the best, generally, he was certainly the best of those being considered for many reasons:

  • He has a budget plan, that is detailed, addresses entitlements and reforms the tax code.  It is not enough, but it is much better than anything else that has come out of politicians, lately.
  • On those entitlements, the Ryan-Wyden plan is the farthest any proposal has gone in correcting the destructive Medicare program.  While complete elimination at the federal level would be better, it is a step in the right direction.  The use of a sort of market driven competition will likely see costs stabilize, but Medicare will still be a huge burden.
  • Paul Ryan has made the anti-Obamacare argument better than anyone has.  He has studied the numbers in great detail, and understands the impact it will have on the economy and our destructive and dangerous level of national debt.
  • His tax plan, while, again, not ideal, brings the incentives of tax code closer to being in line with the goals of greatest economic growth and stability.  A consumption tax would be better, but cutting taxes on business, investment and work will surely incentivize all three. 
  • He has the charisma to debate these issues in a way that gets the points across in a concisely and effectively.
  • On a more philosophical note, he has, since college, been a follower of many Austrian School economists such as FA Hayek and Ludwig von Mises, along with being a supporter of Ayn Rand.  It is becoming increasingly clear that an understanding of Austrian economics will be necessary to correct the economic situation in which America currently finds itself.
From policy to philosophy, Paul Ryan is clearly the best pick, among the commonly discussed contenders, in regards to the proper way to correct our economy and fix our bloated government.  Whether he was a good political choice, remains to be seen.