This is the second part of my chat (here is the first part) with Republican Paul Ryan, chairman of the House Budget Committee.
1. Ryan on income mobility for the poorest Americans:
Education is at the heart of it all, but the culture is, too. Moral relativism has done so much damage to the bottom end of this country, the bottom fifth has been damaged by the culture of moral relativism more than by anything else, I would argue. If you ask me what the biggest problem in America is, I’m not going to tell you debt, deficits, statistics, economics — I’ll tell you it’s moral relativism. Now is it my job to fix that as a congressman? No, but I can do damage to it. But it’s the job of parents to raise their kids … But let’s not ignore it. These things go beyond statistics, they go into the culture. As a policymaker, I simply make that as an observation, not that I have an answer and a bill I can pass in Congress and to fix that.
2. Ryan on how closely he monitors the EU debt crisis:
Very closely. I watch it every day. I read a lot of analysis that’s coming out. One of the reasons why I want this [SuperCommittee] to do something is to just give the bond market some more confidence in the American system, to give us more time. And I do worry about a fiscal crisis with the wrong people in power, and the outcome of that. I’m still hopeful and optimistic that the markets know how our political system is different than these parliamentary systems, how divided government can bring some paralysis, and how they’re going to wait for the election before they draw conclusions on the trajectory of America …
It could be the Germans will just ring-fence the core and have a smaller euro bloc, and that could be real ugly because that could really mess up banks. It’s not going well because they keep kicking the can down the road, and the austerity plans are fairly cosmetic. They’re not structural, which simply means they just go deeper in the hole. And the question is the contagion going to wash up on our shores too much to the point where the bond markets turn on us? I would like to think we’ll still be a flight to quality for some time to come.
3. Ryan on whether the Federal Reserve should let inflation rise to help reduce U.S. indebtedness and boost nominal GDP growth:
Of course not. Are you kidding me? I know [Kenneth] Rogoff and these other people, [Greg] Mankiw, talk about that. Oh my gosh, that would be the worst … They think they can steer the car between the pylons going at a 110 miles an hour — and they can mop up any inflation at just the right point when it gets just a little too high. As if they can keep inflation to single digits because they can just fine tune the economy on dime. It’s never been done before, so what’s to think we can do that now?
4. Ryan on education and keeping America competitive:
I put in the budget a plan to consolidate the 49 different federal jobs programs into vouchers for people to go back to school when they are mid-career and lose their jobs in sectors that are becoming obsolete. So you have to go back to lifelong learning and continual skills enhancement and get society wired culturally to do that. … I hear from so many businesses these days that actually we can hire people but we can’t find people with the skills. And that’s a big deal.
Part of it is the culture of people just having no work ethic — coming to work on time and all those issues — and when people are out of work for more than year, their skills really start to atrophy. That’s what’s really terrible about this. … You look at the [broader U-6 unemployment rate] and that’s the scary statistic. If we want to have a comparative advantage and a high living standard where we’re continuing to increase productivity and therefore living standards, you’ve got to have a society that is continually updating its skills. So our education system needs to be geared toward that and that to me means a more competitive system.