In The Biggest Races, How Big Is A Veep Candidate?

When we think about President Lyndon Johnson’s landslide win over Sen. Barry Goldwater in 1964, we do not attribute his victory to Hubert H. Humphrey, Jr., his running mate.

George H.W. Bush did not get much credit when Ronald Reagan ousted President Jimmy Carter back in 1980. And if I told you that John Nance Garner helped Franklin D. Roosevelt defeat President Herbert Hoover in 1932, you are liable to ask, “Who was John Nance Garner?”

Mitt Romney took command of the conversation about this year’s presidential race – though probably only briefly – with his announcement over the weekend that Rep. Paul Ryan of Wisconsin, the chairman of the House Budget Committee and darling of the party’s fiscal conservative wing, will join the Republican ticket. Romney’s choice was described as “bold” by most Republicans, “radical” by Democrats and “risky” by pundits.

In the final analysis, how important is it? History tells us that vice presidential picks do not matter very much. That’s worth keeping in mind. In the end, presidential campaigns are about choosing a president. A botched vice presidential choice can undermine a campaign – George McGovern’s aborted pick of Sen. Thomas Eagleton in 1972 is a prime example – but the vice presidential nominee will, in most cases, have only a minor role.

I am very suspicious of the phrase “this time is different.” It’s almost always not true. So my instinctive conclusion that this time is, indeed, different, and that putting Ryan on the ticket will make a difference, is tempered by my awareness that history says “nope.”

I am highly confident, however, that no matter who wins, the election of 2012 is going to be remembered as one of a handful of pivotal contests that, over the course of a century, determine the sort of country that America is. The youthful Ryan is already a major figure in the national debate over federal government spending, the $16 trillion debt pile that Washington has already accumulated, and the future of entitlement programs that the nation has put in place without dedicating the necessary resources to pay for them.

Ryan balances Romney’s background in the business world, a world that the Obama administration, drawn almost entirely from government, labor and academe, has alternately diminished and vilified. This election poses voters one of the clearest choices between two visions that they could ever hope to get. Ryan’s nomination did not frame or shape this election’s big issues, but it sharpens the focus. Romney is now all-in with the Ryan approach to government, which is virtually the opposite of the Obama approach.

This is why I expect the 2012 contest to join the three I mentioned earlier on history’s list of the biggest votes.

When Roosevelt defeated Hoover, the Great Depression has prostrated America. U.S. economic conditions approximated those of Greece today, but without the safety nets of unemployment and disability insurance, government-guaranteed pensions and bank deposits, and international aid. People spent hours on breadlines. When I was in college in Montana, older residents who lived on ranches during the Depression spoke of the sunken-eyed men who used to hop off freight trains and show up at the farmhouse door, pleading for work or food.

Americans demanded that the government do something. Hoover felt there was little the government could appropriately do, while Roosevelt promised to do whatever it would take. We could argue that a lot of what Roosevelt did was ineffective, as the depression dragged on into World War II, but Roosevelt’s legacy of social programs, including innovations such as Social Security and government-run unemployment insurance, and generally larger government is with us to this day.

Johnson took office amid the bloodstains from the assassination of President John F. Kennedy in 1963. His election in his own right came less than a year later. The country was still dealing with the trauma of Kennedy’s murder, and beneath that was the lingering shock over how close we came to nuclear war with the Cuban Missile Crisis of 1962.

The two big issues in 1964 were the Cold War and the civil rights movement, which had finally brought passage of landmark anti-discrimination legislation that year. Johnson, a Southern Democrat, pushed hard for the civil rights law. Goldwater, an Arizona Republican and a prominent defender of what was called “states rights,” was cast as a militaristic hothead and a civil rights throwback. The country voted for what it saw as a more peaceful, more inclusive future.

What followed, however, was a set of domestic spending initiatives, notably including Medicare, that Johnson called his “Great Society” program, together with a new war in Vietnam. Johnson abandoned plans to run for another term in 1968, and Republicans won five of the next six presidential elections.

Reagan’s candidacy was another key turning point. Carter had interrupted the Republican dominance with his post-Watergate victory in 1976, but economic stagnation set in, along with a sharp rise in energy costs. Carter was trapped between his party’s reflexive responses, which included a harsh “windfall profits tax” on oil companies, and his own business experience, which led him to generally favor a lighter regulatory touch. Reagan had no such ambivalence. He asked for a mandate to get the government out of the way of economic recovery, and he got it – in a race that, until the final weeks, Democrats did not think they were in much danger of losing.

There is a very small pool of truly uncommitted voters in this year’s election, and only a handful of swing states will decide the outcome. The winner of this campaign will be the one who best motivates his own supporters to get out and vote. A big part of that strategy is to hammer your opponent, not because you expect to persuade his supporters to back you instead, but merely to diminish their enthusiasm so they stay home. Both sides will engage in this tactic. Romney will try to insulate himself by keeping the focus on Obama’s record in office; Ryan, as a leader of congressional opposition to Obama, helps him do this.

The Obama campaign had a pretty good month in July by pressing attacks on Romney’s wealth, his business track record and his taxes. If it could, the Obama team would happily spend every day from now to November discussing what might have been on Romney’s Form 1040 for 2003, rather than the current state of the U.S. economy, the federal budget or the national debt.

Ryan’s selection will not change the Obama strategy, other than to broaden it to claim that the soft-spoken, bookish, deeply informed congressman from small-town Wisconsin is a radical who wants to “end Medicare as we know it.” This happens to be true – because Medicare as we know it is a few years away from falling apart due to Obamacare budget cuts and runaway costs.

But Ryan’s presence on the ticket will tend to keep the conversation on matters of substance, because he is a substantial sort of guy. And it may blunt Democratic charges that Romney pushes his economic and tax policies to benefit rich and privileged people like himself. Ryan favors those same policies, and his wealth, family background and standard of living are not unusual at all.

Will the selection of Ryan really matter? It’s too soon to say. But it might, and from Romney’s perspective, it almost certainly will not hurt.

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About Larry M. Elkin 564 Articles

Affiliation: Palisades Hudson Financial Group

Larry M. Elkin, CPA, CFP®, has provided personal financial and tax counseling to a sophisticated client base since 1986. After six years with Arthur Andersen, where he was a senior manager for personal financial planning and family wealth planning, he founded his own firm in Hastings on Hudson, New York in 1992. That firm grew steadily and became the Palisades Hudson organization, which moved to Scarsdale, New York in 2002. The firm expanded to Fort Lauderdale, Florida, in 2005, and to Atlanta, Georgia, in 2008.

Larry received his B.A. in journalism from the University of Montana in 1978, and his M.B.A. in accounting from New York University in 1986. Larry was a reporter and editor for The Associated Press from 1978 to 1986. He covered government, business and legal affairs for the wire service, with assignments in Helena, Montana; Albany, New York; Washington, D.C.; and New York City’s federal courts in Brooklyn and Manhattan.

Larry established the organization’s investment advisory business, which now manages more than $800 million, in 1997. As president of Palisades Hudson, Larry maintains individual professional relationships with many of the firm’s clients, who reside in more than 25 states from Maine to California as well as in several foreign countries. He is the author of Financial Self-Defense for Unmarried Couples (Currency Doubleday, 1995), which was the first comprehensive financial planning guide for unmarried couples. He also is the editor and publisher of Sentinel, a quarterly newsletter on personal financial planning.

Larry has written many Sentinel articles, including several that anticipated future events. In “The Economic Case Against Tobacco Stocks” (February 1995), he forecast that litigation losses would eventually undermine cigarette manufacturers’ financial position. He concluded in “Is This the Beginning Of The End?” (May 1998) that there was a better-than-even chance that estate taxes would be repealed by 2010, three years before Congress enacted legislation to repeal the tax in 2010. In “IRS Takes A Shot At Split-Dollar Life” (June 1996), Larry predicted that the IRS would be able to treat split dollar arrangements as below-market loans, which came to pass with new rules issued by the Service in 2001 and 2002.

More recently, Larry has addressed the causes and consequences of the “Panic of 2008″ in his Sentinel articles. In “Have We Learned Our Lending Lesson At Last” (October 2007) and “Mortgage Lending Lessons Remain Unlearned” (October 2008), Larry questioned whether or not America has learned any lessons from the savings and loan crisis of the 1980s. In addition, he offered some practical changes that should have been made to amend the situation. In “Take Advantage Of The Panic Of 2008” (January 2009), Larry offered ways to capitalize on the wealth of opportunity that the panic presented.

Larry served as president of the Estate Planning Council of New York City, Inc., in 2005-2006. In 2009 the Council presented Larry with its first-ever Lifetime Achievement Award, citing his service to the organization and “his tireless efforts in promoting our industry by word and by personal example as a consummate estate planning professional.” He is regularly interviewed by national and regional publications, and has made nearly 100 radio and television appearances.

Visit: Palisades Hudson

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