The Republican vice-presidential choice brings into focus two different economic visions of the US. The United States presidential race has been a war of attrition between the two candidates for several months. The incumbent Democrat, Barack Obama, has been struggling with an economy still suffering the hangover of the subprime crisis with unemployment remaining at stubbornly high levels. The challenger, Republican candidate Mitt Romney, has avoided nailing down a clear policy platform from which to take on Mr Obama. His calculation was that Mr Obama was his own worst enemy and that Mr Romney had only to stand around to be in a winning position.
Mr Romney’s strategy is failing. His choice of the genial but economically conservative congressman, Paul Ryan, as his vice-presidential candidate indicates that the Republican has decided to define a policy alternative to Obama. Until July, a poll of polls would show the two candidates running neck and neck. Since then, Mr Obama has been creeping upwards. The reason has been a successful and sustained attack on Mr Romney, portraying him as a hard-hearted business executive whose failure to reveal his tax records indicated that he had something dodgy in his background. Indians may cringe, but Mr Obama’s claims that Mr Romney outsourced jobs overseas have also helped pull the Republican down. Ryan’s legislative record has been almost solely about cutting the US public debt and stimulating growth — but doing so by slashing welfare payments and giving tax cuts to business. At a time when so many Americans are on the dole, this may seem a suicidal position to take. But this may be less of a gamble then it seems.
One, polls indicate swing voters see Mr Romney’s strength as being his economic policies. Thanks to the assassination of Osama bin Laden and his tough stance on Pakistan, Mr Obama — unusually for a liberal Democrat — attracts more confidence when it comes to national security. Two, Mr Romney’s weakness is his standing with conservative voters who are wary of his past moderation on social value issues. Mr Ryan helps rally the right-wing base over economic policy, the one issue which the disparate schools on the right agree upon. The US voter now has a black-and-white choice on the economic policies that he would like his government to follow. Mr Obama has chosen a Keynesian path of running up the public debt to sustain demand until the economy sparks back to life. Mr Romney and Mr Ryan are all about reducing government spending and giving the corporate sector the financial space to restart growth. Austerity versus stimulus is a debate that is global. Now it lies at the heart of the US presidential election.