Vivek Ramaswamy owes his readers and voters more optimism

Amy Acton, Vivek Ramaswamy’s opponent in the Ohio governor’s race, should make Ramaswamy his latest Wall Street Journal opinion piece. Unfortunately he denigrates the enormous economic progress of the US and, worse than a conservative, links investment success to government waste.

Ramaswamy writes that “the biggest driver of inequality over the past five years has been exactly what socialists are now asking for more of: large-scale government spending.” The latter will not age well. Think about it.

Over the last five years artificial intelligence (AI) has hit the market and surprised investors, as evidenced by the rise of a former unknown like Nvidia, countless other super unicorns brought to life by Nvidia’s genius (OpenAI, Anthropic perhaps?), not to mention growing investor excitement about the growth potential from planet Earth. But to read Ramaswamy, the latter was rather curious, like the stock market logic in relation to government spending that apparently fooled the deepest markets in the world.

In Ramaswamy’s version of reality, “When Washington floods the economy with borrowed and newly printed dollars, the money flows first into assets owned by the wealthiest Americans.” Except if capital rallies were that simple, every country would do what they imagine the US has done. In fact, Japan has been doing this for decades amid falling inventories. Yes, investors despise the central planning of resources (government spending) that Ramaswamy claims boosts markets.

Furthermore, and as Ramaswamy has rightly pointed out, the top 1% account for 40% of federal tax revenue. From the preceding truth, we can deduce that government spending does not enrich the rich not only because central planning is anti-market, but because the rich per Ramaswamy usually disappear so that the federal government can spend.

Moving on and returning to Ramaswamy’s overwhelmingly absurd claim that “When Washington floods the economy with borrowed and freshly printed dollars, the money flows first into assets owned by the wealthiest Americans,” he seems to have forgotten a basic market lesson he surely learned at Goldman Sachs. Americans’, then equal amounts of money must flow. It’s something about there being a seller for every buyer, and since the “1 percent” per Ramaswamy represents “about 30% of the nation’s net worth,” it seems that the money flows naively imagined to be taking place due to market-fooling government spending are pessimistic selling of the rich to the optimistic rich.

Ramaswamy wisely scorns currency debasement, but then claims that “borrowed and newly printed dollars” are once again increasing asset values. Global stock markets continue to make a mockery of Ramaswamy’s certainty, so did US yields in the 1970s and 2000s when the dollar depreciated significantly, after which logic must kick in: when investors invest, they buy future returns in dollars. Based on the above truth, can Ramaswamy seriously believe that devaluation is the way to boom asset markets? If so, he is imagining rampant market stupidity in addition to a myriad of other lies.

From there, it is notable that five years ago the total federal debt was about $28 trillion versus $39 trillion today. While he agrees with Ramaswamy once again that dollar price stability would trump any other policy today in terms of deep economic meaning, can he really believe that investors would so easily buy rapidly shrinking income streams from the US Treasury?

There is much more contradiction in a piece that Ramaswamy’s opponent should be very happy about, but the need for brevity intrudes. For now, Ohio voters are paying attention.