The fact that Paul Ryan and two dinner companions were spotted ordering two $350 bottles of wine at Washington, D.C.'s Bistro Bis the other night has made a bit of a splash. After all, here's the guy preaching massive austerity for the rest of us doing anything but practicing austerity in his own life.
But it's not clear what's supposed to be surprising about that. Isn't that sort of the great American story, circa 2011?
His dinner companions, though, are a little more interesting. Again, not necessarily surprising, but if you want to see the Republican policy world in a nutshell, this is it. TPM has identified them:
Both men have doctorate degrees in economics and are well-known in the conservative media world as die-hard proponents of the free market's ability to right itself without government bailouts when the crisis hit in late 2008.
[Cliff] Asness, who ordered the wine and who, according to Feinberg was the one who said "Fuck her," is better known as a high-profile hedge fund manager. Asness founded and runs AQR Capital, which manages an estimated $26 billion in a variety of traditional products and hedge funds, and his life story has been the subject of numerous books and articles about the rise and fall of Wall Street. He's also grabbed headlines for being one of the most voluble opponents of President Obama's economic policies.
(snip)
[John] Cochrane, the other, more tempered dinner companion, is the AQR Capital Management Distinguished Service Professor of Finance at the University of Chicago, an apparent tip of the hat to the contributions Asness' AQR Capital Management has made to the Booth School of Business there.
Matt Yglesias looks at one of Cochrane's pet theories, "a novel model of fiscal and monetary policy in a recession that has the convenient property of affirming all of Rep Ryan’s political views," and argues that:
you might be a freshwater economist if you think it makes sense to reassure us that a deflationary spiral is impossible because your model says so even though deflationary spirals do, in fact, occur in human history. To me, a model that denies the possibility of something happening that does, in fact, happen indicates that you’re working with a flawed model.
Hedge fund billionaires make giant contributions to elite universities and get like-minded professors hired to named chairs. (The Koch brothers have been doing this with a vengeance.) Together, they influence politicians, who set the economic agenda in Congress and to a great extent in the media. That is how it works, how our public discourse on the economy is shaped, and it starts with money.
Again, this is not shocking, but the very baldness of what's we're seeing in this particular case is a helpful reminder of the myriad ways money buys access. It's not just campaign contributions or even the promise of high-paying jobs to politicians who've left office. Money buys experts. It buys credentials like named chairs for the experts you, as a billionaire, want to be influential. And then you and your pet expert go to a nice dinner and drink $350 bottles of wine with a high-profile member of Congress and when he cites the ideas you were pushing, he's not citing some self-interested hedge fund guy, he's citing a University of Chicago economics professor.