It's official, Rand Paul, the junior senator from Kentucky, is running for president--and though his libertarian rhetoric has many enthusiasts among entrepreneurs, a win for Rand might just imperil businesses in general.
Paul announced his decision to run on the Republican ticket for president in 2016 on his Web site on Tuesday morning. Among other pronouncements, he says he plans to return the country to its founding principles of liberty and limited government, should he win the election.
But Paul, known as a libertarian by some and populist conservative by others, won’t necessarily be a friend to small business. Sure, his Laissez-faire attitude toward regulations and business in general has many acolytes in the business world including the former Pacific Investment Management Co. fund manager Bill Gross and, perhaps, Paypal founder Peter Thiel. He's also staked out some controversial views on policies that could stir up trouble among business owners who like stability and predictability, which helps them plan and grow.
“Paul is an honest believer in free markets and the idea that the market will fix whatever hurts the nation,” says John Hudak a fellow in government studies at Brookings Institution, the public policy think tank in Washington, D.C.
Paul, 52, is trained as an ophthalmologist. He spent more than a decade in private practice before venturing into politics, following in the footsteps of his father Ron Paul, the former U.S. Congressman from Texas and three-time presidential nominee. Like his father, Sen. Paul has aspirations to reform the criminal justice system and legalize medical marijuana usage. He has also come out forcefully against the National Security Agency's mass surveillance practices--all ideas that tend to fly in the face of standard Republican thinking.
When it comes to issues that directly affect small business owners, his record has been uneven at best. In 2013, he voted with his party against comprehensive immigration reform, an issue that’s critical to the growth of the agricultural and tech sectors. He also voted against raising the minimum wage, against tax cuts for the middle class, and most importantly to entrepreneurs, against the Small Business Jobs and Tax Relief Act in 2012. That would have given small business owners a tax credit for wages paid to employees, and would have extended a 100 percent bonus depreciation allowance.
Marco Rubio, the junior senator from Florida, who is also expected to announce his run for the presidency at an April 13 news conference, voted both for immigration reform and for the small business bill, breaking with most of his party to do so.
The only other Republican to officially announce his run for the presidency is the Tea Party candidate Ted Cruz, the junior senator from Texas. Compared to Cruz, policy analysts say Paul’s thinking is perhaps a bit more nuanced and less extreme.
On the Federal Reserve Bank, for example, Cruz has said he favors abolishing the central bank, along with the Internal Revenue Service. While that may play well to some of the more extreme members of the Republican party in the primaries, political experts don’t see such talk surviving in a general election campaign.
By contrast, Paul has said he’d like to scale back the authority of the Federal Reserve and make it more accountable to Congressional audits. Nevertheless, he has also opposed its policies since the Great Recession, including the monetary policy known as quantitative easing. Under that policy, the Federal Reserve has kept interest rates low and engaged for period of years in a campaign of aggressive bond purchases that have increased monetary supply and bolstered the stock market.
And in classic libertarian fiat, Paul, like his father, has also said he favors returning the dollar to the gold standard, which he thinks would make the monetary supply more stable. Economists have widely discredited this theory, saying it would hobble the ability of the central bank to act and make adjustments during times of economic crisis. Adherence to the gold standard is one of the policies that prolonged the Great Depression, they say.
In addition to Rubio and Cruz, Paul is expected to be joined on the Republican presidential slate by former Florida Governor Jeb Bush, and Wisconsin Governor Scott Walker, who currently poll as the Republican favorites. According to Reuters, 8 percent of likely Republican voters currently favor Paul.
“He is a long-shot,” says Dean Baker, co-director of the Center for Economic Policy and Research, in Washington, D.C. He adds that Paul's chances could change after the first primaries.
“If he is still standing after the first caucuses, he would rate high in my list, higher than either Bush or Walker in terms of who can stay,” Baker says.