Vivek Ramaswamy wrote in 2022 that a market crash was “the medicine that we need” and that the market crash that year would “ultimately be a good thing for the country.” In the same book, he acknowledged that a market crash he believed a wealth tax would trigger would “cost the middle class and poor far more than the wealthy” while his own life would remain “mostly the same.”

The remarks appear in Nation of Victims, published Sept. 13, 2022, during a year in which falling markets wiped billions of dollars in value from Ohio’s public pension systems.

Ramaswamy was explicit about how he viewed the economic downturn.

“A market crash serves as a much-needed shock to the new culture of laziness that has permeated the American economy,” Ramaswamy wrote.

He blamed workers who had “grown accustomed to staying home,” investors accustomed to rising stock prices, monopolies accustomed to easy profits and young founders accustomed to plentiful capital.

“I think a market crash is the medicine that we need,” Ramaswamy wrote, saying it could help recreate a national identity based on “excellence rather than entitlement.”

He went further when discussing the downturn already underway in 2022.

“My view is that the market crash of 2022 will ultimately be a good thing for the country,” Ramaswamy wrote.

His argument was not limited to inflation or monetary policy. Ramaswamy wrote that tighter fiscal and monetary policy was necessary to fight inflation, but said the crash would also combat what he called the “cultural lethargy” produced by years of easy money.

Ramaswamy wrote that poor and middle-class Americans would bear more of the cost

Elsewhere in the same book, Ramaswamy acknowledged how unevenly the consequences of a market crash could fall.

Writing about a wealth tax that he said would “undoubtedly cause a market crash,” Ramaswamy said the resulting crash “would cost the middle class and poor far more than the wealthy.”

Two pages later, he described what a crash would mean for him personally.

“My own life would remain mostly the same if the market crashed,” Ramaswamy wrote.

He then identified the people who would not be insulated from the consequences: retirees who had counted on investment income, workers fired after their employers lost access to capital and prospective homeowners who could no longer obtain the same mortgage financing.

Ramaswamy therefore acknowledged in his own book that severe market losses could threaten jobs, retirement security and access to homeownership even as he argued that a crash was the “medicine” the country needed.

Ohio public pensions lost $32 billion in 2022

In Ohio, the losses during the 2022 market downturn reached tens of billions of dollars.

The state’s five public pension systems collectively lost about $32 billion in investment value that year.

The Ohio Public Employees Retirement System lost about $19.7 billion, roughly 12% of its portfolio. The State Teachers Retirement System of Ohio lost $9.5 billion, or 9.64%. The Ohio Police & Fire Pension Fund lost $1.74 billion, or 9.04%. The School Employees Retirement System lost $949 million, or 4.89%, and the Ohio Highway Patrol Retirement System lost $109.9 million, or 10.1%.

Those systems cover workers and retirees across Ohio government, public schools, police and fire departments and the Ohio State Highway Patrol. OPERS alone served approximately 1.2 million workers and retirees at the time, while STRS served roughly 465,000 active and retired teachers.

For scale, Ohio’s five retirement systems paid approximately $17.1 billion in pension benefits in 2022, according to an Ohio Retirement Study Council report. The roughly $32 billion in investment losses that year were nearly twice the amount the systems distributed in pension benefits.

The $32 billion figure represents investment losses, not $32 billion taken directly out of retirees’ benefit checks. But the downturn had consequences for the financial position of the pension systems.

At OPERS, for example, the estimated remaining solvency period of its health care plan fell from 29 years at the end of 2021 to 21 years at the end of 2022. OPERS said it had recognized only one-fourth of its 2022 investment loss for pension funding purposes in the first year and would have to recognize approximately $14.8 billion more over the following three years.

Ramaswamy is now campaigning on lowering costs

The comments are resurfacing four years later as Ramaswamy campaigns for Ohio governor with affordability at the center of his message.

His campaign website currently leads with the slogan “Lower Costs. Bigger Paychecks.” The campaign says its mission is to make Ohio “the most affordable, opportunity-rich state in America” and promises lower taxes and lower energy bills.

Affordability is also a major concern among Ohio voters. A statewide poll conducted Aug. 3-6 by UpONE Insights for Groundwork Ohio and the First Five Years Fund found that 64% of 600 registered Ohio voters identified lowering the cost of living as one of the two most important issues facing their families. The survey reported a margin of error of plus or minus 4 percentage points.

Ramaswamy’s own 2022 writing puts his comments about market crashes alongside his acknowledgment of who could suffer when markets collapse.

He called a crash “the medicine that we need.” He said the 2022 crash would “ultimately be a good thing for the country.” And elsewhere in the same book, discussing a crash he believed a wealth tax would cause, he wrote that it would cost middle-class and poor Americans “far more than the wealthy” while his own life would remain “mostly the same.”