Thread: Romney's VP pick, the Freshman class, & will the GOP get a new Speaker of the House?

WF,

And really, how much has all the spending from Bernanke and co. helped economic recovery?

bernanke wasn't doing the spending-- you are confusing fiscal and monetary matters.

what bernanke did was attempt a monetarist solution, which would have been the conservative solution under any other administration.

if you are referring to the stimulus, almost every keynesian prediction based on available models stated that this was not enough. obama did NOT follow a keynesian solution; his administration purposefully cut it down (and made it half inefficient tax cuts) to make it politically palatable to the republicans, which it would never have been.

All the Fed is doing is sacrificing the future of this current generation to sate baby-boomer appetite for ss/healthcare/welfare.

now you are conflating a lot of issues, namely the distinction between federal deficit and national debt. SS/healthcare/welfare are major, long-term issues, and are not currently what drives the deficit, which was largely created by the huge drop in receipts with the recession.

How does government have to "enforce" civil rights outside of the long arm of the law that prevents citizens from encroaching on others negative liberties?

see his opposition to the Civil Rights Act.

Currently, your citizens care more about the economy and recovering lost jobs than they do about the security of Taiwan, Saudi Arabia or X,y,z.

it's a good demonstration of his ignorance of how american guarantees of international security play into her role in the global economy. he wants an isolationist, protectionist america.

Again, according to your school of thought. Chicago and laisezz-faire advocates argue that this would be a much faster way to recovery.

they can say it, but they have as to yet not a single real-world proof that their theory works.

again, look at europe. jean claude trichet, president of the ECB, said in 2010:

As regards the economy, the idea that austerity measures could trigger stagnation is incorrect...In fact, in these circumstances, everything that helps to increase the confidence of households, firms and investors in the sustainability of public finances is good for the consolidation of growth and job creation. I firmly believe that in the current circumstances confidence-inspiring policies will foster and not hamper economic recovery, because confidence is the key factor today.

now, let's review the situation today.

FT Alphaville » Core infection and eurozone PMIs

Hjalmar Schacht and war-Keynesianism were responsible for birthing Nazi Germany. Prior to that, the Weimar Republic practiced Zimbabewean economics that mirrors the practices of todays Fed.

buying long-term bonds does NOT equal "printing money".

A command economy that took keynesianism to its logical extreme wrt distribution of income and allocation of resources was shaping up further East.

it's funny how i understand austrian economics but you do not seem to understand keynesianism. keynesianism advocates government spending ONLY in terms of a recession/depression. a New Keynesian like me would not even look at government spending in terms of a regular recession, but would advocate it in terms of a severe recession/depression.

keynesianism also does NOT advocate "distribution of income and allocation of resources".

i would advise you to read on the precepts of keynesianism other than mouthing "KEYNESIANISM IS MARXISM".

The New Deal was a remarkable failure that mirrored Keynes. I'm not sure how you can attribute the above to neoclassical economics particularly when Keynes' school of though ran rampant throughout the world.

of your two points here, i have no idea what you are talking about.

let's take a look at the first: "the new deal was a remarkable failure that mirrored Keynes."

here is US GDP from 1910-1960, as well as US employment figures.

File:US GDP 10-60.jpg - Wikipedia, the free encyclopedia

File:US Unemployment 1910-1960.gif - Wikipedia, the free encyclopedia

the New Deal effectively started in 1933, although full implementation lasted about 2 years. tell me what happened between 1933-1936.

here are some even more detailed pictures. by the way, the employment chart for the latter does NOT include WPA programs.

US Real Gross Domestic Product History United States 1930-1940 - Federal State Local Data

File:US Employment Graph - 1920 to 1940.svg - Wikipedia, the free encyclopedia

now, see that fall in GDP for both pictures around 1937, and the increase in unemployment? that is the recession of 1937-1938...and in 1936, FDR under pressure from Morgenthau decided to cut government spending by 17% in two years. coincidence?

as to your second point, let's review what western governments did in during the throes of the Great Depression (thanks to wiki.)

Australia: The Melbourne Agreement, which "entailed the balancing of the budget through expenditure and wage cuts, without additional overseas borrowing, necessitating reductions in social welfare programs, defence spending and other sweeping cutbacks"

Canada: PM King, whom "believed that the crisis would pass, refused to provide federal aid to the provinces and only introduced moderate relief efforts"

France: "Depression was seen as a necessary evil, to "purge" the excess liquidity in the world economy and to push over-indebted companies into failure. Successive governments maintained restrictive policies into 1934 and interest rates were kept high to maintain the attractiveness of the franc. The absence of contra-cyclical policies kept the state budget in balance."

Weimar Germany: "In line with conservative economic theory that less government spending would spur economic growth, Brüning drastically cut state expenditures, including in the social sector. He expected and accepted that the economic crisis would, for a while, deteriorate before things would improve. Among others, the Reich completely halted all public grants to the obligatory unemployment insurance (which had been introduced only in 1927), which resulted in higher contributions by the workers and fewer benefits for the unemployed."

UK: "The May Report of July 1931 urged public sector wage cuts and large cuts in public spending (notably in benefit payments to the unemployed) to avoid incurring a budget deficit. This proposal proved deeply unpopular within the Labour Party and among its main supporters, the trade unions, which along with several government ministers refused to support any such measures. The Chancellor of the Exchequer, Philip Snowden, insisted that the Report's recommendations be adopted to avoid incurring a budget deficit. "

US: "Hoover rejected direct federal relief payments to individuals, as he believed that a dole would be addictive, and would reduce the incentive to work. He was also a firm believer in balanced budgets, and was unwilling to run a budget deficit to fund welfare programs."

in short, the entire western industrialized world relied upon neoclassical economics in the aftermath of the Depression. it was only after 3 years or so that the FIRST countries began to switch over to a keynesian solution...and the countries which did so fastest and most (ironically, Germany, with her gear up towards war) recovered fastest.

Whats hard to get around? Constant growth without the reallocation of capital and labor via recessions is a pure fantasy. Labor and capital HAVE to be reallocated, but Austrian theory affirms that the boom/bust cycle is exacerbated by Federal interventionism and manipulation of the money supply.

labor and capital were reallocated massively in the growth period of the 1990s without recession. just one easy example off the top of my head. for that matter, most labor and capital have been reallocated during periods of growth; the industrialization of america didn't happen just in periods of recessions and depressions.

austrian theory may "affirm" so, but my question for austrians is: why, then, were recessions more frequent and more severe prior to the creation of the fed?

Originally Posted by Bigfella

OK, now that we have that out of the way, do you have any suggestions about likely picks? Do you think they will play safe & go 'inside the beltway' - Paul Ryan might be a clever pick given his appeal to the conservative wing of the party. Alternatively, will they look to cover some of Romney's weaknesses & perhaps go for a female or minority - Rice, Haley, Rubio & is it Martinez from NM have also popped up. Rice is probably too liberal (assuming she wants the job), but what about the others?

No suggestions at this point. Ryan is on track for big things. He's more valuable to Romney in Congress. Besides he's too polarizing. Rice is a good person, a 2-fer, black and a woman and a football fan, and a foreign policy maven, but doesn't feel right. Haley is a possibility, woman, southern, smart...articulate, but not ready for prime time. Rubio has hidden baggage which might distract, Cuban doesn't translate into Hispanic well...too young...can't see him as president. Have to look south of the Mason-Dixon line, but don't see much there.

You probably have more insight into this than most of us, who do you think are likely picks (don't worry, no butter cookie bets riding on the outcome).

No. Have no more insight than anyone else here. Gonna have to reason this out.