Choosing the Red Pill
Romney’s Economic Advisers Cost Him the Election, and It’s Time to Etch-a-Sketch Erase Them | John Tamny – the Conservative Top 10

Romney’s Economic Advisers Cost Him the Election, and It’s Time to Etch-a-Sketch Erase Them | John Tamny

In short, President Obama ignored the basics of economic growth, the economy during his first term limped along as a result, and when the electorate reached the polls unemployment was abnormally high while GDP was abnormally low. The numbers, along with history, suggest once again that the election was Romney’s to lose. Yet he still lost.

To understand why, it’s best to look at the economic plan Romney was proposing, and most notably the economic advisers who helped him craft his program. Personnel as they say, is policy, and in Glenn Hubbard, Greg Mankiw and Kevin Hassett, Romney had the wrong personnel that fed him bad policy ideas.

Regarding Hubbard, not only is he a China trade skeptic despite the fact that free trade is a voluntary act that benefits both sides, he’s also rather confused when it comes to investment versus consumption. Indeed, in December 2008 Wall Street Journal op-ed that he co-authored with Christopher Mayer, Hubbard called for policies meant to increase demand for housing as the path to renewed economic growth.

Of course, in the year leading up to his article housing had collapsed precisely because markets were calling for less investment in housing, but the vastly overrated Hubbard called for more. Missed by the Columbia Business School dean was that housing is not investment, rather it’s consumption. More to the point, the rush to housing in the 21st century was the recession for limited capital flowing into housing consumption over investment that would author real economic growth. Business suffered a capital deficit amid the cheap-dollar driven housing boom, yet Hubbard wanted to double down on that which had failed miserably.

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