Now that the 2008 U.S. Presidential election is sandwiched between the end of the primary season and the party conventions, it is time to play the game of assessing the possible vice presidential nominees, or “running-mate", to use that ever over-used sickly cliche.

But before actually mulling the field and dispensing armchair pretzels of wisdom of the greatness or diminutude of mere governors and senators, it is almost as fun to assess the criteria of assessment. What should a man (or woman, though this year not the case), who will be the leader of the free world, look for in someone who will take his job should an accident befall on him?

Here I have assembled an account of the main considerations (and various sub-considerations) when picking a veep:

1. Potential to help the nominee win the election. This has always been the most salient of the selection criteria. That is not surprising from a candidate’s self-interest perspective, but it is surprising how much the press, the public, and especially the candidates themselves cynically admit to it. Here are the kibbles and bits of what makes up this potential.

   • Possesses an independent national constituency. The candidate has a following that will increase the number of people who work for and vote for the nominee. Usually this is a result of a strong showing in the primaries, but not always. The choice in 1996 of Jack Kemp, who did not run that year, reflected the fact that there were many conservatives who new him and who would be energized. This was also one of the main reasons for the choice of George Bush in 1980 and John Edwards in 2004. This is also Hillary Clinton’s big argument for choosing her this year.
   • Represents a differing political viewpoint. Politicians will often pair up with running-mates who enlarge their political base by being significantly more conservative or more liberal, either on key issues or as a whole. This is especially true if the presidential nominee is not in the mainstream of their party’s orthodoxy. In some cases, such as the choice of Lloyd Bentsen in 1988, it is to garner votes from moderates or independents. In others, such as the selections of both Bob Dole and Walter Mondale in 1976, it is to nail down the support of the hardcore elements in the party.
   • Represents a demographic or interest group. Apart from people who know and already follow the veep candidate, there may be some natural support for a relatively unknown candidate because of who or what that candidate represents. Geraldine Ferraro in 1984 was chosen almost entirely for this reason. In many ways, this brings out the worst of identity politics. Often, as was the case with Joe Lieberman in 2000, the voters targeted are not exclusively from the demographic group the candidate personifies, and it is the appearance of “diversity” or care for the group’s issues that matters.
   • Possesses a local constituency that will deliver a state or region’s electoral college votes. This question is the most over-hyped, over-stated, and over-analyzed reason to choose a candidate. As our country became more and more homogenized, “favorite sons” became less and less effective at moving geographic-specific voting blocs. In the last forty years, running-mates added only around 1% more votes from their home states than would be otherwise expected. In 2004, only four states were within that margin of difference (IA, NH, NM, WI). But even if Kerry had chosen a candidate from one of the two he lost (IA, NM), and carried that state because of it, he still would not have had enough electoral votes to win. It is only critical in states which would have been close if the election itself is close. So let me ask. When was the last time that a vice-presidential candidate made a critical difference in a U.S. presidential election by pushing his home state into the winning column? NEVER. Come to think of it, when was the last time a presidential candidate chose a running-mate with this issue as a major factor? Hmmm. Exactly. So much for political consultants.
   • Is telegenic or charismatic. A thoroughly shallow and cynical reason to choose a veep. But this was a major factor in choosing Dan Quayle in 1988 and John Edwards in 2004.
   • Has presidential character people will vote for. In essence, this is the political implication of the next major category (how good a president the candidate would make). While the above five political calculations are ways candidates try to add something to their ticket, this is more one that subtracts if it is overlooked: Mike Dukakis ran commercials in 1988 mentioning how often vice presidents succeed sitting presidents (9 times thus far), because George Bush’s choice of Dan Quayle was not seen as being remotely presidential. George W. Bush learned a lesson from his father, and did not overlook this factor: the choice of Dick Cheney in 2000 garnered a lot of political mileage because Bush claimed that he chose Cheney for his ability to be president if he had to serve, and people believed that Cheney was well qualified to be president. An important note: if a nominee is old or of questionable health, this factor is amplified.
   • Continuity. This is not applicable this year, but is obviously a huge factor when an incumbent is running, mostly because it shows a lack of confidence in one’s past judgement to put someone new on the ticket. The last time this happened was when FDR chose Harry Truman in 1944 over his sitting vice president, Henry Wallace.

2. Potential to serve the nation well, if elected. From the nation’s perspective, as opposed to the party or the nominee, these should be the most important, perhaps only, considerations when choosing a vice-presidential candidate.

   • Service as Vice President. No presidential candidate has ever said that he chose a running-mate because he would serve the country well at funerals for foreign heads-of-state. But in recent years, vice presidents have been given more and more responsibility, and the president is bound to often have his ear bent by his number two. Consideration must be given to what value the candidate adds while in office, even if the office he holds is regarded as less valuable than a warm bucket of spit.
   • Possible service as President. This was the original intent of the office of Vice President. If the veep candidate also ran for president in the primaries (or in a previous election), he or she has at least wanted to be in the job. All the factors that make for strong presidential candidates also make for strong vice-presidential candidates. One important difference between this (how presidential the candidate seems to the nominee) and the political aspect of this (how presidential the candidate seems to the voters from the nominee’s perspective) as indicated above is the ideological compatibility between the nominee and his veep candidate. While a nominee may want to “balance” the ticket with someone who differs with him on his political outlook or on the issues, he would no doubt be more comfortable having the country run by someone who agrees with him 100%. The choice of Al Gore in 1992 was largely a case of such ideological compatibility.
3. Potential to serve the party or the movement. This is perhaps the most under-appreciated ramification of the nominee’s choice. Whether the nominee wins or loses the election, the vice presidential candidate will almost certainly be a bigger player on the national stage and usually becomes the front-runner for the party’s nomination in the next non-incumbent election. When party conventions chose the vice president, this concern was more of a factor, while in recent years more selfish concerns of the presidential nominee have prevailed. Nevertheless, the chosen individual’s rise to national prominence will occur whether it is considered or not. Consider this: four sitting vice presidents (Adams, Jefferson, Van Buren, and G.H.W. Bush) and one previous vice president (Nixon) have been elected president. Also, five vice presidential nominees who lost were later presidential nominees of their party (F.D. Roosevelt, Hubert Humphrey, Walter Mondale, Bob Dole, and Al Gore), and in the case of Roosevelt, served our nation as president for over twelve years. Not only is one choosing a running-mate, one is possibly choosing the future direction and leader of one’s party and one’s nation.
4. Personal considerations. Before 1960, because a vice presidential candidate was chosen by hundreds of convention delegates, the personal relationship between the running-mates was practically nonexistent as a deciding factor. Today, friendship, loyalty, and personal chemistry play a significant part in the selection process. While it is perhaps not as important as electability or the capability to serve as president, it can be a deal-breaker if the two candidates don’t get along.

The selection of vice presidential nominees by party conventions, rather than by the presidential nominees themselves, was the way the system worked until 1960. Obviously this change altered the relative prominence of the various factors indicated above, with long-term party considerations taking a back seat to immediate electoral results and personal considerations.

From the nation’s perspective, almost all emphasis should be placed on (2). From the party’s point-of-view, (1), (2), and (3) should be given almost equal consideration. But neither the nation nor the party get to choose the veep candidate; the party’s nominee for president does. And the nominee will almost certainly put the most emphasis on (1), with (2), (3), and (4) far behind, varying with how patriotic and ideological the nominee is, and how contained his or her self-interest is.

As the presidential candidates and the nation move forward through the selection process, the above criteria indicate some useful ways to evaluate potential running-mates. I will use them in my analysis next week of John McCain’s possible choices for his candidate for vice president.

With the surge in retail gasoline prices lately, American consumers are questioning the energy policies of the federal government that have led to a situation where the amount of disposable income spent on ‘filling up’ is more than double what it used to be just a few years ago. While it is true that the price at the pump in large part reflects global supply and demand for crude oil, the federal government is not an innocent bystander here. Over the last 30 years, the government has been an active impediment to the free market in domestic supply, resulting in steeper prices for crude oil that are further exacerbated by increased global demand. The government has also advanced liberal environmental policies which have had further impact to the prices of downstream products, specifically gasoline. In both respects the policies of environmentalists and Democrats are to blame for higher oil and gas prices. In fairness, these policies have had marginal positive effects on the environment. But it must be clear that these effects come with a cost, and the American public is paying it right now.

So, when faced with an outraged public on the issue, instead of calling for moderation in environmental policies which clearly have more societal costs than benefits, or removal of impediments to domestic energy supply, the Democrats call for … more such policies and more impediments! Not only that, but they say we need these because of the higher gas prices. In other words, they imply (believe?) that impediments to supply will actually reduce prices at the pump, even though every economist knows they will have the opposite effect.

Let’s look at what Senate Majority Leader Harry Reid (D-NV) said on the subject of high gas prices just yesterday. His full remarks can be found in the Congressional record (thomas.loc.gov) page S5537.

He was complaining about Republican filibusters to Democrat legislation and said, “We wanted to do something about gas prices,” and then referred to four legislative initiatives that the Democrats have on energy policy, and Republican efforts to stop them:

1. Suing OPEC.
2. Removing tax incentives for oil exploration.
3. Imposing a windfall profits tax on ‘unreasonable’ profits by oil companies.
4. Addressing global warming (cap-and-trade).

Now, I know Sen. Reid has a tough time of putting two-and-two together, there are few bulbs in the Senate dimmer than his, but is it really that difficult to realize that EVERY ONE of these policies result in higher, not lower, gas prices?

Let’s see. Suing OPEC, an international cartel, under U.S. antitrust laws. Yeah, don’t think that’s going to work. Appreciate the thought, but come on, lay off the junior-high-school policy prescriptions, okay? And even if the birds decided to fly north next winter and it did work, it would be another cost for OPEC, thus increasing oil prices.

Next. Removing tax incentives. As a free-market libertarian who thinks that such meddling of promoting this industry or discouraging that industry distorts markets, I actually think this is a good idea. BUT, nevertheless, it would raise gas prices. The point of the incentives is to encourage greater exploration to find more oil and natural gas, and this reduces the costs for vertically integrated oil and gas companies and results in more energy supply. I think that prices should drive incentives ($130 a barrell is incentive enough), and that targeted tax breaks should end. But when they do, gas prices will rise.

Next. The windfall profits tax. This is typical Democratic bumper-sticker politics. High gas prices? Stick it to the oil companies! Hmmm. Feet hurt? Shoot yourself in the foot! Higher taxes on oil companies means higher costs of production, which means higher gas prices. Can’t believe I actually have to spell that out in a sentence. And that’s not to mention the fact that none of the profits that large integrated oil companies have been making are excessive. Yes, Exxon Mobil had “record” profits. But that’s only because it is the largest company in the nation; as a percentage of revenue, the profits are about average.

The last one is the most hilarious. That’s because efforts to fight global warming all explicitly drive energy prices higher. The higher the energy prices, the less energy we use, the less CO2 in the atmosphere, that’s the thinking. So all the global warming lunatics want higher gas prices, and design policies specifically to raise gas prices and reduce consumption. To say “we wanted to do something about gas prices” and then say that that “something” is global warming cap-and-trade legislation is retarded in the extreme.

Efforts to remove the impediments to energy supply have been overwhelmingly opposed by Democrats. Increase the domestic supply of oil, increase oil-to-gas refining capacity, and the price of gasoline at the pump falls dramatically. But the environmental lobby have imposed more and more impediments over time, whether through opposition to drilling on the OCS, opposition to drilling in ANWR, or restrictions on building oil refineries, these have all added to the price of gasoline. And while environmental concerns are legitimate, the American public have to know that there is a trade-off, and the prices they pay at the pump have a large environmental premium. If they want lower gas prices, they need to stop supporting environmental extremism.

So the preliminary real GDP numbers for the first-quarter ‘08 came in today, and guess what? As I’ve said before, we’re not in a recession. The economy grew at 0.6%, same as in fourth-quarter ‘07. The traditional rule-of-thumb definition is two consecutive quarters of negative real GDP growth, and we haven’t even had one yet. Given the Fed’s exceedingly accommodative monetary policy, we’re going to get inflation and not contraction when the fiscal stimulus package starts deploying this month. That means it’s unlikely there will be any negative growth this year. So much for the fear-mongers and the press-induced recession hysteria.

Now I do realize that NBER, the “official” arbiter of business cycles and what determines a recession and when, does not use this traditional rule-of-thumb approach, and may yet claim we are in a recession. However, the employment and income data which they claim to use in conjunction with GDP output data do not show signs of the significant or prolonged contraction that are indicative of their definition.

More to the point, if we avoid a recession because of policy, it may be worse than grinding through one. As I have expressed many times before on this page, both the fiscal and monetary policies of this country in response to recent macroeconomic symptoms are decidedly ill-advised. In tandem, they will have some stimulative effect, as the interest-rate cuts by the Fed more than offset the crowd-out of business investment from the fiscal stimulus package. Yet this Keynesian-style solution is bound to have an inflationary result: the money supply is increasing dramatically while the amount of business and (especially) consumer activity is stalled. Not only that, but the structural changes in the economy that should be occurring due to the late awareness of flaws in the mortgage market will not occur (or will be delayed) due to the forgiveness of mortgage debt and especially the continuance of easy money. Better to have a recession, one which is due to real structural problems in the economy (too much home-building, too much bad-credit-borrowing), let the economy make the necessary adjustments without coddling, and have a clean slate to build on.

In his article “The Genocide Loophole” published today, Jonah Goldberg laments that “[t]he United Nations defines genocide as the ‘intent to destroy, in whole or in part, a national, ethnical, racial or religious group.’ Left out of this definition are ‘modern’ political labels for people: the poor, religious people, the middle class, etc.” He goes on to say that “[m]urder is murder, whether the motive is bigotry or the pursuit of allegedly enlightened social planning.” In short, he wants any kind of mass murder to be labeled genocide so as to not mitigate the consequences of murder, whatever the motive.

This is quite disagreeable. As he no doubt should know after just publishing a book (Liberal Fascism) on the topic, the left gets away with murder just by hijacking the English language. If we let genocide simply mean mass murder of any group, then racial animus may be ascribed to people who had none, which over time can cause unnecessary resentment.

This is not to say that true genocide, the murder of people primarily for their racial or sub-racial classification, is necessarily more immoral than other motives for murder. But the term itself should be merely descriptive of the crime, not judgemental of it. Language should not be made to conform to moral interpretation, otherwise we simply end up with miscommunication as we mean things that others do not hear. The term regicide is not meant to evoke sympathy for the perpetrator because kings are to many people antagonizers; it is simply meant to indicate that the crime involved the intentional death of a royal monarch at the hands of someone with a political motive. The whole point of the term genocide is that the common racial or ethnic genes of the victims provide the motive for the crime. If we strip the term of this specificity, it becomes banal and less informative. Such dilution of meaning has in recent years occurred with the terms fascism and fascist, which now vaguely means subjectively oppressive political actors or policies, instead of a likeness to the corporatist and syndicalist socialism of interwar Italy. And that is something that has made Goldberg himself cry bloody murder.

This is the fourth article of six examining Barack Obama’s “Economic Agenda” (www.barackobama.com/…/EconomicPolicyFullPlan.pdf). Here is an in-depth look at the policies he suggests to “Address Predatory Credit Card Practices".

1. Create a Credit Card Rating System to Improve Disclosure. Gives the FTC a mandate to “assess the degree to which credit cards meet consumer-friendly standards,” and “to provide consumers an easily identifiable ranking of credit cards.” They will target those “features that are deemed the most dangerous for consumers, including the underwriting standards used to issue the card, the card’s interest rate spread between the introductory rate and the maximum rate allowed, and transaction fees,” and will assign ratings and require disclosure of “simplified, clear language” of “the major features” of credit cards. This is another feel-good measure. Like the mortgage disclosure rules, it attempts to address apparent asymmetrical information problems. But the information is already disclosed; by assuming consumers don’t read it, this makes previous disclosures (fine print) even more ignored as consumers just look at the “simplified” summary. It also inhibits the development of legitimate credit products that some consumers need. This is a useless reform.
   Economic efficiency grade: D.
   Economic fairness grade: C.

2. Establish a Credit Card Bill of Rights to Protect Consumers. The original Bill of Rights was a list of limitations on the power of the federal government. The idea was that, while the federal government had specific, enumerated powers (beyond which they were not supposed to stray), even within those powers there were some areas that citizens could expect the government never to tread. In recent years there have been many mickey mouse “bill of rights” to protect or advantage one group of citizens against another. Insofar as these prohibit or uncover fraud, dishonesty, or coercive behavior between parties, they are useful. More often than not, however, they simply try to favor or advantage one party over another, with the full force of the government to back them; in these cases they simply limit voluntary trade and thus hurt both parties. Let’s look at the specifics of Obama’s “Credit Card [Holder’s?] Bill of Rights” and see which kind they are.

   • Ban of unilateral changes to credit card agreements without written consent from the consumer. This effectively makes changes to card agreements impossible. Without this flexibility, card agreements will be more stacked against the consumer, and unresponsive to consumer needs. You ever get into a phone plan that you thought was good, only to realize later that telecom prices had dropped dramatically and you were the only fool on the block still paying 10c a minute? Same thing will happen here.
   • Rate increases may only be applied to future debt. This idea has a weak understanding of financial markets. The debt that the card issuer carries has an expected term, and the interest rate assessed is in relation to that term. By freezing the rate the issuer can assess to the rate given at the time the debt was incurred, it forces issuers to assess long-term rates on short-term debt. Also, this will cause issuers to discriminate (unfairly) against debtors who carry debt loads for long periods of time.
   • Prohibition of interest on fees. This is rather petty, considering the fact that the IRS charges interest on penalties they assess. It is a standard accounting practice and there’s no reason why fees should be especially exempt from interest, let alone it be a “right".
   • Prohibition of “Universal Defaults” practice, whereby a credit card company raises a cardholder’s rate due to a third-party default. This is one way a card issuer can stratify their customers based on credit risk, which is perfectly fair and reasonable. Eliminating this option will ultimately result in fewer extensions of consumer credit. It also unfairly pools people who are making improvements in credit with those who are getting worse.
   • Requirement that payments be applied so as to minimize finance charges and pay off higher interest rates first. At most, the requirement should be that the issuer practices FIFO accounting of debt, i.e. that the oldest debt is paid first. But requiring that the payoff method always benefit the consumer is naive and inflexible.

   Economic efficiency grade: D.
   Economic fairness grade: D.

Overall, it is surprising that credit card reform has a standing in Obama’s economic plan equal to the more substantial goals of tax relief and economic stimulus. This is a political trick: a majority of voters have run into credit card interest and fees and bashing finance companies is easy populism. But putting greater restrictions on credit markets will only restrict economic opportunities for both creditor and borrower.