this isn't something we have to accept. now is the moment when we can do something and with your help we will do something. >> i would just like to say something, ladies and gentlemen. something that i think is very important is that you, we, we own this country. >> it's friday, august 31, 2012. i think that's the last day of the month. and "squawk box" begins right now. ♪ good morning. welcome to "squawk box" on cnbc. i'm becky quick along with joe kernen. andrew ross sorkin is off today and be back on tuesday when we come back after labor day. we'll head down to tampa to talk about rnc's festivities. here's your other top business

lines. ben bernanke will speak to the annual fed symposium at 10:00 eastern time. few economists are expecting the chairman to signal the central bank will take major new action to boost the economy. we'll listen for any hints that action may be coming sooner than later. steve liesman will join us from jackson hole. david lipton will be joining him. sharp has fallen behind schedule on screens for apple as latest iphone. sharp is struggling with high cost that it says have cut into its margin and this news raises the question of whether apple may provide financial incentives. jpmorgan facing uncertainty in resolving the libor probe.

the transatlantic nature of the situation could come ply indicate things for regulators. jpmorgan's own internal investigation is still on going. joe, back over to you. >> thanks, becky. now to the talker of the morning, mitt romney officially accepting the gop nomination. chief washington correspondent john harwood joins us from tampa with the full story. make my day, john. tell me what it was like. >> reporter: well, first of all, speaking of make my day, that clint eastwood bit was the most bizarre bit of stage craft i've ever seen at a convention of either party and certainly republican strategists who i saw in the hall last night were rolling their eyes they can't imagine how that happened. how did you react to that, joe? >> that's why i said. i have a lot of reactions. i stayed up and i watched it.

i said yesterday that when clint did that auto bailout ad he was stunning not only by the criticism from the right but by the left using him a sort of a poster child for the bailout. he came in there wanting to set the record straight, i think, and there was no doubt left about where he stood. and the thing is, and i said this before, both my parents lived to be over 80 and i'm not saying that they were slipping when they were over 80 but one thing they did do was whatever they wanted to say they didn't give a rat's patootie about saying. they said whatever is on their mine which is what we got last night. john, the other thing what's the real crux of the issue is that the romney campaign let him get up and do that. he's not running for anything. we have a guy a heart beat away from the president more scatter

brained than where clint was last night. so he's not going to be -- >> reporter: the issue, joe -- no. >> what's the issue? >> reporter: how is the romney campaign is going to use the "60 minutes" they had with the broadcast networks, all of them showing their message to the nation and in particular to a few million swing voters who may decide the election and what they got was not -- >> would you have turned -- if you had clint eastwood an icon and say oil come back, would you say no? >> reporter: joe, i guarantee you that every single decision maker in the romney campaign, if they had the choice right now to look back and turn down that bit they would turn it down. what they would do instead was put that very effective bio film of mitt romney and use some of those 60 minutes they to but that there. look, this is a -- >> side show.

>> reporter: the problem -- yes. that was the problem in the stage craft. but let's talk about romney for a second. >> one more thing. can you imagine -- john. can you imagine if the democrats put up either alec baldwin, sean penn, cher, can you imagine what might come out of their mouths in front of the dnc, the kind of impolitic whacko. >> reporter: that's why i don't think they will do it. >> they will put chogeorge cloo out. >> reporter: let's get back to romney's speech. 37 minutes. heavy on the biography and i think they saw a problem to repair, especially with women voters. there was a lot of talk about outreach to women. mitt romney talked about his parents. he talked about ann. he talked about appointing a

woman lieutenant governor in the state of massachusetts. where he was light on which was the policy which disappointed our friend larry kudlow who was on with me. he did say, he gave people permission to turn the page from president obama, nice guy but it's time to get somebody else in there and it's okay if you felt good when you voted for him but you don't feel very good now. as for his own prescription for the economy he reduced it to a single word. here's mitt romney. >> what is needed in our country today is not complicated or profound. doesn't take a special government commission to tell us what america needs. what america needs is jobs. lots of jobs. >> reporter: now as for specific prescriptions, he talked about five elements of his economic plan. energy, education. he talked about reducing regulations and taxes on

business. but he didn't get very specific. he did say that unlike president obama he was going to reduce taxes on small business rather than raise them. >> we will champion small businesses, america's engine of job growth. that means reducing taxes on business not raising them. it means modernizing the regulations that hurt small business the most. and it means that we must rein in the skyrocketing cost of health care by repealing and replacing obama care. >> reporter: and, joe, what had larry administering some tough love to romney after the speech he did not say the word tax cut and did not invoke his 20% across the board individual tax rate reduction which he has proposed. interesting they thought a higher priority was humanizing him, connecting with women voters especially. >> larry and his tax cuts. in fact that could have been his whole speech, tax cuts and larry would have been more happy with

that. here's one other thing that struck me. you saw the testimony from people, mitt romney was a pastor of an lds. you saw the family that had the son that passed away and how poignant that was and you also saw -- >> reporter: yes. >> your colleague, dale collins at least 65 types has summed up mitt romney's character with the dog on the roof in the store her column. did she make a single call that anybody knew mitt romney when and he was pastor. can it be summed up from a dog riding on the roof. do you think that's a fair appraisal she's given? >> reporter: are you asking me that question? >> you see her, don't you? don't you go in that building once in a while. she grew up right up the street.

the water was the same. the environment was the same. >> reporter: you're talking to an empty chair too, aren't new. >> empty suit. >> reporter: joe, i have no idea what dale collins did. it's been clear for a long time. >> 70 times about the dog. not once about the little boy where he gave the eulogy. >> reporter: it's obvious -- >> i can't do that to myself. you're telling me what to do to myself. in can't do that. oh, man. >> reporter: somebody tweeted last night the fcc has fried my brain for understanding that joke. >> my kids were still up watching that. i would like to say they were scratching their heads about what they meant but they weren't. >> reporter: joe, it's beenous

for a long time that mitt romney is a devoted faithful believer. he is a good husband. he's a good father. very close relationship with his parents. >> sounds like he's a toad man. >> reporter: no aspects of his character have never been in doubt. >> oh, man. from what we've seen from david axelrod and friends and obama administration, i guess it's greed. >> reporter: i'm telling you what's obvious to me. >> okay. i guess if greed and cut throat capitalism and firing people and all those things are good character traits they have been highlighting those traits. >> reporter: no i'm not talking about what democrats have been highlighting. i'm saying the human aspecials of mitt romney which he was trying to communicate to voters last night are things that -- i don't think have been much in

doubt but people haven't had much of a chance to see it. when romney slowed down his delivery, when he showed some emotion he was fighting back tears when he walked up to the podium and talked about his mother running for the senate he got emotional. all those things, the love of a husband. the relationship between father and sons. the relationship between his parents and him. those are universal things. i know that mitt romney who doesn't show many universal -- who doesn't reveal that of himself, the more he can show those universal things he has a chance to connect. >> true, john. we all have relationships with our parents family. i've never been a missionary. never been the pastor of a church. never gone out and visited people. there was stuff you heard that was above and beyond last night and, you know, maybe they went out and found the two people that he did that with. i doubt it. i bet it was more of a, you

know -- >> reporter: why would you doubt it? >> i doubt if they just found the only two people he did that to. i'm sure it was across the board. >> reporter: no. everyone i kno who is personally acquainted with mitt romney -- >> that's what i mean. we're agreeing. i'm saying unless you can only find two people that did that, that's the mitt romney that did that. that's a far cry and a different person from what i've seen him portrayed as a spoiled rich kid that went to prep school and, you know, cut off a kid's hair when he was 16 and bullied kids and did that and everything else i've seen, you know, over the last six months, far cry from that. i'm glad it came out. that's all. >> reporter: human beings are complicated. we all got good thing and bad things about us. mitt romney had the chance to tell us that his stories that his friend and family know about him and more power to him. that's hat nominees are supposed to do. he remind more than anything

else although less policy than george h.w. bush of 1988. he very much is somebody who to me evoex the elder president bush because of the legacy of his parents, his father in politics, because of the relationships within his family, large family. i see a lot of resemblances there and i think in the way that george h.w. bush was, with the no new tax line was trying to lend an air of edge and substance to his persona. i think mitt romney was trying to soften his persona because of the attacks you've talked about from democrats and other people about his business career and to a lesser and more extent -- >> his character. when you're associate is asked, you mentioned that 65 times do you have nothing else to write about. she said i think character

issues are important. this is a window. >> reporter: are you the press agent for every single person at cnbc including the producers and cameraman. >> what do you mean? >> reporter: everyone on air? do you answer for all -- >> see. i do try to take that on. no i'm not asking you. i'm putting it out there. we all have good qualities and bad qualities. conce joe kernen hairs, i look perfect. >> don't get me started on collins. >> reporter: joe if you run for office, i'm sure nobody has got a thing on you. >> no that wouldn't be true. i don't want -- that's not going to happen. not too bad. is arrested different than convicted? how does that work? anyway, drop it. round there's a big difference between county jail and federal

prison. >> she swore she was 18. no. thanks. >> you're kidding. >> i'm kidding. i'm kidding. >> this waurkd moment has been brought to by joe kernen. >> he has the hair going on. >> he does but more mature look because he's older. time for the thanks john. time for the global, i think we're going back. i have to argue with ross westgate. ross westgate is standing by in london. becky, i got to yell at ross. your people, your people cut that sound bite of clint where he looked most confused and was rambling about gitmo but ended with, instead -- your guy cut it right when he got to the punch line, it was, but you decided to bring the terrorists to trial in the mid. new york city and there was a huge uproar and applause and everybody stupd. you cut it off some looks like

he's just, he was rambling off innowhere. the other thing i have a bone to pick with you, westgate, when danny boyle put on the most inskrutable opening ceremony in history, i thought his kids in bed, you guys get down and say he's an artist. he's an artist. plus your biggest icon, we have clinton, you have benji hileve . so your jealous. he was talking to an empty chair. >> we love clint evidentwood too because he talked to us. >> look, it's flattering. >> you have benny hill. >> it's flattery. i wonder how tough a gig it is. that's a tough thing to do to have an empty chair. >> we're doing it with kelly's

chair all morning long. >> she will be back next week. tough thing to do. no reflection on clint, okay. that is -- it was an interesting gig so we thought we would try it out. >> your sound guys cut that. >> wait a second you're giving him grief for being a smart alec. >> i don't take any responsibility. like you. i don't go anywhere near that end of the program. right now ahead of mr. bernanke we are, we're weighted to the upsi upside. no major position. euro/dollar is up near the session high. european stocks were down yesterday. pretty much recovered the loss we had during yesterday's session. ftse 100 up. ibex is up a percent today and

it's been the best performer in europe over the last month up over 7% for the month of august. now, despite that the ibex stocks doing fairly well, the yield on the ten year is 6.67%. so still firmly above 6.5% this morning. meanwhile more chat going on around the ecb moves. we had a report in the newspaper in germany which suggests the jens weidmann had been considering resigning because of mario draghi's planned to step up bond purchasing of peripheral debt. they refused to comment on that in another newspaper earlier. weidmann said he wouldn't resign then he wouldn't able to do his job to the best of the ability and put the bundesbank. we had a finance minister saying angela merkel believes it's good

the bundesbank wants politicians. he said it's a full rescue program for spain is not on the agenda. if there's no rescue for spain or assistance for spain then the ebc, that's precondition for the ecb for acting. the politics are swirling around here, and oil hand it back to you. i'm sure you guys will make our day. >> we'll sure try to, ross. we will see you next week. we know kelly is going back but we would like to see both of you next week. >> i know we'll come over and do a show there for a week and then we can just join you guys afterwards. >> the two of us do this. >> we'll pretend you're sitting in an empty chair and you don't have to get on a plane. you know your buddy rupert, how do you feel about rupert at this point? do you like him any more? he was australian because you

like him because they kind of sound like you. hollywood tough guy, clint eastwood roared in the rnc and made mitt romney's day with both barrels blagz. that's different. >> the idea you get mitt romney knocked off the cover on the dave his acceptance speech. >> that was his point. i think he made the point was did, it wasn't about whether clint did a bad or good job but did you waste the air time that you could have focused more on romney and i suppose that -- >> saw three days of c-span, if you're assuming people now get their news only from when the major networks give you and hour -- most of the best parts of that convention were not in the 10:00 to 11:00 hour. >> the people you are trying reach in the ends -- >> they don't have cable. >> maybe they are not interested in following every bit along the

way. >> it has got us talking about it. on the other side, that worked. >> yeah. >> they are saying please tease. i got to go. ross, thank you very much. we'll see you next week. when we come back two big stories. ben bernanke's speech in jackson hole this morning and race for the white house heating up. like the music. we'll talk about both stories with a man who was vice president joe biden's economic advisor, jared bernstein right after this. on every one of our cards there's a date.

a reminder... that before this date, we have to exceed expectations. we have to find new ways to help make life easier, more convenient and more rewarding. it's the reason why we don't have costumers. we have members. american express. welcome in.

. we're following two big stories this morning. mitt romney's speech last night and later today ben bernanke's speech in jackson hole. joining us now is jared bernstein. he was economic ad slicer to vice president joe biden. we haven't spontaneity lot of time talking about jackson hole. what do you expect to hear from bernanke later today? >> i believe the name of the speech is something like monetary policy in a time of crisis. i expect a fair bit of backward looking analysis, the idea that this has been a particularly tough recession and recovery. the role that monday taxpayer policy has played. certainly some signalling regarding future unconventional stuff as has been the case lately. the idea that we're going to keep looking. but i don't expect any big announcements of anything new on the unconventional side. remember there's a meeting in a week and a half. between now and then there's a jobs report. that jobs report is important to

the fed. if they see a positive trend developing off of last month's 163,000 pop and if that withholds the revision, then you're going to see probably a different tone than if the trend -- not really a trend yet, if you get a much worse number on the payroll. >> you don't expect to see any serious signals for the market because the market will be looking for that forward looking stuff. anything that he might show his hand like he did two years ago at jackson hole? >> i think the market may be disappoint opened this front because, yeah, becky, i don't expect anything forward looking beyond the kinds of the probability remains high given conditions and the weakness in the recovery we'll do something. but i don't think and here's what we'll do when. >> do you think they are holding off because they want to get more numbers coming in. they want to hold off because they don't want to look political ahead of a election. where do you come down? >> all of that and the following. i said this before. i think i've talked to you guys about this. one thing i look to hear

bernanke talk about and i like when he talks. he's really smart. monetary policy on its own can set the table but it can't bring the customers. i'm not sure that's a great analogy. let me say what i mean. you can get interest rates down really far. we already have that. you have a lot of cash sitting on the sidelines. what's lacking is demand. what you hear chairman bernanke consistently saying is we need fiscal policy on the demand side to compliment our low interest rate policy on the supply side and so he's going to probably ask for more fiscal policy. congress get your act together, do something about the fiscal cliff. let's not give this wobbly bicycle in our economy another knock. >> we'll find out more about this in 2 1/2 hours when we get the headlines from the speech and some of the text. thank you for joining us and we'll talk to you again soon. >> my pleasure. >> coming up the gloves coming off. mitt romney accepted his party's nomination and the democrats plan to convene their

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good morning. welcome back to "squawk box". race for the white house, mitt romney firmly accepting his party's nomination for president last night. was there any question -- he wasn't is going to turn it down. we knew he would accept it. introductions from these guys, clint eastwood and marco rubio. >> mitt romney knows america's prosperity didn't happen because our government simply spent more

money. it happened because our people used their own money to open a business. and when they succeed they hire more people. who investors spend their money in the economy, helping others start a business or create jobs. >> i just would like to say something, ladies and gentlemen. something that i think is very important. is that you, we own this country. >> we will champion small businesses. america's engine of job growth that means reducing taxes on business not raising them. it means simply figure and modernizing regulations that hurt small business the most. it means we must rein in the skyrocketing cost of health care by repealing and replacing obama care. >> joining us now to talk about both sides of what happened last night also at the convention and what to expect from the democrats next week in

charlotte, kelly, president of the polling company she served as the senior advisor and has been on a bunch of times for newt gingrich and his presidential campaign. now a romney support center >> of course. romney/ryan. >> more palatable. jimmy williams is a democratic strategist and previously worked for senator dick durbin and for bush crowd. >> i used to be a republican. >> i'm a big quayle girl as well. >> you maim more so and you became slows. >> i love no politician more than bush. >> that's nice. >> working for dick durbin will do that. >> dick can say some pretty amazing things bp but we forgot about dick after biden.

what did you make of last night? what did you make of the three days? >> have a problem with conventions. i think they are dog and pony shows. fine, great, let's go do it. what would be smart if they condense them down to one day each. make at it 24 hour affair. >> it's about big donors. >> this is about lobbyists and donors. at this point the country doesn't admit romney they have a problem. >> teleprompter reading over three days. because clint didn't read the teleprompter -- >> remember when barney frank said i rather debate a couch or a dining table what the hell was clint eastwood doing last night. that was the strangest thing i've ever seen. >> it wasn't for us. >> i'm a voter. it was a strange thing. >> wait a minute. you're not a voter for the right. >> you don't knmnow who i'll vo for. >> meet him in the parking lot.

>> that was red meat and some of the loudest applause and some of the -- >> the show and tell. across the tv it came across strange. mitt romney's speech i thought was vintage romney. mitt romney is not a good speech give but deeverything he needed to do in that speech. he touched on women, touched on small businesses, touched on america what it means to america. i thought it was all very good. he bashed obama. here'she problem. i still don't believe him. i don't believe him. i don't believe everything he says. every position is the exact opposite of when he was governor. that doesn't jive. >> same sex marriage or won't raise taxes on the middle class? >> what taxes has obama raised. >> let's start with obama care. >> name one tax that americans are paying right now that's higher under obama than bush? >> under obama they would pay --

>> right now. right this second. >> oh, my god your serious? >> absolutely serious. >> obama care -- >> right this second. right now today. today is august 31st. >> they are paying higher taxes for medical implants. >> okay. they also get tax credits if they are a small business. >> obama 2012 is not obama 2010 when he agreed to accept all the bush tax cuts and changed his mind to 250,000. that would proportionately impact -- >> you're talking right now what tax. i'm plants are the last thing we want to tax? i mean -- >> i'm not going there. i have no idea. >> i want to live in a world without implants or tanning booths. >> i'm fresh off the lean from tampa. there's a big group of people that's reining too, the delegates, the alternatives. it's important to the

rank-and-file who don't have the access other people have and don't necessarily feel they are a big part of the insider's process and good for them. they are the real people of the parties and they save up for quarters to come. they are very devoted their state parties and by extension very devoted to the process in the convention hall and it was an action-packed couple of days off the podium of panels and speeches and delegate interaction. seems to be very important to them on both side of the aisle. so i really can't begrudge the grassroots aspects, the bottom up aspects of convention. on tv we see the top down. i thought romney was terrific. this was his i have a plan speech and people are looking for specifics and solutions. and they wanted him to show a little leg against obama too. this is a preview of what you'll see in the debates by romney. this whole nonsense of likability can we stop talking about charisma.

i want to talk about a bye who can create jobs. likeability is so overblown. do you like the guy who fixes the pipes or do you like the guy who doesn't fix the pipes that makes you laugh a little bit while he fails to fix the pipes. we need a guy who can turn things around. >> i would agree but there's two men that have a rob. one is reagan and one is clinton. they both did exactly what you're talking about they promised but they had the likability factor and hit in a huge way. clinton came in only because the economy frankly and ross perot. >> thanks for admitting that. >> reagan was a great president and raised taxes and economy. he ran against a pretty weak guy. >> they created jobs. that makes you likeable. >> we lost jobs under obama. 4.5 million jobs created. he didn't create a single one of them, american businesses

created them. the point is if you're going give him the debit you have to give him the credit. is stock market the day he was inaugurated was at 8,000. today it's over 13,000. >> from the day he was inaugurated he didn't add 4.5 million jobs. you're take out the first 14 months. he lost some of it during his time. then you can't just date it at -- he's in for 14 month, then we start adding jobs. >> do you think that -- >> net loss of jobs under him. you cannot sell this. >> how are government jobs bigger. that's impactful. that's not true. that's infactual. >> here's the thing. workers and consumers are now voters. >> that's why i think the convention is a farce. they don't care about them. >> people believe life -- >> i'm with her.

>> they are going to walk about war on women. "squawk box" has to talk about contraception and abortion. >> who are you going to have? i did ask that question. >> sandra bullock. >> i'm not a delegate to the dnc. >> hilary is not going. >> bill. your going to let biden come? >> i assume he'll be there. >> he'll talk to somebody as posed to a chair. >> might be a change. >> come on. come on. >> bill clinton, hillary clinton, even michelle obama are all at least 20 to 25 points more popular than president obama and that's because people don't feel the statistics that you have. >> can't use the likability factor on people like that. >> would you see nancy pelosi up there? >> absolutely. >> harry reid? >> no.

not because reid isn't a good leader. he's not a good speaker. he's a brilliant man. >> he leads really well. >> listen, reid runs the senate remarkably well. >> what about the budget? >> wait, wait. >> in 1999, 2000, 2013, 2005 republicans put up a budget. i don't want to hear this b.s. -- >> love when people say we haven't put out a budget in three years. when the republicans had the house and senate they didn't put out a bill for fours years. we have a year to catch up to you guys. >> obama was leading heading in to this convention in nine out of ten swing states. does he get a bump coming out of this and how long does it last? >> romney gets a bump and obama gets a bump and everybody hunkers back down. >> i think they will wait for these debates. 20 debates in the republican primary, average vote are really

atuned and almost expect there to be, not just hand to hand combat but the irony about presidential politics you don't see the candidates together until the debates. they are never at the same place at the same time until somebody dies. >> the vp debate -- >> i won't be on the edge of my seat on that. >> can you pay to get in to watch that? >> no. you put your guys in and your guys in and just let them go at it. >> it stops accidents and watch like last night. >> gawkers. >> something like this. >> paul ryan is a polite man he won't say pop-pop let's debate. >> paul ryan will attack. he should. then biden will react. >> paul ryan is filled with solutions. this is a generation torch being passed. paul ryan is our jfk, he's jfk

in vision as ideology. >> good sound bite. >> it's a fact. >> so you're from charleston not charlotte lot? >> south carolina. >> yeah. >> not north carolina. >> i'm from south jersey not north jersey. >> from the garden state and nongarden state. >> looking forward to it. new guys thank you both for coming in. kelly and jimmy. we will be talking to boston you i'm sure as the campaign continues. >> if you have any comments or questions about anything you see here on squawk, go ahead and e-mail us at squauk @c squawk@c. andy roddick announcing he's retiring from tennis following this year's u.s. open.

he'll be facing bernard tommick in the second round tonight.

welcome back. scott joins us from the cme. people have no idea, they said on the screen i want said split screen, i thought it was going to come up with boston us. people think i have gas or something. but scott, how are you? good to see you. >> reporter: good to see you. hi. >> it was about time, i guess, the vix was quiet but moved up a little bit recently. said never short a dull market. does that count when no one is

around. is that what makes a market dull? what are we setting up here for s&p. on europe we're not sure what to do. it looks like maybe they had trouble moving higher? no? >> i've been chicken little here in the last six to eight weeks. i'm starting to feel better about it and i can wait to get this three day weekend out of the way so we can come back next tuesday which is the beginning of next september and realize nothing has fundamentally changed. a lot of problems in the u.s.. you mentioned earlier. 8.2% unemployment and i can't stand the fact we want to hang our hat on 1.7% gdp. europe has gotten worse in the last five or six weeks and here we see china starting to slip. who is going bail us out? >> we've got the fiscal cliff not going to be solved next week. we won't know who will win the election next week. all of that still stays.

what about -- could something good happen in europe if it looks like the ecb has got somebody more amenable to a bigger step maybe -- what do we want germany to do? do we want hem to stick to their guns or do they have to cooperate? >> political will in germany has eroded i don't think they will cooperate. people in germany don't want to do that. i really think that ultimately they can't continue to foot the bill. we have to go back to second grade math. their debts are bigger than their gdp. there's not an easy way out of this. chow what? you call kicking the can in temple university, we call it qe3. kicking the can anywhere we don't have an answer. we need real growth. real growth will come from innovation and some sort of energy form and we can't have real growth by throwing money at our economies and building roads

and bridges. that won't do it. >> scott, thanks. >> see you. >> when we come back, could hurricane isaac help the drought midwest. we'll ask the man who writes the nation's most circulated agriculture newsletter after this. first, make sure you look to the skies tonight because a blue moon will be appearing. you don't know what blue moon is? every few years you'll get a month that has two full moons. this sell it. it's because the lunar cycles are not perfectly added up. every few years there's 11 extra days. tonight. if you have less than ideal viewing conditions for watching this, check this lunar event out online. there's a camera broadcasting the feed from the prescott observatory in arizona and be a observatory in the canary islands in honor of neil armstrong. his funeral is today. very fitting. >> perfect.

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corn and soybean crops taking a huge hit from the summer's drought. we wonder how that's changed with the arrival of isaac. chip flory of "profarmer newsletter" from chicago. doesn't the rain come too late for the kro pz? crops? >> absolutely. the drought has done all the damage it's going to do to the

corn crop in the central corn belt. rain and wind is actually the worst possible thing we could get on this crop. the crop is so weak, a little bit of wind is going to blow it over and leave more bushels out in the field than if we hadn't had the storm roll in. so far so good. we don't have a lot of damage from isaac but it could change as the system moves further north. right now, no, no there's no chance that this storm is going to help the corn crop. the bean crop you might be able to say it will add a little bit of a yield but building a bigger bean inside the pod but the beans are done, we're not going to do any good from this crop to this storm. >> i saw corn prices above $8. >> yes. >> these are incredibly high levels. >> the risk on the corn crop is that it's going to continue to get smaller, becky, and if the crop continues to get smaller, we're going to probably see one last push to the upside in this corn crop, maybe take a shot at

$9, and on soybeans, the soybean crop just isn't there either. we saw some of the worst pod counts we've seen in our life out there on the "pro farmer" midwest crop tour. we don't have much much of the soybean factory up and running. as a result of that, beans at $17.50, you would think that would be enough to reflect the crop damage that we've got out there, but the fact that demand remains strong at $17.50, means that we probably need to push up to the upside one more time, maybe see that $19 level in soybean futures, just to try to slow down the demand for a really poor bean crop that we've got out there. >> when does the whole thing reset? when do we say we're giving up on this year and looking to next year? >> that's one thing about the storm, if we can get some rain from this storm, it will help to recharge the soil moisture we've got out there for the 2013 crop. the other thing is the south american supplies, that will hit

the reset button for the soybeans, that will bring some more supply to the market but that's not until late february or march until we start to see some of those supplies out of south america start to come to the market. >> chip, thank you very much. we'll cross our fingers and hope for the best as we go forward. thanks for joining us today. >> you bet, thank you. coming up, aei arthur brooks' prediction for the presidential election. tdd#: 1-800-345-2550 when i'm trading, i'm totally focused.

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making the case on the national stage. >> we deserve better, my family deserves better, my children deserves better, my country

deserves better. >> mitt romney accepting the republican nomination. arthur brooks here to tell us how the presidential race will impact america's business opportunities. >> what america needs is jobs, lots of jobs. it's your money, your vote. strategists from both sides of the aisle weighing in on the speech and what happens as the spotlight shifts to next week's convepgs. >> go ahead -- >> make my day! >> steve liesman in jackson hole as the second hour of "squawk box" begins right now. ♪ i was born free, i was born free ♪ ♪ i was born free good morning, everybody, welcome back to "squawk box" on cnbc, i'm becky quick along with joe kernen. andrew will be back next week. right now dow futures up by 68 points coming after the worst

day, the broadest declines for the month in tthe month. at this point the dow has given back all of its august gains so today's markets matter to see where we end this month. joe? the republicans rolled out their biggest names this week for the republican convention, ending with governor romney's acceptance speech last night. >> i wish president obama had succeeded because i want america to succeed. we deserve better. my children deserves better, my family deserves better moorks i country deserves better. president obama promised to begin to slow the rise of the oceans, and to heal the planet. my promise is to help you and your family. >> joining us is american enterprise institute's president, arthur brooks, and probably better known for

receiving a "squawk" book award for "road to freedom" or was it like an oscar you get for your entire career. >> i've been carrying around the "squawk box" plaque with me all the time. it's unbelievable. >> gets you into -- >> clubs i was never able to get into before. >> so it was a high point. >> pretty much. >> okay. you've seen, how much, how did you watch the convention? >> the stuff wasn't coming on the network, i was watching pbs and c-span so i was watching. >> why didn't i watch it on c-span? you didn't want it interrupted. >> i didn't want to hear any of that. how much did you watch? >> all of the major speeches and some of the lesser ones during

the day. >> did you watch archer davis? >> yes. >> did he read your book? >> we've been in some contact. is anyone that isn't already of that mind seeing it? that's preaching to the choir. >> conventions, there are four groups you have to deal with, true believers, persuadables, hostiles and apathetics that makes up the american public. the apathetics aren't going to tune in, persuadables are where it's at, 5% to 10% of the american public truly don't know which direction they're going to go and this is the thing that's going to get them maybe woken up. >> do they wait to see next with the democratic convention and the debates? those people haven't made up

their minds. is this walking into the polling booth and still haven't quite decided which button they'll hit if. >> a lot of different theories. generally speaking if somebody's truly undecided, the people who say i don't know and they mean it generally speaking that's something like 5% of the population, they tend to break away from the incumbent at the last minute. so that's, and it is very good news for mitt romney if it holds true. every election is different. >> that's what happened in 1980, 44 states and two weeks before that, carter looked like he was a lock. before i ask you some of the other questions, i want to make the point while you are a big free enterprise guy and free markets guy and capitalist, i don't view you really at political and one of the reasons i say that is because you think maybe the corporate cronyism that the republicans are probably more guilty of in certain ways, maybe not, after, you know -- >> solyndra and gm, you name it.

>> -- but in general you think of corporate cronyism with republicans, that's just as deleterious what you see as being a negative for progressives. >> i'm a political independent, not a republican or a democrat, and one of the things that bugged me about this convention, there was not enough talk from the republicans about this twin threat to liberty. if we're trying to build the empire of liberty, trying to build it back over these last few years, we've been at encroachment after encroachment on the free enterprise system, we have to look at where the threats are and stateism is a huge deal. >> obama, saying that the other side is the -- >> the common law wife of stateism in corporate cronyism, special deals, too big to fail, all of the stuff driving people who are watching us crazy. >> the accountants that corporations can employ to do whatever they want, all that stuff. >> the proximity of the people in government. i live in washington, d.c., basically, joe, so you don't

have to and let me tell you -- >> thank you. >> --' amazing, how many people are actually living there at the largesse of the government because they can get special access to government. the state is growing exponentially and the people that live in derivative industries for the state are growing quickly and enriching themselves as well. if we don't take care of the cronyism problem, we're not taking care of the stateism problem. i didn't hear enough about it at the republican convention. >> is the biggest way to do that to reset the tax code where you bring corporate rates down but get rid of the loopholes? you think of the lobbyists and the armies of lobbyists who make sure that every corporation, every industry has its special favors but into the tax code? >> sure, that he's one way to do it. the key thing to remember is that naming and shaming cronies and taking care of the tax code are important but there's a cultural problem that underlies this much bigger deal. we're moving away from a culture of competition in this country. cronyism is the antithesis of

competition. your ancestors, our ancestors came to compete, to not be in a wired system. they were writing letters from eliless island, i hope i can get to know my congressman and get a special deal? no. they wanted to start a business, a farmer, that's the essence of competition, over the last four years in particular we've said competition is not good, what we need is to move toward a more sharing society, we need more redistribution, that foments the culture of cronyism. we have a cultural problem in america, until we get back to the idea that the competition of ideas and business and the competition among countries is fundamental to a free society we're not going to make much progress. >> i wanted you to get to that so the next questions don't sound so partisan. you wrote a book called "the battle." it's not going to be settled this election, it's a

multidecade fight to reassert free enterprise, but is it possible that, i mean, who do you think is going to win this election, do you think the president's going to win, and if so, does that take us another four years down the path towards stateism, which will be harder to reverse? there comes a point where if more than 50% of the country is on the receiving end of government largesse, how do you ever wrestle that away from the people providing the largesse? >> it's hardo it. it gets harder and harder and if presidentby ma's reelected and governs the same way with the people in congress, who agree with his basic world view, we will continue down the path of stateism. lots of republicans are statist do, the aparacic republican party made administering the welfare state 4% more

efficiently than the democrats is not a big help. the whole concept of ryanism is this hybrid republicanism is so dangerous and damaging and scary to the people on the left. ryanism basically says this is not the old republican party that's going to take us towards social democracy, slightly more slowly than the democrats. >> right. >> it's also not radical, let's zero out the welfare programs, let's not get rid of the social safety net. basically we need a social safety net for the truly indigent, we believe morally in free entrepreneurship, we stand up for american greatness without being embarrassed about it and traditional social issues but we're quiet about it, that is the essence of ryanism as i see it, that's very damaging to the status quo, which takes us toward the ever enlarging state where cronies have special favors and that's why it's scary to a lot of people even in the republican party in washington, arguably it's a bigger threat, more barbarian at the gate of traditional republicanism than it is for the democrats, so who

is actually going to take us more towards stateism and who is going to do more damage to america? i don't know who is going to win the election but we need a true change and it would be best if we had a competition of ideas to see who is more pro-entrepreneur. >> you don't know whether we're past the point of no return. is europe past the point of no return? >> yes. >> can they get it back? >> it's almost impossible. they have demography against them. in the next 30 years italy, the average italian will have no brothers, sisters, aunts, uncles or cousins. the demography is imploding. you have to backfill your workforce with babies, and they're not doing it and when you don't have any kids and no real optimism for the future you become a taker nation and we have an antiquated creaking theme park of a continent if

we're not careful in europe and it's certainly looking that way. i don't want that for america. >> so he was raised in a really artsy, liberal family on the west coast, and then what were you doing, you were still in spain, a professor, what were you doing, a sousa? >> a french horn. >> a french horn, come on, you were in barcelona when you were 30 with your wife. >> yes. >> and you're a musician playing a french horn. >> yes. >> and you had like a tenured spot in the barcelona orchestra. >> and no college degree. >> and no college degree. and when he talks, i'm like, i get that way sometimes with jared bernstein, i can be hypnotized by both sides but you came back and what happened? you paid your way through --? >> went to college. >> and got --? >> a masters and i ph.a ph.d.. i was interested in economics. i called my dad, i was still in

the orchestra and called my dad in seattle, "dad, i'm going to make a career change. i'm going to quit the french horn and i think i'm going to study economics and maybe i'll become a professor." he says, "what do you want to do that for? you're at the top of your game, started a family. you can't do that." i said, "i'm not happy." he says, "so what makes you so special?" >> wow. >> the truth of the matter is -- >> great dad thing to say. >> probably what i'll tell my kids, too, if they take a gap decade like i did. >> we have something called the animal orchestra we play from time to time, it's a really accomplished musicians that we may drag out. >> block your ears, we're sorry. >> we may drag it out for you. there's a sousaphone on one of those. french horn, do you still play? >> no. >> we're going to have -- yeah, they're saying you may want to after you hear the animal orchestra. stick around, we'll have much more of the story. if you have comments, questions

about anything we've been talking here, e-mail us at squawk@cnbc.com, or@squawk cnbc is our handle on twitter. what will ben bernanke deliver at jackson hole? we'll get a preview in a couple of minutes up next, more reaction to romney's performance last night. "squawk" will be right back. we weren't always successful at bain, but no one ever is in the real world of business. that's what this president doesn't seem to understand, business and growing jobs is about taking risk, sometimes failing, sometimes succeeding, but always striving. [ male announcer ] at scottrade,

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checking the futures right now this morning, after the worst session we've had in a while yesterday, 13,000, 0.71 where we closed on the dow and the s&p did great, closed at 1399 and we've been sort of sitting above 1400, sitting above 13,000 for the dow for a while and yesterday we see that was the beginning of maybe a new intermediate or short term trend, today we're looking up what is that? >> up half a percent, about 0.68, 0.69 last time i saw. more reaction to romney's acceptance speech and the just concluded republican convention.

joining us is republican strategist joe watkins and democratic strategist steve mcma on. joe you said mitt romney needed to close the deal and make the sale. did he do it? >> he did. he did. it was a great speech. he reached out to not only people in the audience but the 40 million americans watching around the country and i think he hit a home run, big home run. >> steve your take on it from the other side of the aisle? >> i think that mitt romney did a good job delivering his speech but i don't think there was enough in the speech to move independent voters and the people who are sitting on the fence. there was a focus group among the voters last night by another network which indicated they didn't hear anything new and i didn't either, but i think he did a good job delivering the speech, he warmed himself up a little bit, he talked about his record as governor and bringing women aening lo, which i thought was a nice touch but his attacks on the president were -- >> he also brought in 12 million new jobs, you can't not look at the fact 20 million americans not working and creating 12

million new jobs, growing the economy at 4% a year, those are all things people want to hear and gave his five-point plan which is specific about how he would grow the economy and put people back to work, lessen regulation on businesses. that's all good stuff. >> joe, two of the components of his five-point plan are tax cuts, costing $4.3 trillion and balancing the budget and he didn't talk about anything he would cut. he'll protect medicare, not going to cut defense, he so far hasn't outlined a single penny of savings and i thought that's what business people who want to balance the budget do. he didn't lay out a plan to get to where he said he wanted to go. >> paul ryan at his side, that he doesn't have a specific plan specifically to cut, do you have any doubt in your mind? i don't. i don't think any american listening last night does. >> joe, paul ryan's cuts basically come at the expense of medicare and mitt romney says he doesn't want to do that. i don't think you can have it both ways.

i would ask the republicans, who are thinking about voting for mitt romney, and the independents waiting to make a decision, what it is about his deficit reduction plan that is specific with respect to the cuts. >> steve, i haven't heard a single democrat say that was a crappy speech. >> i didn't say it was a crappy speech. >> why do you have to be so -- >> clint eastwood, now that was a bad speech. >> he's not running for anything. >> i know, i know. >> biden is a heartbeat away from the presidency, don't forget that. joe, if the president bombs, will you at least say it was a crappy speech? you guys, oh, pretty good speech, yeah. >> i always tell the truth. >> you guys are pr masters. you never just say it was crappy, steve. pr masters. >> it was a great speech, it spoke to americans right where they were and that's what you want at the end of the day. you want americans all around the country especially the 23 million who aren't working

saying what's next? what can you do better than the guy that's there. >> guys, what matters is what happens in the polls, and a compilation of polls the "wall street journal" points out today as we headed into the convention showed president obama was leading in nine out of ten states in those important swing states. there have been other polls that have quickly taken a pulse and it looks as if mitt romney has stepped ahead at least in some of these and he has a strong chance particularly in states like iowa, michigan and wisconsin, all important battleground states. my question is, what happens next with the democratic convention, joe, can he hold onto the slight lead he's got or this advantage that it looks like this last week gave him? >> i think romney can hold on to that slight advantage. i think he can hold onto it and build upon it. now the ball is in the court of the obama team, they can't just attack mitt romney and say they don't like him or he's a bad guy or whatever other bad things they've been saying. >> dog on the roof. >> they have to say how we get

america back to a plan to cut taxes and put americans back to work. >> steve, the democratic strategists say they think this is their battle to lose, mitt romney would have to basically sweep the table in order to oust them. what is your take? >> i think that's right. i didn't see any brooms last night. it was a pretty good speech but didn't change things fundamentally. the states are fool's gold for republicans. wisconsin is not really in play. there's states like virginia, iowa, new hampshire, florida, ohio, they're genuinely in play but the president has an advantage in all those states and there was nothing that mitt romney did last night that is going to change that fundamentally. if this is a battle of speeches and romney gave a good one, i'll put my money on barack obama next thursday because i think we all know he gives a pretty good speech. >> he gives a good speech but it's the results that people are worried about. >> i always say -- anyway, sorry, he said it again like three times, steve. >> the best part of the evening

frankly was the video that warmed up mitt romney. the next best part was the platitudes at the beginning. the first third of the speech could have been given by any candidate for any office in america. at tacks on the president i don't think went over very well with the voters who are going to decide the election and i think the poll also bear that out in the next week or so. >> gentlemen, thank you both very much. >> we will see. >> we will see. guys, thank you. >> thank you. >> i think watkins might just say it was a crappy speech, next week, from charlotte. it sounds like it's 101 in the course you take when you go on. don't trash the other guy. say it was good, and then. >> say the platitudes were really good. >> that's right. coming up, zynga gets zapped by two executives, that story and other stocks to watch next at the bottom of the hour, businessman and republican supporter, remember this guy ran amex for a long time, harvey golub, chairman of ripplewood

holdings and former ceo of american express. comments? questions? send them to @squawkcnbc on twitter, follow the show and look for updates from andrew, becky, joe and the "squawk" staff. "squawk box" on cnbc, and on twitter. at optionsxpress we create easy-to-use, powerful trading tools for all. like our all-in-one trade ticket. we put strategies, chains and positions all on one screen. start trading today with optionsxpress by charles schwab. there's natural gas under my town. it's a game changer. ♪ it means cleaner, cheaper american-made energy. but we've got to be careful how we get it. design the wells to be safe. thousands of jobs. use the most advanced technology to protect our water. billions in the economy. at chevron, if we can't do it right, we won't do it at all. we've got to think long term. we've got to think long term. ♪

♪ welcome back, everybody. animal orchestra for you. isn't it beautiful? >> what you see, isn't there talent there? >> it's not what i was expecting. >> can you show the -- all right, those people like it. this is an aquarium in japan. look who is playing these things. you don't give them any credit for that? you think it's easy for that guy to -- you have to have fingers. >> look, i have 1% taste, what can i tell you? >> these guys are tenured, by the way. >> these guys are tenured, that's right. >> we have a couple of stocks to watch, first up apparel retailer is beating earnings but the shares plunged on disappointing

guidance for the current quarter for zumiez. shares of zynga, two vice presidents left the social services games provider, the company shares have fallen nearly 70% this year. if you have any comments or questions about anything you see here on "squawk," e-mail uus at squawk@cnbc.com, and follow us on twitter, @squawkcnbc is our handle. up next, reaction to mitt romney's speech. harvey golub will be joining us after a quick break. stick around. today, our financial advisors lead from a new position of strength. together with bank of america, they have access to more resources than ever before. a steadfast commitment to help you achieve your financial goals in life.

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that was first you saw clint out in pebble beach, where becky interviewed him, hopefully we'll interview him again this year, last year you were able to talk to him, oh, okay, now. >> it was right after the super bowl, we done the ad. >> auto bailout ads, maybe they were going to roll it.

let's see. >> we've been in a recession for quite a while now, and i've seen a lot of those. i was born on the year of the great depression, not so great depression, but so we've seen a lot of those. i think we just got to keep it going. unfortunately the country in recent years has been spending way, way out of control, so we have to kind of get that back in. >> clint eastwood right here on "squawk box" in february of this year, we spoke to him and becky did at pebble beach after his super bowl ad for chrysler, his message then was similar to his message last night when he spoke at the republican convention. >> when somebody does not do the job, we've got to let him go.

>> my take even yesterday, remembered what he would say, he was stung, he didn't know it would be used by the right to criticize him and the left for backing the bailout. he made it clear that wasn't his intention, he went off. harvey golub is here, what would four more years of president obama mean for business. he's chairman of miller buckfire, is he a former chairman and ceo of american express, i think after roibbins and before chenault from '93 to 2001, also on the board of the american enterprise institute as well, and i've -- you have resurfaced at least for me three or four times with editorials in different newspapers, one in the "wall street journal" i remember specifically where you went back and analyzed all the recoveries

in the last 60 years, and your case is that this is by far, by every measure the worst recovery we've had. is that fair? >> that wasn't my asis.it was t done by the federal reserve bank of minneapolis, on their website, anybody can go there, they have the data on every recession, the length and the depth of every recession since world war ii, and the length and the recovery times measured against gdp growth and job growth. this recovery from the bottom of the recession out of the, i think 14 recessions that we've had, is the 13th worst in gdp growth, and i think the 14th worst in employment growth. >> and we were talking off camera, i brought up ryan hartmann rogoff and out of the

14 recovery, how much reinvestigations were credit recessions and ones we're more familiar with, things heat up, fed worries about inflation, raise interest rates to break the back of inflation and the economy seems to recover quickly. if you have a credit problem over ten years, a global expansion of credit, when it pops, people are basically giving a pass to this administration, because they're just saying this is normal. this is the new normal, it's what to be expected after this credit expansion, and no one could have done any better. >> well, that's about four erroneous assertions. >> i'm good at those. >> let me try to take part of it. >> you've seen the show, you know how erroneous my assertions are in general. which one? >> let's start with the first one. the nature of this recession was known at the time the recession started that it was a housing bubble related starting

recession. >> right. >> all of the plans that president obama and his administration put in place knew that was the fact, they knew that that was the nature of the recession, and the policy prescriptions they put in place were designed to deal with that. they didn't at the time say boy, this is a credit-related recession. it's going to take us a decade to get out of this, and we're going to have 1% growth. they said no, we're going to have 4% growth, and they put together three successive budgets that were based on being able to get out of the recession using the policies that they were pursuing, and in every one of their budgets, none of which incidentally have been voted on by congress, his economic assumptions turned out to be too high, so it's only now, after the policies have failed, that he says nobody could have done any better. that is completely wrong.

>> you made the point -- go ahead. >> this recession was a credit related recession based on the housing bubble that was primarily due to stupid government policies. first government policy is that we want to have home ownership and the way that we'll get home ownership up in this country is by requiring banks to make loans, and this requirement was actually put into place, to make loans, to people whose income is less than 80% of the median in their community, you got to provide them loans and fannie mae and freddie mac have got to buy those loans and securitize them. >> granted that was a huge part of the problem, but you had a lot of mortgage brokers who were very willing to go along with

this, weren't doing background checks to make sure people met even some of the minimum requirements. everybody got caught up in this. >> the government wanted fannie mae and freddie mac and fha to buy loans from people who own houses and shouldn't have made the loans and the only who could get the loans are people who didn't have downpayments and didn't have income. the mortgage brokers were playing the game that the government was requiring them to play. >> wall street bankers played it, too, when they got involved. >> wall street bankers played in it, too. they could have said no, no, we're not going to play your game. that's a very dangerous thing to do, when you tell regulators we're not going to do what you want, they have a habit of getting back at you, it's called crony capitalism, when the government says you do this or we punish you. >> wall street actually took it to a higher level with the mortgage-backed securities and wrapping these things up and packaging them. i'm not arguing at all that the

government set the ground rules for what happened there. >> aig enabled it all by writing insurance and not putting any reserves against it, and you could pass it all off as aaa and people -- what was three and four? >> that the policies he was putting place would actually deal with the problem, and solve them, and that rogoff in particular, reinhardt less so, rogoff does not believe in capitalism in any form. >> whenever he says capitalism, unbridled capitalism. >> it doesn't work, it sets up resentments and tension, so you got to take what he writes with a grain of salt. >> what policies have been in place -- is obama care a problem, did that hurt? did dodd-frank, did all the activist agencies, so all the things we hear all the time? >> okay, let's go back.

here's the basic idea that i think people fully understand. the only system that has been successful in raising the masses of people out of grinding poverty and above subsistence levels has been free markets, embodied in capitalism, accompanied by personal liberty, property rights, and the rule of law. those are the conditions under which countries, businesses can prosper. that has work. every attempt in human history to create wealth for people, for broad people, has failed when those principles are violated, from setting up the amana community, it was one of the first communes in the united states, but there have been a number of others that have tried it, through marxism, through north korea, cuba, russia, china, they all failed.

>> you seem to be implying that we're now pursuing policies similar to those or the obama administration is pursuing similar, and people on the other side would argue that he is not. that he's a moderately liberal governing from just left of center. >> i understand paul krugman thinks that obama is too far right. but instead of characterizing him as liberal or moderate or conservative, one has to look at the actions he takes and the results of those actions. if you agree, joe, that you require personal liberty, property rights, and the rule of law, operating in a fair system, free markets are fair when governments don't interfere, when governments start to interfere, they create burdens. now that does not mean that you don't regulate business, that you don't regulate situations. of course you do. it's a question of degree and

depth. when you have crony capitalism, that is not free markets, that is unfair, and that does not allow people to prosper, so the question for business is not whether or not things are uncertain. things are very certain. they're very certain. if obama is reelected for four years with a very high degree of certainty, i would bet my entire wealth on it, that taxes will go up, regulations will increase, the backlog of regulations he's ready to put in place is huge, that militarily the united states will become weaker and less a factor in the world and that growth will harbor around zero, plus or minus 1%, and 50% of kids getting out of college will still be unemployed. >> i've known you for a long time, harvey. as far as i can tell you and i see the world in exactly the same way in pretty much every dimension. i kind of know how you're going to vote in this election and what you'd like to see happen

coming out in november. what do you think the odds are if the republicans win, they can and will make the kinds of changes that you're talking about? you're talking tectonic change in american public policy, debt as a -- gdp to debt, the amount of regulation, the progressivity of the tax code, all this has to change. can republicans do this or will we go back into a process of demobilization and conservative advocates like you and me, republicans are a weak version of the democrats, how do you see change actually happening? >> well, i think first of all, what is one of the things that is different now is the nature of the republican party is different from what it was even four years ago. the tea party movement has bought into the republican ranks honest to god conservatives, not people who i guess bob dole was once accused of being the --

>> tax collector of the welfare state. >> -- tax collector of the welfare state. if we reduce the rate of going over the cliff from 90 miles an hour to 80 miles an hour, nothing has been accomplished. you have to change the direction we're moving. if we're headed toward the cliff, the closer you get, the faster you got to change the trajectory, and move the car. >> jam on the brakes and still skid over -- i'm visualizing that. >> you're just as dead going over at 90 or 60. >> or decelerating as you go. >> there are some battles that need to be fought very, very quickly and can be fought. most of the regulatory stuff is entirely within the power of the executive branch. >> dodd-frank, completely eviscerate it from the get-go, right? >> no, not the regulations based on law. lot of what barack obama has done in increasing the amount,

the extent that the burden of the regulatory system is done by executive order, not by virtue of law, that is entirely within romney's, will be within romney's control, and the ability to execute that will depend on who he puts in the important posts. >> you have to come back. we have to end it, tried to go as long as we could. are you optimistic -- who do you think is going to win the battle? are you optimistic that the good guy that you view are going to win or not? >> this is the first time i'm saying this to other than friends in parties but last week i predicted romney will win by six points. i think he will not only win, but i think he'll get enough of a win to get what people will call a mandate, everybody but "the new york times" will call it a mandate. >> not a dukakis moment or who

the other one, mcgovern. one state. it was a really good state, though. >> what did he win, south dakota? >> massachusetts? >> massachusetts. >> i thought he won his home state. maybe not. >> i wasn't paying attention, i was 8. >> harvey golub, thank you, we appreciate it and come back. >> thank you. >> thank you, harvey. when we come back, are we talking about a bad moon rising in wyoming? central bankers gathering in jackson hole as they look for a way to get the global economy growing once again. it's going to be a blue moon tonight so keep an eye on it. we'll check in with steve liesman after this. tune in to "squawk box" and get ready for a september to remember, on tuesday morning we have a great line-up including jack reed, jared bernstein and more. "squawk" will be right back. [ male announcer ] while many automakers are just beginning

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investors will be monitoring chairman ben bernanke's speech today. our senior economics reporter

steve liesman joins us from jackson hole, wyoming. what do you think we can expect to hear today, steve? >> i think he'll keep the door open. good morning, becky -- to additional quantitative easing but i don't think he'll provide markets with a definitive signal. there's a couple reasons for that, there's a lot of data between now and the meeting they'll make a decision september 13th on. and you have the isms coming out, you have the employment report coming out, the european central bank meeting september 6, that's consequential for fed policy. what bernanke has been sort of a bit of a verbal intervention, keeping sort of hope alive for additional quantitative easing but not necessarily pulling the trigger. i don't think the fed wants to be in the business of a third round of quantitative easing but looking at its mandate, looking at what's been happening with growth still in that 1.5% to 2% range, unemployment stuck around 8.3%, and seeming to be rising at least slowly. the fed feels an obligation to

look at what it can do and see if there are possibilities out there for additional help to the economy, especially given what's going on with congress and the fiscal cliff issues that people think are affecting the economy right now. so i'd be watching him talking about, pardon me, whether or not the federal reserve, whether additional added value from qe, look for discussion of alternatives, pushing ahead the forecast for low rates in the 2015, maybe targeting unemployment rate, i think that's unlikely to be mentioned by bernanke but it is being talked about here. watch for bernanke's discussion of the economy, does he provide a half full or half empty take on what's going on with the recent data. overall what i'm hearing in the hallways general agreement, the economy is not good enough and that something needs to be done, but whether or not the fed is at a cost-benefit place to do that additional easing is unclear right now. >> steve, john hilsenwrath set

up this debate in his piece in the "wall street journal" today where he said that bernanke at this point needs to think about his legacy, he has 17 months left and there are some people who have been pushing him, the paul krugmans saying he has not done enough, others who say wait, he's done more than enough and we need to start thinking about how he unwinds this whole process. where do you get a sense of where things stand right now? forget about the legacy part of this but in terms of that debate as to whether he's done enough or not, where do you think bernanke himself thinks about this? >> well, i agree with you we should forget about the legacy stuff. i don't think that's motivatinm bernanke and it's late in the game to be rejiggering his legacy. i think it's clear what bernanke has done has been fairly bold moves in response to unique economic times, and i think that the key is going to be how the story ends, and i don't think bernanke is going to do more or less right now because he's concerned about how history is

going to judge him. i think he's done what his academic training and theory has told him he needs to do. nobody had ever done it before and i think this group of academics is going to be studying this for a long time and one of the things we'll start hearing today are the first bits of academic research, trying to figure out, did it work, was it the right or wrong thing to do. >> we're going to be trying to go back and figure this out for a long time to come, i think. steve, obviously you've got a lot of big guests coming up today. we can't wait to see more of it. we'll talk to you in a little bit. >> terrific, thanks. >> thanks. coming up, more thoughts from guest host arthur brooks, and then at the top of the hour, former economic counsel adviser ed lazear.

coming up, two former heads of the council of economic advisers will be helping us preview ben bernanke's jackson hole speech that's coming later this morning. ed lazear will be joining us at the top of the hour and larry lindsey will be our guest later, "squawk" will be right back. at optionsxpress we're all about options trading. we create easy to use, powerful trading tools for all.

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mitt romney accepting the republican nomination for president. >> that future is out there. it is waiting for us. our children deserve it. our nation depends on it. the peace and freedom of the world require it and with your help, we will deliver it! >> ed lazear and larry lindsey will give us their take on the gop message, they're former economic advisers to the george w. bush administration will ask them what to expect from today's jackson hole speech by fed

chairman ben bernanke. and david lipton will join us live from jackson hole to talk about the eu's prospects for recovery and u.s. fed policy, the top ranking american at the imf. the third hour of "squawk box" begins right now. ♪ hey, kids, shake it loose together ♪ ♪ the spotlight's hitting something to know to change the weather ♪ ♪ so stick around welcome back to "squawk box" here on cnbc, first in business worldwide, i'm joe kernen along with becky quick. andrew ross sorkin is on vacation. our guest host is arthur books, president of the american enterprise institute and author of "the road to freedom" and "the battle" and we were talking about our upcoming guests, larry lindsey who we both love, he's a conservative, keynesian. >> fundamentally. >> i said when he comes on you got to call him that. i want to ask him whether he would really say he's a keynesian because it's a dirty word in some circles.

>> if there's anybody who can rehabilitate keynesianism, it's larry. >> krugman said "zombie ideas" that i was spewing which are i guess longstanding ideas that were buried long ago but come up as zombies. is there any zombie idea, anything epitomize the zombie idea more than keynesianism? >> we have the conceit of the anointed in the policy-making class who believe they can figure out what will stimulate the economy in exactly the right sequence during the right period of time and that the bounce that's going to come from it later, because you take it, you're borrowing from the future, when you take it away it will happen after the recession and the stuff that the hangover that will come from it, that will be so far in the future. >> you're not suggesting we should have done nothing? >> no, and i know what i got from that was, who could have predicted it was going to be horizontal drilling and

fracking? four years ago we decided we are going to go to energy independence with renewables, it's going to be solar and it's going to be wind and it's going to be all this stuff that we, and batteries in the future, and meanwhile, that's the state. the state decides this is what our bet is going to be placed. suddenly the private sector, money flows downhill and suddenly you have $2 gas which makes all of the other things totally economically unfeasible. the state tries one thing and meanwhile we ha huge almost a boom in domestic energy because of something that had no, the government wasn't greasing the wheels. >> there can be a time for keynesianism too. >> there's one thing to do, and that's get out of the way of entrepreneurs. if you want to be a keynesian, and you're president of the united states you should say every day before my feet hit the floor in the morning i'm going to say, what am i going to do for entrepreneurs today? why? because that would have anticipated the fracking thing, not even knowing what it was instead of the conceit saying i'm going to pick the winners in the economy.

>> did you finish your book? i'm going to quiz you on it. what is the average salary of an entrepreneur? >> it's 20% lower than the salary of an average bureaucrat in america. >>s about 59,00 s abou$59,000. >> lower than that. >> and how many failures before one works? >> 3.8, according to steven rogers at northwestern business. >> you read it. i made andrew read it, gave him $1 a page and didn't work. checking equity futures this morning, we are indicated for a nice bounce from yesterday, where i think we lost triple digits, weird, we closed just above 13,000 on the dow, just below 1400 on the s&p. >> the dow gave back all its gains for the month of august so today is the deciding factor for how the month goes in the last day of august. let's look at some of our headline this is morning, mitt romney officially accepting the republican nomination for president. convention speakers including clint east wood and florida

senator marco rubio attacked president obama's record on at jobs and the economy. >> when somebody does not do the job, we've got to let him go. >> mitt romney knows america's prosperity didn't happen because our government simply spent more money. it happened because our people use their own money to open a business. and when they succeed, they hire more people who invest or spend their money in the economy, helping others start a business or create jobs. >> every president since the great depression who came before the american people asking for a second term could look back at the last four years and say with satisfaction, you're better off than you were four years ago, except jimmy carter and except this president. >> the democrats kick off their convention next week in charlotte, north carolina. also, fed chairman ben bernanke is set to speak at 10:00 a.m. eastern at the central bankers policy conference in jackson hole, wyoming. few economists are actually

expecting the chairman to signal that the central bank is about to take major new action to boost the economy but the markets will still be listening for hints that action might be coming soon. let's go now to the conference at jackson hole, our economics reporter steve liesman joins us with another guest, and i don't know, yesterday i missed a couple of opportunities, steve, and my filter was on and i guess it should have been -- >> hold on, joe, joe, what did you just downgrade me again, just the economics reporter, not the senior? >> senior economics reporter. >> thank you very much. continue. >> when you were talking about the trout and all that stuff and you said i think my trout was really long and you know, i just didn't -- but i missed the opportunity, this guy fishes with you, that you have now, right? or no? is this eddie? >> no. >> did you fish yesterday? >> mountain biker. >> mountain biker. >> you can do anything you want out there. >> yeah, you can hike, you can fish. >> oh, look at this. we got it all loaded up.

we're looking at you now, and we're looking at you, mrs. crane. we're looking at you working hard, thinking about qe3 as you're casting. >> that's last year, just by the way i want to you know, that's not this year. >> because we didn't have a camera on you this year. you weren't in a similar position? >> well i suppose that's true, joe, and i just want you to know, we have larry lindsey in the wings here. i'd love to bring him in. >> the keynesian. >> he said he's ready for you, he's not embarrassed and ready to go. >> arthur brooks he has to argue with. i'm tired of arguing. >> and i'm trying to think, joe, who has a better job than you. you get to call in your hero and have him across the table for you for three hours this morning? >> it's weird to have a hero -- >> who has a better life than you? >> weird to have a hero that's 20 years younger. >> can i introduce the guest, should we go forward? >> please, he's another of my heroes. >> ed lazear who was the former chairman of the council of economic advisers.

>> right. >> and really, you're one of, presenting one of the papers today. >> indeed. >> and economyist in your own rite, from stanford university. ed, let's talk about the possibilities, horizons and thinking about the federal reserve at this point. i want to understand what you think, not just sort of forecasting what the fed is going to do. do you think additional quantitative easing could help the economy here? >> well i think that the fed always uses its most effective tools first, so there's no question that they've already done those things that they think would be most effective in stimulating the economy. at this stage, they're down to second and third order kinds of considerations but that doesn't mean they don't think they'll be effective. they wouldn't be talking about these things if they thought they had no effect. the fed clearly believes they can have some effect on the economy and some stimulus. the issue and i think the issues that are going to come up at this conference will be do we think that there are some possibilities for the economy to grow as a result of fed action,

and i think they'll be looking at those things, but primarily i think they understand that their tools are not strong ones. >> there's a lot of talk about cost benefits. i've seen estimates that say you know what? you might get 0.2 or 0.3 of gdp growth out of a $5 billion program, you might get a 0.1, 0.2 decline in the unemployment rate. say $500 billion of additional growth in the balance sheet, is that worth it, in your opinion? >> well, personally i'm not a strong advocate of additional monetary easing right now. i think that the unfortunate situation is if you look at the past few years, we've done pretty much what we can do and we're still in a very weak economy. i think the reasons for that are primarily not monetary policy problems. i think the fed has been effective as it possibly could be. i think particularly if you look at the policies that were done

in the autumn of 2008, those were good policies, those were necessary policies. i think the fed took the right action. at this point we have to be thinking about other kinds of policies, long run policies, the kinds that will really suggest long-term economic growth and stimulate that, rather than the kinds of things that are focused on what are we going to do for the next month or two. >> there's an interesting line of thinking in the way the federal reserve has become an enabler when it comes to the budget deficit, that if the fed was not out there buying treasuries, that the fiscal authority would have to get its act together. is that something you subscribe to? >> i don't really believe that's an important consideration. i think that the government would be pretty much what it's doing, irrespective of fed policy. this government wanted to spend and spend big. they did that early on and i don't think that had much to do with whether the fed would accommodate or not. the fed has also followed its own path in terms of what they wanted to do, you know, ben has

charted this path out for a long time, in his academic work, he's following the blueprint, and i don't think this is dependent on what the fiscal policy is. >> i was sitting with some fed people last night, and i was giving them some of the criticisms about fed policy. >> right. >> and one of them said, you know what? once you tell a person who is complaining about the fed fixing interest rates, or the activity of the fed, the alternative is 20 years of stagnation like japan. do you think that's the alternative here? >> let's talk about japan. that's an interesting example. japan stimulated the heck out of their economy. they've got debt that equals double their gdp and look at what it's bought them. so they've got two decades -- >> of course it's keynesian ideas rather than monetary policies. >> that's right. no, exactly, but the point is that after a while, stimulus, no matter what you're talking about, runs out of gas. i think that the point that i'm making is that if you look at the history, and you look at whether this stuff can be effective over the long haul, i

think the evidence is that it cannot be effective over the long haul. the kinds of things that are effective over the long haul come from the literature on economic growth, and those are things like low and efficient taxes, trade policy, fiscal responsibilities, a cautious eye to regulation, that doesn't mean no regulation, but not excessive regulation, those are the kinds of things we ought to be focusing on right now. >> and the fed knows that potential growth is a result of the sorts of right policies for the economy. >> i think the fed is well aware of that. >> let's turn to what you think the fed will do. you read the tea leaves and see what's out there, do you think the fed is close to doing another round of quantitative easing? >> i don't think i have any more insight than you do on this but i guess my take on it is they wouldn't be talking about it if they're not considering it seriously so the economy has not turned around, you know, the issue is, is the economy still in need of stimulus? there's no question it's still in need of stimulus. the economy is weak. we've had 2.2% growth since the

turnaround, that's not a recovery by any stretch of the imagination so we need it. the question is whether it's effective and that comes back to your cost benefit story that you talked about a couple of minutes ago. i think the fed is well aware that the costs are quite high, the benefits are not so great and that's what they're struggling with right now. >> one thing that seems to have had reasonable effects on the economy is the forward guidance, is that something you think they'll be extending? >> i don't know whether they'll go an additional year. that's a signal that to my mind, you know, you think it's been effective. i guess i'm not quite as optimistic about its effects on the economy. i think promising things two to three years out from now really doesn't have much of an effect whether you're talking about monetary policy or fiscal policy, that's like saying we're going to balance our budget in 2050, you know, who cares about that stuff? you care about what happens in the next few years. so i don't think that's going to have a whole lot of effect. i think that the one way in which it does have an effect is

that it does central stability in fed policy, and so people don't have to worry about erratic movements and that's probably the most significant aspect of it. >> we have to leave it there, ed, i'll be talking with you throughout the weekend and i look forward to the paper you'll be presenting later. >> thanks, steve, good to be with you. >> we have david lipton at the bottom of the hour and we have the bernanke headlines everybody's been waiting for straight up at 10:00. >> steve, thank you very much. larry lindsey, former director of the national economic council under president george w. bush, he's waiting in the wings and will be stepping in so we can ask him whether he expects to hear from fed chairman bernanke looking back or into the future and we'll get his reaction to mitt romney's speech from rast light. and finding long-term solutions for europe, we'll talk to david lipton, first deputy managing director at the imf, he'll be with steve. stick around. we'll be right back.

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fed chairman ben bernanke is said to speak later this morning

from jackson hole, wyoming, investors going to be listening closely for any hint of what policymakers might do next to try to spur the u.s. economy. joining us is larry lindsey, president and ceo of the lindsey group. larry is is a former fed governor and -- >> and a devout keynesian. >> and a devout keynesian we're told. how are you doing? >> liesman is being a troublemake per. >> it's not liesman, it's actually our friend, mr. brooks here. >> i'm sorry, larry. let me defend myself. >> he said if anyone can give keynesianism a good name it was larry. >> if anyone can redeem keynesianism it's the smartest guy around which is larry lindsey. you can deal with that, right? >> i sure can. gosh, what a great insight. >> larry, go ahead, though, keynesianism? >> well, i think actually keynes would be scratching his head

now. the essence of keynesianism, when you have a business cycle it's appropriate for the government to lean against the wind. the question is whether we have a business cycle problem or a long-term structural problem and i think we're, it's looking more and more like the latter. we've had extraordinary monetary policy for almost four years. i think keynes would think that's a pretty long time. i don't know of any economist of any stripe who would say simply printing money over and over again is going to do anything about a structural problem or, b, it's a sustainable proposition. yes i'm a keynesian but realistic keynesian. >> in fact the speech, based on the title we're expecting from ben bernanke today is one that looks back at what's happened over the last several years. you say it's more important to lay out some sort of a blueprint for how to get out of what we're in. >> right, look, i am very supportive of what chairman bernanke and the fomc have done.

they face truly significant problems and took dramatic action, sometimes experimental action. we need to learn from the last four years and figure out what goes next. i mean, we know this is not going to go on forever. it can't go on forever. you can't have a country that runs 10% of gdp budget deficits and has the central bank by, you know, two-thirds of those bonds every year for a long period of time. it's been a fairly long time already, so i think i'd like to hear maybe lessons learned from the last four years and what exactly the next phase is going to be in this operation. >> the only thing we've heard from the fed to this point, do they expect these incredibly low rates to continue for years down the road? what more specifically would you like to hear? what kind of a plan would make you feel a little better? >> among the great and the good, most of whom are here, i think there's sort of this theory that

the way out is going to be to do fiscal consolidation while you can still keep interest rates low in order to cushion the blow. that's the economic policy being followed by the united kingdom, and relative to the people they're next to, they're doing quite well. we need to begin that process here. we have maintained the low interest rates. we have not begun the fiscal consolidation process, and so i think that's really what the next step is going to be, and the back of everyone's mind, i think everyone knows that's the only path that makes a lot of sense going forward. >> and larry, this is arthur here. fiscal consolidation is a great topic, because we actually have a ton of data from a lot of countries going back a long time, and for people who aren't watching this show or who are not economists, fiscal consolidation means closing your budget gap. >> cuts.

>> it doesn't necessarily mean cuts. it could also mean tax increases which leads to my question. if you ask liberals who understand we need fiscal consolidation they'll say that's why we need to raise taxes on the rich, close part of this gap. what can you tell us about the most successful strategies that countries around the world, say finland in the '90s, places that have gotten out of a terrible, terrible situation by fiscally consolidating, what has been the balance between spending cuts and tax increases? what can we learn from other countries as we try to solve our own problems? >> well, yes, that's a great point. the first point to make, i apologize but i'm going to throw little numbers and facts on the suggestions by the other side. you know, we're going to be going over a so-called fiscal cliff of $630 billion in january. the so-called tax cuts for the rich are $75 billion of that. 12%.

even if you do all the stuff that they're talking about to raise taxes on the rich it's like a drop of water in the lake behind me. it is not, cannot possibly be the sole solution to the problem. the second point you make is a good one. once tax rates get to a certain level, it's the private sector carrying the burden of the whole thing. once you make that burden too high, you end up slowing economic growth and exacerbating a problem. the stratistics vary but when yu get marginal rates over 50, i think most people would say that that's being counterproductive. i think the actual number is somewhere in the mid-40s. we're about to hit 43.6 so i think we're pretty close to having gotten all the blood from the stone that we're going to get on the tax the rich side.

we do need to get the tax share of gdp up. remember the tax share paid by the rich has gone up dramatically in the last decade, in large part because we have cut taxes substantially on everyone else, 70% something of the bush tax cuts went to middle class taxpayers. we've had further middle class tax cuts in this administration. so if you're going to do taxes at this point, the incumbents don't want to mention most taxes are going to hit the middle class. we also have to bring down the share of gdp going to the government. it's at a record except for world war ii, historically it's 20, we're now at 24, we've come down from 25. we've got to bring that number down. >> go ahead. >> that's terrific and one more quick question for you, larry, before we wrap up.

what's your view of the premise that we always hear from the other side of these arguments, that the government needs more money. do you accept that basic premise when we're talking about closing the fiscal gap? >> the government always blee s believes the government needs more money. i don't think there's any doubt about that. it's who are we going to take it from in order to do what we want. i think there is a natural path out of here, it involves moving the government spending share of gdp back to historic norms, moving the tax share of gdp back to historic norms and coupling that with long-term entitlement reform that keeps the government share of gdp down to manageable levels. you know, we talk about a $1 trillion annual deficit. the long-term commitments, the if the federal government were a business, we would have a $70 trillion negative balance sheet, just phenomenal number. we've got to do something about that or we're going to go broke, we'll be greece or spain or what have you. >> larry, thank you very much.

it's always great to see you and we hope to see you back here in studio sometime soon, too. >> i look forward to it, always great to cheer people up in the morning, too. >> yes. thank you, larry. >> all right, it's not so bad for a keynesian. coming up more from our guest host arthur brooks and 8:30, top american at the international monetary fund, we'll ask him about the european recovery and what he expects to hear from fed chairman bernanke today. with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason

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when we return today much more from our guest host, arthur brooks, president of the american enterprise institute. up next, he is the highest ranking american at the david lipton will join us from jackson hole, the imf's first deputy managing director. right now, as we head to a break, take a look, the futures are markedly higher, dow futures up by 82 points, after a triple-digit loss for the dow yesterday in its worst performance in about a month. "squawk box" will be right back. at optionsxpress we're all about options trading.

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welcome back to "squawk box" and the headlines this morning, investors will get three economic reports this morning, as they await fed chairman ben bernanke's jackson hole speech, the chicago purchasing manager's's index is out at 9:45 eastern. the university of michigan consumer sentiment index comes at 9:55 eastern, and then at 10:00, july factory orders. else where, spain's government has approved the creation of a so-called bad bank. it will be used to separate heavily devalued real estate assets, the country's deputy prime minister says the goal of this step is to get banks

lending again and restore the flow of credit, some of the ideas that we heard back during our own financial crisis. and then isaac is now a tropical depression, but the former hurricane is still bringing heavy rain to the gulf coast, new orleans mayor mitch landrieu says the city's flood defenses upgraded after hurricane katrina back in 2005 did work successfully. isaac may have caused up to $2 billion in insured onshore losses, though, even though everything did work pretty well, according to industry experts. $15 billion, $14 billion or whatever it was. >> money that was spent since then, that's right. let's get back to jackson hole and the conference there. steve liesman joins us with another special guest. steve? >> hey, becky, thanks very much. viewers. you the your seat belts on. we're going around the world in about four minutes or so. we got the first deputy managing director of the international monetary fund, david lipton with us. thanks for joining us. >> nice to be here.

we meet in all the nicest places. >> we do. let's start off with an overview of the economy. how weak? what are the challenges? >> well this recovery continues to be a rocky one, maybe not as rocky as those mountains behind us, but you know, i think we believe that with two provisss, the u.s. manages not to go over the fiscal cliff, to use the mountain analogy but also if europe is able to plug ahead with dealing with its problems, we see growth continuing, albeit it somewhat slower than historical growth than the advanced economies and quite comfortable growth in the emerging markets but of course the big risks are the fiscal cliff and europe dealing with its problems, and in particular, both of those could cause problems for the united states, europe, and spillovers that would widely affect the rest of the world. >> the managing director of the imf has not been shy about saying europe should step up and use its resources. what is the state of play?

do you feel europe is getting close to having the policies that address the current problems rather than what people criticized in the previous problems? >> in a nutshell europe has taken some decisions and they have to implement those and figure out exactly how they're going to do that. these are complicated matters but their problems are to make sure that they can dispel the doubts about the viability of the euro, doubts that people and markets have, and secondly, that they can see that growth recovers and continues as a basis for doing all the other things that they need to do. and what this really requires is certain of the peripheral countries have their own problems to deal with, whether it's about budgets and debt, restoring growth, dealing with competitiveness, but there are a number of things europe has to do to create an environment in which all of that can happen. europe needs to show the direction that the european experiment is going, how they will complete the monetary union and europe needs to deal with

the failure or problems of the monetary transmission mechanism, to make sure that monetary policy can be supportive of growth, and europe needs to make sure that its banks are able to be supportive of growth. >> does it sound like what mario draghi has been proposing when it comes to the ecb buying the debt of the sovereign nations, is that sufficient involvement which by the ecb there? >> i think the idea is conceptually right on target. clearly the monetary transmission mechanism has been impaired. the high interest rates in those countries threaten the sovereigns, create this interlinkage between the sovereigns and the banks, and it also means that for all the efforts the ecb is making to provide accommodation, those are effective in the northern countries but not effective in the periphery, so the growth is not able to benefit appropriately. so i think he's barking up the

right tree, he's got the right idea, the right approach, and he needs the conditions under which his actions can be effective, he needs the countries of the periphery to be doing what they need to do and then he can act. >> unwith of the criticisms i've heard from some people of the imf is overly emphasizing austerity when it comes to greece. and that under the austerity that's mandated under the programs, greece cannot grow and that this is too harsh on the country. what is your reaction to that? >> look, we make -- we are working together to help greece with our troika partners and we come to approaches all together. there's been a lot of discussion about the appropriate pace of adjustment, and of course the limit to austerity is finance. if you're going to have less austerity and have a slower path of adjustment that has to be more finance and this has been a balancing act over the two-year period, an approach was tried, and then an approach was tried

when there was private sector involvement, and we've seen where greece stands right now. greece is trying to find ways to put its program back on track. we have a mission heading out there next week to help them do that. we believe that the prime minister, the finance minister are dedicated to finding an appropriate path for adjustment, getting things back on track, and we're trying to help. >> you're optimistic about -- >> i'm optimistic in the sense that i think they're working hard. they want to stay in the eurozone. they want to get their country going again, and i'm optimistic because the prime minister's gone around europe and he's just this week and he's seen leaders and you know, mrs. merkel came out of the meeting and said, i have trust in this man, and expressed her support that greece stay in the eurozone. >> lots more countries to advise

id, davi visit, david, i want to move on. >> sure. >> one of the questions i get all the time is do you believe the data in china and how slow is the growth there? >> i remember visiting china in the '90s and hearing the deputy premier saying he didn't believe the data in china. he explained it's a complex, huge country, many regions providing information. i think one has to look at all the data, look at the official data, look at supporting information like electricity and transport of materials and see whether there's consistency. look we believe there's been some slowdown, we've been projecting 8% growth. it's lower than historically so. recently there have been some further signs of slowdowns so we're reassessing. >> the managing director was just in the middle east just talking about the middle east. the imf is ready to do programs especially in egypt to begin with, talk about what the imf could be doing there. >> this is an historic

opportunity in transformation and the middle east has had the misfortune or bad luck to be going through this transformation at a time when the global economy is in trouble, and in eastern europe they didn't have that adversity. we are trying to help the country stabilize because part of the tumult has been that there are doubts and uncertainties and so on. you look at tunisia, they're making huge progress. we are working with egypt, the managing director saw the president of egypt in egypt last week, we are talking to them about an imf program, we're hoping we can help them stabilize, and then over time, all the countries that are going through these changes need help from the u.s., europe, the gulf countries, they need investment, they need trade, just like in eastern europe, it took a few years for this to start to work, and for businesses to be willing to come in. we're trying to help them provide the foundation for that later, more important growth days. >> david, there was great

overview of the world, and join us again to do an overview. >> good to talk to you. >> guys, back to you from jackson hole. >> all right, senior economist, steve liesman. >> economics reporter, economics reporter, joe. >> you don't want to be chief economist? make up your mind. >> you know i should make up my mind. >> what is it that you really want? >> i want to talk to a lot of these fed guys and do interesting interviews and then i want to go fishing if you really want to know what i want, that's what i want. ♪ what you really, really want >> then you got everything you want. >> you do. coming up, more from our guest host arthur brooks, president of the american enterprise institute and as we head to break, with the dulcet tones of the wombats don't miss "squawk box" on tuesday, a big line-up, former pennsylvania governor ed rendell, democratic senator jack reed, jared bernstein, who was a former economic adviser to vice president biden, although i don't know if he will admit that

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welcome back to "squawk box." our korptd headlines, navistar can continue to sell truck engines that don't comply with federal emission standards. the e. a says the company can do so by paying fines of $3,800 an engine, more than it had been paying but less than many were

anticipating, and that's why that stock is up by almost 2.5% today. a pair of retailers, zumiez is under pressure, forecasting fourth quarter profit well below what the street was expecting, that stock is down by about 9.5%. more from our guest host, arthur brooks, president of the american enterprise institute. did you hear that, see that little thing we did? >> nice. >> your money, your vote. >> your money on your vote? like a take off on the stick up line. >> you know, just out of curiosi curiosity, in a society that you envision that would be closer to what we want, what do we do with these voter registration like laws? i see texas just struck one down. i mean i see both sides of that. do you? >> what do you mean? >> should you make it much harder for people that don't have identification to vote? >> well, i think it's a basic.

what kind of compromise or sacrifice is it to ask people to -- >> a lot of people don't. >> we should make it easier for people to have i.d.s. the problem is not that you show up and say you are who you are. we have to make it easier for people to have i.d., identification in this country. if that's the issue, if we want to know who people are. i don't believe it's a slippery slope toward a police state. that's nutty. we have to show who we are if we want to exercise our citizenship rights like voting. >> off camera we talked about immigration, too. you said the thing that's made this, greased the incredible economic machinery of the united states was not what. but it was immigrants, right? you were saying the president thinks it's what and actually -- dpsh. >> the whole idea the government has to facilitate the system and make it possible for people to earn their success. it's nonsense. >> what are we doing wrong with

immigration? >> making it harder for people to come into the country and create jobs and opportunity. every study shows immigrants that come in, skilled create three and five jobs for native born americans. i'd staple a green card to every college degree, take away their passports practically, stay in america, please. >> but you meant staple it to the degree. >> staple it to anything where it will stick, but this is the problem we have with immigration, fundamentally one of the things that we know is the most entrepreneurial act ever is immigration. you're putting everything at risk. entrepreneurs put capital at risk in search much explosive rewards that have an uncertain origin. that's the immigration experience, putting their linguistic and their social and their cultural and the religious cap, putting the whole thing at risk. it's a big deal. >> who has got the right answer, republicans or democrats? >> neither right now. one of the things that we're stuck in the stupid,

unproductive debate about border issues on the republican side and the left has these unions they basically don't want any competition. they'll set america back so they don't want to be competing with anybody. the truth of the matter is that the border issues are largely going to go away over the next five years, why? because there was a baby bust in mexico, is one of the biggest reasons, one of the things that never hits the news is, you know, mexico has demographics that are more and more and more like europe's crazy enough and that's one of the reasons that fewer people are coming across, not to mention the fact that we've got a lousy economy. my kids are going to grow up and say that whole thing where you used to talk about illegal immigrants from the southern border, what's that all about? that's not going to be recognizable. the immigration crisis we're facing is the fact we're not letting in enough and keep people from other countries. >> we hear that from just about every business leader who struggled to find qualified people to operate in their offices. >> yes. >> how come it's taking so long to get around this issue and to find any sort of consensus? >> part of it is, we're worried about swing voters, for example,

so if you look at who is really up for grabs in this election, it's the 5% to 7% people in swing states like ohio and these people are working a lot in semiskilled provings, really not democrats, really not republicans and you can sway them a lot by talking about scary foreign countries and foreigners here to keep our jobs. >> swing voters in florida. >> and anyplace basically where that's a hot button topic it's hard to make progress in the immigration issue but we have to do it. our economy is at stake. traditionally, the only way we've been able to revitalize our economy is with a constant inflow of people who want to work. >> not to mention how it affects the demographics problem. >> for sure, we don't want to become europe. look at what happened to them, right now you see not just an aging population but a population that can't sustain job growth. in spain, the country i know best, 52% of young adults are unemployed, 52%. >> is that people below the age of 25 or 30?

>> it's to 25, not in school and they want jobs. 46% of 35-year-old -- adults under 35 still living with their parents. i'd shoot myself. >> you mentioned the university of colorado predicting a romney win. i've seen something my daughter talked about this peace love profits her blog, there's a place out in east hampton, they sell monogrammed cups, romney-ryan or obama-biden 2012 cups and this has been right for i don't know how long and in fact kerry edwards was ahead until the last month of, and they went ahead. romney-ryan is ahead but it's unclear, not a very big part, it's -- >> 2680 to 2437 i'm looking at the picture. >> 2754 sold compared to 2496, but -- >> the picture is an earlier count. >> now it's 2754 so just put

that in your -- >> look, markets speak. >> a boulder, colorado, study predicts romney, i don't know, i can't believe that would happen. they must be moving from location to location so they can't be found in that town, right? >> the thing is they put together the political scientists that did that study, they had a predictive model, good, quantitative predictive model that looks at economic dynamics, it's not just what the unemployment rate is, it's the change in the unemployment rate, that appears to be way more important and predicts what it predicts. >> all right, well if you're in east hampton, ma know grammed, buy a cup and vote early. >> and often. >> maybe in the hamptons, i don't know, i think obama will take the lead probably. when we come back we have stocks that are on the move ahead of the long weekend. we'll head down to the new york stock exchange right after this.

ready or not, the stock of the day is coming up. you're watching "squawk box," on cnbc. first in business worldwide.

welcome back to "squawk box," everyone. take a look at the futures. are you looking at green arrows after a down day yesterday. they have just jumped up 106 points. that just about matches how much the dow was down by yesterday. s&p and the dow had a rough day yesterday although it was in light volume but at this point the dow has given back all of its gains for the month. it is the last trading day for the month, so we'll see what happens. >> doug lives five minutes from the monday gram shop and four years ago it was four times mccain-palin in selling cups, four times. >> that's a community that's probably been hit pretty hard they feel by some of the president's rhetoric that has come out. >> really? obama has a 25-point lead in new york. >> talking about probably a lot of bankers. >> all right.

coming up, parting shots -- ♪ >> i like it. >> tuesday on "squawk box" the republicans had their chance. now it is the democrats' turn. we'll kick off our coverage of the dnc convention with ed rendal, former pennsylvania governor and democratic senator jack reed and a debate between steve forbes and former white house press secretary bill burton. don't miss "squawk box" on tuesday starting at 6 a.m. eastern. mostly for us economic development looks quite good. last year we had a surplus of our budget. this year we might have a slight deficit which is quite unique for the world, so we expect quite a healthy growth, around 4, 5% per year.

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stock of the day, yes, yes, it is splunk, the software maker posting a smaller than expected loss, and the company is boosting its full year revenue guidance, splunk completed its ipo in april. ever reported on splunk. >> never have. it is fun to say. turn to our guest host for final thoughts. joining us today has been arthur brooks, the head of the aei. thank you very much for being here with us.

>> thank you. >> if you have to leave us with final thoughts, again, you have said before this is really important to get rid of cronism. how do we go about attacking this? >> the key thing for us is to remember what our core values are. we believe in competition. at aei, this is an old think tank, our founding motto was the competition of ideas is fundamental to a free society. it is the same thing people watching us who care about business and success informal commerce understand that the fundamental to a free society is a competitive economy as well. the fundamental idea for a successful america is competition around the world. when we get away from the ethos of competition, everything else we talked about from immigration to the public policies, they all fall apart. a symptom of that is cronyism, having to deal wire and harvey talked about the cancer of cronyism in the country and it is true. it is the evil twin sister of statism, when people have extra

deals. we'll remember that we do best and have the best life when we are happy warriors and actual competitors and that's the key thing to remember. i want both parties to be in the competition. >> what does aei want to do for education? >> you have to have as level a playing field as you can and the opportunity in society starts by helping kids. we're systematically marginal rising the bottom 20%. they're stuck in school systems built for the benefit of grownups, not kids. it is an anticompetitive, antipoor set of policies. we really want to help people. mitt romney talked about that last night. it was great. he said everybody should have a choice. you have a choice if you buy milk. actually, who said that? it was somebody who gave a speech and talked about you have 50 different kinds of milk. you should have a choice where you send your kids to school that will disproportionately help the poor. if we want to lift people up and give people the right t