Status Quo PanicAs a supporter of Bernie Sanders, I was upset to hear, a few days ago, of a flurry of panicky articles by elite Democratic economists criticizing Bernie Sanders' ecconomic plans:
- An Open Letter from Past CEA Chairs to Senator Sanders and Professor Gerald Friedman
- Worried Wonks, by Paul Krugman
- Bernie Sanders' Campaign Has Crossed Into Neverland, by Kevin Drum
I am overjoyed to see that one of my favorite economists, Jamie Galbraith, has already responded with an open response to the CEA Chairs. And Galbraith's response is typically brilliant, with wit and wisdom.
Furthermore, I found that Kevin Drum has already recanted:
A severely critical letter from former CEA chairs ... roasted Friedman's study without doing any actual analysis of his forecasts... And it turns out that...Friedman isn't projecting anything wildly out of the ordinary after all... I set out to take another whack at these projections, and I didn't really get what I expected. [On Second Thought, Maybe Bernie Sanders' Growth Claims Aren't As Crazy As I Thought]Kudos to Drum for following up and correcting the record. Don't expect any such admission of premature judgment by Krugman, who is notorious for never acknowledging when he is wrong.
As for the substance of the Sanders economic debate, I'll just quote Galbraith:
So, let's first ask whether an economic growth rate, as projected, of 5.3 percent per year is, as you claim, “grandiose.” There are not many ambitious experiments in economic policy with which to compare it, so let's go back to the Reagan years. What was the actual average real growth rate in 1983, 1984, and 1985, following the enactment of the Reagan tax cuts in 1981? Just under 5.4 percent. That's a point of history, like it or not...
When you dare to do big things, big results should be expected. The Sanders program is big, and when you run it through a standard model, you get a big result...
Paul (Krugman) relies on you (the former CEA chairs) to impugn an economist with far less reach, whose work is far more careful, in point of fact, than your casual dismissal of it. He and you also imply that Professor Friedman did his work for an unprofessional motive. But let me point out, in case you missed it, that Professor Friedman is a political supporter of Secretary Clinton. His motives are, on the face of it, not political.
Unfortunately, this episode fits a pattern of panicky status quo reaction to the Sanders phenomenon. In addition, there have been Clinton attacks on Sanders for having temerity to criticize Obama at times over the past 8 years, and on caucus eve, Clinton’s allies warn Nevada Latinos to beware of Bernie Sanders.
I strongly believe, with regard to the economy, that the Democratic status quo is better than the Republican alternative. But the Democratic status quo is badly flawed, and it doesn't help the team to pretend otherwise. Sanders' proposals are realistic in my opinion, and this becomes clearer the more one examines attacks such as the one described here.
Update 2/22/2019: More discussion by Ron Baiman of the Chicago Political Economy Group.
Is it really that unrealistic to hope that we can achieve things are a reality in Canada?It's well worth reading the entire post by Mr. Baiman.