My guest today is Robert Pollin, distinguished professor of economics and co-director of the Political Economy Research Institute at the University of Massachusetts-Amherst.
JB: Welcome to OpEdNews, Bob. You recently wrote a piece that appeared in The Nation entitled, Bernie Sanders Will Make the Economy Great Again [March 29, 2016]. How confident are you about that and why?
RP: The title for the article was actually not chosen by me, but rather by the Nation editors. The language of the title is a bit over-the-top for my tastes. But it nevertheless captures the overall spirit of my argument reasonably well. The things that I am extremely confident about regarding Sanders' main economic policy proposals are what I myself did write in the article. Two key summary points are these: 1) "All of his major proposals are grounded in solid economic reasoning and evidence;" and 2) "A Sanders economy will be fully capable of growing at healthy rates. But more than just growing, a Sanders economy will also deliver standards of well-being for the overwhelming majority of the U.S. population as well as the environment in ways that we have not experienced for generations." I am happy to defend these claims against all critics.
JB: Interesting that it was the Nation editors that wanted this very strong title - to stimulate interest, perhaps? And there are critics galore, from media pundits to Hillary and her representatives. So, this is a great time to combat their arguments that Bernie is simply an idealist and his numbers don't add up. Please address your first point, Bob.
RP: In the article, I focus on four major areas of Sanders' overall program: Medicare for All; a $15 minimum wage; a Wall Street trading tax, to pay for free college tuition; and overall economic growth. For the first three cases, I go over major points, and provide detail as well.
The discussion on Medicare for All is straightforward: the U.S. currently spends approximately 7 percent more of overall GDP than other advanced economies on healthcare. This amounts to about $1.3 trillion in excessive spending, which goes mainly to private insurance companies and pharmaceuticals. If we see countries such as Germany, France, the UK, Canada, Japan, and Australia spending so much less than we do in the U.S. on health care, and getting better overall health outcomes, it simply can't be possible that the U.S. is incapable of devising a system that is roughly akin to those in these comparison countries. The Sanders program is based on that simple idea. The details matter, but these can be worked out later.
On the $15 minimum wage and the Wall Street trading tax, I go through in the Nation article details of the extensive research I myself have done on these matters. The numbers do add up, in this specific sense. We can implement a $15 minimum wage (as is now being done in California and New York City, among other places), without workers facing declining employment opportunities. The economy will need to adjust, since this represents a doubling of the minimum wage. But the adjustments are not that difficult--reducing worker turnover and absenteeism, and raising prices modestly in heavily affected sectors, such as fast food.
With the Wall Street tax, my co-authors and I recently showed that, given U.S. financial market conditions today, the tax could conservatively raise $300 billion per year in revenue, equal to 1.7 percent of U.S. GDP. This is enough to cover the free college tuition program four times over. It would then leave more than $200 billion to cover the major public investments in green energy and infrastructure that Sanders also favors.
When you add up these measures, the Sanders program is capable of delivering a more egalitarian, and more green economy through realistic policies. There is also no reason for these measures to be a barrier to healthy economic growth. Indeed, many features of the program will support growth, such as the strong infrastructure investments, and the single-payer health program, since this will lower health-care costs for businesses.