Reprinted from Campaign For America's Future
"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." -- James K. Galbraith
Democratic presidential candidate Bernie Sanders says he wants the American people to join him and "fight for a progressive economic agenda that creates jobs, raises wages, protects the environment and provides healthcare for all." His website outlines a number of proposals toward this end, including increasing taxation of corporations and the wealthy and using the money to repair the country's infrastructure, extending public education four years to cover college, extending Medicare to everyone, expanding Social Security and addressing climate change.
Gerald Friedman, a respected economist (and Clinton supporter by the way) took a look at Sanders' proposals, ran the revenue and spending numbers through a standard economic model, and suggested that the very high level of spending would provide a "significant stimulus to an economy that continues to underperform, with national income and employment at levels well below capacity." This stimulus could lead to several positive economic outcomes, including increasing gross domestic product growth to 5.3 percent a year, cutting unemployment to 3.8 percent and increasing wages by 2.5 percent per year. This, combining with the revenue proposals, would bring a budget surplus. Friedman wrote:
"Like the New Deal of the 1930s, Senator Sanders' program is designed to do more than merely increase economic activity: the expenditure, regulatory, and tax programs will increase economic activity and employment and promote a more just prosperity, "broadly-based" with a narrowing of economic inequality.
"On balance, the Sanders program will lead to a dramatic acceleration in economic growth and employment. It will raise wages, especially for the lowest-paid Americans, and narrow the gap between rich and poor. With these gains, economic conditions will return to the prosperity of the late-1990s, or even the mid-1960s."
Friedman's analysis went largely under the radar of the mainstream press.
White House Economists Stoke Opposition
Then, four ex-chairs of the White House's Council of Economic Advisers (CEA), all Democrats, wrote an open letter using Friedman's projections as a way to attack the Sanders campaign. The letter called the projections "fantastical," "extreme" and "claims that cannot be supported by the economic evidence." They compared the projections to the "grandiose" predictions Republicans make about the effects of tax cuts. They wrote that the Sanders campaign (not Friedman) was making "promises" of high job and income growth, writing, "Making such promises runs against our party's best traditions of evidence-based policy making and undermines our reputation as the party of responsible arithmetic."
The New York Times amplified the attack on Sanders in "Left-Leaning Economists Question Cost of Bernie Sanders's Plans," written from the premise that Friedman's projections came from the Sanders campaign itself, writing that even "liberal-leaning economists who share his goals but question his numbers and political realism." The Times piece quoted Austan Goolsbee saying Sanders is offering "magic flying puppies with winning Lotto tickets tied to their collars."
This was picked up widely and amplified further. Paul Krugman, in Varieties of Voodoo wrote that the former CEA chairs' letter matters because "fuzzy math from the left would make it impossible to effectively criticize conservative voodoo." Krugman said all of this "is an indication of a campaign, and perhaps a candidate, not ready for prime time."
Many others piled on, including Kevin Drum at Mother Jones, who wrote in "Bernie Sanders' Campaign Has Crossed Into Neverland," "... this is insane. If anything, it's worse than the endless magic asterisks that Republicans use to pretend their tax plans will supercharge the economy and pay for themselves. It's not even remotely in the realm of reality." (Note: Drum later takes it back. Read on to learn how.)
Most recently Ezra Klein amplified Krugman's "not ready for prime-time" comment in "Why Bernie Sanders's campaign makes me worry about how he'll manage the White House" implying that voters are looking for a manager, not a visionary, and this all shows that Sanders...
"...isn't very interested in learning the weak points in his ideas, that he hasn't surrounded himself with people who police the limits between what they wish were true and what the best evidence says is true, that he doesn't seek out counter-arguments to his instincts, that he's attracted to strategies that align with his hopes for American politics rather than what we know about American politics. And these tendencies, if they persist, can turn good values into bad policies and an inspiring candidate into a bad president."
Apparently, though, none of the critics actually ran Sanders' proposals through their own economic models to see if the results differed from Friedman's. They just followed the White House advisers' letter and went ballistic.
"Tribalism And Intellectual Dishonesty"
William K. Black looks at this attack on Sanders, through Friedman, at New Economic Perspectives in "Krugman and the Gang of 4 Need to Apologize for Smearing Gerald Friedman":