Wayne O'Leary

Attack of the ‘Liberal’ Economists

The venerable New York Times, the Gray Lady of American journalism, has lately taken upon itself the unseemly role of choosing sides in the Democratic presidential-primary contest. The Times has long been a leading liberal voice, invariably endorsing Democrats over Republicans, but now it wants a particular kind of Democrat, one whose last name is Clinton.

In one sense, this is understandable. The Clintons, expatriates from Arkansas, have for some time been upscale residents of New York; they probably attend the same cocktail parties as the Sulzberger family that runs the Times. More to the point, candidate Hillary Clinton was New York’s senator from 2001 until her appointment as Barack Obama’s secretary of state in 2009. It’s not surprising, then, that America’s newspaper of record set a precedent by its early primary-season endorsement of Clinton and gave free rein to its stable of high-profile columnists to go after her rival, Sen. Bernie Sanders.

Led by Paul Krugman, whose sudden transformation from insurgent gadfly to intellectual guardian of the Democratic establishment’s castle keep has been wondrous to behold, the Times pundits have hammered away for weeks at Sanders’ economic program as a mad departure from the safe centrism of the Clinton and Obama administrations. A few choice words directed by Krugman toward the senator’s agenda are indicative: “outlandish,” “horrifying,” “voodoo of the left.” From the rhetoric, you would think the Democratic primaries constitute a referendum on the American way of life, with Bernie Sanders positioned as far beyond the pale as Donald Trump. Clearly, the Gray Lady’s corporate bloomers are showing.

While the Times op-ed columns have carried on what sometimes seems like an anti-Sanders vendetta, its news pages have given full play to any reports reflecting badly on the Vermont senator’s tax-and-spend apostasy. A recent example concerns the ongoing flap among academic economists over the relative merits of the Sanders economic package.

In mid-February, the Times began publicizing the views of a quartet of “left-leaning economists,” veterans of the Clinton and Obama administrations, who indirectly attacked Sanders’ economic plan by picking a fight with Gerald Friedman, a University of Massachusetts economist whose analysis of the senator’s proposals had been generally positive. The four, Austan Goolsbee, Alan Krueger, Christina Romer, and Laura D’Andrea Tyson, were quickly joined by other pilers-on, including the esteemed Mr. Krugman.

The gist of the criticism was that Sanders’ proposed budget for new federal spending, $18 trillion over 10 years ($14 billion for single-payer health care, the rest for items like infrastructure investments and public-college tuition assistance), was not only politically unrealistic, but based on faulty calculations and false growth assumptions unlikely to offset accompanying tax increases. Quoting Goolsbee, a long-time Barack Obama advisor, “The numbers don’t remotely add up.”

Seeking to bury the aforementioned Professor Friedman with sarcasm and ridicule, Goolsbee, who fancies himself a purveyor of cute witticisms, likened the Friedman analysis to “magic flying puppies.” He and his nay-saying associates released an open letter in which they accused Friedman (and, by extension, the Sanders campaign) of making extreme and grandiose claims unsupported by economic evidence.

But others jumped to Friedman’s defense, most prominent among them University of Texas economist James K. “Jamie” Galbraith. Galbraith, like Friedman, regards the Sanders program as in part an economic stimulus, whose practical effect would be to boost a still-underperforming economy, generate jobs and income, and cause the gross domestic product (GDP) to grow — in Friedman’s estimation, one-third beyond what it otherwise would over the coming decade, thereby generating the taxes to pay for itself in the process.

Galbraith, a former executive director of the congressional Joint Economic Committee, put it this way: “The projected impact of Senator Sanders’ proposals stems from their scale and ambition. When you dare to do big things, and when you run it through a standard model, you get a big result.”

Others on the Democratic left agree. Robert Reich, professor of public policy at the University of California (Berkeley), one-time labor secretary (1993-96), and estranged former political ally of the Clintons — he’s endorsed Sanders — seconded the obvious: the Sanders plan’s projected impact, as calculated by Friedman, is a function of its magnitude; that is, the anticipated results reflect the program’s size. “There is nothing unrealistic about it,” said Reich.

The Friedman projections, a 5.3% annual growth rate and a 3.8% unemployment rate, figures dismissed by the critics as totally lacking in credibility, are in Reich’s view entirely attainable. Money freed up by the Sanders single-payer system alone, he argues, would improve America’s economic performance long-term by reducing the debilitating drag of our existing wasteful and inefficient health-care system, which consumes 18% of the entire national economy.

The critics, however, remain unconvinced. A guest op-ed column by economist Justin Wolfers, a supporter of the original anti-Friedman four, appearing in the Times (Where else?) on March 1, lays out what is evidently Professor Friedman’s irredeemable sin. Since Friedman assumes a stimulus on the order of the Sanders plan can generate a permanent improvement in national economic performance and not just a temporary uptick, his numbers, Wolfers is shocked (shocked!) to report, “don’t represent conventional economic thinking” — the failed conventional thinking endorsed and represented by the economists of the anti-Sanders brigade.

So who exactly are these press-described “left-leaning” or “liberal” economists whose views, Paul Krugman insists, represent the progressive movement? As befits individuals who have served in the administrations of corporate Democrats Bill Clinton and Barack Obama, they are largely centrists with pro-business inclinations. Their professional backgrounds are a world removed from those of Gerald Friedman, a labor economist, and iconoclastic public intellectuals Jamie Galbraith and Robert Reich, neither of whom has enjoyed much access to the Obama White House.

All four of the Sanders-Friedman antagonists were establishment-approved chairs of the president’s Council of Economic Advisors under either Clinton or Obama. Two (Goolsbee and Tyson) are business-school professors and advocates of free trade. One (Krueger) views education as the answer to economic inequality. And one (Romer) actually argued for a bigger, Sanders-like stimulus ($1.8 trillion) in 2009 before falling into line with the wholly inadequate Obama consensus of $800 billion. Their politically colored opinions deserve to be taken with a large grain of salt.

Wayne O’Leary is a writer in Orono, Maine, specializing in political economy. He holds a doctorate in American history and is the author of two prizewinning books.

From The Progressive Populist, May 1, 2016


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