Bernie Slanders: How the Democratic Party Establishment Suffocates Progressive Change

By Thomas I. Palley, Independent Economist Washington, D.C.

Cross-posted at the author’s blog, thomaspalley.com.  An earlier version of this appeared at Social Europe.

The Democratic Party establishment has recently found itself discomforted by Senator Bernie Sanders’ campaign to return the party to its modern roots of New Deal social democracy. The establishment’s response has included a complex coupling of elite media and elite economics opinion aimed at promoting an image of Sanders as an unelectable extremist with unrealistic economic policies.

The response provides a case study showing how the Party suffocates progressive change. Every progressive knows about the opposition and tactics of the Republican Party. Less understood are the opposition and tactics of the Democratic Party establishment. Speaking metaphorically, that establishment is a far lesser evil, but it may also be a far greater obstacle to progressive change.

The elite media’s response was captured in a snapshot report by Fairness and Accuracy In Reporting (FAIR) showing that the Washington Post ran 16 major negative stories on Sanders in 16 hours, prior to the Michigan primary. The headlines were particularly hostile, and since only 40 percent of the public reads past the headline, that is as important as the substance of the story.

Economic policy has been the fulcrum of Sanders’ campaign, and the response of elite opinion has been exemplified by Paul Krugman of The New York Times.

For years, Krugman has mockingly used the term “very serious people” to attack Republicans opposed to President Obama’s policies. Now, he unironically revokes the credentials of all who do not support Clinton  by declaring: “every serious progressive policy expert on either health care or financial reform who has weighed in on the primary seems to lean Hillary.”

Regarding Sanders’ opposition to neoliberal trade agreements, Krugman writes “In this, as in many other things, Sanders currently benefits from the luxury of irresponsibility: he’s never been anywhere close to the levers of power, so he could take principled-sounding but arguably feckless stances in a way that Clinton couldn’t and can’t.”

The slamming of Sanders has also been joined by a gang of past Democratic appointee Chairs of the Council of Economic Advisers. In an open letter co-addressed to Senator Sanders, Messrs. Kruger, Goolsbee, Romer and Tyson mauled a favorable empirical assessment of Sander’s economic program conducted by Professor Gerald Friedman.  Without any detailed independent assessment, they simply declared the assessment unsupported by the “economic evidence”.

Messrs. Kruger et al. were then joined by Justin Wolfers, via one of his regular New York Times opinion pieces. His accusation was the beneficial effects of fiscal stimulus would disappear once full employment was reached and the stimulus withdrawn.

Wolfers is co-editor of the prestigious Brookings Papers on Economic Activity. Ironically, a recent issue contained an article by elite Democratic economists Larry Summers and Brad DeLong invoking a similar mechanism as Professor Friedman. Summers and DeLong argued a large negative temporary demand shock can permanently lower output: Friedman simply reversed that and argued a large positive temporary stimulus can permanently raise output and growth.

There is legitimate room for intellectual difference. What is so stunning is the tone of the critique and the fact it sought to diminish an important policy (fiscal stimulus) just because Sanders was using it to his political advantage.

Given their elite professional standing and easy access to elite media, these attacks quickly ramified throughout the mainstream media, illustrating how the elite media – elite opinion nexus works.

The slamming of Sanders reflects an enduring status quo defense mechanism which usually begins with insinuations of extremism, then mixes in charges of lack of qualification and realism, and ends with assertions of un-electability. It is applied in both political and public intellectual life.

The extremism gambit explains the persistent linking of Sanders and Trump. Whereas Trump is an egotistical demagogue and businessman with a disreputable business history, Sanders is a thoughtful social democrat with a long history of public service through high electoral office.

The un-electability charge pivots off the extremism insinuation as follows. Americans will not elect extremists; Sanders is an extremist; ergo, Sanders is unelectable.

As with the extremism insinuation, the un-electability charge lacks foundation. Polls show Sanders beating all the potential Republican nominees, and beating Trump handily.

The third charge is lack of qualification. The reality is Sanders has a fifty year history of political involvement, worked his way through the political ranks serving people, was Mayor of Vermont’s largest city, then Vermont’s representative in Congress where he co-founded the Congressional Progressive Caucus, and after that became a Senator for Vermont. That seems to be exactly the career and CV a President should have.

Lastly, Sanders has been dismissed as selling unrealistic pipe dreams. Social Security would be a pipe dream if we did not already have it; so would Medicare and public education too. There is a lesson in that. Pipe dreams are the stuff of change.

Rather than an excess of pipe dreams, our current dismal condition is the product of fear of dreaming. The Democratic Party establishment persistently strives to downsize economic and political expectations. Senator Sanders aims to upsize them, which is why he has been viewed as such a threat.

November will be a time for Democratic voters to come together to stop whoever the Republicans nominate. In the meantime, there is a big lesson to be learned.

Today, the status quo defense mechanism has been used to tarnish Bernie Sanders: tomorrow it will, once again, be used to rule out progressive policy personnel and options.

Progressives must surface the obstruction posed by the Democratic Party establishment. Primaries are prime time to do that, which means there is good reason for Sanders’ campaign to continue.

Links on the Kerfuffle about Friedman’s Sanders Analysis

There’s been quite a fuss about our columnist Jerry Friedman’s analysis of the macroeconomic effects that implementation of all of Bernie Sanders’ proposals would have. (The analysis was the basis of two of Jerry’s recent columns for us, here and here.) Here’s a minimally annotated round-up of articles and blog posts related to the kerfuffle:

Jackie Calmes, New York TimesLeft-Leaning Economists Question Cost of Sanders’s Plans I linked to this in my last blog post; this article mentions Jerry Friedman and his analysis, but doesn’t quote him (they apparently didn’t contact him before running the piece–I am sure he would have spoken to them if they had!). The piece also makes it sound as if Jared Bernstein, about the only truly left-leaning economist they quote, is harsher on Friedman than he is, and even more misleadingly, that he is skeptical of Sanders’ plans (more on this below).

Dean Baker, Beat the Press, NYT Invents Left-Leaning Economists to Attack Bernie Sanders.  Lots of good points here critiquing the Calmes NYT piece, especially how the people they quote aren’t leftists, and in one case (Ezra Klein) not an economist.

Doug Henwood, FAIR blog, NYT Rounds Up ‘Left-Leaning Economists’ for a Unicorn HuntAlso a very good critique of the Calmes NYT piece, plus a great new metaphor for hippie-punching–the “unicorn hunt.” Since the kerfuffle really blew up, though, Henwood has been harsh about Friedman on Twitter, calling his analysis “embarrassing.” (Henwood finds Jerry’s the growth-rate projections “risible.” Ouch, comrade.)

Alan Krueger, Austan Goolsbee, Christina Romer, Laura D’Andrea Tyson, An Open Letter from Past CEA Chairs to Senator Sanders and Professor Gerald FriedmanHere is the real driver of the kerfuffle. It is amazing that they take Friedman to task for growth projections that they say are not credible (and take Sanders to task for relying on them–though the Sanders campaign did not commission this analysis), but they don’t give any specific empirical criticism of his analysis. Instead, they fault Sanders/Friedman for making projections that are outlandish in the way that GOP projections standardly are. (But see below–many observers have defended Friedman on this score.)

Jim Tankersley, at WashPo’s Wonkblog, The economist who vouched for Bernie Sanders’ big liberal plans is voting for Hillary Clinton.  Ok, this is just weird. Not an entirely unsympathetic article, but I wish Jerry were more careful not to feed into Clinton’s “one-issue candidate” talking point. (“I agree with Bernie on economic issues, but there are other issues.”)

James K. Galbraith, open letter (dated February 18) to Kreuger, Goolsbee, Romer, and Tyson (posted here). A lengthy response, starting by taking them to task for not providing any substantive critique or analysis of Friedman’s research: “You write that you have applied rigor to your analyses of economic proposals by Democrats and Republicans. On reading this sentence I looked to the bottom of the page, to find a reference or link to your rigorous review of Professor Friedman’s study. I found nothing there.” Then there are a couple of pages of analysis defending Friedman’s analysis and methods. (“There is no ‘magic asterisk,’ no strange theory involved here.” The conclusion: “What the Friedman paper shows, is that under conventional assumptions, the projected impact of Senator Sanders’ proposals stems from their scale and ambition. 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.”

Matthew Klein, FT Alphaville, “Extreme” doesn’t mean what it used to, Sanders vs the CEA.  This piece (which you have to be registered to see) explains why Friedman’s growth projections may not be as outlandish as Kreuger et al. suggest, using this chart, showing that Friedman’s optimistic growth rate under Sanders programs only brings the growth rate back to the 1984-2007 pre-recession trend line:

Sanders-growth-590x275

Matthew Yglesias, Vox, Top Democratic economists don’t think much of Bernienomics. He doesn’t care.  Surprisingly, a piece from Vox that is pretty sympathetic to Sanders and Friedman (though he identifies the parts of Friedman’s analysis that he thinks are implausible). Under the heading “Imperious dismissals only make Sanders stronger,” Yglesias writes: “It’s noteworthy that the former CEA chairs criticizing Friedman didn’t bother to run through a detailed explanation of their problems with the paper. To them, the 5.3 percent figure was simply absurd on its face, and it was good enough for them to say so, relying on their authority to generate media coverage.”

Nick Timiraos and Laura Meckler, Wall Street Journal, Democratic Economists Say Bernie Sanders’s Math Doesn’t Add Up. Reporting on the past CEA chairs’ open letter; does better than the NYT piece on reporting Jared Bernstein’s actual views. Requires subscription.

Jared Bernstein, at his blog, I Endorse…(No One!)  Does the best at explaining Jared Bernstein’s actual views. He thinks Friedman’s projections are overly optimistic, but he repudiates the CEA chairs’ comparison with Republican “fairy dust”: “I do give Friedman credit for running all of Sanders’ plans through a macro model, versus Republican candidates’ hand-waving claims that the power of their personalities leavened with massive sprinklings of supply-side fairy dust will generate GDP growth of 4, 6, 8 percent! But such models are a function of your assumptions, and his, including his multipliers, the sharp increase in labor supply and productivity, diminished health care inflation, and a passive Fed amidst all this stellar growth, all seemed way too sunny to me (I called them ‘wishful thinking’ in the NYT).”

Paul Krugman, his NYT blog, Worried Wonks.  (Plus he has two other blog posts on the kerfuffle.) What’s interesting about them is not what Krugman says (which is what you’d expected now that he is in Hillary shill mode) but how many of the commenters (more than three quarters, I would say) are unsympathetic to his siding with Kreuger, et al.

Kevin Drum, Mother Jones, The Sanders Campaign Has Crossed into Neverland. Another piece highly unsympathetic to Friedman, but with no actual counter-analysis–just name-calling (see below). Surprising, for MoJo and Drum.

Ryan Cooper, The Week, Why are big-shot liberal economists hippie-punching Bernie Sanders?  A vigorous defense of Friedman and Sanders. “Ironically, in the frenzy to destroy Friedman’s reputation, nobody actually explained in detail what the problems were with his paper. The CEA pronouncement had no data or economic argument at all — it was 100 percent political handwringing. Krugman gave a very brief gloss suggesting that Sanders couldn’t possibly get labor force participation back up to 1990s levels due to aging, and trying to do so would cause inflation. Kevin Drum gave a similar incredulous stare argument about worker productivity and GDP growth, pronouncing it ‘insane,’ worse than Republican ‘magic asterisks.'” Cooper does what the big-name wonks should have, and has a mixed assessment Friedman’s analysis. But his point is: “Friedman is just a professor who thought it might be interesting to game out the Sanders platform. He doesn’t work for the campaign, or have platoons of graduate students, think-tankers, or public relations experts at his beck and call. His major error, it seems to me, is that he didn’t realize he’d be walking into a buzzsaw of Clinton supporters if he didn’t fiddle with his numbers to make them look ‘sensible.'”

Mike Konczal Roosevelt Institute Rortybomb blog, In Praise of the Wonk: Dissecting the CEA Letter and Sanders’s Other Proposals. This is a nice discussion, which agrees with Kreuger, et al. that Democrats and the left need to have good policy analyses (hence “In Priase of the Wonk”), but takes them to task for not explaining why they reject Friedman’s idea that an expansionary policy could get us back to the historical trend of growth (he uses Klein’s graph from the FT Alphaville post). “To reject Friedman’s analysis, as the former CEA chairs do, seems to involve rejecting that component of the analysis. If so, they have an obligation to explain what happened to that potential output trend from 2007.” He discusses various possibilities, plausible and not.

J.W. Mason, at his blog, Can Sanders Do It?  A nicely argued defense of Friedman, by a former student of Friedman’s who now teaches at John Jay College. He says the discussion should focus on this question “Is it reasonable to think that better macroeconomic policy could deliver substantially higher output and employment?”, where many of Friedman’s critics have focused on whether Sanders programs will get us there, or on whether Friedman has just the right numbers. Mason: “Is it plausible that there could be 5 percent-plus real GDP growth and 300,000 new jobs per month over the eight years of a Sanders presidency? I think it is — or at least, I don’t think there is a good economic argument that it’s not.” He gets there via five points (with arguments for each point–read the post for the arguments):

  1. It’s not controversial to say that a historically deep recession ought to be followed by a period of historically strong growth.
  2. Friedman’s growth estimates are just what you need to get output and employment back to trend.
  3. In other contexts, it’s taken for granted that more expansionary policy could deliver substantially higher growth.
  4. Friedman’s projections are unreasonable only if you think the US is already at full employment.
  5. The argument against Friedman’s piece comes down to the claim that the economy is already close to potential.

Ron Baiman, Chicago Political Economy Group, posting at the D&S blog, The Poverty of Neoclassical Economic Analysis. I’ll give Ron the last word: “No one assumes that Bernie’s economic program will be passed as currently conceived. The fate of these proposals depends on the power of the ‘political revolution’ that the Sander’s campaign is leading. Like the Clinton campaign, the NC-economics trained, former CEA Chairs exhibit abundant ‘pessimism of the intellect” but no ‘optimism of the will’. This is not an economic debate. It’s a political and ideological debate that reflects the deep division in fundamental theoretical outlook between NC progressive and radical democratic socialist economists.”

This is all I have for now. I am sure there will be more.