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.

The Latest Links on Friedman/Sanders, Romers, etc.

Gerald Friedman, Naked Capitalism, Gerald Friedman Responds to the Romers on the Sanders Plan: Different Models, Different Politics. Differences between my evaluation of the impact of the Sanders economic program from that of the Romers reflect different views of the economy, the difference between a static model where national income and employment are largely fixed and a dynamic one where these are shaped by effective demand and are, therefore, susceptible to change in response to economic policy. There are no errors in arithmetic.* [There’s a footnote contradicting the Wolfers NYT hit piece alleging accusing Friedman of “bad math, or logic”.] It is a fundamental difference in vision that divides our approaches; the same distinction that divided John Maynard Keynes from those he labelled the Classicals in his General Theory of Employment, Interest, and Money.”

James Sherman, at his blog The Body Politick, Uncovering the Bad Math and Logic (and the Bias) at the New York Times. A nice takedown of the Romers and of Wolfers. Follow-up to a previous post, Bernie Sanders, Social Democracy, and Economic Growth – Part I.

Robert Waldman, at Angry Bear blog, New Keynesian Orthdoxy and HysteresisWaldman seems to be agreeing with Friedman (against the Romers) that temporary stimulus can have permanent effects; he is also criticizing the Romers for appealing to the standard model to criticize Friedman, when they themselves don’t agree with the standard model. “There is a standard model in which demand stimulus has only a temporary effect on output and certainly no long term effect on the rate of growth of output. The model does not fit the data. In the academic discussion, macro economists note this and discuss alternative models. But if an outsiders (the Sanders campaign) or other than top status academics say something inconsistent with the standard model, economists say they are wrong and appeal to the standard model. This can make the orthodoxy invulnerable to data. It can be noted that it is rejected by data and alternatives discussed when confronting the problematic data, but this discussion isn’t shared with non-economists.” This was the “Weekend Reading” at Brad DeLong’s blog. (Does this mean DeLong is backing away from his earlier harsh remarks about Friedman’s analysis (in this blog post, in which he manages to praise Friedman before criticizing him, as a vehicle for mentioning that he got two summa readings on his senior thesis, one from Friedman)? Will he admit that he’s doing so, vs. siding with Krugman and the Gang of Four, as he said in his original post?)

Laura Tyson,  at Project Syndicate, Closing the Investment Gap. A commenter on Robert Waldman’s Angry Bear post links to a piece by Tyson, who is one of the “Gang of Four,” saying: “Tyson may not realize it, but she just provided a ringing endorsement of the Sanders economic plan as well as Friedman’s analysis of same.” In the paper (which the commenter quotes from), Tyson argues that a temporary fiscal stimulus can have persistent effects: “Under conditions of weak aggregate demand, stronger public investment encourages more private business investment.” Oops. She’s saying what the Romers are criticizing Friedman for saying. I guess if you say it in an article that only other economists are likely to read, and not in support of an insurgent anti-establishment campaign, it’s ok; if not, not.

Menzie Chinn, Econbrowser blog, Visualizing Textbook and Alternative Interpretations of the Friedman Analysis of the Sanders Economic Plan“Now that the dust has (kind of) settled on exactly what is and is not in Gerald Friedman’s interpretation of the Sanders economic plan, I thought it useful to contrast the textbook (at least the one I use, Olivier Blanchard/David Johnson’s) view of how a fiscal stimulus works, versus that in which a one-time spending increase yields a permanent increase in output, in a graphical format.” Nice graphs!

David Ruccio, Real-World Economics Review blog, Looking Below the Surface. “The fact is, the arrogant liberal response to Sanders and Friedman carried out in the name of ‘responsible arithmetic,’ which has created an ‘illusion of consensus,’ has been been both timid (in terms of actual policies) and shallow (in terms of what it focuses on).” There were several earlier pieces on the kerfuffle from the Real-World Economics Review blog that I’d missed (also siding with Friedman, natch): Lars Syll, Real-World Economics Review blog (2/28), Bernie Sanders and the Verdoorn Law. David Ruccio, Real-World Economics Review blog (2/28), The Debate Continues; Peter Radford, Real-World Economics Review blog (2/21), Krugman versus Sanders; and earlier from David Ruccio, at Occasional Links & Commentary on Economics, Culture and Society (2/20), Pushback.

Robert Vienneau, at his blog Thoughts on Economics, Romer and Romer Stumble. Points to three problems with what the Romers say in just one passage about labor markets and regulation. The conclusion: “Even the best mainstream economists seem incapable of writing ten pages without spouting ideological claptrap and propagating silly errors exposed more than half a century ago. Something seems terribly wrong with economics profession.”

Robert Reich, from his blog, Why the Critics of Bernienomics Are Wrong. Short and snappy. Hew as also interviewed on Democracy Now!, “We Must & Can Aim High”: Former Clinton Labor Secretary Robert Reich on Endorsing Bernie Sanders. In response to a question from host Amy Goodman about the kerfuffle, “Bernie Sanders is claiming—and Gerald Friedman, professor Gerald Friedman, an economist, backing him up, is claiming—that he could, because of his proposals, such as a single-payer plan, get economic growth up to 5.3 percent—that’s not out of the historic dimension of what’s possible; in fact, in the early 1980s, we had 5.3, almost 5.4, percent economic growth—and also get unemployment down to 3.9 percent or 3.8 percent—again, not out of historic possibility. In fact, that’s what was the approximate rate in the late 1990s.”

Gerald Friedman, interviewed on BloombergBusiness, Sanders Economics: Do the Numbers Add Up?  Jerry acquits himself well.

Ryan Cooper, The Week, Who’s Afraid of John Maynard Keynes? Nice piece on the debate about output since the Romers’ critique of Friedman came out. “Ultimately, there is only one way of resolving this question for sure: Attempt aggressively expansionist policy, and see how far we can get. No one knows for sure where the top is, or whether serious efforts to bring the millions of discouraged workers with fiscal stimulus, active labor market policies, or paid family leave would pay dividends. But they are unquestionably worth trying. Insofar as the professional center-left economist corps is creating a sense that such efforts are futile, they are doing their nation a massive disservice.”

That’s it for now.