Catherine Rampbell makes a good point about the frustration a lot of progressive wonks have with the Sanders campaign. There’s actually a moral objection to how he’s presenting his proposals that is just plain discomforting. I think her best example involves the unemployment rate and labor force participation. So, do me a favor and think about this:
Consider the claims about labor force participation. If you actually think about Sanders’s proposals — such as completely delinking health insurance from employment, making college free and increasing Social Security benefits — you’ll realize they mostly would reduce workforce participation on the margin.
That doesn’t mean they’re unworthy policy choices. Like any other choices, though, they bring tradeoffs — including making it easier or more attractive for Americans to not have a job.
According to the 53-page report prepared for the campaign by University of Massachusetts-Amherst economist Gerald Friedman, the cumulative effect of Bernie’s proposals would reduce the unemployment rate to 3.9 percent. To be fair, there are other components to his plan that would boost employment, like massive infrastructure spending. But, it’s also obvious that people who are only working for the health insurance would have the option to quit their jobs, that college students would be less incentivized to work and more incentivized to focus on their studies, and that having the comfort of a more generous Social Security check would make retirement look more feasible. That’s a lot of people who become less likely to seek work. There’s always a debate about what the official unemployment rate means, but if it’s lower because people “have given up looking for work,” that’s ordinarily considered a bad thing. Is that how Sanders arrives at this low unemployment rate?
Either way, it’s completely inconsistent with his promise to “restore the share of the population in the labor force back to what it was in 1999.” And that’s not even accounting for the fact that the Baby Boomers are retiring now, adding massively to the share of the population that isn’t in the official labor force.
When you pair pie-in-the-sky numbers like this to Sanders’s totally unrealistic promise to create 5.3% gross domestic product growth, you get the same incredulous response from responsible liberal economists that they gave to George W. Bush’s tax plans, and that they’re currently giving to the economic plans of the Republican candidates for the presidency.
It’s no wonder that liberal economists are frustrated that Sanders’s campaign is practicing, or at least touting, similar statistical shenanigans.
“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,” four former top economic advisers to Democratic presidents fumed in an open letter to Sanders and Friedman this week.
One of its signatories, University of Chicago economist Austan Goolsbee, compared the realism of the Sanders agenda to “magic flying puppies with winning Lotto tickets tied to their collars.”
Austan Goolsbee can always be relied upon to explain stuff in a compelling and hilarious way. But this is actually a big problem.
Let me explain why it bothers me. I also get frustrated when Sanders (and Clinton) makes promises that I know he won’t be able to keep even though his numbers do add up. But I’m forgiving about this when the sin in limited to not being on the level about the Republicans’ ability and willingness to block nearly every worthy proposal that can be proposed. It would be a very uninspiring campaign if both Democratic candidates responded to every question with, “Good idea! But we can’t do that because of Paul Ryan and Mitch McConnell.”
For one thing, the Democrats have a realistic hope of winning back control of the Senate (although not with filibuster-proof numbers). And we all assume the House can’t be won, but it wouldn’t violate the laws of physics. There’s some hope that the next president will have a little more leeway to get things done, even if I think it’s a faint hope. For another thing, there’s value in trying to move the Overton Window and change how Americans think about certain issues. We’ll never have free college tuition at state universities if no one makes an argument for it.
So, I’m forgiving of a little rainbow-and-pony talk on the campaign trail. In the limited sense I’ve described above, such happy talk has a legitimate purpose and can actually advance interests that are important to me.
Fuzzy math, though, is a sin. It sends a message that evidence-based policy is optional. And in an era of climate science denialism, that’s not acceptable. Not when the arctic region was absurdly warm in January.
This is where Bernie’s progressive values and aspirations crash for a lot of people. It’s where he stops “speaking for me.”
There are many ways in which his opponent has never resonated for me. Some of them also implicate big moral questions, like when to go to war or depose dictators or impose no-fly zones in Russian proxy nations.
It’s actually disturbingly easy to be morally offended by both Democratic candidates, which is why I’m not on the ramparts for either of them.
OMIGOD! People are going to get free stuff and they’ll quit work!
Tell me again what’s the difference between the Republican and Democratic Parties? Just the spelling?
Way to piss on my values, Voice.
AS you piss on mine.
Knee-jerk sneering. Don’t bother to consider the rightness, wrongness or total ineffectuality of the argument. You and Trump, Voice, tweeting the first bullshit that crosses your mind without thought.
Boo is right. The policies that Sanders is advocating are not inconsistent with reality, they are not bad things, they are things worth fighting for and are desirable in ANY society. But all policy changes have consequences. And some of those consequences with be anti-thetical to certain portions of society.
One consequence of upping the minimum wage is to flood certain labor markets with previously unemployed because they can suddenly afford to get day care of some sort.
One consequence of requiring all employers to provide a basic health care insurance is to encourage mobility within the ranks of those who previously HAD health care insurance and now can move without losing it. If you employ people in this situation, you now have to make their employment more lucrative to avoid this mobility.
One consequence of requiring surgeons to wash their hands before and after childbirth is a much higher survival rate of both newborn and mothers. Of course, if your desire is to maintain the status quo and protect doctors from responsibility, you would have opposed this in the 19th Century.
Just who was doing the knee-jerking, however?
http://www.vox.com/2016/2/18/11041838/bernienomics-wonks
I wouldn’t be citing that in your defense.
I have posted all over this segment on participation rates. I posted numbers. Not reactions.
What kind of reaction did you expect? The link you posted did not make the arithmetic add up.
Facts and arithmetic have never mattered to Republicans, but Democrats are usually proud to claim that the facts have a liberal bias. Apparently they do not have a Sanders bias.
This is pure gatekeeping. No attempt to point out areas of disagreement or engage the author, just sneering dismissal.
The link you posted did not address the question. The fact that other countries have higher participation rates is not relevant.
That rate is not going to spike back to 1999 levels in the United States. Nor will the American economy grow at impossible rates for a decade. And productivity growth will not grow at impossible rates for a decade.
Period.
I snickered at the way Bernie planned to pay for his free college for all plan. I don’t think many states will pony up a third of the cost. I don’t think his transaction tax on Wall street will produce that much revenue. Those are opinions that I can defend, but I cannot say either is a fact.
But impossible is impossible.
“The fact that other countries have higher participation rates is not relevant.”
And why is that?
GF’s extrapolations are pretty standard. Here is a short paper that describes them.
http://jwmason.org/slackwire/can-sanders-do-it/
Jamie Galbraith agrees…http://big.assets.huffingtonpost.com/ResponsetoCEA.pdf
He does a very good take down of Friedman’s critics even Krugman for essentially trolling with no real facts to back it up.
As pointed out in the article, you can’t have your policies reducing the labor participation rate while explicitly claiming your policies will increase the labor participation rate and not be a liar and/or a hypocrite. If he just picked one, it wouldn’t be much of a thing. But you literally can’t do both and Sen. Sanders is claiming to do both. That’s a horrible thing if you’re trying to claim you’re running an honest campaign.
How exactly is this not a warning that there’s something not right with the math and/or the candidate?
Sen. Sanders is a politician. Please stop placing your ideological hopes on him. You’re just going to be disappointed when he turns out to be exactly what he is: a Politician.
Remember, this all happens after Bernie gets elected
You’re forgetting that after any revolution, there’s no guarantee that the usual assumptions will hold, or that economic givens will still be valid.
NAIRU could be 0%. The fiscal multiplier could be 3. We just don’t know.
Revolutions change things.
If you look at labor participation in four other nations with similar wealth and an aging populations, all four bury the US in male and exceed in female participation, also.
http://www.bloombergview.com/articles/2016-02-18/more-americans-should-be-working
European countries have more generous pensions and universal health care coverage, which make it easier for older workers to retire. And college is either free or low cost so that it is not necessary for college students to work.
And yet they do better at worker participation rates? How does that happen, when all the incentives are WRONG!
I’m not a fan of pie-in-the-sky either. Do economists ever really get it right on forecasts?
https://newrepublic.com/article/130157/pious-attacks-bernie-sanderss-fuzzy-economics?utm_content=buf
ferd7f6a&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer
And then Matt Bruenig’s comments here:
http://mattbruenig.com/2016/02/17/plenty-of-room-to-achieve-bernies-welfare-state/
where he talks about forecasting typically being wrong even by serious people …. just makes me question a little bit, the idea that anybody has very solid ground to stand on with their economic plan.
Isn’t this campaign about two very different views – one a defensive crouch that leaves millions stuck and the other changing the narrative (Obama’s biggest failure) and offering these millions a new possibility and which puts the conservatives on the defensive for once?
If you can only offer your proposals with a straight face by promising 5.3% economic growth, you need different proposals.
It’s the exact same reason we ridiculed Bush’s tax cuts.
And what what the result of Bush’s tax cuts? Was it the economic growth he promised or the deficits we predicted?
I find your lack of faith disturbing.
I for one ridiculed Bush’s tax cut proposals because they described a future that I find undesirable. His math was used to justify a bad idea — and in true Dem fashion, we complained that the math was crap.
The math is always crap. To me, this critique of Bernie just misses the mark of being fair. It’s true enough in that 5.3 annual growth is something that will only occur rarely and for short periods of time. And it may be unrealistic to suppose that such a period will arrive if we enact his proposals.
But (as the campaign says) if these proposals were to be adopted, it would be because we’ve had a major change in our thinking. The idea of health care as a right, provided and paid for efficiently and fairly, is not something we can’t afford. Free university to anyone who can get in is not something beyond our means. And this critique seems to me a back-door way of saying that these goals are unrealistic goals, and that we must trim our vision accordingly.
Maybe I’m just willing to tolerate a more major dose of unicorns and fairies on the campaign trail. Maybe I’m more than willing — maybe I’d like us to have a little pixie dust and magic, and get people to believe that maybe we can after all re-capture the government for the benefit of everyone. If it takes supposing a 5.3 growth rate is inevitable, to me that’s a stretch (a fib) in service of a worth goal.
As opposed to giving rich people more money just ‘cuz.
The problem with your “unicorns in service of a worthy goal” position here is that Bernie were elected President and the Revolution swept in a Congress which allowed him to pass as much of his agenda as we can imagine, he would not get 5.3% economic growth and the media and the conservative movement would use his false promises to attack social programs in general, and we would be fighting from extremely poor ground, having lost the moral high ground needlessly. If the Sanders campaign were to project a growth rate which was realistic but still superior to growth rates this century, the projection would serve its purpose, while maintaining Sanders’ reputation for honesty.
Look at the way those opposed to the ACA have pounced onto the “you will be able to keep your doctor” quote from Obama to discredit the law. Now, there’s nothing in the ACA which caused people to lose doctors from their insurance networks. But there is no health care reform which could have passed which could prevent doctors and insurance companies from making their own self-interested decisions to drop in and out of insurance networks. So Obama didn’t exactly lie; he just made a singular statement while campaigning to pass a single law which could be demagogued successfully. A single law which has had so much bullshit poured over it that even liberals believe untrue things about it and call the ACA shitty.
I think it’s important to carefully distinguish when they create their own reality, on the basis of successful election results, and when we create our own reality, on the basis of election results.
They’re very different.
I’m not sure how, but I’m sure they are…
Bernie and his campaign are NOT claiming that number.
http://rooseveltinstitute.org/praise-wonk-and-wonk-analysis-cea-and-sanderss-proposal/
Again. You really don’t want to site this as a defense of Sen. Sanders policy’s. It rightly points out that he’s blowing smoke on the breaking up the banks with Dodd Frank.
As to the article’s questions about growth, he’s kind of a dolt. Economics can’t beat physics. Physics alone tells us that getting back to the previous trend is going to take more energy and effort than continuing the previous trend would have. There’s all kinds of entropy in the system.
Infrastructure is significantly worse at this point in time than the original projections. Instead of businesses expanding they completely closed resulting in not just a loss of further growth, but of existing economics. The fact that no economic loss or gain scales linearly in the economy as a whole.* And the list goes on.
The bottom line is that you’d have to deficit spend like a drunken sailor on shore leave to beat the current economic inertia and then do it some more to boost the economy back on the old predicted track. The odds of that being allowed to continue for more than the first two years a slim and none, and slim has already left town. And that’s provided that you already beat the spread and retake both the House and the Senate.* Let alone beating the odds that you have a Congress that will let Sen. Sanders do that much deficit spending.
The old predicted path is lost to us not because it’s impossible to get back there, but because it’s impossible the way things stand to get the American People to agree to the things required to do to get there. It’s a matter of political will not economics per se.
*(There are specifics involved in each individual case, but it’s part of the reason that modern economic theory says that stimulus dollars spent properly are guaranteed to return 1.x dollars to the economy instead of 1 or < 1 dollars to the economy. Sane theories merely quibble over how much extra it returns, not that it returns extra. The inverse also must hold true. Truly take a dollar out of the economy [e.g. by firing a worker and then hording the extra money or destruction of perceived value such as base land prices falling on land used as collateral.] cause a greater than a dollar lose to the economy because that’s one more dollar that can’t be re-spent. It’s the very basis for Keynesian Economics and deficit spending.)
*
(Admittedly that’s looking more and more likely with Scalia’s death and the Republican blockade on even considering a nomination. But IOKIYAR exists because the rules are different for Republicans and Conservatives than for Democratic Party and anyone to the left of Nixon. So I would not count on the Repubs paying the price at the ballot box.)
Okay… that’s an odd error on my part. I did not know that the system would take two * right next to each other and treat that as a bold/strong command. Duly noted.
How did Germany and Japan become such export powerhouses after WWII? ALL NEW PLANTS. (And some favorable trade policies to protect infant industries.)
What is 3-D manufacturing going to be applied to?
What will renewable power do to cost of doing business?
You just point out that the fiscal policy cannot depend on past policies of stimulating real estate, construction, and consumer goods. Where fiscal policy must aim is sustainable physical capital investment that the private sector has been unwilling to build. It is not necessary to have major deficit spending beyond one or two years if you get full employment at highest skills (another capital item) quickly and tax back progressively to lower the deficit and begin the reduction of waste in the national security agencies of the US government. The rest of the world likely would like some respite from fearing and overspending to face the most expensive military in the world. And the current returns from diplomacy potentially immense even as expanding necessary costs to shut down non-state actors with the assistance of state actors is small comparatively. If you had the civilian jobs for people to go into with equal or better pay than the military, you likely could trim the US national security expense to $300 billion.
Then you recycle decommissioned military hardware and store the commodities in government storage facilities as strategic reserves in the USA. No more fretting about finding minerals in Africa, Latin America, or Central Asia. And prudent management–are we in the US even capable of that any more–can hold on to those reserves for hundreds of years, even purchasing defunct military equipment from other countries to add to the reserves until they catch on and start demobilizing themselves. We no longer need to protect mines; we need to recycle what has already been mined back into longterm storage. It takes long enough to dismantle stuff that one can watch for the response from other countries. We’ve got enough stuff in inventory that we will remain strong through a great amount of build-down.
Breaking up banks is not to stimulate the economy; it is to dramatically reduce the risk of systemic economic failure driven by fraudulent bank practices that persist even after their proven catastrophe in 2007-2008. It also reduces the political power of banks over the government to the disadvantage of other players in the economy. It was not long ago that many states did not allow branch banking, essentially because of risk and corruption.
Keynesianism is kind of simple minded in the long-term because it does indeed make a difference in future cycles what spending in the current cycle is spent on. Destruction of infrastructure in foreign nations has the effect of impoverishing your potential trade partners’ customer base.
If all this is is an argument that the American people cannot be persuaded to do what is required to become an nation of peace and prosperity, we have left the realm of economics for that of culture. And we need to ask why it is that that is. Because it is a severe form of dysfunction that must be addressed before everything else.
At the moment Sen. Sanders seems to be operating as every Presidential candidate in recent history has operated. Give him the Presidency and a Congress and the chance to operate for two years, and then come back and hold an accounting. The current political process is so dysfunctional that no candidate on the Republican side dare operate like that. And on the Democratic side, the excuse of the Republican Congress becomes a millstone for policy, conceding what Mitch McConnell created the day after the election 2008. That is capitulation masquerading as realism and one wonders who benefits from that political approach. It certainly isn’t the people who seek the promised America of peace and prosperity in vain hope from Donald Trump.
The fact is that Sanders’s economic proposals are in any other time and place moderate, practical, and demonstrated in practice.
The defining mistake of the Obama Administration was not spending enough. All of the Sanders critics agreed at the time, and virtually all of those same critics (Delong in fact supports Sanders) have been and are screaming for more spending.
What I find interesting in this line:
“The bottom line is that you’d have to deficit spend like a drunken sailor on shore leave to beat the current economic inertia and then do it some more to boost the economy back on the old predicted track.”
This in many ways sums up the political argument. It is basically the argument for Clinton: but in the end it is an argument for what you call “economic inertia”.
Some political platform you have there.
So the alternative is to fight on traditional New Deal Policies. Because it is certainly true that Sanders probably won’t win the argument, but it is even more true that you are certain to lose the argument if you never make it.
There is a reason Trump has exploded. There is a reason Sanders has put up a far tougher fight than anyone expected.
The numbers are probably known by all here:
3 Economic insecurity has increased. Things that defined the middle class – like access to college – have become more expensive.
The author here said some time ago that things are better than people think: and in some ways that is true. But in most ways the comment betrays a disconnect from the economic reality of Americans.
A friend tells a story the Saturday Night before New Hampshire of a dinner with a Senator and many old New Hampshire hands. To a person they didn’t understand the Sanders appeal. They were resigned, and a bit angry.
This same friend mentioned an account of Hubert Humphrey’s last campaign in 1972. You could substitute Clinton’s name for Humphrey’s and it would be identical. A sense of anger that people don’t remember. Shock at how the electorate has changed.
This is how political change happens, I think. Clinton was as popular among people under the age of 30 in Iowa and New Hampshire as George Bush was among African Americans 2004.
Read that again.
The politics of the 90’s are dying – and their last champion is waging the last campaign based on that era’s ideas. Time has passed those politics by, and the veterans of those campaigns no longer really understand the electorate.
As a result what once passed as tactical arguments are shown to be ideological arguments, and the ideological divide in the Democratic Party is far greater than in the Republican. It is amusing to see the blogsphere response – which has been completely clueless about Sanders from the very beginning – try to catch up.
It is disappointing to see the bad math. There are parts of Bernie’s agenda I don’t agree with.
But he is broadly right, both politically and economically.
And those who profess disinterest in the argument either don’t understand it, or are trying to avoid taking sides.
That is a very important point. I can see how he gets a 5% increase in GDP the first year and declining thereafter. If you stimulate the economy with infrastructure jobs, an increase in the minimum wage and in SS and a dividend in health care and education costs, it most certainly means you will get larger national income GDP). That is what a his political revolution is all about. The workers are there, the work is there, we need a revolution to make it happen.
It’s been done before recovering from a bad recession;
1983, 4.633.
1984, 7.259.
1985, 4.238
1986, 3.512.
1987, 3.462.
If Bernie duplicated that, we’d be fine
You mean like how they trot out Romer’s analysis of having a much lower unemployment rate than was achieved through the stimulus? Geithner’s “recovery summer”.
Concern is noted. Concern is massively unpersuasive to me given they will do what they’ll do no matter what.
There is also Austan Goolsbee’s paper on “why sub-prime mortgages are good for poor people.”
If supporting unrealistic growth projections gained Sanders’ campaign something, I’d be more willing to accept it. I just don’t see how it gains them anything worthwhile.
No matter; I’m still voting for Sanders. I want him to do well, though, and don’t want his campaign to hand his opponents a weapon.
It does. It means he doesn’t have raise taxes as much.
Getting 5.3% GDP growth off of a recession or off of austerity is not that big a jump. Especially if the fiscal programs generating it have the effect of lowering the cost of consumer or business spending in the domestic economy and the taxes suck that into paying down the deficit instead of more asset bubbles. That will deflate executive salaries and non-productive assets like posh buildings in favor of assets that actually support the work that labor does. As the deficit comes down, so does the public debt, providing more favorable terms for private (corporate) debt.
Changes in tax law punish short-termism and high marginal increases of profit releasing decision-makers from the iron grip of cost cutters, who focus on labor to the exclusion of all else.
Where we need to be going in the economy is toward high-quality living standards (not necessarily expensive living standards) on fewer natural resources, less artificial energy, human participation in their amount of labor, and employment of maximal intellectual leverage of productivity. Where we are at the moment is he exact reverse of that allocation of resources. Transform that allocation and the immediate effect will be a transformation of satisfaction even as physical or monetary growth begins to moderate. Most likely the first effects will be major growth in production of capital and quasi-capital (mixed consumer-capital) goods and services.
The more I think about the myopic focus on the marquee growth rate, the more I think it is a distraction from the vision of the economy that needs to be built. We need to stop subsidizing paper capital as we have for 35 years and anchor physical capital in the US. Where you see miles after miles of empty factories and stores and office buildings, you are seeing the stripping of physical capital to transform it into paper capital to facilitate playing the Wall Street casino. Or to build the physical capital of casinos; isn’t it interesting that we have two billionaires who have made their money in casinos and are financing candidates in this election in order to preserve that scavenger of paper financial assets.
That’s more important than GDP growth numbers. Trump and Adelson are graphic examples of the failure of the Reagan revolution by being two of its greatest successes. Likewise the Kochs and likely every politicized moneyman who is active. Is it any surprise that a real estate developer in Texas was behind the Swiftboat Veterans for Truth three years before the start of the housing mortgage meltdown?
In the Clinton era, the new economy was the information economy that was going to enrich the rustbelts of the country. Well those profits were well and truly blown in the IT meltdown and Bushonomics.
How would you characterize an economy that actually values people as customers workers, citizens, vendors, and taxpayers once again instead of defrauding them? That, not GDP growth, is how you will know that a Sanders economy has arrived. It’s not the incentives to work that are at issue but removing the disincentives of treating people as human beings. Mr. Gradgrind nitpicking over numbers and envying people decent leisure shows the extent to which people are being treated as commodities.
absolutely, yes
Maybe I’m just willing to tolerate a more major dose of unicorns and fairies on the campaign trail. Maybe I’m more than willing — maybe I’d like us to have a little pixie dust and magic, and get people to believe that maybe we can after all re-capture the government for the benefit of everyone. If it takes supposing a 5.3 growth rate is inevitable, to me that’s a stretch (a fib) in service of a worth goal.
Republicans justify their lies the same way. They want to recapture the government for the benefit of everyone. The way to do that is to cut everybody’s taxes. Job creation, trickle down, yada, yada, yada. The economy will grow by leaps and bounds! A rising tide lifts all boats.
Everybody knows it is a lie, but it sounds good to everybody paying taxes which is most voters. I might even know it is a lie, but I can pretend to believe it for a few thousand a year. That’s why it works. It is a lie that hurts Democrats and helps Republicans. It is a lie that self serves.
Who are you supposed to be fooling when you claim that Bernie’s plan would bring – would need! – impossible levels of growth and impossible levels of productivity growth? How many taxpayers – most voters – will pretend to believe in that impossibility?
This is not a lie that helps Democrats. This is not just fudging the numbers. This is more like climate change. There is plenty of room for arguing about ways and means of addressing it and one can imagine some fudging there. But denial? That’s beyond the pale.
This isn’t like forecasting a recession or the Fed trying to guess what unemployment will be in two years and getting it wrong. This is Bernie promoting the work of an economist who is arguing Bernie’s plans can deliver things which our economy cannot produce.
No developed economy has ever grown at those kinds of rates on a sustained basis. Not the US, not Germany, not Britain — not even Bernie’s beloved Denmark. Developing economies grow at those kinds of rates (and sometimes higher, obviously, as in China’s case) as investment drives their productivity up to levels closer to the developed world, at which point they slow down like the rest of us because productivity then relies on new technological discovery.
Discussion of your very point:
“It’s not controversial to say that a historically deep recession ought to be followed by a period of historically strong growth. Every macroeconomics textbook teaches that changes in GDP can be split into two components: short-run variation driven by aggregate demand and by monetary and financial factors, and a long-run trend driven by population growth and technological change. While all sorts of things that constrain or inhibit spending can cause temporary dips in production, over time it should converge back to the fundamentals-determined trend. Unless they involve the destruction of real resources — and they don’t — recessions should not have lasting effects. A direct corollary of this textbook view is that the deeper the recession, the stronger should be growth in the following period — otherwise, there’s no way to get back to trend. The people who are saying that Jerry’s growth numbers are impossible on their face are implicitly saying that that we should expect all output losses in recessions to be permanent. This is not orthodox economic theory, at all. Orthodoxy says that the exceptionally deep recession should be followed by a period of exceptionally strong growth — and if it hasn’t been, that suggests some ongoing demand problem which policy can reasonably be expected to solve.”
http://jwmason.org/slackwire/can-sanders-do-it/
There is a lot of new technological discovery waiting to be deployed, just as there was when Bill Clinton was elected. What was missing from the information revolution was regulatory clarity. Al Gore provided that by pitching it as being a common carrier; thus the image of an information superhighway that drove wonks in the know nuts. Guess what net neutrality returns us to.
The technological revolution waiting to bloom has to do with sustainability, but it is not high-tech. It is strictly appropriate tech. It focuses on delivering rural electric, information, and other services in ways where the grid either will never reach or current reaches through electric co-ops. It focuses on moving finally from mining to recovery and storage. On moving freight from superhighways to high-speed rail tracks. On improvements to water-borne inland transport. It is highly geared to transportation because that is where the greatest potential cost reductions to business and consumers are. And privatization and security concerns have made air transport virtually unusable and unprofitable once fuel prices start rising again. It is an energy conservation technical revolution that is now 40 years overdue.
And except in some innovations, it won’t be a bonanza for investors; it will be major cost reductions or reduction of cost increase trends. All it requires in ending the subsidies of the incumbent industries. A Sanders tax policy can do that.
I can’t shake the image of Mike McGinn here.
There arent enough jobs for college graduates now. We will lose net 3.5 million in the next 5 years to automation (includes white collar jobs). Getting people to retire and spend money while keeping them from being destitute is a good idea. Hell it opens up people to do community building volunteering because they want to, can affird it and have time.
yes. it’s a complex interlocking picture, not just changing one component. work is part of how ppl have meaning in their lives but that is real work, rewarded and presumably connected with one’s interests. making ends meet with 3 part time jobs, fast food or adjunct teaching is not the kind of work i’m talking about.
much more to say, but take a look at germany or austria or the netherlands – how do they do it? btw it was in the netherlands that a social worker talked to me about ppl becoming depressed when they had no work, although they had education, housing, and subsistence support, and I expect Oui has much to say on this. the person took me on a tour of community centers for unemployed middle aged workers [result of automation]
If you implement free child care that is not something you can automate. At least some people would want to help take care of children a few days a week in non classroom settings.
Its basically laying the groundwork for post scarcity.
yes; and not only is much environmental work is labor intensive there is much to be done. this “labor saving” idea must go now that we have the technology; also the idea that prosperity derives from growth. there’s just so much rethinking to be done. the drug problem is so much about ppl caught up in a treadmill of hours of underemployment, undereducation and no prospects for anything different, young ppl who can’t afford to move away from home, can’t afford school, etc etc etc. [stopping here before more rant]
You know, the freak out by the right is awful now, but I can’t even begin to really imagine the freak out of the right and center when they realize that if we continue on our present trend we really will get to a post scarcity world.
I’m not sure I really want to be around for that. The number of fainting couches alone should however keep the factory bots busy for at least a decade. But I’m afraid there’s no easy automation cure all for the shear amount of whining and bitching that’s going to occur.
Im sure we can whip up some sort of mood improving pheremones …
Larry Summers is all over this on his “secular stagnation” theory. Anything to obscure the fact there is no demand from the 99%ers. The consumption of the 1%ers cannot by themselves make up that gap in GDP (historically it represents 70% of our nation’s GDP) and that raises the debt/GDP ratio. Horrors! Who is going to increase production in that climate?
That is the explanation of the misery from the DNC establishment.
Maybe you could take a look at these charts of labor participation in similar societies?
http://www.bloombergview.com/articles/2016-02-18/more-americans-should-be-working
“prepared for the campaign” is a misrepresentation. Whether you intended it to be or not.
It was not solicited by Bernie’s campaign. In fact, the author is an admitted Hillary partisan. It was remarked upon by Bernie’s people, but unsolicited.
And where are the hard numbers in rebuttal? By anyone?
Link?
For me, this whole thing is a reason to SUPPORT Sanders, just like Clinton testing negative anti-Bernie messages (at least according to dailykos) is a reason to support her.
I don’t give a shit about playing fair. The bottom line of political reality is that nothing sufficient is possible without a major realignment. Almost by definition, you can’t reasonably predict one of those.
I’m quite surprised that Sanders is doing this. I didn’t think he had it in him. And I’ll be so relieved if he does.
The right dreams big, then settles for half measures. The left dreams small, then settles for crumbs. We need pie in the sky. We need lies, fantasies, emotions, grand stories of slaying the dragon. We need to make people feel something, not just think something.
But of course, leftie wonks (not the ones on the right) who are all brain and no heart will try to crush the dream. Because it’s fucking ridiculous. It’s wholesale nonsense. (Nu? You expect Bernie to pay retail?) It’s utter bullshit, just like all rallying cries.
We will never change this entrenched shitslog of a system without a motivated political movement. We will never achieve a motivated political movement without big crazy lying nonsense bullshit dreams.
You will not change the “entrenched shitslog of a system” without getting rid of the constitution of the United States. That is exactly what the founders designed. They designed a system to make sweeping change nearly impossible without massive majorities.
That’s why it took a civil war to get rid of slavery or the Great Depression to bring on the new deal.
The New Deal.
Er. There was more to that, but you can probably imagine it better’n I can write it.
That took three years of Great Depression – times that were miles and miles worse than today – to give Roosevelt the massive majority I mentioned.
Actually goes to prove Tom’s point, not yours. It did in fact take massive majorities to get The New Deal through.
I would love a political reality where it even looked like the Dems were going to have a romp big enough to get those kinds of majorities in both chambers of Congress, but I really don’t see us actually having that particular political reality.
Dreaming big is important. But not if failing to reach that dream is going to demoralize your supporters and leave you in a worse position than you are in now. I worry very much about all the new ‘BernieBros’ who are just getting involved in politics completely checking out if he can’t deliver by the midterm elections.
Correcting the current structural problems is a very long term proposition. It took the GOP 40 years to break America before most Americans really tuned in. I find it very hard to believe it won’t take us at least that long to fix everything. Not because of physics, but because of a lack of political will.
I agree that there’s a risk of Sanders supporters checking out when Grand Change is not forthcoming. I don’t think it’s a bigger problem than them not getting involved in the first place, but I guess that’s a judgement call.
As for the New Deal … yes, it took years and a massive majority to happen. But look where we are now. We’ve put in our years. Not as bad as the Great Depression, but … not good. And still ongoing, of course. So now we need majorities.
How do we get those? With the battlecry, ‘I’ll make things slightly better, to whatever extent is politically feasible!’ or with the battlecry, ‘Political revolution now!’
To my mind it seems obvious that both candidates will deliver the same things. Mediocre, weak tea improvements. Except one candidate will say, “Yay! I delivered mediocre weak tea improvements, this is the most you can hope for!” And the other will say, “It’s a fucking shanda that I only delivered mediocre weak tea improvement and its THEIR FAULT! Them, right there! So vote your asses off and give me a majority and lets kick them in the brain and get this shit done.”
Not saying it’ll work. But at least one path has a tiny chance of leading to real change.
“…And it’s true that Friedman isn’t officially part of the Sanders campaign team. But they’ve previously relied on his analysis of their universal health care plan, and the campaign’s policy director has repeatedly praised Friedman’s paper…”
(http://www.motherjones.com/kevin-drum/2016/02/bernie-sanders-responsible-gerald-friedman)
Plenty of sources for M. Friedman’s announced primary choice.
I agree completely. “Facts have a liberal bias” isn’t just a funny slogan, it is also true. The day it stops being true is the day I stop being a liberal.
Watching Maddow’s interview with Joe Biden last night he brought up how good things really are in the US compared to our neighbors’ economies. He added that the US has added more jobs than any other country, on and on.
What Joe brought home was that Sanders & Clinton haven’t based their campaigns on the successes of our economy under Obama, the advances in civil rights. Instead they both seem to use as a starting point the ‘anger’ of the middle class for their own platforms.
That leaves the candidates with an emphasis on, yes, rainbows & ponies. So the incentives become promises of a brighter future that is compelling yet lacks the foundation of reality that is a major part of the Dem Party structure.
We don’t have as bad a record as we blame ourselves for. What we do have is a hard slog ahead that will only be made sloggier if and when the reality box isn’t checked.
This is where the Bernie crowd loses me. They take good ideas and then botch the math. Then they get mad at you and call you a stooge for the corporations for telling them they botched the math.
They remind me a bit of the Paulbots calling people Nazis for saying the gold standard was economically stupid years back.
The US economy cannot sustain 5.3% real GDP growth, unless Bernie’s got some sort of magic technology to jack productivity growth through the roof.
The labor participation rate isn’t going anywhere near the 1999 level for the foreseeable future because of demographics.
His Medicare-for-All plan is nonsense.
It’s become pretty obvious that the Sanders people never intended this campaign to be anything other than a protest. Now they’re like the dog that finally catches the car and doesn’t know what to do. So they bullshit about it.
I hate Clinton’s foreign policy views, and I don’t think she’s half as smart as people on teevee routinely suggest she is, but at least the math is in the ballpark when her people put together a proposal.
70% of our GDP is consumption! Who is consuming these days? The 99% are using ~1970 dollars.
Jared Bernstein had a less knee-jerk evaluation:
As an aging pundit who’s spent decades here at the intersection of dysfunction junction, both in and out of government-I’ve seen the sausage made at every level, people, and damn…it ain’t pretty-I too am drawn to path dependency and incrementalism. I’ve seen lots of market failure, but I’ve seen government failure too.
And yet, I would strongly constrain my criticism of those who feel otherwise. I admire their hope, their aspirations, the fact that they’ve had it with incrementalists posing as revolutionaries. I agree with them that we need a new model, as the current one is, in many ways, working as badly as I’ve seen it work.
http://jaredbernsteinblog.com/i-endorse/
No, it’s not “knee-jerk” — it’s a matter of being an economist and having some familiarity with growth theory.
GDP growth is a function of investment, labor and productivity (technology). To alter the growth path as radically as Friedman is suggesting, you’d need enormous technological change. There aren’t enough workers to generate those kinds of growth rates otherwise.
And, no, 70% of our economy is not consumption. 100% of our economy is consumption. 70% is consumer spending. The other 30% is investment, government and international spending.
Quote from the introduction of M. Gerald Friedman’s actual 53-page paper: “Warren Gunnels and Steve Wamhoff on Senator Sanders’ staff provided technical assistance in interpreting the Senator’s program but this work was done independently of the Sanders campaign. Mistakes, alas, remain my own.”
The paper in question: http://www.dollarsandsense.org/What-would-Sanders-do-013016.pdf
It’s not the Sanders camp making these claims, it’s Friedman. The Sanders campaign is being accused of Republican style voodoo merely because they they complemented his paper and its findings. Friedman called for discussion of his assumptions.
Narayana Kocherlakota and Matthew Klein don’t find any reason to reject out of hand the possibility of 5% growth.
Mike Konczal:
Lost forever? Then eternal slavery, or do we put the heads of the rich on pikes?
I think that it’s going to be tough, but the everexpanding universe of inequality will end up badly. Do the rich figure out a way to eliminate excess labor? It’s happened before.
We’ve certainly been on a 70-year bleed of eliminating excess labor and infrastructure worldwide, not nearly as rapidly as the previous 30 years but still substantial.
To the extent that timid economic policy locked in austerity politics, we did lose something forever. After all, optimism was one of the signature “assets” of the American workforce prior to the Reagan revolution.
This is a pretty good deconstruction:
http://rooseveltinstitute.org/praise-wonk-and-wonk-analysis-cea-and-sanderss-proposal/
“To alter the growth path as radically as Friedman is suggesting, you’d need enormous technological change. “
The problem is that no one really can predict technology change before the fact, and as a result economic forecasting is TERRIBLE.
However, if you take a step back, you see enormous economic inefficiency in the US in the Health Care Sector, which consumes at least 5% more GDP than it should.
There are very real productivity gains to be found in a Medicare for all program.
There would be enormous transition costs, but I think Delong, Krugman et all are failing to consider the effect on productivity resulting from health care reform.
I think you’re forgetting that almost all the gains from ‘Medicare for All’ comes from firing most of the people who work for insurance companies. You seem to be falling into the trap of thinking that more productivity == better. The fact of the matter is that technology and automation are on a course to provide massive increases in productivity but no corresponding proportional increase in the economic gains to the economy as a whole.
You really need to read up on automation and ‘Post Scarcity’ before you go around talking about how great tech advancements are for the economy as a whole.
The comments on this blog address your concerns. I did some checking and the current #employed in the industry is about 500K.
“If, as Wennberg and others have shown, a third to a half of all healthcare spending should be eliminated, then we need to accept one of two futures: a healthcare sector that is now $2 trillion will only be one of $1 trillion to $1.33 trillion in constant dollars, and employ proportionally fewer people a decade or so from now; or we need to accept that we are being overcharged for make-work and become sanguine about paying for it.
Somehow, I believe that the Protestant ethic that has remained an American constant since the Pilgrims landed in Plymouth will drive us more toward the former than the latter. The only debate worth having is over how quickly.”
(There are some other salty replies, too.)
http://thehealthcareblog.com/blog/2008/02/18/where-will-all-the-employees-go-by-eric-novack/
“In general, relatively few employees have been laid off because of technological change. The introduction of new
technology can be consistent with higher levels of employment and minimal displacement when the economy is
strong. Moreover, investment in new technology generally
takes place during periods of economic expansion when
there is also growth in employment.”
Technological change and employment: some results from BLS research (http://www.bls.gov/mlr/1987/04/art3full.pdf)
So if we want to capture any of that expansion in wages, we had best get employment increasing, no?
I did find this on demographics and another poster lower in the thread also discusses it…
…the aging of the population implies a long-term fall in the employment ratio, all else equal. But let’s put this in perspective. DeLong, for example, suggests that 0.13 points per year is probably an overestimate of the decline due to demographics. David Rosnick, applying the 2006 employment ratios of various age groups to the population projected for 2026, finds a larger decline due to demographics, on the order of 0.25 points per year. But even that leaves most of the fall in employment unexplained by demographics. By any standard, there is a lot of room to do better. But we have to agree that this is something that, in principle, demand side policy can do.
Show the math, and show where they botched it. The Bernie folks. Not the economist or his critics.
The campaign is full of delusions about 10-year trends. When exactly are they assuming that the various pieces of the Sanders plan go into effect? Which parts are complementary to the operation of other parts.
Can we get an omnibus plan passed in a hundred days by an incentivized Congress facing a crisis? Figuring out what makes it impossible tells who what else you have to work on before inauguration day no matter who wins.
Interesting thread here, thank you all for your numerous various opinions.
I would like to bring to all of you this very important but neglected point.
246 Republicans; 188 Democrats in the House http://clerk.house.gov/member_info/cong.aspx
Senate Republicans 54; Democrats 44. https://www.govtrack.us/congress/members/current#current_role_type=1¤t_role_party=Republic
an
The point is that with these current numbers in The House and Senate there is no way that any major policies of either candidates will get passed.
By the way those that claim there is no difference between the parties have a right to their opinion. I have one question for them. If there is no difference then, why are numerous pieces of legislation blocked?
Pieces of legislation that would help America gain strength. When offered by one party is blocked by the other.
If we do not vote a straight Democratic ticket then nothing will change or be accomplished. Currently the GOP in the Senate threaten blocking a Supreme Court nomination by President Obama. Do you really think if the GOP remains in control of the Congress they will not continue this form of strategy?
The GOP are fighting a political war. They are using a scorched earth policy. If they do not win they destroy believing the blame will fall on the Democratic Party.
By the way the “New Deal” was mentioned above. During that time Congress make up was
322 Democrats:Republicans 103: at the start. 74th congress.
334 Democrats 88 Republicans: 75th Congress http://history.house.gov/Congressional-Overview/Profiles/75th/
This is why FDR could accomplish all that he did. There is a clear difference in parties their proposed policies show it for all to see, if they have an open mind that is.
Those that belittle Blue Dog Democratic Party members. Just a few thoughts for you.The Blue Dog Dems vote for some of the Democratic Party legislation. It is true they do not vote for all of the Dem Legislation. The point here is if a Blue Dog Dem averages say 60% support of Dem policies. Is not that 60% a better average of support then any GOP member will vote for?
Just food for thought all.
246 Republicans x 175.000 votes to win = 43,800,000 votes required to end Republicans totally in the House.
175,000 x PVI = numbers of swing voters a campaign needs to organize to flip the district.
It’s the number of Republicans in the House after January 20, 2017 that matters.
It’s not as much an uphill battle as Democrats are pretending. It’s been done before. And dramatically divisive periods have been dramatically reversed.
Given the fact that it is now demonstrable that the conservative project is a policy failure and that the base of the Republican Party knows that it is a failure but has not said to itself why, someone should clue them in. “The era of limited government is over. And that’s a good thing.”
The New Deal was largely bi-partisan. Key components had majorities in both parties.
Something virtually everyone who has written about FDR the last 8 years has ignored.
Both parties had their liberal/conservative wings in those days.
I find that labeling a set of economic goals that would have been considered middle-of-the-road during the 1960s as immoral and ponies and unicorns a bit of a stretch for reasons to dislike Sanders’s economic policy. It likely show more about the professional constraints on American economists than the issues with sanders’s full economic plan.
That it claims to rest on practical politics instead of practical economics (Bernie can’t deliver) only makes it more interesting because there was a time when policy created its own politics. The New Deal, the Reagan Revolution, and even Obama’s bipartisanship foray had that effect.
The difference of opinion rests on the question that after Obama is out of office and some all-white person is in the Oval Office, how much more austerity are the American people willing to take? Even Larry Summers pre-empting the argument for Hillary Clinton now wants to put fiscal policy back on the table because monetarist economics has blown its entire wad. There is nothing the Fed can do now but raise interest rates; the question is when.
Just as in the period from 1932 to 1968, the key to prosperity is building the capital infrastructure that lowers the cost of production in the US and provides wider expansion of a better standard of living, the situation now is the immense waste over the past 48 years of natural resources, human labor, and intellectual effort and the misallocation of skills, education, and experience over the past quarter century.
When true prosperity returns, there will be high growth in production and low unemployment. And there will be a massive shake up in who has what jobs.
It is not the job of the candidate to do an accountable budget on conditions that are yet unknown. All that is required is a sense of how we get from here to there and what will be required.
Saying that the Republicans will not let him do it declares in advance that Democrats will not seek to win both houses (and by implication the states as well).
The assumption that the Baby Boomers are retiring is a half-truth. Most Baby Boomers have tried not to retire except when health issues or family issues have required it. Some Baby Boomers are working hard at jobs as unfunded volunteers but a decade or so ago were professional positions in social and health and environmental agencies.
Mothers and fathers who would rather be taking care of their children are working for half what a comparable single job was forty years ago. There is a strong suspicion that employers sought to make equal employment opportunity a cruel joke by adopting an overemphasis on cost-cutting that destroyed formerly broadly affluent customer bases.
If fuzzy math is a sin, the US national security agencies have permanent places in hell. Speaking of which, downsizing a lot of the purely jobs activities in the defense industry and reallocating those efforts to civilian efforts that lower resource use and costs for everyone could be a key policy that makes the fuzzy math less fuzzy. That would take some large-program costing out, which would provoke a state-by-state who-wins-who-loses analysis that might not actually be correct. We know how and when such data would be used in the current electoral environment.
It is interesting that Thomas Piketty has weighed in on the US election campaign. No doubt he hopes that the US will be a model for economic policy again.
Everything else is status quo, which boringly and consistently modelable.
There is a political battle going on in the economics profession as well. The charmers in the old guard are essentially making endorsements in the Democratic primary. That’s all that is going on. They have no special knowledge about what will or will not happen with the aggregation of Sanders’s policies. But we do know what will happen with status quo candidates — more of the same.
The real key is taking back congress and take it with people who will buy into the plan. That may be the biggest risk. If Sanders can do what is in his plan, it will greatly improve the economy.. The math here is not a sin. It works. Maybe not for ten years but a massive improvement. Sanders is not promising 5% per year. That was Friedman. But he is saying it will improve the middle class. If my Dad asked FDR about his prediction what would he have said?
It’s a sad comment on our body politic that “responsible math” is even a phrase.
Ouch, ouch, ouch.
Response to CEA letter from James Galbraith, former Executive Director of the Joint Economic Committee – the
congressional counterpart to the CEA.
http://big.assets.huffingtonpost.com/ResponsetoCEA.pdf
Yes.
Ouch indeed!
3)It is Not clear if Goolsbee et al actually read the report before issuing there open letter; in any event GF has stated that they didn’t bother to talk to him
If you live in a safe Dem district (as i do) then look around for a place you can help, as I am
So it’ll be too good to be true, everyone will stay home and watch tv and make babies.
You know, back in the sixties I heard the same thing about welfare for black people.
Not saying that there won’t be families where an adult decides to stay home to raise the children. But there are rich people, with amazing educations, who stay home while the partner goes to the bank and counts the money coming in.
The argument against raising education, wages and equalizing justice for all is inherently classist and, when used in America, becomes dangerously racist. And we’ve been living in it for awhile.
And if you use Goolsbee as a reference, at least point out whose team he’s playing for.
GDP fluctuates quite a lot from year to year. How accurate were economists in predicting these fluctuations over time?

It will continue to do so going forward, of course, and it’s no more unlikely to return to higher levels over periods of time than lower levels. The experts criticizing Sanders plans have their own fuzzy math that serves their purposes, those being, I’d guess, to highlight outcomes favorable to the establishment interests that sponsor them.
If Reagan could expand the economy by 5% for two or three years by cutting taxes for the wealthy, why wouldn’t expanding the wealth of the working class do as well?
People presume that the money saved by the average worker for healthcare doesn’t get recycled. But to me it means new cars, new technology, new markets with millions participating. If there are ten million new workers making union wages rebuilding our infrastructure I see more bulldozers and diggers and a few fewer tanks. I see lots of people with college degrees making more money than people on welfare.
Essentially, we are not arguing about economics at all, because you can move numbers any way you want to prove or disprove your theory. We are arguing, really, about hope, and that’s what the Democratic primary is about. Millenials understand. Boomers not as much, perhaps because they’ve been in the pot of boiling frogs too long.
There is a reason why a lot of working class voters who were going to tag along with a Clinton candidacy are getting fired up by Sanders. From my recollection, you have to go back to JFK to find a candidate with as much hope in the dank well of politics as Sanders displays. And JFK was only trying to avoid WWIII.
Clinton says we can’t have single-payer. And indeed there are lots of economic interests against it, many of which have given Clinton her walking money.But even if her financial situation wasn’t braced up by the rich, the same still holds. If you are unable to do what’s required, it won’t get done.
I suspect I might be farther down the foodchain than a lot of posters here. I’m living on a federal pension and a tiny slivver of social security. There hasn’t been a decent increase in cost-of-living for about a decade. Housing prices in Portland have pretty much tripled.
So what happens if Sanders gets the nomination? He may lose, but with twenty seconds of tv on ABC last fall he managed to catch up to Hillary. And there is a gut hatred of Clinton among the right and middle. Her trudge to the White House has a lot of baggage. Sanders isn’t frightening the average voter.
So the question is: Why not? Because putting people into single-payer is impossible? No, it’s not impossible. Look around the world. Infrastructure not going to happen? It’s what drove the Chinese economy for the last half-decade. Higher wages? They seem to manage in Europe.
So why not? I remember long, long ago sitting in the Fillmore East waiting for the show, and they showed a thirties cartoon that had a battle between guys and gals who were singing “Sunshine” while there were bad guys who sang, “I don’t want to be happy.” Now I’m sure that when the Sunshine folks shot sunshine bombs at the unhappy people most of the audience presumed that there was some hidden meaning about psychedelics. But it’s the same, from the thirties, sixties and now. It’s like slapping Malcolm McDowell at the end of “O Lucky Man!”
Or we admit that the world slowly crumbles. Your choice.
It wasn’t cutting taxes on the wealthy that goosed the economy, it was upping by twice over David Stockman’s estimate of how much additional funding the Pentagon required to beat the Soviet Union, an estimate that contained an error on the upward side. Read The Triumph of Politics: Why the Reagan Revolution Failed from 1986.
The Republican’s economic miracle from Nixon to W has been military Keynesianism and still is. Where else can basing give you identifiable pork barrel without visible voting for pork barrel. Why the GOP loves omnibus bills.
Indeed, the only stimulus Republicans can manage to agree to is defense contracts.
I have more to say about this, but for now, here are a few stats from the bureau of labor statistics.
Unemployment rate (U3 official rate) end of January 4.9% seasonally
Rate not season adj 5.3
Alternate rate taking marginally adj and part time bc no full time job
Seasonally adj 9.9
Not adj 10.5
Using not seasonally adj numbers:
U3 unemployment.8.3 million
Part time workers 6.4 ( who want full time jobs)
Marginally attached 2.1m
Total U6 unemployed. 16.8 m
Participation rate in Jan 09 65.4
Rate in 2016 62. 3
Population 252.4
Difference in rate times population = 7.8 million potential added workers,
Grand total16.8+7.8= 24.6 million ” unemployed” in today’s economy.
So with or without changing the participation rate there are lots of people who could be employed today. And, yes, more will choose not to work in the new paradise but some more may find it worthwhile if median income increases significantly. Friedman makes an assumption that Sanders taxes will not “catch up” with spending in the beginning and hence, there will be a very fast increase in economic activity. I am not sure if he assumes any inflation.. That could be a problem. But even 15 million more workers with income of 70k is pretty substantial. Just sayin. ( disclaimer clause: did this very quickly, so no guarantees math is good)
It would be just great if the genius economists had some, you know, real detail behind their missive. Maybe they work for Clinton.
No one estimates the number of unfilled jobs. Non-participation rates are generally those who have given up looking because their experience has been frustration for some amount of time or another.
It is a real test of a culture to face what one would do if one did not have to work, one that turning all activities into commodities obscures.
It is pretty well known that anti-Vietnam organizing in the late 1960s or early 1970s in many places depended on the people living with people receiving welfare checks. Or on pooling of incomes from minimum wage jobs. Who was working and who was not? Who had jobs and who didn’t?
Who is participating in the workforce and who isn’t.
Seeing participation as a moral virtue is extending morality into an area of moral ambiguity.
Also, there are well over two million people in jail, most of whom are there for drug related from Clinton’s assault on the AA community through his crime bill.
“…his crime bill.” Yes, the crime bill Sanders voted for, joining supermajorities in both houses of Congress.
These attempts to mislead get really tired.
Those folks are still available to be released into jobs in the economy, dignity, and paying taxes instead of being counted as a cost. Regardless of who voted for it. It was 22 years ago. It was a panic vote. It did not derail the Gingrich revolution. It had the negative effects that its critics anticipated. It’s time to get prudent policy back.
There are actually numbers on job openings from the BLS.
Non-participation is REALLY complicated.
15 million more gets us another trillion dollars in GDP, at least. That is five percent and there is a chance for more. I haven’t read his analysis yet but it is not outrageous other than there is no one to pass it all.
David Dayen: The Pious Attacks on Bernie Sanders’s Fuzzy Economics
The true employee bloodbath has been in the state govts.
The US is down about 600K public sector jobs, mostly at the state and local level.
This is about 40% of the unemployment.
Monetary policy and QE has weak effects.
Monetary policy will not be successful against strong opposing contractionary fiscal policy.
Austerity blocks the transmission of QE.
Fed is considering inflating interest now. But without considering what that does to those 1970 dollars the masses are given to spend.
http://economistsview.typepad.com/economistsview/2016/02/quantitative-easing-walking-the-walk-withou
t-talking-the-talk.html
Personally I think higher interest rates mostly helps the upper incomes. It makes everything else more expensive.
“Because of constraints on the supply of labor and capital, the alternative profile that I propose would push upward on real wages and real interest rates. The key to my analysis is that both real wages and real interest rates are unusually low by historical standards. I use conventional elasticity estimates to argue that the supply pressures induced by the alternative growth profile would only be sufficient to push these prices back into more normal ranges.”
https://sites.google.com/site/kocherlakota009/home/policy/thoughts-on-policy/2-19-16
“…delinking health insurance from employment, making college free and increasing Social Security benefits — you’ll realize they mostly would reduce workforce participation on the margin.”
What a load of bullshit this is. This is much more than delinking health insurance from employment. Bernie wants to establish health care as a right, not a privilege of employment by eliminating the role of the predator insurance companies that contribute nothing to health care except make it the most expensive and least effective of any major industrialized country in the world.
Attending college full time is a full time job in itself. Free college tuition does not include a guaranteed income and free housing. This is only free tuition probably not even certain fees. Unless you’re wealthy you still must have to have a job to live but this time with a higher minimum wage you might be able to do it one outside job instead of two.
What a cold blooded thing to say that increasing social security would decrease the margins of employment participation by allowing seniors to actually enjoy their hard earned retirement without a job.
I could go on but I’m starting to fell ill.
It’s nice that Catherine Rampell has read Bernie’s economic plans so we don’t have to. A good start to build a bullshit mountain but that is still quite a construction project. The problem in building a good working bullshit mountain are the slopes, they tend to get slippery. What we need is some good old fashioned gravel. We need some analysis from bi-partisan organization with experts to help us tell the difference between what’s good for us and garbage. Bernie’s position is the garbage.
No worry, The Washington Post has a lot of resources for this project. They found the perfect vehicle, The Committee for a Responsible Federal Budget (CRFB) complete with a nice track record. Speaking of experience, this was “the primary vehicle advocating private equity billionaire Peter Peterson’s debt reduction agenda, including cuts to social safety net programs — has allowed corporate donations to influence its work on budget issues.”
We’re not done yet. “The organization was used in the early 1990s to create a front group for tobacco companies during the battle over President Bill Clinton’s health care reform proposal. That group, called the Cost Containment Coalition, presented itself as a civic-minded coalition of those interested in finding the most responsible solution to the health care crisis.”
After taking a good deal of money from the tobacco companies the president of CRFB Carol Cox-Wait (married to Philip Morris Vice President Bob Wait) said, “They contributed to us, and they may have seen it that way, but what we were doing was a very serious study referring to a report on health care reform costs released by the CRFB. Calvin H. George, tax counsel at the Tobacco Institute, the industry’s lobbying arm, described that report as “useful” to protecting tobacco profits.
“Cox-Wait remains on the board of the Committee for a Responsible Federal Budget, which is now run by Maya MacGuineas. Last year, the CRFB created a new entity called Fix the Debt, also headed by MacGuineas and funded by Peterson and multiple CEOs and corporations. Fix the Debt is calling for a grand deficit bargain to be reached by raising revenue, cutting spending and reforming social insurance programs.”
I want to wish the Washington Post good luck with their bullshit mountain project, but I think the gravel is not going to work, especially from this outfit.
http://www.huffingtonpost.com/2013/01/24/crfb-corporate-funds_n_2545878.html
Well, no surprise to find Third Way tentacles in there, was it?