Try something different:
http://www.addictinginfo.org/2016/03/14/why-a-wall-street-investor-endorsed-senator-bernie-sanders/
Why A Wall Street Investor Endorsed Senator Bernie Sanders March 14, 2016 9:23 am ·
Asher Edelman inspired the character Gordon Gekko in Oliver Stone’s 1987 film, Wall Street , played by Michael Douglas. The infamous stockbroker, who made a fortune buying and selling companies in distress, was recently asked on CNBC’s Fast Money , who he would endorse for Bernie Sanders. His answer was surprising, but his reasoning is not:
“Bernie Sanders, no question,” said Edelman. , “I think it’s quite simple again. If you look at something called ‘velocity of money… That means how much gets spent and turns around. When you have the top one percent getting money, they spend five-ten percent of what they earn. When you have the lower end of the economy getting money, they spend a hundred, or a hundred and ten percent of what they earn. As you’ve had a transfer of wealth to the top, and a transfer of income to the top, you have a shrinking consumer base, basically, and you have a shrinking velocity of money.”
http://www.commondreams.org/views/2016/02/23/sanders-economic-plan-controversy
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Economist James K. Galbraith wrote a letter responding to the CEA criticisms, saying:
I respond here as a former Executive Director of the Joint Economic Committee – the congressional counterpart to the CEA.
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.
[. . .] [L]et’s first ask whether an economic growth rate, as projected, of 5.3 percent per year is, as you claim, “grandiose.” There are not many ambitious experiments in economic policy with which to compare it, so let’s go back to the Reagan years. What was the actual average real growth rate in 1983, 1984, and 1985, following the enactment of the Reagan tax cuts in 1981? Just under 5.4 percent. That’s a point of history, like it or not.
You write that “no credible economic research supports economic impacts of these magnitudes.” But how did Professor Friedman make his estimates? The answer is in his paper. What Professor Friedman did, was to use the standard impact assumptions and forecasting methods of the mainstream economists and institutions. For example, Professor Friedman starts with a fiscal multiplier of 1.25, and shades it down to the range of 0.8 by the mid 2020s. Is this “not credible”? If that’s your claim, it’s an indictment of the methods of (for instance) the CBO, the OMB, and the CEA.
[. . .] It is not fair or honest to claim that Professor Friedman’s methods are extreme. On the contrary, with respect to forecasting method, they are largely mainstream. Nor is it fair or honest to imply that you have given Professor Friedman’s paper a rigorous review. You have not.
[. . .] What does the Friedman paper really show? The answer is quite simple, and the exercise is – while not perfect – almost entirely ordinary.
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.
That, by the way, is the lesson of the Reagan era – like it or not. It is a lesson that, among today’s political leaders, only Senator Sanders has learned.
Again, “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.”
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Read the rest for yourself if you want to learn something about economics)
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