When Wonks Attack

Beltway wonks are dismissing Bernie Sanders’s economic plan as unserious and unrealistic. Here’s why they’re wrong.
by J. W. Mason

My old professor Jerry Friedman wrote a piece several weeks ago, arguing that a combination of increased public spending and income redistribution (higher minimum wages and other employment regulation favorable to labor) proposed by the Sanders campaign could substantially boost growth and employment during his presidency.

This piece has gotten a lot of attention in the past several days. Most notably, it inspired a letter from four former Council of Economic Advisers (CEA) chairs strongly rejecting the claim that Sanders proposals could “have huge beneficial impacts on growth rates, income and employment that exceed even the most grandiose predictions by Republicans about the impact of their tax cut proposals.” A number of prominent liberal economists have endorsed the CEA letter or expressed similar doubts.

I want to try to clarify the stakes in this debate. There are three questions, each logically prior to the other.

Is it reasonable to think that better macroeconomic policy could deliver substantially higher output and employment?

Are the kinds of things proposed by Sanders capable in principle of getting us there?

Are the specific numbers in Sanders’s proposals the right ones for such a really-full employment plan?

The second question doesn’t matter until we’ve answered yes to the first one. And the third doesn’t matter until we’ve answered yes to the first two.

much more
https://www.jacobinmag.com/2016/02/mason-bernie-sanders-jerry-friedman-economists-employment-wages-growth-cea/