Tuesday, February 23, 2016

By Definition "The Establishment" Is Always A Force For Conservatism, Preserving The Status Quo


Increasingly loathed Democratic Party bosses like Schumer, Wasserman Schultz, Hoyer, Emanuel, Van Hollen, Israel can't understand why Bernie is doing so well. They want to stop him, of course, but, according the a report from Lauren French and John Bresnahan, they also want to emulate... something. Chuck Schumer will never feel the Bern but he wants to see if he can steal some of the magic for his repulsive batch of schumercrats running for Senate seats-- Patrick Murphy (FL), Katie McGinty (PA), Tammy Duckworth (IL), Chris Van Hollen (MD), Ted Strickland (OH)... all utterly unaccomplished establishment hacks fighting against the progressive values Bernie Sanders stands for. And all but Duckworth are also fighting markedly more progressive primary opponents. Schumer's usual tactic-- selling his candidates to Wall Street-- might not work in 2016. So he and his colleagues are trying to figure out how they can employ the Bernie-magic-minus-the-Bernie-values.

Schumer and Israel can't see past the flood of grassroots money and can't grasp it's coming in because of hatred politicians-- like Schumer and Israel. "They’re also stunned by how 'The Bern' has tapped into the zeitgeist of college-age voters, a key demographic for the party in a presidential election year. That surge of support is something Democrats haven’t witnessed since the glory days of Barack Obama back in 2008. 'The fundraising base is phenomenal. You can’t ignore that. You can say that winning a primary is ephemeral. But that funding base-- millions of people willing to donate, more than Obama. Wow, that’s something amazing,'" said Gerry Connolly, an unimaginative hack from the Wall Street-owned New Dem anti-progressive wing of the party.

Schumer and Israel weep tears of rage when they read that "Sanders’ campaign raked in more than $6 million in the 24 hours after his crushing victory in the New Hampshire primary earlier this month. Sanders is fundraising on a par with Clinton, a development that has stunned the Democratic establishment and provided him the financial muscle for a drawn-out struggle with her for the presidential nomination. Success like that is something party leaders can’t ignore, even if they reject the messenger... Democrats, particularly in the House, are actively strategizing about how they can reach the young, white voters who propelled Sanders to victory in New Hampshire and a near win in Iowa. And if Sanders can rocket out of obscurity to challenge a political heavyweight like Clinton, they admit it would be wise for Democrats to try and incorporate his most successful messages."

Can I suggest an auto-de-fé featuring Schumer, Van Hollen, Israel, Hoyer, John Tester and Ben Ray Luján and a generous sprinkling of New Dems and Blue Dogs on the steps of Capitol Hill. That might get the attention (and approval) of "the young, white voters" who have utterly rejected the hideous corruption, careerism and compromise of today's DC Democrats.

Instead, you have multi-cycle loser and message-maker-in-chief Steve Israel-- not a brain scientist-- insisting that Bernie and Herr Trumpf are both playing to voters’ fears more than their hopes. Do you need any more proof that these people will never get it-- never in a billion years?

Maybe these two letters-- one from James Galbraith, executive director of Congress' Joint Economic Committee in 1981 and '82, and one from University of Massachusetts Economics Professor Gerald Friedman-- would help the Democratic Establishment get a clue. Galbraith's letter was addressed to Republican-lite Hillary shills Alan Krueger, Austan Goolbee, Christina Romer and Laura D'Andrea Tyson, who, along with a much-diminished Paul Krugman, smeared Professor Friedman, using dishonest statistics to deceive the public about the cost of Bernie's proposals and thereby make a case for Hillary's far more conservative approach. (What we're talking about here is free tuition at public universities, Medicare-for-all health, the $15-an-hour minimum wage, gender pay equity and increased infrastructure spending-- which have been labeled as voodoo economics by Krugman and derided by visionless establishment economists Krueger, Romer, Goolsbee and Tyson). "You write," offered Galbraith, "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.
You go on to state that Professor Friedman makes “extreme claims” that “cannot be supported by the economic evidence.” You object to the projection of “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.”

Matthew Yglesias makes an important point about your letter:
“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.”
So, let'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 you have done, is to light a fire under Paul Krugman, who is now using his high perch to airily dismiss the Friedman paper as “nonsense.” Paul is an immensely powerful figure, and many people rely on him for careful assessments. It seems clear that he has made no such assessment in this case.

Instead, Paul relies on you to impugn an economist with far less reach, whose work is far more careful, in point of fact, than your casual dismissal of it. He and you also imply that Professor Friedman did his work for an unprofessional motive. But let me point out, in case you missed it, that Professor Friedman is a political supporter of Secretary Clinton. His motives are, on the face of it, not political.

For the record, in case you're curious, I'm not tied to Professor Friedman in any way. But the powerful-- such as Paul and yourselves-- should be careful where you step.

Let's turn, finally, to the serious question. 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.
Saturday, Friedman addressed his own irate letter to Krugman, a once trusted-figure of the left who is now widely viewed as an utter sell-out to the establishment he always flirted with. Krugman's smear of Friedman is nauseating and unforgivable.
Your suggestion that “personal ambition” in any way influenced my analysis of the Sanders economic plan is as insulting as it is wrong and you owe me an apology.

You don’t know me. We did not quite overlap in graduate school and our paths have diverged since. We have never met or spoken. The closest we came was when my department attempted to bring you to Amherst to give a guest lecture. Never happened because we could not afford your rate.

While you don’t know me, you seem to feel free to speculate about my values and interests. You assume that an outsider economist like myself must be considered not particularly “ insightful or even technically competent." And, elaborating this theory, you conclude that envy would lead me to jump on an opportunity for self-advancement by shilling for an outsider politician. Now this theory might be tested empirically. You could easily have tested your theory by investigating my motives empirically. You could have called me and asked. Or you could have read any of the news stories where I explained how I stumbled on this research project, and where I explained my (lack of) connection to the Sanders campaign. You might have asked people who know me. Had you done so, you would know how much I value my privacy, enjoy living and working in Amherst. And, I assure you, people would have laughed at any suggestion that I have political ambitions or want to go to Washington to hobnob with the powerful.

Since you did not bother to do the empirical work: let me do it for you. I undertook this study from simple scholarly curiosity; I did it without any connection to the Sanders campaign; and I have no expectation of reward. I have no desire to be involved in a Sanders Administration. I am completely happy teaching at UMass-Amherst and have no wish for anything more in the world than to do my work where I am.

Finally, if I may point out another flaw in your envy-ambition model: why would the Sanders camp ever appoint someone who has publicly acknowledged that he donates to the Hillary Clinton campaign and is undecided about for whom to vote in the upcoming Massachusetts primary?

In its lack of empirical grounding, your column is like the CEA-chairs’ letter: substituting attack language and ad hominem argument for reasoned discourse. If you had taken the time to read my paper, you would find, as others have, that I evaluate the Sanders program using standard assumptions and methods. Rather than jumping on my conclusion, a more constructive discussion would focus on identifying possible errors in my method that may have led to conclusions that may seem implausible. Certainly, we can agree that it is illogical to reject conclusions without finding fault with method.

By the way, you also owe me an apology for another smear. I have never in any way vilified or blackened “the reputation of more insider types.” If you had taken the time to do empirical research, you would know that when asked to respond to the CEA-chair letter, I have expressed genuine respect for them and their work, and have refused to comment on their motives, saying, like a broken record, “you have to ask them.” I do not know why they wrote that letter, will not speculate, and have not speculated. Nor will I speculate as to your motives.
In the words of Dr. Cornell West, "I was born at night, but I wasn't born last night." These Hillary surrogates are systematically destroying their own reputations.

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