How Extreme is Bernie’s Economic Vision?

Popular Economics Weekly

Major progressive economists are protesting Bernie Sanders predictions of robust economic growth and jobs if his policies are enacted. What are his policies? Policies he claims will give Americans what the other developed countries already offer to their citizens, including a higher minimum wage, tuition-free public university education, universal health care, and better retirement benefits.

Then why are progressive economists protesting, who presumably have similar goals? Because we are not like other developed countries, and so shouldn’t be exaggerating the benefits of such assertions, says Paul Krugman.

“On Wednesday four former Democratic chairmen and chairwomen of the president’s Council of Economic Advisers — three who served under Barack Obama, one who served under Bill Clinton — released a stinging open letter to Bernie Sanders and Gerald Friedman, a University of Massachusetts professor who has been a major source of the Sanders campaign’s numbers,” said Krugman. “The economists called out the campaign for citing “extreme claims” by Mr. Friedman that “exceed even the most grandiose predictions by Republicans” and could “undermine the credibility of the progressive economic agenda.”

Why are the Sanders-Freidman claims so extreme? Because Dr. Friedman claims he can achieve those goals in just ten years, if the body politic will back Bernie. The late Supreme Court Justice Antonin Scalia over some 30 years led conservative attempts to turn the clock back at least one century to a time when the white male patriarchy still ruled.

Whereas Senator Sanders wants to move the economic clock into the next century. “Like the New Deal of the 1930s, Senator Sanders’ program is designed to do more than merely increase economic activity: the expenditure, regulatory, and tax programs will increase economic activity and employment and promote a more just prosperity, “broadly-based” with a narrowing of economic inequality,” says Professor Friedman in his economic analysis.

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Graph: CBPP

The increase in income concentration since the 1970s reverses the prior, long-term downward trend in concentration, says the non-partisan Center For Budget Policies and Priorities.  “After peaking in 1928, the share of income held by households at the very top of the income ladder declined through the 1930s and 1940s.  Consistent with the shared prosperity found in the Census data on average family income, the share of income received by those at the very top changed little over the 1950s, 1960s, and early 1970s.  The sharp rise in income concentration at the top of the distribution since the late 1970s was interrupted briefly by the dot-com collapse in the early 2000s and again in 2008 with the onset of the financial crisis and deep recession.” 

So Sanders and Friedman have a point—what economic policies will catch US up to those benefits that the citizens of all other developed countries have? In fact, but for the record income and wealth inequality, we could already offer many of those same benefits. We still have the worst income inequality since 1929, the beginning of the Great Depression, and it has not improved since the end of our Great Recession.

Can we blame our young for supporting his vision? It could take more than ten years, as the so-called Reagan trickle-down revolution prevailed for more than 30 years, policies that created the record income inequality by the massive transfer of wealth upward; via the combination of lower tax rates with higher deficit spending that caused major cutbacks in government benefits and programs.

So really, the outcome of Bernie’s economic vision is very dependent on the “broad-based” support of his policies by independents voters, as well as Democrats. The Nevada caucus and South Carolina primary should provide that answer.

Harlan Green © 2016

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

About populareconomicsblog

Harlan Green is editor/publisher of PopularEconomics.com, and content provider of 3 weekly columns to various blogs--Popular Economics Weekly and The Huffington Post
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