# No, Sanders is not just full of hype on economics! (A brief spike in growth to ~5% is possible.) **URL:** \ **Category:** Politics & Elections\ **Created:** [February 19, 2016, 11:22pm UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591 "2016-02-19T23:22:12Z")\ **Posts on this page:** 15\ **Page:** 1
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [February 19, 2016, 11:22pm UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/1 "2016-02-19T23:22:12Z")
Paul R. Krugman, formerly of Princeton and now of the New York _Times,_ has been laying into the Sanders campaign for junk economics, because of a paper by one Dr. Gerald Friedman, which projects unusually high economic growth if Sanders’s entire program were passed. But now we get input from another respected economist. James K. Galbraith called Drs. Krueger, Goolsbee, Romer, & Tyson to task for not actually running the numbers on Friedman’s analysis. Apparently Gerald Friedman’s much-derided growth projections for the whole Sanders framework are, well, entirely consistent with current economic science. > [@Jamie Galbraith](#): > > [http://big.assets.huffingtonpost.com/ResponsetoCEA.pdf](http://big.assets.huffingtonpost.com/ResponsetoCEA.pdf) (PDF) > > In the specific case of this paper, one can quibble with the out-year multipliers, or with the productivity > assumptions, or with the presumed impact of a higher minimum wage. One can invoke the trade deficit > or the exchange rate. Professor Friedman makes all of these points himself. But those issues are well > within mainstream norms. > > There is no “magic asterisk,” no strange theory involved here. And the main effect of adjusting the > assumptions, which would be a perfectly reasonable thing to do, would be to curtail the growth rate > after a few years – not at the beginning, when it would matter most. > > 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. So we have a handful of high-profile wonks who dismissed the work out of hand because it _sounded_ implausible. Oh, it’s a short PDF, & I don’t want to quote too much of it, but this is a good line: > [@](#): > > 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. Mentioned as part of a larger context of PRK’s bias toward HRC here: [The Fight Between Bernie Sanders And Hillary Clinton Is Officially Super Ugly | HuffPost Latest News](http://www.huffingtonpost.com/entry/bernie-sanders-hillary-clinton-fight_us_56c74dade4b0ec6725e25f49) ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [February 19, 2016, 11:25pm UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/2 "2016-02-19T23:25:40Z")
Also at the Huffington Post link: [QUOTE=Zach Carter] Krugman has aggressively defended Clinton in the wonk trenches all year. In January, he wrote a post belittling Sanders’ call to break up the banks by claiming “too big to fail was at best marginal” to the 2008 financial crisis. The statement ran against the official conclusion of the Financial Crisis Inquiry Commission and the views of Sen. Elizabeth Warren (D-Mass.), former Federal Reserve Chairman Ben Bernanke, former IMF chief economist Simon Johnson, former Federal Deposit Insurance Corp. Chair Sheila Bair, former bank bailout inspector general Neil Barofsky and FDIC Vice Chairman Thomas Hoenig, who have all maintained that “too big to fail” was, in fact, central to the crisis. [/QUOTE] It’s a shame to see PRK go so far in twisting analysis to push his favorite candidate, but that seems to be what’s going on. ☹ ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [February 19, 2016, 11:50pm UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/3 "2016-02-19T23:50:50Z")
> [@foolsguinea](#): > > James K. Galbraith called Drs. Krueger, Goolsbee, Romer, & Tyson to task for not actually running the numbers on Friedman’s analysis. Apparently Gerald Friedman’s much-derided growth projections for the whole Sanders framework are, well, entirely consistent with current economic science. > So we have a handful of high-profile wonks who dismissed the work out of hand because it _sounded_ implausible. Thank you very much **Mr. Guinea**. It’s a shame how the right-wing propaganda train rants its ignorance and dogma; and especially a shame how many “moderate progressives” fall for the same dogmas, unwilling to dream big. Whether he makes it to the Oval Office or not, I hope Bernie Sanders leads a revolution in American discourse. (Maybe we’ll see a Sanders disciple get the Oval in 2024.) ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [February 20, 2016, 1:16am UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/4 "2016-02-20T01:16:23Z")
Sorry I missed this thread. I quote myself: > [@2016 Bernie Sanders (D-VT) campaign for POTUS thread](https://boards.straightdope.com/t/2016-bernie-sanders-d-vt-campaign-for-potus-thread/718754/883): > > James K. Galbraith’s letter is rather disappointing. Sure, you can get a burst of growth following a deep downturn if you apply sufficient fiscal stimulus. But Friedman posited a 5.3% real growth rates _over 10 years_. That’s ludicrous: at some point stimulus feeds into prices after you hit short term capacity limits. Galbraith’s treatment of the subject is misleading and embarrassing. > > There’s nothing standard about Friedman’s methodology. > I repeat that the 5.3% figure was Gerald Friedman’s creation and has not been explicitly showcased by the Sanders campaign to my knowledge. The policy director of the Sanders campaign has however correctly portrayed Friedman as supporting their plan. The Friedman model was cooked. Galbraith misleads his readers. This isn’t a case of dreaming big. Passing single payer is dreaming big. Claiming that passage will have one consequence or another is something else. In a blog post Kevin Drum dug a little deeper. It’s not just one number. [INDENT]Productivity growth will double compared with Congressional Budget Office projections [according to Friedman’s analysis]—and in case you’re curious, there has never been a 10-year period since World War II in which productivity grew 3.18 percent. Not one. And miraculously, the employment-population ratio, which has been declining since 2000 and has never reached 65 percent ever in history, will rise to 65 percent in a mere 10 years.[/INDENT] And it will be much harder to drive the emp/pop ratio ever higher given the aging of the population. > **[The Sanders campaign has crossed into Neverland](https://www.motherjones.com/kevin-drum/2016/02/sanders-campaign-has-crossed-neverland/)** > >   ---
**Author:** ![Yookeroo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/yookeroo/32/323_2.png) [@Yookeroo](https://boards.straightdope.com/u/Yookeroo)\ **Post date:** [February 20, 2016, 1:31am UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/5 "2016-02-20T01:31:02Z")
Sanders supporters are pushing me more and more to Hillary. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [February 20, 2016, 2:18am UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/6 "2016-02-20T02:18:31Z")
I was going to create a chart like this, but Krugman did it for me. It shows historical growth rates relative to those projected by Friedman over 10 consecutive years. In this case the figure is GDP per person. [http://krugman.blogs.nytimes.com/2016/02/19/plausibility/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body](http://krugman.blogs.nytimes.com/2016/02/19/plausibility/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body) Also available here: [http://wm40.inbox.com/thumbs/9b\_130b23\_8956f49\_oP.png.thumb](http://wm40.inbox.com/thumbs/9b_130b23_8956f49_oP.png.thumb) This isn’t dreaming big. But I don’t think it’s imitating the conservatives either. It’s a tacked on analysis of an aspirational plan, endorsed by a policy director in the midst of a political campaign. Note that the economics of the plan itself hasn’t been challenged by Krugman et al. Just one analysis of it. At any rate, you can see why the members of the Council of Economic Advisers didn’t offer an analysis of their own. That takes time. And really it’s unnecessary: the burden is on Friedman to show the plausibility of his analysis. I seriously doubt he can. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [February 20, 2016, 2:31am UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/7 "2016-02-20T02:31:17Z")
What I’m reading is that the 5.3% growth is not meant to be a ten-year mean, but a high in the first two years. So Krugman and the CEA four are arguing against a distortion of the paper’s conclusions, not the paper itself. ETA: Wait, no, apparently that’s spin. I’ll have to track down the actual paper. ETA2: Wow, that PRK graph is…definitely spin. Of course we’re not going to have 4.5% growth _over 57 years._ ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [February 20, 2016, 2:53am UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/8 "2016-02-20T02:53:09Z")
I’m still looking! Found a whole mess of links to the ‘kerfuffle’ (that is the technical term) here: > **[Blog | Dollars & Sense](https://www.dollarsandsense.org/blog.html/2016/02/links-on-the-kerfuffle-about-friedmans-sanders-analysis.html)** > > Dollars and Sense magazine and textbooks provide analysis and opinion on economic policy and politics from a progressive political perspective It sounds like Gerald Friedman ran Sanders’s plan through some conventional models & got some numbers that do fit the pre-2008 growth trend but don’t fit certain other economists’ assumptions about, um, structural change in what full employment looks like. So the actual argument among economists is about what “full employment” can mean with an aging society. _This is a tempest in an economic teapot, arguing about structurally low labor participation, and really not that important to whether Sanders’s plan is better or worse than anyone else’s._ When Sanders’s policy director (whose background is poli sci, not econ) heard about the study, he said, “Wow! Thanks for your endorsement!” (paraphrase) and this turned into a…kerfuffle. Then Gerald Friedman said, “Actually I’m voting for Hillary, for other reasons. Growth is just one issue; there are others.” (paraphrase) ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [February 20, 2016, 2:54am UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/9 "2016-02-20T02:54:00Z")
People don’t seem to understand how gigantic a number 5.3% growth is for the American economy. Just hearing the number should make anyone scoff. It should have been an immediate trigger. Wait. I got 5.3% for my result? I must have done something wrong. Well, my calculations aren’t wrong _so the numbers I fed into them must be_. That was my reasoning, and the pdf from Jamie Galbraith says it presumably was the reasoning of others. (I can’t reconcile the numbers in the chart in Measure for Measure’s link with the numbers Galbraith quotes, so they must be different measures of different things.) Possibly Sanders’ “plan” is so gigantic that it would transform the country if enacted by a snap of the fingers. It won’t be. No gigantic plan is or ever has been. (The New Deal never came close to what many reformers wanted, even before so many pieces of it were rescinded or scaled back.) What is the analysis if only bits and pieces get enacted? What is the analysis if everything is enacted at a smaller scale? What is the analysis if a multi-year fight is necessary to get it passed? Sanders’ plan is fantasy in any real-world setting. Any. Even one with a fully Democratic Congress. With a hostile Congress it is lying with statistics. Dangling a 5.3% growth rate (and it can’t be a brief spike, nor does Friedman say so anywhere in his article) before people is pandering at the same level as building a wall that the Mexicans will pay for. The technicalities of the analysis is not the issue. One can always enter numbers to make any desired outcome occur. The issue is the validity of the numbers entered. These numbers don’t have any. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [February 20, 2016, 2:55am UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/10 "2016-02-20T02:55:29Z")
> [@foolsguinea](#): > > ETA: Wait, no, apparently that’s spin. I’ll have to track down the actual paper. Isn’t the actual paper the one you gave in your OP? Sure looked like it when I read it. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [February 20, 2016, 2:58am UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/11 "2016-02-20T02:58:27Z")
My OP linked Galbraith’s response. I still don’t have the Friedman paper in front of me. Wait a minute. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [February 20, 2016, 3:09am UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/12 "2016-02-20T03:09:36Z")
OK, there’s [this](http://dollarsandsense.org/archives/2015/1115friedman.html) [pair](http://dollarsandsense.org/archives/2016/0116friedman.html) of articles for Dollars & Sense. I’ve only skimmed it. I can understand the argument for temporary accelerated growth, but the shocking drop in the poverty rate looks counter-intuitive to me. This may have been a half-assed analysis, if you’ll excuse the expression. But if the (apparently pretty normal) models and assumptions Friedman used overstate the effects of the Sanders tax & redistribution plan, then presumably they would also overstate the effects of whatever plan a more mainstream Democrat puts out. That implies to me that if Sanders’s plan is not going to get this big an effect, any more mainstream plans will have effects on growth and poverty nearer zero than advertised. That thought is not comforting, if you expect to elect a mainstream Democrat. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [February 20, 2016, 3:26am UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/13 "2016-02-20T03:26:32Z")
> [@foolsguinea](#): > > My OP linked Galbraith’s response. I still don’t have the Friedman paper in front of me. Wait a minute. I see what happened. It’s linked to in the [HuffPost](http://www.huffingtonpost.com/entry/bernie-sanders-hillary-clinton-fight_us_56c74dade4b0ec6725e25f49)article you linked to. Click on the link under “an analysis”. It’s a pdf so I can’t link directly to it. > [@](#): > > To explain the costs and benefits of his Medicare-for-all health care plan, $15-an-hour minimum wage, gender pay equity, increased infrastructure spending and other programs, the Sanders campaign has touted _an analysis_ performed by University of Massachusetts Amherst economist Gerald Friedman. ---
**Author:** ![Chronos](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/chronos/32/134_2.png) [@Chronos](https://boards.straightdope.com/u/Chronos)\ **Post date:** [February 20, 2016, 3:56am UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/14 "2016-02-20T03:56:23Z")
If economists’ standard models work anything like physicists’ do, then you _can’t_ feed unprecedented huge inputs into them. In order to make a model usable, you need to assume that some terms are small, and that higher orders of those terms are smaller, and that at some point they’re negligible. If they’re large enough that the things that you’re neglecting aren’t negligible, then the model simply doesn’t work. ---
**Author:** ![Measure\_for\_Measure](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/measure_for_measure/32/557_2.png) [@Measure\_for\_Measure](https://boards.straightdope.com/u/Measure_for_Measure)\ **Post date:** [February 20, 2016, 5:50am UTC](https://boards.straightdope.com/t/no-sanders-is-not-just-full-of-hype-on-economics-a-brief-spike-in-growth-to-5-is-possible/746591/15 "2016-02-20T05:50:32Z")
Well sufficiently fast growth will boost tax revenues and reduce welfare payments, therefore lowering the budget deficit. So it’s a convenient feature of the model. PDF of U Mass analysis: [http://www.dollarsandsense.org/What-would-Sanders-do-013016.pdf](http://www.dollarsandsense.org/What-would-Sanders-do-013016.pdf) Jump to page 10 and you can see the chart at Kevin Drum’s link: [Bernie Sanders’ Campaign Has Crossed Into Neverland – Mother Jones](http://www.motherjones.com/kevin-drum/2016/02/sanders-campaign-has-crossed-neverland) Growth rate of per-capita GDP, 2016-26. That’s where the 10 year figure comes from. And here’s a quote from page 12 of the paper, “The Sanders program… will raise the gross domestic product by 37% and per capital income by 33% in 2026; the growth rate of per capita GDP will increase from 1.7% a year to 4.5% a year.” It’s a 10 year figure. Galbraith appears to have misrepresented the analysis. And Exapno has it correct: when your model spits out something ridiculous you re-calibrate. > [@foolsguinea](#): > > When Sanders’s policy director (whose background is poli sci, not econ) heard about the study, he said, “Wow! Thanks for your endorsement!” (paraphrase) and this turned into a…kerfuffle. That’s how I would spin it. I think the study was a hack-job and Galbraith’s characterization was worse. But I’m not sure I’d even call it a kerfuffle given that the candidate himself hasn’t mentioned the study to my knowledge. Note that Dean Baker of the liberal think tank EPI thinks the Friedman study was out of line as well. If that helps.