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Friday, February 19, 2016

Paul Krugman: Varieties of Voodoo

"Sorry, but there’s just no way to justify this stuff":

Varieties of Voodoo, by Paul Krugman, Commentary, NY Times: America’s two big political parties are very different from each other... Republicans routinely engage in deep voodoo, making outlandish claims about the positive effects of tax cuts for the rich. Democrats tend to be cautious and careful about promising too much...
But is all that about to change?
On Wednesday four former Democratic chairmen and chairwomen of the president’s Council of Economic Advisers ... released a stinging open letter to Bernie Sanders and Gerald Friedman, a University of Massachusetts professor... 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.” ...
Sorry, but there’s just no way to justify this stuff. For wonks like me, it is, frankly, horrifying. ...
Mr. Sanders is calling for a large expansion of the U.S. social safety net... But ... such a move ... would probably create many losers as well as winners — a substantial number of Americans, mainly in the upper middle class, who would end up paying more in additional taxes than they would gain in enhanced benefits.
By endorsing outlandish economic claims, the Sanders campaign is basically signaling that it doesn’t believe its program can be sold on the merits, that it has to invoke a growth miracle to minimize the downsides of its vision. It is, in effect, confirming its critics’ worst suspicions.
What happens now? In the past, the Sanders campaign has responded to critiques by impugning the motives of the critics. But ... Alan Krueger is one of the founders of modern research on minimum wages, which shows that moderate increases in the minimum don’t cause major job loss. Christina Romer was a strong advocate for stimulus during her time in the White House, and a major figure in the pushback against austerity in the years that followed.
The point is that if you dismiss the likes of Mr. Krueger or Ms. Romer as Hillary shills or compromised members of the “establishment,” you’re excommunicating most of the policy experts who should be your allies.
So Mr. Sanders really needs to crack down on his campaign’s instinct to lash out. More than that, he needs to disassociate himself from voodoo of the left — not just because of the political risks, but because getting real is or ought to be a core progressive value.

    Posted by on Friday, February 19, 2016 at 01:49 AM in Economics, Politics | Permalink  Comments (388)


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