WASHINGTON -- A former executive director of the congressional Joint Economic Committee on Thursday accused columnist Paul Krugman and four prominent Democratic economists of dishonestly smearing an academic in order to score political points for Hillary Clinton.
The dispute, which is ostensibly over the ultimate cost of Bernie Sanders' economic agenda, is more than a simple war among wonks. It demonstrates that elite economists -- not merely paid campaign operatives -- are fueling the ugly escalation of hostilities between major factions of the Democratic Party as the presidential primary continues.
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.
Earlier this week, four economists -- Alan Krueger, Christina Romer, Austan Goolsbee and Laura D’Andrea Tyson -- wrote an open letter accusing Friedman of making "extreme claims" in that study that "undermine the credibility of the progressive economic agenda." Krugman then published multiple blog posts citing the letter as evidence that the Sanders campaign was engaging in "fantasy" and "voodoo."
The problem with these condemnations, according to former JEC Executive Director James Galbraith, is that none of the economists involved in the fracas actually crunched any numbers to show why Friedman's study was supposedly such a sham. Galbraith now teaches economics at the University of Texas at Austin.
"You write that you have applied rigor to your analyses of economic proposals by Democrats and Republicans," Galbraith wrote in a letter to Krueger, Romer, Goolsbee and Tyson. "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."
Friedman, who is a political supporter of Hillary Clinton, had projected a 5.3 percent economic growth rate under Sanders' platform. That rate is high relative to the current figure of about 2.4 percent, but Galbraith said it is clear from the paper that Friedman reached the figure by relying on "standard impact assumptions and forecasting methods."
Economic growth did in fact reach that level in 1983, 1984 and 1985, Galbraith noted, as the economy bounced back from recession and responded to the 1981 Reagan tax cuts.
"What the Friedman paper shows, is that under conventional assumptions, the projected impact of Senator Sanders' proposals stems from their scale and ambition," Galbraith wrote. "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."
"It is not fair or honest to claim that Professor Friedman's methods are extreme," Galbraith added. "Nor is it fair or honest to imply that you have given Professor Friedman's paper a rigorous review. You have not."
The four economists who wrote the original letter have all been chairs of the Council of Economic Advisers under either President Barack Obama or President Bill Clinton. Galbraith suggests that the real sham in the wonk scuffle is not Friedman's work, but the willingness of prestigious economists to rely on their mere authority to demean the work of others without actually analyzing it.
"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."
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.
Read Galbraith's full letter here.
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