Gerald Friedman: How the Dogmatic Despair of Mainstream Economists Brought You Donald Trump

Posted on by

By Gerald Friedman, Professor of Economics, University of Massachusetts, Amherst. A version of this post first appeared at the Institute for New Economic Thinking website

The ferocious reaction to my assessment that Senator Bernie Sanders’ economic and health care proposals could create long-term economic growth shows how mainstream economists who view themselves as politically liberal in America have abandoned progressive politics to embrace a political economy of despair.  Rationalizing personal disappointment and embracing market-centric economic theories according to which government can do little more than fuss around the edges, their conclusions — and the political leadership that embraces them — have little to offer millions of angry ordinary people for whom the economy simply isn’t working.

It has certainly been a rough seven years for the economists in the Obama Administration.  While avoiding a Great Depression, the Administration has presided over what Paul Krugman and Brad DeLong call a “Lesser Depression.”  One might almost forgive them for a certain defeatism after seven years of painfully slow economic recovery, and the dismay of seeing urgently needed programs blocked by the Republican congressional majority.  After so many compromises and let-downs, perhaps it is easier to tell those who expect more that it just can’t happen. There is comfort in the Thatcherite phrase, “There Is No Alternative” (TINA).

Combined with orthodox neoclassical microeconomics, however, rationalization has produced a toxic political economy that abandons progressive ideals and surrenders political space to xenophobes and the populist rightwing (see: Donald Trump).  The mainstream economists who have attacked my embrace of Keynesian economics have abandoned, in practice, the notion that government can effectively intervene in the economy to raise levels of employment, and to promote economic growth and equity.  Instead, they have returned to pre-Keynesian Classical thinking, where the very suggestion that government action can raise growth rates or wages is taken to be obviously wrong. Criticisms of the orthodox model and its conservative policies are deemed worthy of scorn, to be dismissed tout court because they are obviously at variance not only with textbook economics, but with what we need to believe in order to accept failure

The mechanism of economic policy paralysis among the liberals who espouse market-centric economics works like this:  If we accept the (flawed) premise that the total supply of goods and services equals total demand, then we can agree with the Congressional Budget Office (CBO) that potential output is best measured by observing actual output. And, with that — presto! — unemployment magically disappears, and we no longer suffer from slow growth. Conveniently align growth projections with the otherwise-disappointing performance during the Lesser Depression, and, as the CBO has done, estimates of potential growth now equal actual growth: Instead of the 3 percent average annual growth of the 1959-2007 period, not to mention the 4 percent growth 1947-73, we are now told to accept 2 percent growth not as a disappointment, but as recognition of an unfortunate necessity. Such reevaluations say to policy elites, “Hey, we are doing as well as can be expected.”  To the general public, the message is: “Sorry, nothing more can be done for you.”  TINA.

The reason why elite economists and politicians were so angry at my analysis of Sanders’ proposals was that it disrupted a consensus that nothing can be done by government to improve the performance of the economy. After all, if things are already as good as they can be, it is irresponsible pie-in-the-sky to even suggest to the general public that we can do better.  Instead, the task of economists and other policy elites becomes to explain to the general public why they should accept stagnant incomes and rising inequality, and applaud the anemic growth of recent years as the best possible outcome.  But the real danger of such thinking is that it leaves liberals like Hillary Clinton with few policy options to offer in response to the siren song of demagogues like Donald Trump.  The self-proclaimed “responsible” elite economists see their role as to persuade the public that nothing can be done, in the hope of heading off the challenge of those who would capitalize on the electorate’s appetite for change.  They have to slap down critics. “Responsible” elite economists have to keep the party of “good arithmetic” from overpromising at all costs.  It should not surprise us, though, that those whose living standards have suffered most from stagnant growth are more inclined to believe politicians promising change.

It was only by rejecting classical economics that Franklin Roosevelt was able to save the American economy and bring about a revolution in social policy.  And only by rejecting the new classical economics and the policy of so-called responsible elite economists can Clinton meet our current economic crisis. 

John Maynard Keynes showed how active government policy can raise employment and output; his followers, including Joan Robinson and Nicholas Kaldor, showed how full employment encourages further investments and leads businesses to find ways to raise labor productivity to match increasing product demand.  New Deal American economists, such as Rexford Tugwell and John Maurice Clark, showed how active government policy can raise growth rates with investments in infrastructure, in public services, in human capital development, and in research and development.  By listening to these ideas, economists associated with liberal American politics helped produce 25 years of relatively rapid and egalitarian growth after World War II.  Abandoning these ideas, we have suffered 30 years of relatively slow growth and rising inequality, culminating in the current Lesser Depression. 

The debate over my little report showed how mainstream economics has left us with a smugly certain macroeconomics lacking in imagination, and offering no effective policies to move beyond economic stagnation and escalating inequality.  If these economists cannot do better, then we risk more than personal disappointment; we gamble our liberal political economy against the likes of Donald Trump and Ted Cruz.  Hillary Clinton can do better. And Americans deserve better.

 

Print Friendly, PDF & Email
Tweet about this on TwitterDigg thisShare on Reddit0Share on StumbleUpon0Share on Facebook0Share on LinkedIn0Share on Google+0Buffer this pageEmail this to someone

69 comments

  1. James Levy

    A very bold thing for a man like this to say. I know he will be criticized (vilified?) for his misplaced belief that Clinton can “do better”, but considering who this man is and where he is coming from, condemning him at this stage of the game would be churlish. He’s taken on The Bigs and the stifling orthodoxy they embody and for that we owe him.

    I had dinner last night with two excellent people who happen to be doing well at this time. They could not comprehend why anyone would be voting for Trump, whom they saw as a dangerous lunatic. They have supported Sanders and voted for him in the NY primary, but are absolutely going to vote for Clinton in the Fall. What I view as the credible case against Clinton has not reached them with any strength or registered at all. I was asked (because I had said nothing while they talked–I hate this kind of confrontation) what problem people could have with Hillary? I said: Libya, Ukraine, and Nicaragua. They really didn’t know what I was talking about and although I spoke up for why I thought this made her a neocon like the ones that surrounded Dubya, they simply didn’t know any of the details and we left it at that.

    1. so

      Sad. There is them and there are us. Empathy. Hard to have when your busy all the time.

    2. jsn

      I’ve had many similar recent encounters. I find that if I ask for a positive reason to vote Clinton, the first three or four reasons they raise can be dismissed by single phrase references to past betrayals, Sister Solja, End of Welfare, Nafta etc. and the next few by scandals, Lewensky or what should be scandals as you mentioned. As a rule after four or five tries I get to watch them self censor before each subsequent try and don’t have to make any negative claims myself.

      I doubt I’ve changed minds, but they no longer doubt mine.

      1. hemeantwell

        I think that was a slip, but an historically correct one I can completely sympathize with. HRC’s recap of Reaganite Latin America policy is her most vile achievement. If anything demonstrates a continuity of imperialist strategy across administrations, that’s it.

        1. James Levy

          It was a slip of the “tongue” on my part and I did say Honduras but my sense was that if I had said Nicaragua the response would have been the same.

    3. bowserhead

      ” I said: Libya, Ukraine, and Nicaragua. They really didn’t know what I was talking about and although I spoke up for why I thought this made her a neocon like the ones that surrounded Dubya, they simply didn’t know any of the details and we left it at that.”

      I run into this all the time. Utter and complete foreign policy illiteracy, particularly from otherwise politically correct millennials who know so little that Hillary gets a complete pass.

      1. jrs

        Well I’m really not convinced Sanders foreign policy would actually be good. He just might give us a little respite from the economic war being waged on the 99s internally, which we do deserve despite the wars the U.S. military wages externally.

        Problem is few really realize it’s a two front war (imperialism against the world, the ruling class against everyone else) and so of course they can’t even see how completely Hillary is its symbol (including quite frankly how she will likely be at war with *them* unless they are one of the extremely privileged).

    4. Norb

      This is a common story and illustrates that our current detachment from the world around us and our fellow citizens is coming to an end. We are being forced out of our individual bubbles. Modern corporations have supplied the populations of the world with abundance of goods, but in order to accomplish this feat, have destroyed and are destroying the cultural glue, if you will, that holds society together.

      TINA will be maintained by propaganda and physical force. We see that the propaganda is starting to weaken because the contradictions of the message can no longer be hidden. The destruction is too widespread and the inequality can no longer be hidden. You can hollow out a social system only so much before it collapses. The collapses we are witnessing is the promise of democracy. A collapse of the ideals of moderation and compromise.

      We are entering a phase of civil war. It is still carried out in a polite manner and intellectually, the discussion is still couched in Orwellian doublespeak. However, criticisms of the ruling elite are becoming more straightforward and more people are waking up to the fact that the system is rigged against them.

      This civil war is a battle over leadership. It is a battle to demand good government instead of no government. It is a battle to demand a government for and by the people. A battle for the common good. Evaluated not in some abstract terms like “trickle down” economics, but direct support and action. The hearts and minds of the population was won over long ago to wholeheartedly support capitalism and private ownership of the world’s resources. This is proving to be a disaster.

      Supporters of unfettered capitalism know only one way. Privatization of ALL the worlds resources and potential. They showed their hand in 2008 with the bailouts and implementation of austerity policies. In their minds, there is no turning back. To compromise means failure. For them, TINA is real and logical. This is the perspective of owners of capital. They gain strength and advantage from seeming to compromise, but in the end know they can always reverse course and regain private control. Subterfuge and force allows the resilience of capitalism as the reigning social order.

      I bring up the notion of a civil war because these ideas are too important to be left to chance. In America, the citizenry has been complacent with their lot in life and so have lost control over their fate. As the world changes around them, they desperately attempt to hold onto their position while not realizing they are supporting their own impoverishment. Speaking ideas of the common good -for ALL- and notions of public ownership of land, natural resources, citizens natural rights to jobs, basic income, and healthcare divide family and friends. Those who are comfortable don’t want to cause trouble and those feeling the pressures brought down upon them by an unrelenting system are too weak and fearful to act.

      In a sense, the revolution has already begun. It is the revolution to convince people that there is a better and different way to live our lives.

      1. tegnost

        +1, the elephant in the room is globalisation. The elite dems are all in. Camping with the brogrammers last weekend really drove it home. They sat around talking algorithms and how to get the next big payoff. For those unaware, in the tech world you’re not working for your massive salary, you’re working for when your group/project gets bought and you cash out. The sort of new thing is unicorn farming (my term, i don’t know what they call it) where the “creatives”, a particularly galling term in my eyes, churn out new possible formats (game platforms, wearables, etc) spend enough time to make something bare bones that they then sell to someone else to develop. Here we arrive at the first thing they don’t understand, that zirp makes these purchases possible, cheap money is essential, and in that vein they also don’t understand that zirp is financing globalisation, if the fed raises, globalisation suffers. For these people there is absolutely no alternative to globalisation. It will happen, and if I say not if money gets expensive, they become hostile. For the most part I don’t even think they understand QE in any of it’s forms, it’s just winners are winners and we’re winners (and I’m not, sort of unspoken understanding) and we won so don’t be bitter, so I point out as seen at NC, that it was policy choices that made it, and policy choices can change it, and here we get to the crux, they don’t want it to change, and so their first instinct is BIG, we’ve created a world that no longer works for people, so lets just give the losers money. Before I go to far here, it was suggested in league with BIG that we need some kind of “class system” (no not kidding, I was shocked) where the good people (brogrammers made rich from coding dubiously valuable products) are accepted as upper, anyone who’s lost their job to globalisation or robots is lower, and it’s a given that those lower class people don’t want to do anything anyway so they’ll be happy with BIG, no need to ponder which TBTF will administer this giveaway to the “losers”, if I found out I’d buy some stock. All of these things are to enable the unsustainable to be sustained status quo. This brings us to the robots and self driving cars. 10 years and no one will drive, I say bs theres no way, and incidentally resource constraints ala archdruid will impede at the least the unlimited expansion of mechanical humans. There’s a real freudian angle here I’m not going to get into. To the robot cars uber drivers are being instructed to complain to the city about potholes and road stripes, gotta get the taxpayer improving their infrastructure for them because infra for self driving cars is gonna cost, and kalanick ain’t going to shell out the dough. “How is the self driving car going to drive on this dirt road?” well that doesn’t matter, they’re doing it and no one can stop them, and no, there’s no need to have a plan for what’s to be achieved, just progress, and making huge piles of dough of course. I asked whats the goal, response, we don’t need a goal, stated in a manner that proves what a small thinker I am. Lastly, as some are aware, rent in seattle is insane, and it’s been made so by QE, in ’07 when started reading NC, I was barely making it working nonstop.My rent was $750/mo. and I lost the house in the downturn, it’s double that at least now. There’s tents everywhere, does that look like a working economy to you? And it’s like that everywhere. People need something to do so jobs guarantee works imo, but the brogrammers? No one is going to work, robots and self driving cars. So drunk on Koolaid. So they want to know when I’m coming back to seattle and i say never, it’s totally out of reach to which the response is if I really wanted to I could work enough and find some cheap place (it’s assumed there are cheap places, yes, in a tent under the bridge) and if I just devote my income to rent it’ll be fine but I know otherwise. There was also a claim made that the GFC and attendant bailouts were unavoidable, blame the homeowners type thinking, and I couldn’t know that things would have been better if they hadn’t bailed out the banks, an intellectually dishonest argument as I can’t prove a negative, but I did make clear that zirp and the policy to “recapitalize the banks” (quoting the bernank) and reflate housing prices made rents go up, and it was done on purpose, in spite of my friends claims that no one did anything wrong or self serving, it’s just like gravity, of course the rich get richer. I supposedly have free medical care from the ACA which comes as a huge surprise to me, and is actually not at all true. So long story short, Hill supporters (even the ones who are bernie supporters but who plan to herd all of us to hillary when the inevitable (not) coronation is complete.
        I blame the thinking mostly on npr and pbs, total propaganda, and on the camping trip? Had to listen to several podcasts…(me…I was listening to those birdies and it sounded a lot better.) The party of the democrats is in disarray, still I think bernie will prevail because as I said to my brother when arguing with a table full of hill supporting medical industry employees, there’s a lot more of us than there are of you. There’s consequences to disenfranchising the hopes of millions then asking them to vote for you, particularly when you derogate in krugman units. Ramble off, apparently had a few things to vent….

        1. PrairieRose

          Terrific rant, tegnost. Thank you for saying that which a lot of us are thinking and for sharing your boots-on-the-ground story.

        2. Carla

          Norb and tegnost — wonderful comments! Thank you!

          And thanks to Gerald Freidman for writing the piece and to Yves for posting it.

      2. shinola

        “It is a battle to demand good government instead of no government.”

        That’s the essence of it right there.

    5. John Wright

      Jonathan Haidt is a psychologist, sometimes featured in the New York Times, who apparently believes the capability of people to be convinced by reasoned argument is not strong.

      From my limited reading of his work, he suggests that humans are instinctive beings who, when they have strong beliefs, their reasoning powers are used to justify these beliefs, not to cast doubt about these beliefs.

      This can explain why attempting to convince someone to change their political/religious beliefs is fated to be largely futile.

      For example, I believe HRC is little more than a well-connected and well traveled mediocrity, with a record of few positives and many egregious negatives that justifies this assessment.

      I view her as potentially more damaging to the USA, as President, than Trump.

      Per Haidt, maybe my beliefs are instinctive and I am willfully blind to all of Clinton’s accomplishments over the last 40 years.

      1. TomD

        It’s hard to say with Trump. Possible outcomes:

        1) He’s a fool, but we move on and have little trouble. Maybe better than Clinton.
        2) He’s a fool who’s used by smarter people, a GWB/Cheney/Rumsfeld situation, bad but still survivable, but hard to see how this is worse than Clinton
        3) He is pretending to be a fool, and is an actual fascist. Almost certainly worse than Clinton
        4) He’s both pretending to be a fool and a fascist and will be the next class traitor. Definitely better than Clinton

    6. Elizabeth Burton

      When I mentioned Honduras, I was informed HRC didn’t actively order the coup, so it doesn’t count against her. Religious cult, anyone?

    7. Knute Rife

      I have had a problem with her since ’93 when she tried to run both healthcare reform and gay rights through against the advice of everyone who knew better. She tanked both, deliberately in my in no way humble opinion. The people who don’t know her history are acting like all true believers: maintaining deliberate ignorance.

      1. TomD

        I don’t think she tanked deliberately. Far too embarrassing and Clintons care about power more than anything. She would have rather “won” even if winning was bad just for ego purposes.

    8. Nathanael

      James, it’s worth noting that the US general election system for the Presidency is so screwed up that most of our votes are totally irrelevant. If those two people voted in the NY primary, their votes mean nothing in the general election. So I don’t bother to change people’s opinions unless they’re intending to give money or campaign actively, or they live in a “swing state”.

      Apparently the only votes which matter in the general election are in Florida, Ohio, and a couple of other states (I forget which). This is one messed up country.

    9. larry

      I agree James, and it shows a certain class to mention a person who tried to smear you and destroy your reputation. And what did Krugman get out of it other than a good deal of bad press?

      When one thinks of Keynes, one needs to go back before 1946, because the period from 1946 until 1971 was the Bretton Woods era where foreign currencies operated under a kind of fixed exchange rate system with many currencies pegged to the value of the dollar and the dollar committed to keeping the price of gold at a stipulated rate to the dollar. Between approximately 1934 and 1946, FDR took the US off the gold standard and operated what was effectively a fiat currency system. And look what happened then – the sky did not fall in. The period from 1946 to 1971 was referred to by Samuelson as neoclassical synthesis Keynesianism and Joan Robinson called it bastard Keynesianism.

      What is the upshot of this? I can’t help but feeling that mainstream economists have confused the Bretton Woods system, which they think failed, and it could be said that it did, with the current fiat currency system. The current fiat money system does not suffer from the defects of the Bretton Woods system. Mainstream economists seem to be unable to think outside their little box. I should mention perhaps that the Bretton Woods system was the idea of Henry Dexter White, not Keynes. It is a standing joke in history of science circles that scientific change proceeds one funeral at a time, not that mainstream neoclassical economics is a science, social or otherwise.

    10. Peter Squitieri

      If Hillary was a neocon she would have put troops in Libya. Libya was irredeemably unstable, certain to descend into chaos and violence without a very strong military government. Suppose you tell us what she SHOULD have done .
      She was no longer Secretary of State when Janukovych was deposed, or don’t you remember? The idea that he was neutral and the new government was fascist is complete nonsense.
      I don’t think you mean Nicaragua. You either mean Haiti or Honduras. But it’s hard to tell what you’re complaining about.

      But on to more substantive issues. So you’re saying you would rather have someone in the White House. who would:

      Cut taxes drastically for the very wealthiest
      Hugely increase the national debt
      Eliminate the Federal minimum wage and let the states decide the matter (heaven help us)
      Repeal the ACA with NO alternative.
      Repeal Dodd-Frank.
      Appoint only an arch-conservative to the Supreme Court.
      Suck up to the NRA (in fact he already has), eliminating any chance for further gun control measures.
      Is a pathological liar, and completely indifferent to the truth.

      You’ve got to fucking be kidding.

      1. Lambert Strether

        “If Hillary was a neocon she would have put troops in Libya.” Even assuming that were possible — it’s not clear to me that we really have a functional army at this point, having just lost two wars — “How Hillary Clinton Became a Hawk” from the Times should disabuse you from your pleasant fantasy that Clinton is not a neo-con.

        As for your parade of horribles, that’s an argument for gridlock, not for any particular Presidential candidate. For my part, I don’t regard a first 100 days, supposing Clinton to be elected with a Democrat Senate, that would include:

        1) TPP passage

        2) A grand bargain

        3) and a new war

        with equanimity either. As for being “a pathological liar, and completely indifferent to the truth,” that seems to be, in varying degrees I admit, the only way to survive as a member of our political class. It’s certainly not unique to Trump.

  2. david s

    I think that if there are to be any Keynesian big ideas and projects that will help lift us out of this stagnation, they will much more likely come from a Trump Administration than a Clinton one.

    1. jgordon

      Successful big ideas and big projects require cheap abundant energy, resources and intelligent design. It’ll be mighty funny when the Keynesians finally implement their plan to overhaul the national highway infrastructure, creating tons of high paying jobs and speeding up the economy–right when our access to cheap oil collapses. That’s dumb design at its finest, yet this sort of thing is almost certainly the best that the lobotomized Keynesian planners will be able to think up and do.

      A truly innovative program to get the economy moving in a positive direction would be to outlaw personal vehicles and rebuild the nation’s railway network. But this society isn’t even anywhere close to having something so useful on its agenda. So we’ll do some Keynesian program, funnel the few remaining resources we have left down into some stupid dead end rathole, and then in a couple of years we’ll be envious here in America of the extravagant lifestyles that the Mexicans are leading. Hell Trump’s wall will be a lot more useful keeping the Mexicans in who are trying to flee. That is the end result of Keynesian programs in a delusional society with bass-ackward priorities. Way more harm than good.

      1. fresno dan

        I share your antipathy toward freeways.
        I remember the big Freeway they built in Fresno when I was a child, destroying hundreds, if not thousands of modest homes (we had to move from a grand rental to a dilapidated house that cost more – were the landlords behind getting rid of a surplus of houses????) – to save maybe – maybe at the most 3 minutes in transit time over driving an existing surface street. Jobs were part of the rationale.
        I have been gone 20 years, and they had gone on a real freeway building tear while I was gone. The whole city crisscrossed with freeways laid out as if someone had thrown a bowl of spaghetti on a map – apparently so every neighborhood can enjoy the sound of traffic.
        Really, Fresno is just not that physically big to justify all these freeways. And with its high unemployment and no real “center” there aren’t any places with traffic congestion anyway – but you get these dubious justifications that millions of dollars are wasted because an implausible auto trip is 4 minutes longer without the freeway….

      2. redleg

        They always bring up road projects, yet almost never water and wastewater. Much of that infrastructure was built by the WPA in the 1930s and has a design life of 75 years. But it’s buried and isn’t charismatic.

        1. Carla

          Excellent point, redleg. Our local sewer bills are going to more than double over the next 5 years and keep going up each year after that to pay for a $3 billion, 25-year program that will reduce the total volume of raw sewage discharges from NE Ohio into Lake Erie from 4.5 billion gallons to “only” 494 million gallons annually. Over 98% of wet weather flows in our combined sewer system will be receiving treatment in 25 years.

          Isn’t that comforting? In 25 years, after paying many hundreds of dollars PER PERSON every one of those years, we’ll have pretty clean water coming from the source of 1/5 of the world’s fresh surface water.

      3. reslez

        It’ll be mighty funny when the Keynesians finally implement their plan to overhaul the national highway infrastructure, creating tons of high paying jobs and speeding up the economy–right when our access to cheap oil collapses

        Yeah, that’s a common canard. People love to gripe about Keynesians who support mindless hole-digging as if it was a thing. In reality most support actually valuable projects like public transportation and environmental reclamation, things that reduce dependence on fossil fuels and put us on a better path going forward. But please by all means pretend otherwise, we wouldn’t want the Austrians or TINA crowd to be unrepresented in a thread.

        1. jgordon

          Very interesting theory you have there, that most stimulus we have in America goes towards actually positive ends–rather than being convenient vehicles for funding graft, fraud, delusions and bridges to nowhere (or highway spending) care to give some examples of stimulus spending that had a net longterm benefit to society and the environment?

        2. tegnost

          You just reminded me of another brogrammer theme, there’s no need to fund public trans like light rail because self driving cars will do it…(and who needs competition from a more economical and sensible source?)

  3. david s

    There seems to be a developing narrative that the Obama Administration has just been brimming with big ideas that have been thwarted by evil Republicans.

    I don’t remember it this way. I do remember an Obama Administration that turned to austerity shortly after the 2009 stimulus, and one that has been patting itself on the back all along about what a great job it has done.

    “All across America, families are tightening their belts and making hard choices. Now, Washington must show that same sense of responsibility.”
    President Obama, April 2009(!)

    1. Akronite

      Now that the pictures we snapped of Obama are finally beginning to develop, where we thought we had photographed his lush jungle, we’re now seeing just a single thin sapling planted for “the future.” And Clinton will soon have a picture of her snapped at this sad tree, with her big lying smile.

    2. hemeantwell

      I don’t think Friedman is saying this, unless Rex Tugwell has been secretly disinterred and is serving under Obama. The capitalist ideological counteroffensive that got going in the 70s has been hegemonically successful. Friedman doesn’t acknowledge that enough, he instead focuses on what sounds more like disciplinary politics.

    3. steelhead23

      Perfect comment David. It was clear, even before his inauguration that Obama would not be an instrument of change. His “team” was mostly the Clinton team, neoliberal through and through. I do give the man the merest of breaks on this – he had little experience, so was likely anxious to take advise from experts. Unfortunately, once the “look forward, not back” path was chosen, it became dogma, neatly defended by one of the best orators of our age. Obama seems willing to kill and wage war, but otherwise totally frightened by change that violates existing orthodoxy, except in areas unlikely to frighten the elite, like Obamacare, and gay friendly policies. Clinton on the other hand, is a neolib disciple, likely to sound more like Margaret Thatcher than Bernie Sanders.

    4. polecat

      there’s that phrase again…’hard choices’ ……….

      ….code for “SUCKERS”……

  4. JLCG

    This type of article or perhaps, all articles about the Economy, deal with the Economy as a substance to which people are appended as accidents. The economy is the sum total of the effort of the people and if the people think that enjoying this very present is preferable to an effort to build a future nothing can be done about it. It is the mind of the people that has to be changed. Wars are very good mechanisms for that.

    1. human

      The “minds of the people” _are_ changed. We don’t want war. We do want a federally managed health _care_ system. We do want responsible and truthful food labeling. We do want policy that ameliorates resource destruction. And we are not just Bernie supporters. Poll after poll shows majorities. But we are told that we are pie-in-the-sky ideologues with the opportunity to vote every 4 years. In the ’70’s we thought that change was right around the corner. Little did we know that we would have to start from scratch again after the change that we did get. The Great Wurlitzer worked its magic.

      Several politicians have stated outright that they believe that they do _not_ have a mandate for the people.

      “Those who make peaceful revolution impossible will make violent revolution inevitable.” – John F. Kennedy

  5. Carla

    I can’t remember if I got this link from an NC comment, or elsewhere. In any case, it’s a scary read: “The 14 Defining Characteristics of Facism,” augmented by a selection from “They Thought They Were Free.” http://rense.com/general37/fascism.htm

    Brings Obama and HRC to mind just as much as Trump, if not more.

    1. Nathanael

      Obama’s a totalitarian. So was GWB, of course (I usually can’t tell the two apart if you list policies).

  6. fresno dan

    “The ferocious reaction to my assessment that Senator Bernie Sanders’ economic and health care proposals could create long-term economic growth shows how mainstream economists who view themselves as politically liberal in America have abandoned progressive politics to embrace a political economy of despair.”
    ==========================

    Here is the problem: “a political economy of despair” – accepting that economists are a real objective academic discipline is a BIG mistake – the idea that these technocrats, who never seem to recognize how much fraud, rent seeking, and capture of the political system
    ((because the people paying them don’t WANT THEM TO)),
    decides things like how much inequality there is, which than decides how much demand there is, and NOT knowing, and apparently NOT WANTING TO KNOW, that it is a POLITICAL economy, and politics decides how resources are often allocated.
    We can have single payer heath care if we choose it and free college education (it wasn’t all that long ago that I went to a CA college essentially for free). HOW is it college used to be free when GDP was less than 1/6 of what it is now??????
    It just doesn’t make sense that we used to be able to afford free college and we can’t now. It is a POLITICAL decision – when Krugman says Sanders plan is “too expensive” Krugman is making a political decision – not some objective scientific assessment. And if he is not even smart enough to ponder why it used to be free and it is not free now – well, theres your problem right there!

    1. Carla

      Thanks, diptherio. Here’s a little more:

      “The people who dominate the political economy at present are determined to use their considerable resources and influence to prevent the development and expansion of democratic infrastructure. Indeed, a many turns, they consciously seek the actual deconstruction of that infrastructure. And they will work harder to do so as the social pressures created by technological change, automation, and joblessness are felt more acutely…

      “The humane and effective solution to the economic crisis requires that (1) the political system be rejuvenated into a powerful democratic infrastructure that (2) draws people into public policy debates as effective participants…Then a frank and effective debate over how best to restructure the economy to serve human interests can occur.”

      “People Get Ready” by Robert McChesney and John Nichols, pp. 206-207

      1. Carla

        Excuse me, fresno dan. You and diptherio look so much alike. I keep confusing you two!

        My apologies.

    2. tegnost

      as i’m sure you know, GDP was increased by making medical care and college more expensive and loaning people the money to pay for it, sanders is obviously threatening the administrative class of both those industries…

    3. Tad

      In backing Clinton there has to be a big payoff for the elites.
      Paul Krugman’s articles that obviously manipulate the truth about Sanders has cost him credibility but the NY Times is manipulating the likes and deleting replies to Krugman.

      This and other obvious lies and manipulation by the above and other elites and institutions lowers if not destroys their place when we look to thoughtful individuals and institutions for cultural points of reference and leadership.

      They suppress and destroy those having the potential to become liberal leaders and thus leave only right wing and fascist populists to be seen as speaking for the people.

  7. Punxsutawney

    Nice to see this article. When I talk about economics, most people who know anything, only know what someone on TV tells them, so they often question, well who agrees with you? Nice to have another name to list.

    And then…

    “Sorry, nothing more can be done for you.” TINA.

    Of course for those at the tippy-top, “How can I help you today?”

  8. LizinOregon

    This is a great article. The health care debate is the best example of this thinking. Yesterday Tom Ashbrook (On Point) had a maddening discussion about the “growing pains of Obamacare” with health economists Gail Wilensky and Dan Polsky that featured excuse after excuse for the disaster that is our health system. The only difference in their positions was that the slightly more leftish Polsky showed a smidge more sympathy when caller after caller outlined their horrible experiences with Obamacare. But he had nothing to offer as a solution and was as negative about the cost of single payer as Wilensky.

    As Fresno Dan said above, the point to keep pounding home is that these are political choices and we need to get the economists out of these debates once and for all.

  9. Rob Lewis

    I know Krugman is the devil incarnate around here, but I’m confused. In the columns I read, he has consistently argued for more government activism, particularly as regards infrastructure spending, to boost the economy. The only reason There Is No Alternative is that Republicans control Congress.
    Frankly I think most economists are re-fighting the same old wars over and over, when they should be focusing on a range of new issues that will define tomorrow’s economy: the minimum wage, guaranteed basic income, technological job destruction, secular stagnation, the limits to growth, climate action, and an aging population, to name a few.

    1. TK421

      But blaming the Republicans is just a dodge. What did the Democrats do when they controlled both houses during Obama’s first term? Next to nothing.

    2. reslez

      The only reason There Is No Alternative is that Republicans control Congress.

      No, because if the Democrats controlled Congress there would be a different excuse for doing nothing / supporting corporatism. As recent memory demonstrates, since Dems had solid majorities 2006-2010 and did absolutely nothing. Neither party represents us, both parties hate us. If you don’t understand this by now you’re not serious.

      1. Maroon Bulldog

        I beg to differ …

        No, the parties don’t hate you. They don’t even know you. There is nothing personal about it–they almost never give you any thought at all.

        The parties don’t hate you; they are indifferent to you. Indifferent with an indifference that is even crueler than hate. If they hated you, at least they would have to consider your thoughts and opinions. If they hated you, at least you would matter to them in some way.

        When they think of you, or us, at all,–when they need to think of ways to coax our vote, or otherwise persuade us not to cast it– they think of us with contempt, not hatred. Contempt and hate are two very different emotions.

        What you hold in contempt is not worth your hate.

    3. Maroon Bulldog

      About 50 years ago, Marshall McLuhan observed that politics gives us yesterday’s solutions to today’s problems.

      Economists re-fighting the same old wars–consistent with McLuhan’s observations.

      Basic guaranteed income is a yesterday’s answer: Robert Theobald wrote “Free Men and Free Markets” more than 50 years ago. Limits to growth: ever hear of the Club of Rome? Technological job destruction–the theme of the chaplain’s orientation retreat for my college freshman class, 50 years ago this fall.

      Apparently, these are the next big problems for us to tackle, and they always will be.

    4. RMO

      Rob Lewis: Funny, isn’t it? Yes, Keynesian policies have been argued for by Krugman for years but now that the Democrat party has a chance to run with a candidate who actually want’s to implement the policies he’s been saying would be good, he’s treating that candidate and his supporters like the Spanish Inquisition treated heretics. I haven’t been able to read his columns for months as they’ve become vicious and insane.

  10. Teejay

    Additional problems I’ve not heard voiced re. her SoS “experience”: forcing the presidential plane of a soveriegn nation to land on the suspicion that Snowden was aboard, pressuring Spain and other countries to drop their efforts to bring American WAR CRIMINALS to justice (how quaint a concept) because our government is too embarrassed to, trapping Assange in the Equadorian embassy in London, ignoring a red letter notice from Nigeria to apprehend and turn over former vice president Dick Cheney to stand trial for bribing Nigerian officials with $180M to win a muliti-billion dollar contract while he was CEO of Haliburton. While I can not evidence this, it’s very hard to believe this Goldwater girl wasn’t in full accord with these international policy decisions. Heh if it’s unconstitutional or breaches federal or international law f**k it do it anyways. The rules are for little people.

    http://bradblog.com/?p=8227

  11. William Neil

    Thanks Professor Friedman. Your posting takes me back to Alan Blinder’s response in the NY Review of Books to Jeff Madrick’s book “Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World.” (Dec. 18, 2014 print edition). Blinder, speaking on behalf of the “mainstream,” maintained that it was, the world of professional econmists, more liberal than we would think, more Keynesian. The four economists who attacked you, prompting another dissenter, James Galbraith to point out their own troubled “analysis” perfectly illustrated that Madrick was correct. Exactly where and how is the mainstream economics profession demonstrating its “progressivity?” I guess you could make the case that Larry Summers, travelling the world to try to convince the Neoliberal Establishment that the world economy is really sicker than the mainstream thinks, suffering from too little demand, is doing this…or is he lobbying for the Treasury Post again in a Clinton administration? Readers will forgive me here at “Neoliberal Clinton” Watch, including now 8 years under Obama, for being skeptical of a change in Summers, because of the very practiced and skilled “head fakes” the Clintons and Obama have given us: fake left rhetorically and go cautious Center. And yes I’ve read both the Summers Commission Report from Jan of 2015 and Stiglitz’s for the Roosevelt Institute, and they never quite get to public jobs like the CCC and WPA did in the New Deal, my test for “authenticity” being intervention into labor markets, one of the great taboos and Rubicons of Neoliberalism that seemingly cannot be crossed.

  12. ewmayer

    Good points overall, but this passage made me throw up into my mouth a little:

    But the real danger of such thinking is that it leaves liberals like Hillary Clinton with few policy options to offer in response to the siren song of demagogues like Donald Trump.

    Let’s get this straight — the only ‘liberal’ things about Hillary are the ones prefixed with neo-. I challenge Friedman to compare her and The Donald’s positions (in her case, not mere triangulational-lies verbiage … we must let her record speak) on things like ‘free trade’, predatory financialization and the looting of the America economy, offshoring of jobs, etc., and then, please tell us once again how ‘liberal’ — or better to avoid ambiguity — Hillary has been throughout her overlong, dismal career of failing upward. Like hubby Bill she is a neoliberal Wall Street shill in her domestic policy and a thoroughgoing neocon on foreign policy.

    Now, I am not so naive as to believe that the all-over-the-rhetorical-map Donald will prove some progressive hero on the domestic-policy side, although one thing he has been quite consistent about is his hammering of so-called free trade agreements as being bad deals for America (as in, when viewed through the eyes of the Great Unwashed rather than the crooked oligarchy.) And I do believe he is far less likely to continue the neocon program of serial crimes against humanity in which Hillary was both a gleeful participant and major mover. Latest example of the genocidal groupthink there was yesterday’s establishment-taking-Trump-to-task over his shocking, traitorous statement that he might be willing to engage in actual – quelle horreur! – diplomacy with someone like the North Korean leader. (He made a similar statement some months ago w.r.to Russia’s Putin and was similarly excoriated over it.)

    So please, no more of the ‘liberal Hillary’ meme – it is patently, laughably absurd and undermines the credibility of those who make use of it.

  13. chuck roast

    So…let’s see, you’re out in marginal little Amherst, and the genius boy teachers of this Bougy-Economics are a couple miles away at various privledged citadels in Boston.
    Why am I reading this at this cranky-pants little site, and not in the Boston Globe?
    But the Red Sox are doing well.

Comments are closed.