Beltway Bullshit, my interview with JW Mason on Bernie’s economics

My interview with JW Mason on how wonk critics of Sanders’ economic ideas reinforce low expectations was transcribed for Jacobin under the great title, “Beltway Bullshit.”

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Michal Rozworski: There’s been a big debate recently around Bernie Sanders’s economic ideas. It was precipitated by Gerald Friedman’s claim that Sanders’s plans would lead to 5 percent nominal economic growth over a certain period, substantial working- and middle-class income growth, and massive job creation. Pretty quickly, liberal economists like Paul Krugman or former chairs of the Council of Economic Advisors attacked this paper as unrealistic. What is your argument here?

JW Mason: So far, until now I think in the campaign the core questions of macroeconomic policy — whether we can or should want to see a higher level of GDP and employment or faster growth going forward — haven’t really been central on the Democratic side and Jerry’s paper really raised those issues.

Now I don’t think we want to get caught up in the specific strengths or weaknesses of that paper or the plausibility of particular numbers. I think that there are some problems with the paper. If you were to do the same exercise more carefully you would probably come up with lower numbers.

I think it would be foolish to defend the specific estimates that Friedman put out there, but I also don’t think that there is any real need to do so because the fundamental issue, as you say, is not this number or that number. Obviously things evolve under the pressure of events.

Economic forecasting is a very imprecise science in the best case. The question is whether there is good reason to think there is space for a substantially more expansionary policy. Is there good reason to think that a big expansion of public spending could substantially boost GDP and employment?

And I think that there the answers are clearly yes. This paper and the debate that it has sparked has actually been very productive in getting people to engage that question and getting a number of more mainstream Democratic-associated economists to agree that there is actually space for substantial additional expansionary policy.

What does this debate say about the diminished expectations about the economy that we have? Is this what you’re saying that it’s fundamentally about?

That is what it’s about. The position on the other side, the CEA chairs and various other people who’ve been the most vocal critics of these estimates, has been implicitly or explicitly: “This is as good as we can do.” (more…)

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Defending Bernie-nomics and debunking the housing market

This week, I interview two guests on fairly different topics linked by the fact that they both give very effective debunkings of some mainstream economic thinking. First, I speak with JW Mason, economics professor at John Jay College in New York City, about the debate that has erupted around Bernie Sanders’ economic program. JW argues convincingly that the criticism of Sanders from mainstream liberal economists is about managing and keeping a lid on regular people’s expectations for the economy. The critics are effectively saying “this is the best we can do” even when millions are condemnded to poverty and shitty jobs. Be sure to check out his posts (1, 2 and 3), which are among the best on this debate.

Second, I speak with Nathan Tankus, a writer also based in New York City, on why housing is so unaffordable in large cities even amidst massive condo building booms. Nathan goes through the history of his Chelsea neighbourhood in NYC and its long process of gentrification as a way of drawing some conclusions about why the housing market is so screwed up. It turns out this market doesn’t work like the model described in Economics 101 textbooks. For further reading on the topic, Nathan suggests Bob Fitch (especially The Assassination of New York), Doug Henwood and Michael Hudson.

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Will Sanders’ rise be felt in Canada?

Co-written with Derrick O’Keefe and originally published at Ricochet.

Even if he’s really only offering a pragmatic form of social democracy, Sanders has created a political space in the mainstream left that’s sorely missing in Canada. His insurgent campaign for the Democratic Party nomination has put inequality and systemic injustice front and centre in the United States.

Policy proposals aside, merely having the word “socialism” back on the agenda in the United States signals a massive shift. Compare Sanders’ unabashed use of the term to recent NDP history.

Canada’s traditional social democratic party has spent recent years downplaying and scrubbing away the last vestiges of socialism from its public presentation. Under pressure from party leaders and bureaucrats, the NDP removed all but one reference to it from its constitution in 2013. The s-word is now only mentioned in passing in the party preamble.

It’s useful to take a broader view than just the recent botched campaign and the party itself. For years, the NDP’s leadership and top advisors have taken their cues from their counterparts in control of the Democratic Party — an electoral machine that has been effectively captured by a small coterie of the rich and powerful. (more…)

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The challenge of Sanders and Corbyn to the extreme centre

Over the past year, unlikely challengers have emerged to the dominant politics of the center-left in both the US and the UK. Jeremy Corbyn is looking increasingly poised to win the leadership of the UK Labour Party next month. Meanwhile, on this side of the Atlantic, Bernie Sanders keeps rising in the polls, drawing large crowds and making Hillary Clinton’s coronation as Democratic presidential candidate a bit uncertain. Both Sanders and Corbyn are silver-haired, decades-long parliamentarians identified with a marginalized left and would have been at home in pre-1970s social democracy. After years of rightward drift from both Labour and the Democrats towards the “extreme centre”, social democracy is making one more stand. Both Sanders and Corbyn have set their sights on economic inequality and economic stagnation for the majority as defining issues. Sanders, in particular, has also made talked widely about reclaiming the political system from under the influence of big money.

This week’s guests joined me to talk about what the Sanders and Corbyn campaigns: where they’re coming from, what they mean and what we an expect from them. First, I speak with Bhaskar Sunkara about Bernie Sanders and his qualified support for Bernie’s campaign. Bhaskar is the editor of the excellent Jacobin Magazine from the New York, which has quickly become an important venue on the US left. My second guest is James Meadway, an economist and activist from the UK. James recently signed a letter in support of Corbyn and has been following his campaign closely.

150815 Corbyn Sanders

 

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