This response to the Romers’ Critique of Friedman Bernienomics Analysis, authored by CPEG’s Ron Baiman, is a cross-post from the Dollars and Sense blog.
To her credit Christina Romer, one of the four former CEA Chairs who wrote a scathing four paragraph letter dismissing Gerald Friedman’s detailed study of the impact of the Sanders economic program, has acknowledged that Friedman’s estimates warrant a detailed and substantive analysis. Romer has, with her husband and prominent fellow “Neoclassical (NC) Keynesian” Economist, David Romer, produced a more detailed critique that attempts to back up the stridently critical statements of the CEA Chair’s letter.
As Friedman notes, in his detailed rebuttal, the Romers’ major critique appears to be that a stimulus program that ramps up from $300 billion in 2016 to $600 billion by 2021 and then declines to the $300-$400 billion per year range from 2022 to 2026 (Romers, p. 2) cannot produce permanent gains in GDP growth rates via increased emp/pop ratio and productivity rather than a one-time boost in output that tapers off as the stimulus declines. Indeed, the Romers appear so sure of their NC methodological approach that they speculate that Friedman must have made an elementary miscalculation by not calculating multiplier impacts off of an unchanged (for 10 years) CBO baseline.
The Poverty of Neoclassical Economic Analysis, by CPEG’s Ron Baiman, is a response to recent denunciations of economic analysis regarding economic proposals from U.S. Presidential Candidate Bernie Sanders. Baiman writes “When I first got wind of the denunciation of Prof. Gerald Friedman’s Bernienomics impact estimates by prominent liberal Economists, two questions came immediately to mind. Who were these “liberal economists” and what were their objections? A little googling around got me the first answer in a jiffy. The liberal economists were four former Chairs of the Council of Economic Advisors (CEA) under Democratic Presidents Clinton and Obama: Alan Kreuger, Austan Goolsbee, Christina Romer, and Laura D’Andrea Tyson. It took more time and more work to establish the second answer.” Click below to read the full essay.
The following piece, authored by CPEG’s Bruce Parry, is a response to Paul Krugman’s February 5th New York Times Op-Ed entitled “Who Hates Obamacare”
In his February 5th Op-Ed piece, Paul Krugman vilifies the Sanders supporters for their position on health care in the United States and their evaluation of Obamacare in particular. He starts out with an anecdote about Ted Cruz, but for the rest of the article ignores the subject of how much the Republicans hate Obamacare. Yet it is the right — driven by the insurance companies, the pharmaceutical companies and other business interests that seem to elude Krugman — that really hates Obamacare. Instead he focuses his vitriol on the left.
Click below to read CPEG Notes, a series of quarterly analyses of current economic reality by the Chicago Political Economy Group. In this edition: Prof. Joseph Persky examines the limping U.S. economy, Mel Rothenberg’s International Note examines the European refugee influx and economic crisis, Ron Baiman talks labor and the fight for $15, Bruce Parry talks trade and the TPP, and finally Bill Barclay dives into high frequency trading and a court case regarding “spoofing”.
In an October 1st address to the UIC chapter of the State Universities Annuitants Association (SUAA), CPEG’s Bill Barclay explained the potential benefits of a small LaSalle Street Tax (also known as a Financial Transactions Tax), on Chicago’s two large trading markets. Barclay suggested that some of the estimated $10-12 Billion in revenues that could be generated by the tax could be used to make up for the decades-long failure of the Illinois legislature to keep their pension funding promises.
The SUAA, with over 1,600 members, exists to promote the individual and collective interests and welfare of its members and of all UIC retirees. You can download Barclay’s presentation here (powerpoint), or view the full presentation on Youtube.