There was one post yesterday, “Sarandonizing Economics:”
The Democratic primary is essentially over, although the Sanders campaign is still fundraising off naive supporters by claiming that it has a real shot. But the controversies will live on, for a while at least. Among these controversies, the debate over economic analysis is probably well down the list of importance; but it’s obviously one that I care about. And I see that Pro Growth Liberal is complaining about Gerald Friedman’s latest attempt to defend his estimates for growth from the Sanders program.
The history, for those who weren’t paying attention, is that Friedman produced huge numbers that were hard to understand on both the demand and the supply side. Initially, he didn’t claim to be doing anything especially new — on the contrary, he and his defenders claimed that they were doing standard Keynesian economics — apparently unaware that they were doing no such thing. Only after this was pointed out did they turn to declaring that the standard analysis was all wrong, and that Keynesians like Christina and David Romer are really just neoclassical types.
For those of us who participated in the austerity debates, that’s pretty amazing and disheartening. Remember when Robert Lucas accused Christy Romer of corruptly producing “schlock economics” to justify government spending? Remember the long fight against the doctrine of expansionary austerity and the mythical cliff at 90 percent debt? There was a huge division between Keynesians and anti-Keynesians, in which people like the Romers faced a torrent of abuse from the right. And there has also been a huge intellectual vindication, with interest rates, inflation, and output looking much more like Keynesian predictions than like what those on the right were predicting.
Oh, and on the issue where Lucas accused Romer of corruption: her estimate of a multiplier of 1.5 turns out to be very close to the numbers most researchers have found in the aftermath of the disastrous turn to austerity.
But now any skepticism about claims that multipliers are vastly higher than that, and that there are no supply constraints preventing the U.S. economy from growing 4.5 percent for the next decade, makes you no different from the inflation and debt fear mongers of the right.
The way to think about this, I’d say, is that it’s the economics nerd equivalent of Susan Sarandon dismissing Hillary Clinton as “the best Republican out there.” Anyone who tells you that you can’t get everything you want, in economics or politics, is just evil and useless.
Will this attitude persist as we enter an election in which the choice is between Clinton and Trump or Cruz, between Romer-type economics and Ayn Randism? We’ll see.