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pat_k

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Current location: Seattle, WA
Member since: Tue Nov 23, 2004, 10:22 PM
Number of posts: 9,287

Journal Archives

Regarding the "18 trillion in debt" attack on Sanders' proposals

Urban-Brookings Tax Policy Center's analysis of Sanders' agenda concludes that the proposals, if fully implemented, would add 18 trillion to the Federal debt in 10 years.

In contrast, an earlier and more extensively reviewed analysis by Gerald Friedman concludes this:

After increasing in the first years of the Sanders Administration, the Federal budget’s cash deficit will drop sharply and there will be a significant and growing surplus in a Sanders second term. Instead of a deficit of $1.3 trillion in 2026, there will be a large budget surplus.

Gerald Friedman
Professor of Economics
University of Massachusetts at Amherst
Estimating the Economic Impact of Sanders Proposals


What's the difference? Friedman's analysis includes the projected increase in economic output as a result of the public investment.

Four ex-chairs of the White House Council of Economic Advisers (CEA) wrote an open letter attacking Sanders' proposals and Friedman's analysis. Paul Krugman joined the chorus. Others piled on.

One problem. The CEA ex-chairs (or "gang of four" as William Black has referred to them) failed to actually "run the numbers."

Dave Johnson provides a great summary of the controversy, in a post on the Campaign for America's Future web site. Here's a sampling of responses to the "gang of four" (and the chorus echoing them) from the post:

William K. Black
Krugman and the Gang of 4 Need to Apologize for Smearing Gerald Friedman

Orthodox economists just hate the results of Friedman’s model, for the results support Bernie, rather than Hillary. Worse, they show that orthodox economists' claims that the government can do little good is a myth. They set out to kill the messenger, Friedman, even though Friedman shares their support for Hillary.

... Friedman's modeling of Bernie’s plan is so terrifying … because it shows – under the orthodox economic models – that the government can be a powerful engine of producing "huge beneficial impacts." What is required is that our President has the nerve to junk the orthodox economic myths. …

Notice that they do not claim that Friedman’s "arithmetic" is inaccurate in the sense of making a computational or data input error. Nor do they attack his use of the conventional models they embrace. No, their criticism is that they hate the results of Friedman’s accurate arithmetic. They point out no errors in Friedman’s arithmetic. There is no indication that they ever checked out the accuracy of how he modeled the impacts of Bernie's plans.


Yves Smith
Krugman and His Gang’s Libeling of Economist Gerald Friedman for Finding That Conventional Models Show That Sanders Plan Could Work

The original sin of Friedman's model of Sanders' plan is that it projects GDP increases in excess of 5 percent for several years running before growth levels moderate. Mind you, Friedman did this using a completely standard model.


David Dayen
The Pious Attacks on Bernie Sanders' "Fuzzy" Economics

it's worth pointing out that his economic growth numbers would simply eliminate the GDP gap that was created by the Great Recession and was never filled in the subsequent years of slow growth — which should be the goal of public policy, however "extreme" it sounds
.

Mike Konczal
In Praise of the Wonk: Dissecting the CEA Letter and Sanders’s Other Proposals

I would have done Gerald Friedman's paper backwards. He gives a giant headline number and then you have to work into the text and the footnotes to gather all the details. But a core assumption within the paper is that we are capable of getting back to the 2007 trend GDP through demand. We can get the recovery we should have gotten in 2009.

… I’d recommend reading JW Mason’s excellent analysis about why this is an important and reasonable argument to have: "In other contexts, it's taken for granted that more expansionary policy could deliver substantially higher growth" when there’s still an output gap, and if the output gap has shrunk understanding why is essential.


J.W. Mason
Can Sanders Do It?

The people who are saying that Jerry's growth numbers are impossible on their face are implicitly saying that we should expect all output losses in recessions to be permanent. This is not orthodox economic theory, at all.


To address the criticism, Christina and David Romer, two members of the "gang of four," decided it might be a good idea to actually bother to "run the numbers." They published Senator Sanders' Proposed Policies and Economic Growth.

All well and good, except that there is a major forecast failure in their model, as discussed by Yves Smith in James Galbraith Describes Major Forecast Failure in Model Used by Romers to Attack Friedman on Sanders Plan. From the article:

So why do the Romers say so confidently that Friedman is off base? They are using a different model. And as Galbraith explains long-form, it's one with a pretty crappy track record in post-crisis America.


There is little doubt that the Urban-Brookings analysis, the latest contribution to the effort to discredit Sanders proposals and Friedman's analysis of them, will, like the efforts before it, fail to stand up to serious scrutiny.

Additional references

Alan Harvey
IDEAeconomics
Standard Fare or Fantasy Economics?

James K. Galbraith
interviewed on the Real News Network, Attacks on Sanders Economic Plan By Former CEA Chairs Are Irresponsible.

Mark Thomas
The Fiscal Times
Here’s Why Bernie Sanders’ 5% Growth Plan Isn’t Crazy After All.

Ryan Cooper
Why are big-shot liberal economists hippie-punching Bernie Sanders?

In short, the whole debate is about how much extra economic capacity there is in the economy, and some fairly strong evidence suggests that the answer is "a lot," provided the government is willing to try really hard. As Matthew Klein writes, "This supposedly 'extreme' and 'unsupportable' forecast implies American output will return to its previous trend just as Sanders would be finishing up his second term."


James K. Galbraith's Ultimate Takedown of the Critics: Response to CEA

You write that you have applied rigor to your analyses of economic proposals by Democrats and Republicans. 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.


Thomas Piketty, author of Capital in the 21st Century, has an Op-Ed in the Guardian in which he discusses lessons from history and the economic implications of Sanders' proposals.

And if you are not familiar with Capital in the 21st Century, Stephen Marche's review of it is typical:

If you want to understand the world, if you want to comprehend the mechanics of the forces shaping our time, if you want to know the political choices we face, you must read it. I cannot think of a more important book published in my lifetime.


A final consideration

In addition to the question of including projected growth in estimates of the economic impact of Sanders proposals, there is another factor that gets ignored. Piketty points out that the data available for such analyses do not take understatement of income by the top decile into account. As Piketty puts it in his section on the Explosion of US Inequality after 1980, the data:

take{s} account only of income declared in tax returns, and in particular do not correct for any possible understatement of capital income for legal or extralegal reasons. Given the widening gap between the total capital income (especially dividends and interest) included in US national accounts and in the amount declared in tax returns, and given too, the rapid development of tax havens (flow to which are, in all likelihood, mostly not even included in national accounts), it is likely the Figure 8.5 underestimates the amount by which the upper decile's share actually increased.


Any regulation that makes it difficult to "hide" income would increase revenue. The effect could be substantial.

Some quotes that seem appropriate at this juncture

There are so many posts here that sap the hope and confidence we need to bring about change of any kind. I find these quotes to be a good antidote.

"Every great dream, begins with a dreamer. Always remember you have within you the strength, the patience and the passion to reach for the stars to change the world."
--Harriet Tubman


"Whatever you can do, or dream you can, begin it. Boldness has genius, power and magic in it."
-- Goethe


"They tried to bury us. They didn't know we were seeds."
-- Dinos Christianopoulos


"New and stirring things are belittled because if they are not belittled the humiliating question arises 'Why then are you not taking part in them?'"
-- H.G. Wells


"Get up, stand up, Stand up for your rights. Get up, stand up, Don't give up the fight."
-- Bob Marley


"Unless someone like you cares a whole awful lot, Nothing is going to get better. It's not."
-- Dr. Seuss, The Lorax


"You are never too old to set another goal or dream a new dream."
--C.S.Lewis


"It does not take a majority to prevail ... but rather an irate, tireless minority, keen on setting brushfires of freedom in the minds of men."
-- Samuel Adams


"Those who profess to favor freedom and yet depreciate agitation, are people who want crops without ploughing the ground; they want rain without thunder and lightning; they want the ocean without the roar of its many waters. The struggle may be a moral one, or it may be a physical one, or it may be both. But it must be a struggle. Power concedes nothing without a demand. It never did and it never will."
-- Frederick Douglass


"Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence."
-- Helen Keller


"Alone we can do so little; together we can do so much."
-- Helen Keller


"Don't be afraid to take a big step. You can't cross a chasm in two small jumps."
-- David Lloyd George


"If your actions inspire others to dream more, learn more, do more, and become more, you are a leader."
--John Quincy Adams


"How wonderful it is that nobody need wait a single moment before starting to improve the world."
-- Anne Frank


"It's the action, not the fruit of the action, that's important. You have to do the right thing. It may not be in your power, may not be in your time, that there'll be any fruit. But that doesn't mean you stop doing the right thing. You may never know what results come from your action. But if you do nothing, there will be no result."
-- Mahatma Gandhi


"The question is not if we will be extremists, but what kind of extremists we will be. The nation and the world are in dire need of creative extremists."
-- Martin Luther King Jr.

I'm feeling my age.

"The activities of JennyQ apparently began on the Salon.com Table Talk forums. "


Media Whores Online was a wonderful resource in the early 2000's.

I was a "TableTalker" back in the late 1990's. There was a big migration from TT to DU in 2004. I can't actually recall what prompted it.

And then there was the "Censure and Move On" petition / email group back in 1998. When that began we had no idea what it was destined to become.

And BartCop (Terry Coppage, who died too young just a couple years ago).

The Clinton impeachment witch hunt woke me up to the "vast right-wing conspiracy." Conason and Lyon's "the Hunting of the President" laid out the players and connections.

Then we were hit by the 2000 (s)election.

I was thinking about one event just a couple days ago. Bartcop's fundraiser for Julie Hiatt Steele at James Carville's restaurant in DC. I met David Brock there. "Blinded by the Right" gave us a picture of what we were up against from the inside. I had a lot of respect for him at that time. He seemed embarrassed by all the attention he got at the event. Later, his Media Matters site became another great resource.

Seeing the role he is playing as propagandist is so disheartening. Who knows? Maybe he'll have another awakening and give us the inside scoop on that.

Enough reminiscing. There's a new chapter ahead.

"wide-ranging foreclosure abuses" -- there's more to the story


Companies like Bank of America, Citi, Wells Fargo and Chase ended up being stuck with an additional $25 billion settlement just for the tawdry document-fudging "robosigning" scheme that helped accelerate the foreclosure crisis.


I am glad Taibbi included this, but there is more to the story than the mortgage fraud and abuses that got so much press.

One aspect that we hear almost nothing about is that fact that the banks that served as securitization trustees for those giant investment trusts refused to engage in the most basic loss mitigation procedures -- procedures that were previously standard practice throughout the mortgage industry. Had they done so, I have no doubt that a countless number of the foreclosures would never had occurred.

I have learned this from personal experience. My partner and were pro se litigants in a case involving Citibank that stretched from 2008 to 2014. It's a long story, but suffice it to say, in the course of the case we became experts of sorts on the unlawful, negligent, and bad faith conduct that permeated the system. (Much of which continues.)

By failing to engage in the most basic loss mitigation steps, the banks displayed a mystifying level of negligence and bad faith. They exhibited absolutely no interest in protecting the interests of the investors. Because they were selling the bonds to each other, their failure is a truly bizarre display of acting against their own interests.

Another thing we learned is the extent to which the state courts enabled the unlawful conduct. From beginning to end in our case, the law was clearly on our side. Nevertheless, we lost in superior court and the appellate division. It was truly mystifying.

Ultimately, the Center for Social Justice at Seton Hall took up the case and petitioned the Supreme Court of NJ on our behalf. Although we lost there too, the fact that the the center took up the case was vindication that we weren't "crazy."

DNFTEC

DNFTEC

That's something we used on the old tabletalk political forums many moons ago.

It stands for "Do Not Feed The Energy Creatures."

Put them on ignore. They just aren't worth the energy.

Why? Beltway group think.

Too many Dems believe Sanders' "socialist" ideas are toxic. Just as they have believed that any fight for the principles we really care about will bring the wrath of... well, somebody... down on them. There will be a "backlash." The Republican noise machine will kill us (not that they call it that). And on and on.

Such beliefs and rationalizations for not "rocking the boat" are never challenged inside the beltway (or by the people "out here" who have internalized the rationalizations). Classic group think. The beliefs of the insular group just keep drifting further and further away from reality as those inside the insular group reinforce the increasingly irrational beliefs.

Sanders campaign is challenging beltway/establishment group think. But it's a hard nut to crack. By its nature, group think is a powerful social force.

It's not hopeless. Redemption is always possible. Sanders' campaign is chipping away, and, win or lose, will generate positive ripple effects into the future. If someone so "radical" can't make it to the White House this time, he will have paved the way for another candidate advocating real change to make it in the future.

In the meantime, it's up to us to just keep chipping away at the rationalizations and memes. (e.g., Can't win so don't fight; there'll be backlash; or whatever the latest excuse for inaction might be.)

The only way they can truly "win" is if we bow out of the fight.

Support verifiedvoting.org

https://www.verifiedvoting.org/donate/

The off-the-scale bashing is so disturbing...

I want to see Bernie in the White House, but if that doesn't come to pass, we still need to win back Congress, and do what we can to make as many parts of his New New Deal a reality as possible. That means continuing to organize. It also means that we need to elect the person most likely to sign any decent legislation that gets through into law. If she wins the nomination, that means Hillary.

I know many reject the idea, and I don't imagine anything I say is going to change any minds, but THERE IS A DIFFERENCE between Hillary and Trump (or Cruz). If for nothing else, for the sake of the Supreme Court. Any more right-wingnuts on the court, just say goodbye to... well, just about any of the hard won rights you might care about.

It's not just about putting Bernie in the White House. It's about much more!

We’re fighting to put Bernie in the White House. But that’s not all we are fighting for.

Challenging Beltway Group Think

Whatever the outcome, every person inspired to play an active part in the campaign, every dollar raised, every delegate won, helps disprove the notion that universal health care, billionaire’s tax, and so on, are "toxic" topics that Democrats must avoid at all costs.

Inside the beltway, the "conventional wisdom" is that raising "socialist" ideas will bring the wrath of... well someone.. down on them. Bernie's campaign is showing them that what "comes down" is masses of money and a well-spring of energetic support. Seeing the real consequences of raising "socialist" ideas can help put some spine back into them... Well, perhaps not actual spine, perhaps just enlightened self-interest (Maybe I could rally some support and raise more money for reelection if I were bolder? Hmmm.)

Inspiring People Across America to Fight for What Bernie Stands For

One of my fondest wishes is that, whether or not Bernie wins the nomination, people who have been inspired to take action by Bernie's campaign, will be inspired to continue the fight for what he stands for after the campaign is over.

Even if he's elected, he can't get the things we want done, done, without a lot of help from "out here."

Change doesn't get done without people “on the ground.” His campaign is bringing in the "troops" needed for the fights ahead: winning back Congress in 2018 (if we don’t manage it this cycle); lobbying to get more sponsors for bills that implement his proposals, lobbying to push those bills through. Big change rarely happens overnight. But if enough people are inspired to stand up, we will ultimately win.

To those who argue that Bernie should drop out, I say this: it would be a terrible mistake. Bernie needs to stay in though the convention, regardless of the cumulative numbers. If he drops out, any state that hasn't voted yet will lose out because the people on the ground will have the wind knocked out of their sails. We would lose people who may otherwise have become agents of change.

Imagine This

Imagine if we had just 250 citizen lobbyists in each congressional district pestering members of Congress (or staffers) face-to-face, gathering names on petitions, raising money, working on Congressional elections, and so on. That's a mere 0.15% of people who turnout to vote for candidates in the middle or left side of the spectrum. (That's assuming an average district size of 700,000; 75% over 18; 60% voter turnout, and about 50% of those in the middle or left side of the spectrum).

With the support of small contributions, these folks could be paid to work full time on our behalf. We could create a formidable "K street" operation of our own.

Corporate America may have the money, but people on the ground translate to money and power too. I think too many don't believe this right now. It’s time for that to change. Bernie’s campaign has already accomplished amazing things. Embrace those accomplishments. Use those victories to feed confidence in our own power to effect change.

Ultimately, that’s what it’s all about.

As a wise friend used to say, we don't need a movement. More of us just need to move.

Turning Hopelessness and Immobility into Confidence and Action

Can it be discouraging? You betcha. Except for voting, I've felt hopeless and immobilized for some time. But, some of the “old-timers” here may remember me. I was in the fight for the integrity of our elections. We lobbied members of Congress, face-to-face, to get a Senator to stand with Stephanie Tubbs-Jones and object to the Ohio electors on Jan 6, 2005 (something that even John Conyers told us was impossible). So many joined that battle. And we did it. We “got” Barbara Boxer. The full extent of the fraud in Ohio is a permanent part of the Congressional record. The tragedy of the stolen election is memorialized. It was proud moment for all. Throughout the Bush presidency, we lobbied for his impeachment, won sponsors, and in the process, put a indelible stain on the Bush presidency.

What I learned, and what I have lost touch with, is that when I get out there and work with others, my hope is naturally renewed. In the process, I encounter other people and groups who are out there tackling problems that seem overwhelming... and winning. It's almost impossible to feel hopeless when you witness people in action first hand.

Bernie’s campaign has inspired me to get back into the fray. I’m committed to staying in for the long haul. I hope many of you feel the same.

Have confidence in yourself. That’s where it all begins.

It always seems impossible until it's done.
― Nelson Mandela

Heartbroken... and grateful

I am so grateful that Karyn touched my life. In particular, I will always treasure the time Dusty ("Senator" on DU) and I shared with Karyn and Andy at the "Gathering to Save Our Democracy" in Nashville back in 2005.

When she responded to my post about Dusty's death, Karyn wrote "I have to believe that not only did Dusty have a terrific reunion with Andy- but I'll bet they are gonna team up and help us win this election." That was back in 2012. In her tribute to Andy, she wrote "He was an extraordinary person, a hero of democracy and a wonderful friend. Knowing that he is now free of the pain that had taken over his body these past few months it is a comfort to know that he is free now and has left it all behind."

Words are failing me, so I borrow hers. I have to believe that not only did Karyn, Dusty, and Andy have a terrific reunion, but that they are going to team up and help us with this election. She was an extraordinary person, a hero of democracy, and a wonderful friend. I take comfort in knowing she is free of the pain she suffered, and am thankful that she gained some measure of normalcy -- even if only for a short time -- before the end. ("Still here and feeling good" Nov 10, 2015)

I love you Karyn.
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