Wednesday, March 30, 2016
Economist Argues 'Pie in the Sky' Sanders Will, in Fact, 'Make Economy Great Again'
Leading economist argues that Sanders' bold economic agenda would 'deliver standards of well-being for the overwhelming majority of Americans in ways that we have not experienced for generations.'
Bernie Sanders' "Future to Believe In" is based, according to economists, on "solid economic reasoning and evidence." (Photo: Gage Skidmore/cc/flickr)
As the Democratic primary race tightens, Hillary Clinton has been trying to cast opponent Bernie Sanders as unrealistic and "pie in the sky," but a leading University of Massachusetts economist says such criticisms are "dead wrong" and, in fact, the Vermont senator's proposals are precisely what will "make the economy great again."
In a column published at The Nation on Tuesday, Robert Pollin, distinguished professor in economics at UMass Amherst and co-director of the Political Economy Research Institute (PERI), examines the major policy items under Sanders' economic agenda. These include a single-payer healthcare system; increasing the federal minimum wage to $15 an hour; free tuition at public colleges and universities, to be financed by a "Robin Hood" tax on Wall Street transactions; and large-scale public investments in renewable energy and infrastructure.
Pollin's conclusion: this program works, handily.
"All of his major proposals are grounded in solid economic reasoning and evidence," Pollin states.
"Overall, the Sanders program is capable of raising living standards and reducing insecurity for working people and the poor, expanding higher educational opportunities, and reversing the decades-long trend toward rising inequality," Pollin writes. "It could bring Wall Street’s dominance under control and help prevent a repeat of the financial crisis. It will also strongly support investments in education, clean energy, and public infrastructure, generating millions of good jobs in the process."
Pollin's analysis builds on previous research, including his own. It takes a big-picture look at the potential impact of Sanders' policies, refuting claims made by Clinton and her supporters that they would stymie job and economic growth.
When discussing the minimum wage increase, Pollin dismisses the idea that employers would not be able to absorb the cost of the wage increase. Citing a recent study by PERI colleague Jeannette Wicks-Lim and himself, Pollin states, "even fast-food restaurants, which employ a disproportionate share of minimum wage workers, are likely to see their overall business costs rise by only about 3.4 percent per year during a four-year phase-in for a $15 minimum wage."
Pollin argues that the overall economy will benefit "from the gains in equality tied to the minimum-wage increase," explaining that "greater equality means working people have more spending power, which in turn supports greater overall demand in the economy."
Referencing a paper that he along with a team of UMass economists published earlier this month, Pollin also concludes that the Inclusive Prosperity Act co-sponsored by Sanders in the Senate and U.S. Rep. Keith Ellison (D-Minn.) in the House, "could conservatively generate around $300 billion per year in new government revenue" through a Financial Transaction Tax (FTT), which "would be more than enough to finance in full the Sanders proposal to provide free college tuition for all U.S. students."
At the time of that writing, National Nurses United executive director RoseAnn DeMoro published a column at Common Dreams which she wrote that it is "no surprise" that "Wall Street moguls, and their surrogates in the media and Washington, hate [the legislation]."
"But," DeMoro added, "shamefully, many in the liberal and Democratic Party elite, from Hillary Clinton to her surrogates in the Democratic National Committee and Congress have also attacked Sanders' social change agenda as 'pie in the sky.'"
In fact, Clinton used that very same language at a rally in Madison, Wisconsin, on Monday, telling supporters that she wasn't a candidate just proposing "pie in the sky stuff" in order to win votes.
Contrary to the criticisms lobbed against Sanders bold economic plan, Pollin concludes that the agenda would both grow the economy "at a healthy rate," and at the same time "deliver standards of well-being for the overwhelming majority of Americans, as well as the environment, in ways that we have not experienced for generations."
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