The political furor among economists over Senator Bernie Sanders’ economic proposals began with an analysis of the impact on economic growth of Sanders’ policy proposals. Friedman’s piece was subjected to a withering critique by four former heads of the Council of Economic Advisers (CEA), who cast his projections as “fantastical” and “extreme,” even though Annie Lowrey’s journalistic investigation, published in the New York Times Magazine, suggests that they failed to perform an exhaustive study. Paul Krugman vehemently criticized Friedman and Sanders in the New York Times, seeming to rely on the reputations of the four CEA heads without examining their own problematic track record in forecasting.
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These critiques were followed by a more detailed exploration by Christina and David Romer, who concluded that Friedman’s assessment had been “deeply deficient.” Their criticisms were ampflified by economist Justin Wolfers, writing in the New York Times.
After an open letter to Friedman’s four critics pointing out that Friedman’s assessment was more carefully argued and calculated than was their dismissal of his conclusions, James Galbraith wrote that “the original mudslinging by four past Chairs of the Council of Economic Advisers was based on nothing, except that Friedman’s growth numbers looked high,” adding that “no analysis preceded that claim.” Unlike Friedman’s critics, Galbraith wrote, the Amherst economist had no political motive in writing his assessment. Laurence Kotlikoff argued that Friedman’s critics were all closely allied with Hillary Clinton, and that this skewed their analysis.
Economist Bill Mitchell pointed out that Friedman’s critics have routinely and significantly overestimated or underestimated economic growth in their own models. James Galbraith emphasizes this in work that has been reposted on the Institute blog
Friedman, for his own part, wrote that his dispute with the Romers was not based on faulty math or political partisanship; it was a fundamental conceptual difference in how to understand the economy: “Differences between my evaluation of the impact of the Sanders economic program from that of the Romers reflect different views of the economy, the difference between a static model where national income and employment are largely fixed and a dynamic one where these are shaped by effective demand and are, therefore, susceptible to change in response to economic policy. There are no errors in arithmetic. It is a fundamental difference in vision.”
