Huffington Post has the article Stephanie Kelton Has The Biggest Idea In Washington.
Once an outsider, her radical economic thinking won over Wall Street. Now she’s changing the Democratic Party.
I don’t usually expect much from HuffPo, but this article is pretty good once you get past the fluff.
I am pretty familiar with Kelton’s economic views, so I didn’t need the Huffington Post’s explanation of it. What interested me was an explanation of some of the political events that had frustrated me.
But it’s hard for many to believe that achieving such ambitious goals wouldn’t come with some other searing social price. While she got Sanders’ attention talking about economic rights and social justice, he balked at the implications of her broader theory. He had been pounding Republicans on the deficit for years and didn’t want to give it up. He had voted against the expensive Iraq War, the George W. Bush administration’s Big Pharma–friendly Medicare prescription drug benefit and the Bush tax cuts, arguing they were too expensive and diverted resources from programs that would genuinely help the middle class. While Kelton the radical theorist wanted Sanders to shrug off deficits, Sanders the politician wanted to pay for his plan by taxing the rich.
For all its ambition, Sanders’ agenda wasn’t very creative. It just expanded the scope of existing programs that liberals already liked. The minimum wage would be higher. Tuition at public universities would be not just reduced, but free. Medicare would be available to everyone, with better coverage. Kelton didn’t have a problem with any of it, but almost nothing distinctive about her economic thinking ended up in the platform.
She thought her boss was walking into a trap by insisting that higher taxes on the rich and economic growth could pay for everything he wanted to do. She was right. When the campaign enlisted University of Massachusetts at Amherst economist Gerald Friedman to calculate the cost of Sanders’ platform, Friedman relied on overly optimistic assumptions in his modeling. Economists aligned with rival Democratic candidate Hillary Clinton pounced, accusing the Sanders operation of fiscal irresponsibility and economic illiteracy. Sanders staffers still wince at the memory. The numbers shouldn’t have mattered, but they didn’t add up.
I had also been warning Democrats not to get trapped into the deficit issues and not to get trapped by their own rhetoric about paying for ambitious programs. Knowing of Kelton’s position with Bernie Sanders and knowing her economics, I was wondering why he wasn’t listening more to what she had to say. Now, at least, I know she fought for her ideas, but failed in this case. I also now see what the Sanders’ excuse was for failing to heed wise advice when he received it.