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“Democratic” Economists And Who Isn’t One
This week, we’re taking a look at how media deference to a certain group of economic pundits can lead to serious misrepresentation of important political and policy nuances. We’ll be looking at two articles: this one from The Washington Post and this one from The New York Times. Each publication sets the tone for the debate that is continued on from cable news to econ twitter to the Halls of Actual Power. The Post piece is actually quite a good article overall, documenting a shift in where (and from whom) the Biden administration gets its economic policy advice. On the other hand, what we get from the Times article is absolutely unhinged economic coverage that is ridiculously one-sided commentary from the right about a budget run amok. The common feature? They both enshrine a specific type of moderate economic stance as the stance of economists. Let’s start with the Post.
Unlike presidents Obama and Clinton, Biden has been much more open to economic thoughts from people outside of what I sometimes think of as the Beltway bunch — a small group of economists that hew heavily to neoclassical analysis, tend to be darlings of the finance industry, and have been influencing government policy for decades. These are people like Larry Summers or Robert Rubin, along with newer additions à la Jason Furman. The defining feature of such a class is that they exemplify an economic policy of Third Way Democrats, ostensibly liberal but purposefully watered down to align more with a free market puritanism that Reaganists champion. These are the policy wonks of Bill Clinton’s if-you-can’t-beat-them-join-them style. In other words, diet Republicans. They’re more outwardly socially liberal and don’t fully hate the government or want to undo all social progress, but they fundamentally believe in the same largely unregulated economy where financiers set the terms instead of the government.
The issue is that rather than calling the Beltway bunch what they are — the remnants of an inept economic philosophy that cost the Democrats the working class and helped to fuel the rise of Donald Trump and incipient American fascism — the Post article consistently denotes them as “the economists,” which is a huge misnomer for two reasons. First, it makes it seem like progressive economic thought is entirely driven by non-economists, which simply is not true. As a major paper, it is irresponsible to tacitly confine the field of economics to the domain of a few center-right guys. Progressive economists certainly exist. And the field as a whole has moved left since the time when people like Summers were doing their PhDs. Now there are whole organizations dedicated to rigorous economic analysis with a progressive lens, including our good friends here at CEPR. Basically, 20 or 30 years ago, Paul Krugman was towards the left end of the spectrum. Now he’s firmly in the discipline’s mainstream.
This study does a good job of documenting some of this ideological drift. The median economic philosophy is now well to the left of where Summers and pals are. Over 90 percent of economists support fiscal stimulus as a means of fighting recession, which Summers famously does not (unless it’s really watered down). In 2000, the heyday of Third Way Democrats and their finance bro economists, 72 percent of economists thought that managing inflation should be prioritized over other goals at the Federal Reserve. Now, only 38 percent do.
The second issue is related to this leftward shift; identifying someone like Summers as a Democratic economist is a misnomer. Centering him, Furman, and others cut from their cloth as the economists in the Democratic party is just not really true any more. Sure, they are Democrats in the sense of voting blue rather than Trump (it would be unsurprising if Summers or Furman had voted for Massachusetts’ Republican Governor Charlie Baker, and we’re skeptical they’ll support Senator Warren’s re-election in 2024), but they are not representative of what the party as a whole believes now (if they ever were). Describing them as Democratic partisans only serves to obscure the views of other expert economists who are more in step with the party’s platform. After all, Summers, Furman, and friends made headlines for opposing key planks of the Biden administration’s agenda. They opposed Build Back Better, threw a tantrum about student debt forgiveness, and have tried to lampoon the American Rescue Plan as the primary cause of inflation (as I’ve written over and over and over, it isn’t — it is a contributing factor, but certainly not nearly the biggest driver). It makes no sense to describe such a cluster as Democratic economists.
None of this should be taken as a reason not to read the piece — like I said at the top, it’s a good article — but rather a critique of a specific terminological lapse that crops up all too commonly across the media. The default view of what economists think as presented in the news is often well to the right of the field and needlessly restricts the range of ideas floating in the public discourses.
Now, let’s dig into the Times piece, which is best characterized as some pretty bad journalism. The topline argument of the “reporting” boils down to “oh no! We have $31 trillion in debt! Time to panic!” For whatever reason, the author seems to believe that $31 trillion is some kind of meaningful threshold, but never explains why it would be. The most likely reason is that it’s just a nice round number that sounds more dramatic than “oh my God! We just passed $30.97 trillion in debt!” Sure there’s some space for debate about whether the debt is too high, but panicking about this random supposed brightline is absolutely ridiculous. We’re in the same situation we were right before crossing $31 trillion and will still be in much the same position when we hit $31.1 trillion. For more on why this is clearly hysterical fear mongering rather than real reporting, take a look at our CEPR colleague Dean Baker’s piece on his “Beat the Press” blog. One last thing: the gross debt is a bad metric to look at because it includes government debt that is held by other components of the government itself. The publicly held debt (which is gross debt minus this intragovernmental debt) was $24 trillion in Q2 of this year. All that is to say, the Times isn’t even talking about the money that the US government actually owes.
Even more absurd than the actual argument, though, is who gets cited in the article to substantiate why the debt is concerning. First up is Michael A. Peterson, who’s cited as the head of the Peter G. Peterson Foundation. Michael A. is Peter G.’s son, for those of you who were wondering about how he ascended so to such an arguably kinda maybe impressive sounding title. Then, we have our old friend Jason Furman. And that’s it. The Times makes a very big claim that debt is getting out of hand and talks to exactly zero people who don’t already agree with them. The Peterson Foundation, as they note, is literally dedicated to deficit reduction, while Furman is widely known for opposing big spending measures like the American Rescue Plan.
Furman also gave quite the… interesting speech yesterday at the Koch founded libertarian Cato Institute. (remember, Cato has moved further right since more moderate elements left to found the much more serious Niskanen Center) Remember this is the guy who’s ostensibly one of that Beltway Democratic Party bunch from earlier. In yesterday’s speech he argued against price gouging regulation and insulin price ceilings. He also was livid about exactly the trend that the Post piece highlighted. As Matthew Stoller put it, “Jason Furman isn’t making a set of policy arguments, he’s making an argument about who has the legitimacy to speak on policy and who doesn’t. His lament is economists don’t have enough power or influence, and the public has too much.”
I guess the Times writers thought that they were balancing out Peterson’s perspective with an ostensibly liberal economist in Furman. But Furman clearly is, in many ways, closer to a libertarian than he is to the Democratic party these days. Honestly, this piece is less reporting and more laundering of talking points from centrist debt hawks by packaging them as news and providing absolutely no alternative views.
The role that major, ostensibly center left publications play in setting the discussions we have around major economic issues is important. They often tend to misrepresent expert opinions as a form of consensus that they simply aren’t. Jason Furman and Larry Summers do not reflect a consensus of Democratic economists. The fact that they are so often treated as the overriding authorities on what the entire field of economics has to say on the issue is concerning. Sometimes, as with the Post, otherwise good reporting can be marred by verbiage that buys into this assumption. Other times, as with the Times, reporting will be purposefully obtuse about who they cite to protect their conservative talking points from real scrutiny.