Thinking About Thinking About David Brooks

Journalistic navel-gazing today focuses on Jonathan Chait's thoughts about the New Yorker's thoughts about David Brook's thoughts about the economy:

This quite good New York magazine profile of David Brooks made me feel sad for him ... Obviously, every column Brooks writes is not a failure. But many of them are. Brooks is very good at making observations, but not especially good at making arguments. He's miscast in the role of an op-ed columnist. You can see that in today's column. It's primarily a set of Brooksian observations -- Keynesian economists are very smart and rely upon models, businessmen distrust the government. Brooks presents these observations as an argument against large-scale stimulus, but they really aren't. They could just as easily be presented as an argument for why businessmen are ignorant of macroeconomics.

Brooks says that it's very hard to change peoples' minds. I agree. Very few people have the sorts of minds that base their beliefs upon factual premises building to a logical conclusion, and which can therefore change their minds in the face of contrary evidence. The problem is that Brooks doesn't make the kind of arguments that could convince a person like that.

I don't know whether all that is true, but I found today's column by Brooks to be annoying. It's written in a pseudo-populist style that I find patronizing, and maybe a bit insulting:

These Demand Siders have very high I.Q.’s, but they seem to be strangers to doubt and modesty. They have total faith in their models. But all schools of economic thought have taken their lumps over the past few years. Are you really willing to risk national insolvency on the basis of a model?

Moreover, the Demand Siders write as if everybody who disagrees with them is immoral or a moron. But, in fact, many prize-festooned economists do not support another stimulus. Most European leaders and central bankers think it’s time to begin reducing debt, not increasing it — as do many economists at the international economic institutions. Are you sure your theorists are right and theirs are wrong?

The Demand Siders don’t have a good explanation for the past two years. There is no way to know for sure how well the last stimulus worked because we don’t know what would have happened without it. But it is certainly true that the fiscal spigots have been wide open. The U.S. and most other countries have run up huge, historic deficits. And while this has helped save public-sector jobs, we certainly haven’t seen much private-sector job growth. It could be that government spending is a weak lever to counter economic cycles. Maybe monetary policy is the only strong tool we have.

The theorists have high I.Q.’s but don’t seem to know much psychology. Lord Keynes, though a lesser mathematician, wrote that the state of confidence “is a matter to which practical men pay the closest and most anxious attention.”

These days, debt-fueled government spending doesn’t increase confidence. It destroys it. Only 6 percent of Americans believe the last stimulus created jobs, according to a New York Times/CBS News survey. Consumers are recovering from a debt-fueled bubble and have a moral aversion to more debt.

This arrogance that David Brooks is having trouble with is the arrogance mostly of just one man, Paul Krugman. Nevertheless, Krugman is completely well-founded in his arrogance, formed from years of studying modern economies and Lord Keynes, and the many counter-intuitive ways that sound business management can ruin perfectly-good economies. The fact that Krugman is getting shrill these days is owed to the fact that he is surrounded by thousands of braying morons like Brooks, who are dead set and determined to gut the economic recovery out of a misguided effort to use economic policy to minimize deficits and try and recover a lost golden era when businessmen were prudent (which can't be recovered as long as Wall Street rather than Main Street rules the world, and likely never existed in the first place).

What is it that drives the deficits in the first place? It's not Social Security, which is currently the most stable and reliably-funded part of the federal budget. Welfare spending is minimal, and has been for decades. Zooming medical costs are destabilizing Medicare, however, so that's one place to look. Let's also try military spending, which raced uncontrollably since 2001, despite the absence of any serious competitors on the world scene. Income inequality is at the highest level since 1929, so tax increases on the wealthy are an absolute must. Try there first. But gutting domestic discretionary spending now will just gut the domestic economy - 70% of the national economy - and leave everything else unchanged. Not a recipe for deficit reduction! Not a recipe for success!