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Home Publications Blogs Beat the Press David Brooks Is Upset at Liberals Who INSIST on Applying Arithmetic to Economics

David Brooks Is Upset at Liberals Who INSIST on Applying Arithmetic to Economics

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Tuesday, 27 September 2011 03:58

David Brooks is really upset, we may have a lost decade because he is sitting there being right, standing in the middle, and the two extremes who control public debate won't agree with him. How do we know Brooks is right? Well, he is in the middle between the two extremes he just told you about, how could he not be right?

How do we know that the liberals/progressives are wrong? Brooks tells us:

"Many Democrats are predisposed to want more government spending. So they pick up on the one current they think can be cured with more government spending: low consumer demand. Increase government spending and that will pump up consumer spending.

When President Obama’s stimulus package produced insufficient results, they didn’t concede that maybe there are other factors at play, which mitigated the effects. They just called for more government spending. To a man in love with his hammer, every problem requires a nail."

 

Yeah, don't we just hate these Democrats? They are in love with their hammer (government spending) and therefore make everything look like a nail.

Suppose Brooks ever took 10 minutes to read the Obama administration's projections for the stimulus. (It's on the web and can be downloaded for free, so a NYT columnist should have access to it.) The first item in the summary of  Romer-Bernstein report would tell Brooks that:

"A package in the range that the President-Elect has discussed would create between 3-4 million jobs by the end of 2010." 

Let look at that one again:

"A package in the range that the President-Elect has discussed would create between 3-4 million jobs by the end of 2010."

Okay, 3-4 million jobs from a "package in the range that the President-Elect has discussed."

How many jobs did the economy need? By April of 2009, when the first stimulus payments were going out the door, the economy had already lost more than 6.5 million jobs. If we add in normal job growth that we would have seen in a healthy economy, we were already down by more than 8.0 million jobs.

And the economy was still losing jobs at the rate of more than 400,000 jobs a month. By July, we down by almost 10 million jobs from what would have been expected if the economy had sustained a normal pace of job growth from the start of the recession. This is what Brooks would know if ever bothered to look at the numbers.

Now let's look at that quote one more time:

"A package in the range that the President-Elect has discussed would create between 3-4 million jobs by the end of 2010."

President Obama proposed a stimulus package of about $800 billion. He got a package of around $700 billion. (We have to pull out $80 billion for the Alternative Minimum Tax fix. No one, I mean no one, thinks that this fix, which is done every year, had anything to do with stimulus.)

Furthermore, the package was more heavily tilted toward tax cuts than the package that President Obama proposed. Tax cuts have less impact per dollar than spending. David Brooks could find this fact in the Romer-Bernstein paper as well. The appendix tells us that a tax cut equal to 1 percent of GDP will eventually increase GDP by 0.99 percent. By contrast, government spending equal to 1 percent of GDP will increase GDP by 1.57 percent of GDP.

If President Obama got a package that was smaller than what he requested and more tilted towards tax cuts than what he expected, then the impact on growth and jobs would be less than what he expected. He expected that the package he rquested would create 3-4 million jobs, the package he got would be expected to create something less than 3-4 million jobs. And, we know that the economy needed somewhere in the neighborhood of 10 million jobs.

So how is anything about stimulus disproved because a stimulus that could have been expected to create maybe 3 million jobs was not adequate in a downturn where we needed 10 million jobs? There are no tricks here, this is all arithmetic and it is all right there in black and white.

But, Brooks does not want to be bothered by arithmetic. He wants his readers to support his plans for tax reform, for cutting Social Security and Medicare. In other words he wants his readers' support for doing all the the things that David Brooks always wanted to do, but he now says that we absolutely have to do because of an economic crisis caused by the incompetence of the people who always wanted to do these things.

And the people who insist on sticking to arithmetic -- who point out now and said at the time that the stimulus was not large enough -- well to a man in love with his hammer, every problem requires a nail. If arithmetic is nails, Brooks has no hammer.

 

 

 

Comments (28)Add Comment
Stuck in the Middle With You, Low-rated comment [Show]
More info please
written by Jerry Griffin, September 27, 2011 6:38
I track with the article, but wonder how many jobs actually were created by the actual stimulus program? I'm guessing 2 - 3 million?
recovery.org
written by Shawn Wilkinson, September 27, 2011 7:17
I remember awhile ago Texas Gov. Rick Perry suggested that "zero" jobs were created. CNN checked the CBO and recovery.org and these sources claimed 1.4 million - 3.4 million jobs resulted from the stimulus package.

I don't feel like digging through the CBO website to look for a direct source, but that would be the best place to find one.
Look in the mirror.
written by diesel, September 27, 2011 7:25
First, American businesses relocate manufacturing plants to China to take advantage of cheaper labor. Next, the Chinese, working in the plants daily, acquire an understanding of not just the particular process they are engaged in but the more general process of manufacturing. Then they say to themselves, "Why should we just make these for the Yankee dogs when we can build another plant just like this one and produce our own copy, slap on a different name tag and export it to the world and eliminate the Yankee middleman?"

Then the Yankee businessman is shocked one day to see the product he designed and patented, painted in different colors and sporting a different brand name, standing side by side with his on a showroom floor and selling for one-half the price. "Foul!" he cries. "Patent infringement! I'll sue the bastards." But why should he have expected anything else? After all, this is war.

Finally, when this process is repeated and spreads through the entire economy, the bewildered look about and wonder "Wha happen? Where'd our greatness go? Lookie there! They stole our exceptionalism!"

What did we expect? We showed them how to do it.
It is not just that he is the sensible center, he has science on his side!
written by Kat, September 27, 2011 8:20

"But Littlefield's great value was as a spiritual example. Despite his strange leanings he was as strict a Presbyterian and as firm a Republican as George F. Babbit. He confirmed the business men in their faith. Where they knew only by passionate instinct that their system of industry and manners was perfect, Dr. Howard Littlefield proved it to them, out of history, economics, and the confessions of reformed radicals."
Horror of Horrors
written by Ron Alley, September 27, 2011 8:52
Brooks begins with a warning of the horrors about to befall us:

“It is about whether the international financial system will survive the next six months in the form we now know it. ... "


I wonder whether anyone would actually mourn the passing of the "international financial system as we know it" and have learned about it over the past five years.

Tea party on Mr. Brooks, Mr. Boehner and Ms. Bachmann.
...
written by Chris, September 27, 2011 10:37
You have to wonder why anyone employs Brooks. He is so wrong about so much so often. Perhaps they want to expose him so he appears as foolish as he is, and he hasn't caught on yet.
Brooks
written by Steve Lightner, September 27, 2011 11:31
It is almost sad to see an intelligent man in so much denial about the reality of his beliefs, that he uses conservative talking points (stimulus didn't work) to try to maintain his denial of reality. I wonder if he dares to ever read Krugman.
...
written by Kat, September 27, 2011 11:45
@Chris.
Do you really wonder why the NYT employs Brooks? Really?
Employing Brooks?
written by Benedict@Large, September 27, 2011 12:12
The New York Times employs Brooks (and Friedman, for that matter) as creative stenographers for the elites. Stenographers because the ape precisely what the elites would want, and creative because it all gets cooked up spontaneously in their imaginations. In other words, they are paid to be artists. What type of artists I leave you to figure out, but you might use "BS" as a hint.
...
written by joe, September 27, 2011 12:26
Total govt spending in 2010 was 5.7988 trillion
Total govt spending in 2007 was 4.9246 trillion
Total govt spending in 2000 was 3.2402 trillion

Govt spending grew 6.16% a year from 2000 to 2007. Govt spending grew 5.5% a year

from 2007 to 2010. Growth in govt spending slowed during the recession. Govt

spending was not even high enough to maintain the public workforce. 160,000 govt

jobs were lost from Jan 2008 to Jan 2011.

Jan 2008 = 22.386 million govt employees
Jan 2011 = 22.226 million govt employees
...
written by joe, September 27, 2011 12:31
(had to reformat the post)
Growth in total govt spending slowed during the recession. There really was not a stimulus.

Total govt spending in 2010 was 5.7988 trillion
Total govt spending in 2007 was 4.9246 trillion
Total govt spending in 2000 was 3.2402 trillion

Govt spending grew 6.16% a year from 2000 to 2007. Govt spending grew 5.5% a year from 2007 to 2010.

Govt spending was not even high enough to maintain the public workforce. 160,000 govt jobs were lost from Jan 2008 to Jan 2011.

Jan 2008 = 22.386 million govt employees
Jan 2011 = 22.226 million govt employees
...
written by Kat, September 27, 2011 12:31
@Benedict
And don't forget that Brooks is always able to find some "research" (usually promising and new! always interesting!) to apply the veneer of science to his crapola. This is what makes him "thoughtful".
David Brooks is Embarrassing
written by Robert Blechman, September 27, 2011 1:06
As a fellow University of Chicago graduate, I am embarrassed every time David Brooks opens his mouth.
The middle ground is always right, as long as it's on the right
written by El Cid, September 27, 2011 1:08
Look, one side here wants to bulldoze your house and make it an open sewer pit.

Another side wants your house *not* to be bulldozed and made into an open sewer pit.

Clearly the right and moral thing to do is have us all come together and advance over this rancorous partisanship.

So we should bulldoze *most* of your home, and build that sewer pit on that side of the house, but allow you to live in the crushed remainder of the house next to that sewer pit for at least a few years more.

In exchange for doubling your mortgage debt, of course,

The Middle!
Mister
written by GMoney, September 27, 2011 3:33
brooks is a neocon mouthpiece in the nyt like monica crowley was a vacuous neocon mothpiece on the mclaughlin group. the nyt should getb rid of brooks lie mclaughlin dumped crowley.
Exhibit A your Honor.
written by diesel, September 27, 2011 5:27
By sheer chance, I hold, in my greedy little mitts, two humble casters. Just two utility casters that I purchased at hardware stores recently. One is made by Faultless, a 110 year old American company, and it is stamped made in the USA. The other, a virtual clone except that it sports a bolt for the axle instead of a rivet, is made by the Waxman Consumer Group, and it is made in China. It would be difficult to make a more convincing copy and from arm's length you would be hard pressed to tell the difference.

The Waxman website informs one that; "Since the early 1980s, Waxman has been a pioneer in developing overseas manufacturing and sourcing facilities in Asia. We were well established in China long before the major shift to Asian manufacturing began.

We have several innovative, dedicated market development teams of specialists that work for and with our customers year round. These teams include:

- Product Development
- Industrial Design
- Engineering
- Manufacturing
- Quality Control
- Merchandising

One of the primary Waxman objectives is to develop strategic partnerships with market leaders. We leverage our extensive Asian resources in order to provide timely and comprehensive manufacturing and retail solutions. We consistently deliver tremendous value and great service to all of our customers."

Now I may get in trouble for saying this, but it appears as though the only product designing going on in this case is that someone carried a Faultless caster over to China on a plane in a briefcase.

What's this got to do with Brooks? A better question is "What's Brooks got to do with the real troubles besetting the economy of America that he expends so much hot air on?"

Now unlike Alan Greenspan, I confess to imperfect knowledge of the product I am buying. Although trained as an engineer, I don't know the relative hardness of the steel used in the axles of the Chinese caster compared to its American version. Nor do I know about the quality and durometer of the rubbers used in the wheels nor the roundness and hardness of the bearings and the surfaces they run on. As a consumer--a well educated, alert consumer--I am ignorant of the quality of what I am buying. Nor do I have the lab facilities to test for these important qualities or the spread sheet database to compile a history of product quality through time. I mention Greenspan because he assumed players have perfect knowledge in the choices they make, and even a simple purchase like this proves the utter absurdity of such a claim. How much less do consumers know about much more complex purchases like financial products?

We have exported not just a factory that makes a particular product, but the entire Gestalt of manufacturing. We have taught foreigners how to make the machines that make the machines we use daily. And with them, the mind set, skills and disciplined mental habits needed to make it all work.

Republicans gleefully say "and don't expect those jobs to come back to America, because they won't" and then go on to blame unemployment on "skills mismatch". Listen to them. They mean it. They have no intention of bringing manufacturing jobs back to the U.S. Brook's job is to explain this to people (NYTimes readers) who aren't really affected by all that (since they probably aren't line workers in caster factories) and somehow make it appear as though there is a solution, albeit a complex one, that we could fathom if only we would put aside our partisan differences and blah blah. What a bunch of hooey.
...
written by Simon, September 27, 2011 5:47
What I am really curious about is how Potential Output is calculated and other forecasts are calculated. Why didn't Romer and Bernstein recognize the extent of the crisis?
...
written by Chris Gilbert, September 27, 2011 6:32
Unfortunately, David Brooks is the only 'conservative' that many in the media can stand to have around: thus, he's the token conservative on PBS's Newshour, the same on NPR's Friday 'sum-up' and of course the same in the NY Times. We just have to put up with his sloppy thinking in mainstream media's attempt to "be fair" to both sides.
...
written by Jethro, September 27, 2011 9:38
That's it, vote down Izzato's post so you don't have to see it. Ignore it and it doesn't exist.
Dean may be correct on not making changes to Medi and SS, but not to reform a tax code full of loop holes and thousands of pages that most accountants can't comprehend, is just plain moronic. Anyone that doesn't want tax reform must have their own agenda (an accountant perhaps or a grumpy economist) or is just a plain idiot.
Amazing that the press lets the GOP get away with this
written by Matt, September 28, 2011 7:12
I find it amazing that most of the press seems content to just let the GOP push their "OMG Dems want to keep doing the same thing over and over" attack line. Apart from increasing the intensity of their attacks against Social Security and Medicare, what exactly has the GOP proposed that's new? Their policy prescription (tax cuts / entitlement cuts / service cuts / privatization) is so old it can rent a car nowadays...
@Jethro
written by J, September 28, 2011 7:19
Izzatzo was making a joke. It was a compliment to Obama and Brooks for not holding out for productive outcomes.

It used an odd phrasing of a kind that makes a certain type of person's critical brain fall asleep, because it's hard to parse. but sprinkles in terms that they find appealing. That's kinda Izzatzo's thing, for good or ill.

You're not reading as carefully as you should be.
Brooks is not worth reading
written by David Gutting, September 28, 2011 9:12
I got tired of David Brooks a long time ago, though I appreciate that someone has the stomach to read his drivel and set it right. He sets himself off as if he's the only guy with common sense. As Mr. Baker shows here, he might have common sense but he can't add and subtract.
...
written by Mike, September 28, 2011 1:19
The fact that your rant contains numbers does not mean it contains "math." You're basically saying that we didn't get the stimulus Obama expected because we didn't get the plan Obama wanted. Obama wrote a lot of checks in the campaign and immediate aftermath with his mouth that his ass couldn't cash. Obama math isn't math, its empty rhetoric. He knows nothing about economics, and by NOTHING I mean he would fail miserably on an Econ 101 exam given to him today - below the guessing percentage.

Yet that same man, day in and day out has been trumpeting the large number of jobs "created or saved" by EXACTLY THAT ACT THAT PASSED. He's not using the AMT fix excuse, so why are you? He's not using the tradeoff of tax cuts for spending, so why are you? He's taking credit for everything in that Act, including the tax cuts.

And yes, the AMT fix would be stimulative (or at least not anti-stimulative) since it avoids penalizing middle class families with excessive taxes intended to be imposed on high-income earners.
...
written by Jethro, September 28, 2011 9:14
@J

I get it - but that does not change the fact that his post got voted down so would it not show up - you should read more carefully, ay ?
Inequality
written by clarence swinney, September 29, 2011 11:21
IT IS OURS WE WANT ALL OF IT
Our 5% own 62% net wealth
Your 80% or 112,000,00 lazy loons own 15% and we want it We deserve it.
Our 20% own 93% of financial wealth
Your 80% or 112,000,000 inept goof offs own 7% and we want it. All of it.
Our 25% take 67% of all individual Income
Your 50% of 70,000,000 undeserving take 13% and we want it. We earned it. It is ours.

You are calling Jesus? Ha Ha Ha.
That brown skinned lover of the poor cannot harm us.
You are calling Congress?
Ho Ho Big Joke. We own them. Have you never noticed big $$$$$$$$$ BUYS ANYONE?
You are calling “our” White House. We own it. We started in 1980 with good old Ron then good old Busheloon capped it off and now we own it 100%. Ours! You dummy.
You will go to the press? Wow! Are you out of the loop. We own it. All.

We are now in control we are now known as
THE UNITED STATES OF CORPOCRACY INC
viva la $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$
clarenceswinney madmadmad at Inequality in America
political historian lifeaholics of america cswinney2@triad.rr.com
@Jethro
written by J, September 29, 2011 10:07
You get it now. I was just trying to tell you that it isn't the sheeple denying and oppressing the reality of the obvious truth telling common sense like it is, etc., etc...
On David Brooks . .
written by Elwood Anderson, October 02, 2011 1:54
Some people base their position on their best understanding of the facts. Others, like Brooks believe what they want to believe. Robert Reich has already pointed out that the truth does not lie half way between right and wrong.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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