I knew I shouldn’t read Brooks’s most recent column, because he’s talking about the economy, and Brooks is always in over his head when talking about the economy. But then he’s in over his head about just about anything else, too. I suspect he could be quite the authority on many simpler things, such as cheese graters or crew socks, but anything that involves more than a couple of moving parts tends to confuse him.
Nevertheless I waded in, to find Brooks explaining that neither conservatives nor liberals really understand what’s wrong with the economy. But he has perceived that its problems are structural, not cyclical. “Fixing these structural problems should be the order of the day, not papering over them with more debt,” he says.
So what are these structural problems?
“First, there are those surrounding globalization and technological change. Hyperefficient globalized companies need fewer workers. As a result, unemployment rises, superstar salaries surge while lower-skilled wages stagnate, the middle gets hollowed out and inequality grows.”
I hadn’t noticed a need for fewer workers in those globalized companies, just cheaper ones, such as in Mexico or China.
There’s actually a free-market solution for that, though. Once there’s no middle class to play the role of “consumer,” the globalized companies won’t have any “consumers” around to buy their products, and the whole house of cards will collapse. A correction! Or, a depression!, depending on your point of view. But let’s go on.
“The United States, once the world’s educational leader, is falling back in the pack. Unemployment is high, but companies still have trouble finding skilled workers.”
I though they didn’t need workers? But is it true companies are having trouble finding skilled workers? I have heard of some isolated incidents, but I have a hard time believing this is a major trend.
“Over the decades, companies and other entities have implanted a growing number of special-interest deals into the tax and regulatory codes, making it harder for politically unconnected, new competitors, making the economy less dynamic.”
There may be something to this, but essentially it comes down to the big companies rigging the system to eliminate competition from smaller companies. Theodore Roosevelt had a similar problem to deal with, as I recall. In his case, government was the solution.
“These and other structural problems have retarded growth and wages for decades.”
Beside shipping jobs to Asia, what’s suppressing wages are a whole mess of other things, including the decline of unions, which Brooks doesn’t mention.
“Consumers tried to compensate by borrowing more. Politicians tried to compensate by reducing the tax bill, increasing deficit spending, ensuring easy credit for homebuyers”
Yes, blame the poor homebuyers, not predatory lenders, for the financial crash.
“… and by helping workers shift out of the hypercompetitive, globalized part of the economy…”
… since their jobs were lost forever to Bangladesh …
“…and into the less productive and more sheltered parts of the economy — mostly into health care, government and education.”
I hadn’t noticed that government was doing all that much to train people to take jobs in health care, government, and education, and in any case government jobs have been chopped all over the place lately. And I’m not sure what he means by “sheltered.” Is Brooks hallucinating?
“But you can only mask structural problems for so long. The whole thing has gone kablooey. The current model, in which we try to compensate for structural economic weakness with tax cuts and an unsustainable welfare state, simply cannot last. The old model is broken. The jig is up.”
Granted, the tax cuts aren’t doing a hoo-haw to get the economy moving, but the “unsustainable welfare state” is mostly a figment of the Right’s imagination. America is pretty chintzy on “entitlements” compared to a lot of other countries, but if Brooks can’t appreciate the structural role played by Medicare and Social Security and other props to keep the middle class from sinking into a third-world bog, then he truly is an idiot.
“Unlike the cyclicalists, we structuralists … “
“We structuralists.” That’s so … affected.
“… do not believe that the level of government spending is the main factor in determining how fast an economy grows. If that were true, then Greece, Britain and France would have the best economies on earth. (The so-called European austerity is partly mythical.)”
Translation: Brooks can’t believe genuine austerity is failing as badly as it is obviously failing in Yurp, so he assumes the Yurpeans must be doing it wrong. But the only partly mythical thing here is Brooks’s brain.
But let’s go back to “we structuralists do not believe that the level of government spending is the main factor in determining how fast an economy grows.” I don’t think anyone believes just spending a lot of money makes the economy grow. This is a fantasy the Right has pushed for ages; that the Left believes spending lots of money in and of itself is a good thing. If that were true, then let’s role the dice and use the entire federal budget to give ourselves vacations in France. That would certainly be great for the economy … of France.
What some of us believe is that if taxpayer money is invested in things like, oh, I don’t know — education, maybe. Brooks says we need a better educated workforce. Does he think the “free market” will take care of that? On what planet?
Make college more affordable, for example. Make student loans cheaper. Throw some money into failing public schools so that the buildings aren’t falling apart, class sizes are smaller, and at least some of the books in the library were published after 1989.
Throw some money at infrastructure issues such as the energy grid, roads, and bridges; plus information technology. Business needs this stuff to thrive, you know. Plus, it makes jobs.
Let’s go with a single-payer health care system, to get health care costs off the backs of business and prevent medical bankruptcy from ruining so many lives. Plus, a healthy workforce is a more productive workforce.
Invest in scientific research. All that pure science stuff is what provides the know-how for new products of the future.
Etc. etc. There are a few more paragraphs in Brooks’s column, but I lacked the strength to go further. Brooks is a freaking idiot.
I actually do agree with him that the ultimate problems are structural and not cyclical, but as I see it, the whole consumerist-capitalist economic system is unsustainable. We’re going to have to evolve into new economic models. But that’s hard to do when people conflate economic theory with religion. So I’m not hopeful.