David Brooks Says Something Stupid: The Debt Edition

Really, one should only read NY Times columnist David Brooks for the pictures–and since there are no pictures in his columns, you would be better off not reading them at all. Brooks hyperventilates (boldface mine):

Every generation has an incentive to borrow money from the future to spend on itself.

But, until ours, no generation of Americans has done it to the same extent. Why?
A huge reason is that earlier generations were insecure. They lived without modern medicine, without modern technology and without modern welfare states. They lived one illness, one drought and one recession away from catastrophe. They developed a moral abhorrence about things like excessive debt, which would further magnify their vulnerability.

Recently, life has become better and more secure. But the aversion to debt has diminished amid the progress. Credit card companies seduced people into borrowing more. Politicians found that they could buy votes with borrowed money. People became more comfortable with red ink.

Today we are living in an era of indebtedness. Over the past several years, society has oscillated ever more wildly though three debt-fueled bubbles. First, there was the dot-com bubble. Then, in 2008, the mortgage-finance bubble. Now, we are living in the fiscal bubble.

I wonder if the Times Overlords will ever let Krugman fully off the leash against this bozo. He would have a field day with who is responsible for the ‘fiscal bubble’ (hint: it’s not the middle class).

But there’s a deeper confusion about debt–which isn’t surprising since Brooks loves himself some morality fable. Private debt is not the same as public debt. With private debt, you either have to pay it back, depressing future earnings, or go bankrupt, which usually inhibits future earnings (and you often loose your remaining stuff in bankruptcy proceedings). But federal public debt is different–the government can’t run out of money. It’s a currency issuer. As long as no one plays shenanigans with rolling over the debt, we can’t go broke. No one is going to show up with a giant tow truck and repossess California.

There are issues with debt–if the debt is increasingly concentrated in the hands of the wealthy (individuals or corporations), debt payments will further increase their wealth. But right now, government securities are losing money (but not as badly as holding cash), so that’s not an issue. Likewise, government spending can be bad for either macroeconomic reasons (crowding out, inflation when real economic limits are reached) or policy reasons (misallocation of resources, exacerbation of inequality, or just bad policy).

But a “fiscal bubble”? Right now, our problem is high unemployment and stagnant wages. We need that fiscal bubble, since we’re in a ‘fiscal depression.’ Spend the damn money.

What is frustrating is that a fool like Brooks gets prime real estate to spout his idiocy. He is granted the imprimatur of the Grey Lady, and thus is deemed Very Serious, even though he’s ridiculous. I suppose the NYT, in order to have a balanced op-ed section, needs to find balance by employing people who are wrong.

This is yet another reason why we can’t have nice things.

This entry was posted in Conservatives, Economics, Fucking Morons. Bookmark the permalink.

6 Responses to David Brooks Says Something Stupid: The Debt Edition

  1. sciliz says:

    “No one is going to show up with a giant tow truck and repossess California.”
    Really? Darn.

  2. Your points about David Brooks are well taken, but his presence on the Times opinion pages really isn’t surprising – the Times, after all, is an official voice of the financial industry. The occasional tsk-tsking of “excesses” in contrast to the somewhat more rabid cheerleading of, say, The Wall Street Journal, serves to give the Times a liberal veneer. But then Democrats are hardly shy about supporting the financial industry, are they?

    There is less difference among the mass media that we ordinarily like to think: http://wp.me/p2cpPS-1g. In fact, Brooks once was on the editorial page of the Journal; he has simply moved from one important institutional voice of Wall Street to another. If we are to be endlessly told that unions, or teachers, or the middle class using too much credit, is the root of economic crisis (even though it is Big Business that moves jobs to countries with far lower wages and dominates the economy), the distractions have to come from as many sources as possible.

    I just hope Mr. Brooks is well compensated for his services (and I imagine he is).

  3. mrtoads says:

    David Brooks is what Our Megan wants to be when she grows up. Unfortunately, being somewhat innumerate and a whole lot illiterate, (and, of course, not male) she’s pretty certain not to make that leap. Although, given her thoroughly demonstrated ability to blithely write whatever her masters tell her to, the WSJ is likely to be her next stop after the magazine formerly known as Newsweek.

  4. sethkahn says:

    Mr. Brooks had the luxury of growing up in a comfortably middle-class family, with two academic parents. His father worked nearly 40 years in the department I currently work in, an English Department. David certainly didn’t learn his politics at home, but he learned enough about intellectual-sounding discourse that he can sound less crazy and mean-spirited than most of his like-minded counterparts in the wealth-o-sphere.

    • malekith188 says:

      Good to know. Thanks for the insight. It’s to be taken in by we’ll developed discourse or phrasing that communicates one idea but stands only to conceal a much less acceptable ideal or, worse, government policy (a good example: Indiana’s “Right to Work” law. It really means workers can be termnatd for absolutely on reason:and since it is a LAW it effectively emasculates all unions).

  5. malekith188 says:

    Yours is rapidly becomlng my favorite blog. Keep on writing!

Comments are closed.