Economics

David Brooks on the Economy: One Hem for Every Haw

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New York Times columnist David Brooks (he's the conservative one, right?) notes that the Bush and Obama administrations have "made a hash" of "the idea that people have to live with the consequences of their decisions," a principle on which "our moral and economic system is based":

The Bush and Obama administrations have compensated foolishness and irresponsibility. The financial bailouts reward bankers who took insane risks. The auto bailouts subsidize companies and unions that made self-indulgent decisions a few decades ago that drove their industry into the ground.

The stimulus package handed tens of billions of dollars to states that spent profligately during the prosperity years. The Obama housing plan will force people who bought sensible homes to subsidize the mortgages of people who bought houses they could not afford. It will almost certainly force people who were honest on their loan forms to subsidize people who were dishonest on theirs.

But Brooks is not complaining, because compensating foolishness and rewarding irresponsibility are necessary "in times like these," when "government is fundamentally in the business of stabilizing the economic system as a whole." Then again, "actually executing this is a near-impossible task," resulting in "technocratic Rube Goldberg schemes that alter incentives in lots of medium and small ways." But at least the president's men "seem to be driven by a spirit of moderation and restraint." And after all, "greedy idiots may be greedy idiots, but they are our countrymen. And at some level, we're all in this together. If their lives don't stabilize, then our lives don't stabilize."

At that point, Brooks reaches his limit of 800 words and four self-contradictions per column.

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  1. “New York Times columnist David Brooks (he’s the conservative one, right?)”

    You do a show or two a week with Jim Lehrer, unobjective Liberalism is gonna start to grow on ya.

  2. “And at some level, we’re all in this together. If their lives don’t stabilize, then our lives don’t stabilize.”

    In that event, people who have established that they cannot be counted on to exercise even minimal common sense and responsibility — and who are demanding that society pay damages done by their misconduct — must be declared legally incompetent to do anything in life (especially enter contracts) and have legal guardians appointed to take over all decision-making in their lives.

    If society is to be forced to assume their responsibilities for them, declarations of incompetence and guardian appointments is the very least that must be done as part of the quid pro quo.

  3. or get employed by NYT and want to keep the job, you gotta sound “moderate” … or may be Brooks is just an idiot with no ability for logical analysis

  4. “greedy idiots may be greedy idiots, but they are our countrymen. And at some level, we’re all in this together. If their lives don’t stabilize, then our lives don’t stabilize.”

    Fuck that shit. My countrymen better learn to take care themselves.

  5. Ah yes: The sanction of the victim.

  6. New York Times columnist David Brooks (he’s the conservative one, right?)

    I thought that was Bill Kristol? 😉

    On a serious note, though, while I don’t like the idea of a bailout, and think we’d be better off doing nothing, that’s not a viable option. We pretty much all agree that doing nothing is going to cause a great deal of pain and suffering in the short term. You think that the American people are just going to shrug their shoulders and accept that we’re going to have to live at a 70s standard of living for a few years until conditions improve on their own? Yeah, right. People will be out on the street demanding a strongman to bring back the days when everyone could buy a new car every couple of years and watch 300 channels on their big screen TVs, not having to worry about how they were going to pay the mortgage next month or where they were going to get their next meal.

    That said, the particular bailout proposal is terrible and won’t work. But we shouldn’t appear to have no alternative; we should favor a plan that will give us at least a soft landing, even if it’s not thoroughly consistent with libertarian philosophy. sometimes you have to dance with the devil if you want to have a chair to sit in when it’s over.

  7. History repeats itself. During the New Deal, some wealth was redistributed, and those on the receiving end were showcased as evidence that “it’s working”. Meanwhile, the system as a whole continued to deteriorate.

    Maybe I’m too callous, but I would rather see bankers jump out of windows. Let’s put fire dept. catch baskets below their windows, but not give them any money.

    Small businesses are closing left and right. Extending credit lines to banks is not what they need to re-open. People need to save and skimp for several years before real demand returns.

  8. “or may be Brooks is just an idiot with no ability for logical analysis”

    We have a winner!

  9. I’m using my first $13 tax rebate to buy an enormous novelty lollipop to symbolize what a sucker I was, rejecting a mortgage a few years ago for some silly reason like “I can’t afford it.”

  10. I think I’m going to have fun watching the new-New-Deal people make fools of themselves-in much the same way that the avenge-the-Twin-Towers-by-invading-Iraq people made fools of themselves.

    Within his lifetime, FDR more or less “got away with” the New Deal, but that was before the Internet. My arrogant prediction is that Obama won’t be so lucky, thanks to the increase in flow of information since the 1930s.

  11. I’m buying a copy of Tha Carter II to listen to while I don’t buy a house.

  12. Brooks is no more a conservative than Bill Maher is a libertarian. There is something in human nature (or in a nature of a lot of humans) that makes them dream of a large centralized utopian state controlling all aspects of human existence. Paul (seize the means of production) Krugman, Brooks (to a lesser degree), and their intellectual brothers insist that current economic downturn should be used to take over as much of the economy by government as possible.

    As I see it, there is nothing unnatural in a current downturn. It is a correction to an accumulation of bad choices, irresponsibility’s, and mismanagement in addition to simply changing times. Nothing is for ever. It is a janitorial action. It should happen once in a while to keep the economy healthy and dynamic. People should be allowed to take risks and to be expected to accept the consequences of their choices. Good or bad.

    The mighty dinosaurs had to be wiped out after millions of years of rule in order to let a small and completely unremarkable rodent-like mammal to emerge and finally rule the world.

    It would be more beneficial if congress would find some other, more benign way, to make it look like they are doing something: may I suggest a rain dance for example, or sacrificing a goat in front of Karl Marx’s or Alan Greenspan’s effigy.

  13. And at some level, we’re all in this together.

    Why do I keep hearing this phrase? Every newsbot says we’re all in this together. Every High School Montana the Explorer thing my kids watch has a chorus of We’re All In This Together every two minutes. Brooks says we’re all in this together. Canadians say we’re all in this together. Potash says we’re all in this together. Bridges says we’re all in this together.

    Until somebody can tell me what they mean by “we,” “all,” “this,” “together,” and “in,” I’m saying we are not all in this together.

  14. Brooks has always been a magnificent writer, but the dunder chief of intellectuals.

  15. Until somebody can tell me what they mean by “we,” “all,” “this,” “together,” and “in,” I’m saying we are not all in this together.

    It means “give us your money”, Tim.

  16. Tim, the same thing they mean when they say “service”, “sacrifice”, “common good”, or “oath of fealty”.

  17. “”or may be Brooks is just an idiot with no ability for logical analysis”

    We have a winner!”

    No, agree with him or not, Brooks is not an idiot with no ability for logical analysis. You must be thinking of “Foreign Affairs” columnist Thomas Friedman.

  18. @ Tim Cavanaugh: Excellent point, and do you notice that they keep saying it with a pronounced tone of a wimpering question? As in “We’re all in this together . . . right? Please tell me we’re all in this together, I don’t want to be alone . . .”

  19. . . . just think of the Blair Witch Project:

    “Mike?! Mike! Where are you Mike?!?! I pissed off the Blair Witch and now I want you to sacrifice yourself to save me. Mike!”

  20. but the dunder chief of intellectuals.

    He’s only the vice-chief.

  21. There is something in human nature (or in a nature of a lot of humans) that makes them dream of a large centralized utopian state controlling all aspects of human existence. Paul (seize the means of production) Krugman, Brooks (to a lesser degree), and their intellectual brothers insist that current economic downturn should be used to take over as much of the economy by government as possible.

    Everyone, including libertarians, think that there is a right way to run society. It’s just that our solutions are extremely rare since they consist mostly of consciously choosing inaction. We want minimalist rules that are uniformly applied.

    Most people I think are hardwired to regard inaction as a nonpolicy, rather than a policy of inaction. We want to see people “doing something”. We want the big chief out there ordering people around. And when you mix in our knowledge of economics the “doing something” inevitably ends up meaning government intervention in the economy.

    Personally, I think the concepts of “the economy” and “economics” are inherently problematic. The terminology creates a contrived separation between the social, personal, and economic spheres of life. In reality it’s impossibly to separate economic choices from personal choices. ALL choices are economic in some way. Much of economics is socio-cultural in nature. We see things manifested in “the economy” that are cultural artifacts, and vice versa, which creates all sorts of misguided notions that “the capitalist system” gives rise to phenomenon like “greed” and “consumerism”. Phenomenon that are really more like biological features or reality. Somehow we then get the idea that these “alien” external forces can be controlled, when really those forces are extensions of our lives, and by seeking to control and constrain them, we are really chaining ourselves.

  22. You’re right, David Brooks. Hey, can I have sex with your 16-year-old daughter?

  23. I think what they mean by “we are all in this together” is that when houses are foreclosed upon it can make housing prices everywhere go down. And other stuff like that…

  24. I beleive that all of these people that we are being forced to compensate for their stupidity should be required to send to all of us pulling the wagon, a nice thank you note…I think they hsould also be required to rid themselves of cell phones, cable and or satellite tv, high speed internet and any other non necessity. I also believe that on demand, as reimbursement for my “voluntary” charity on their part, they should clean our homes or clean the public streets…do something to earn my hard earned money.

  25. And Hazel Meade makes a more logical analysis than a NYT columnist.

  26. Another funny thing is to assume that everyone being hurt is being hurt “for their stupidity.” You mean like the “stupidity” of choosing to work for a company that, in the face of the tough economic times, now engages in lay-offs?

    Sure, you saw these lay-offs coming a mile away and chose your workplace with that in mind…Sure…

  27. Hazel
    We probably won’t agree on much else tonight, so let me say I think your last post was incredibly thoughtful…

  28. No I mean the stupidity of people buying more house than they can afford, the stupidity of lenders lending money to people that wouldnt qualify for an annual zoo pass…that is the stupidity that I am talking about. I am not talking about someone that has lost their job through no fault of their own. I dont believe however that it is up to me to subsidize them either.. this housing “crisis” has not been caused by massive layoffs

  29. Are you against action that would make sure that your house and mine’s value does not fall due to these stupid people’s actions?

  30. I think what they mean by “we are all in this together” is that when houses are foreclosed upon it can make housing prices everywhere go down.

    Exactly, so by definition anybody who is shopping for a house right now is not Together with All of Us in This.

  31. I think what they mean by “we are all in this together” is that when houses are foreclosed upon it can make housing prices everywhere go down.

    Ah, this explanation would make sense, were it not for the nitpicky fact that “we” are not all homeowners. Indeed, a significant percentage of “we” would benefit from housing prices going down.

  32. Exactly, so by definition anybody who is shopping for a house right now is not Together with All of Us in This.

    You can’t make an omelette without shitting on a few eggs.

  33. “Are you against action that would make sure that your house and mine’s value does not fall due to these stupid people’s actions?”

    Given that those values were inflated, yes, I am against it. I’m looking for a house myself right now (not a big one, but one with a guest room and a decent kitchen) and the last thing I want is for prices to reinflate.

  34. “Are you against action that would make sure that your house and mine’s value does not fall due to these stupid people’s actions?”

    What about those of us who staked our nation’s economies on high oil prices? What about us, huh?

  35. Seriously, the oil price drop is breaking my balls here.

  36. since when did a correction in housing prices become so terrible that our politicians are now considering reducing principal amounts on loans? the claim that it is necessary because “we are all in this together” is very weak and very bunk. yeah, there are people who have lost equity in their homes because they bought them at the height of the housing bubble. but if they are planning on living in those homes for a reasonable period of time, and were not just trying to make a quick buck, then the lost equity is a non-issue, except that they can no longer borrow against it. this is because housing prices will once again rise, though they may not return pre-recession levels for a while. Rewarding irresponsibility is the absolute worst thing we can do. It will just lead to more in the future. When you subsidize something, in this case poor and reckless financial decisions, you only get more of it. And that is what we are about to see as a direct result of the government’s plan to subsidize peoples mortgages. More of these kinds of bad financial decisions is much worse in my mind than everybody losing a bit of equity in their homes.

  37. The stupid people’s actions caused housing prices to go up, which prompted more building and the allocation of more resources than might have been prudent to housing. That said, there’s not a whole lot you can do about the supply-demand imbalance now (Unless you want to adapt a policy from FDR and burn down houses to raise prices). Don’t worry, I don’t think it will take long for houses to become hideously expensive again.

  38. ceanf,
    ” Rewarding irresponsibility is the absolute worst thing we can do. It will just lead to more in the future.”

    But Barack Obama promised to make sure everyone receiving bailout money acted responsibly!

  39. I will be seriously pissed if reinflating the housing bubble becomes government policy. So pissed that Lord Xenu XXV might come back.

  40. You can’t make an omelette without shitting on a few eggs.

    Eggs come out of the cloaca! It’s kind of like shitting!

    “Yah, they’re fresh, eh! Straight out of my body and on to your plate!”

  41. economist, I’ve been reading a lot of Hollywood blacklist memoirs lately. At one point the agent John Weber shows he’s more than just a pretty face by telling how in school his fascist teacher flunked him for delivering a presentation “debunking the law of supply and demand” — in an economics class.

  42. economist, maybe you can help me out here. Is there any truth to the reports that there is a fuckton of money invested against these bad motgages? Investments that were sold as AAA? Investments totaling many times more than the actual mortgages? If all theses are true, won’t the foreclosures lead to the ruination of the economy of the entire world?

    yes I am serious in me own tardo way.

  43. “At one point the agent John Weber shows he’s more than just a pretty face by telling how in school his fascist teacher flunked him for delivering a presentation ‘debunking the law of supply and demand’ — in an economics class.”

    Sounds like the time in college chemistry, so many years ago, that I denied the existence of atoms.

    My chem professor was such a fascist.

  44. OK, I think I said “And other stuff like that…”

    Like as the markets fall, anyone with holdings in it is punished…

    Like as credit markets tighten, those seeking credit are punished…

    Like as times get worse, people are laid off…These people don’t buy our libertarian magazines as much (among other stuff)…

    No man is an island bro…

  45. brotherben,
    This might just be me blowing smoke, but I don’t think the foreclosures will lead to “the ruination of the economy of the entire world”. In general, I think that as long as the productive capacity of the world exists, and we don’t have governments intervening to fuck things up, the economy will recover in time. Some economic resources will shift from their former allocations (like housing) to different sectors, and there will undoubtedly be short-term pain involved for quite a few people, but I don’t see this precipitating a worldwide economic collapse.

  46. “No man is an island bro…”
    No, that’s why I have my eyes on a seastead. Then I can have my own island.

  47. It’s kind of like the best test to see if someone is a libertarian: would you support a policy that would actually fuck you if it also would make sure that it fucked someone who acted foolishly much more? If you answered yes, then you are a libertarian…Or as I sometimes say, a responsibiletarian…

  48. A lot of libertarians seem to rub their hands together and twist their handlebar mustaches while saying “jesus if only that lazy/stupid/no count so and so down the road from me gets it for their stupid actions then I’m happy…”

  49. economist, thanks. My very limited understanding of it is from public tv programs. It was explained that the world’s economy is a huge upside down pyramid. With the numbers they were using, it seems to me an impossibility for the govt or anyone else to throw enough money at the problem to fix it.

    Enron accounting on a global scale.

  50. MNG,
    No, it’s awfully tough to get chicks if you have a handlebar mustache, these days.

    And I don’t really care either way if my idiot neighbor gets his for his idiotic decisions. I just don’t want him to bitch and moan to me about it.

  51. “would you support a policy that would actually fuck you if it also would make sure that it fucked someone who acted foolishly much more?”

    Since I’ll probably be alive to see the public debt come due (and pay taxes towards it), I consider it more of a “fucked now vs. fucked worse later” proposition.

    In general someone fucking up (with collateral consequences to others connected economically to them)+redistributing wealth from the people who didn’t fuck up does not equal prosperity, especially for the more responsible individuals.

  52. economist:
    WHAT HAPPENS TO YOUR IDIOTIC NEIGHBOR’S HOUSE PRICE WILL EFFECT YOUR HOUSE PRICE (and other stuff).

    There, jesus, maybe you’ll see it now…All caps, y’know?

  53. MNG,
    There’s no need to attribute nefarious purposes to the critics of current government policy. Unlike some posters here, I don’t usually infer the worst motives from people’s actions (at least when I’m sober). For example, I don’t think that environmentalists really want us to live in the stone age. I just don’t think that they’ve considered the costs vs. the benefits, if any, of their proposed policies. Similarly, I think it’s rather unreasonable of you to assume that everyone here acts out of spite.

  54. MNG,
    I live in a condo. I’M CURRENTLY SEARCHING FOR A HOUSE. Proportionally, the amount I have invested in housing will go up, so the dip in housing prices ends up being a net plus for me.

    Naturally, I wanted to make sure you didn’t miss that I’m searching for a house.

  55. Again, the fucker-uppers actions will hurt the non-fucker-uppers.

    Housing foreclosures will mean a drop in housing values for ALL FOLKS WITH HOUSES. This will mean less loans they can get against the equity, etc…

    Layoffs will mean that those folks laid-off do not spend their money on Reason magazine, or other things (maybe things you make!).

    Etc. It would be nice if what stupid people in an economy did only negatively effected those people…

    It would also be nice if I had wings and could fly, but you don’t see me basing an ideology around that…

  56. Err, so if we fast forwarded three years to when you are a home owner you would see that the failures of others is a terrible thing for you, right?
    So the luck of the draw has you where you are at?

  57. 15% drop in my condo’s market value (according to the realtor) gets balanced out if what I’m buying generally costs twice as much as a condo.

    Plus, I expect housing prices will go up sooner than most people expect.

  58. “Etc. It would be nice if what stupid people in an economy did only negatively effected those people…”

    Again: How, exactly, does redistributing wealth from responsible people to idiots help the responsible people who’ve already suffered blows from the aforementioned idiocy.

  59. MNG,
    Not entirely the luck of the draw. I deliberately minimized my housing costs because prices were high (price goes up, quantity demanded goes down, that sort of thing). I’m interested in buying right now because my credit is in good shape and prices are lower (and, as I’ve mentioned before, I think prices will go back up in the near future, and I would prefer to lock in at a low price).

  60. Oh noes, I just realized that I am engaged in speculation.

    I am unclean!

  61. I have come back to get revenge on the Economist for being reallly mean to me on Sunday’s thread. No more of MNG’s kid glove treatment, Economist. Now the REAL argument begins!

    Libertarians are a bunch of fetus-fetishizing gun nuts who don’t understand my great mind!

    Yeah, I BURNED you!

  62. And I was really getting into the argument.

    Where did MNG go?

    Probably to spend time with his family. No time to argue on the interwebs.

    It’s making me feel…unimportant.

  63. Economist
    I feel what you are saying and I am glad if you can capitalize off of this economy. My firm and my wife’s employment are not going to be touched by this, and that is great…

    But I argue that other people are effected by other people in this economy…People who own houses who did nothing stupid will see their housing values, and hence many options to them, go down…Many people will be laid off through no fault of their own…Credit will be denied many a businessperson through no fault of their own…

    The plague here and coming will not fall on just the wicked…and this is why liberals want to lessen the hardship.

  64. Spending time with family is important, but my kid goes to bed around 8:30 and then my wife must spend time with my step-kids, I’m free during this time, and then I am not…usually at this time I am not free, but tonight my step kids have some unusually difficult homework…she’ll come up soon, and I will vanish…that’s how it is…

  65. WHAT HAPPENS TO YOUR IDIOTIC NEIGHBOR’S HOUSE PRICE WILL EFFECT YOUR HOUSE PRICE (and other stuff).

    MNG, you’ve convinced me. If you could make a cheque out to my neighbor to, you know, prop up the price of his house because I hear-tell mine is falling.

    More zeroes… MORE ZEROES, MNG!

  66. Housing foreclosures will mean a drop in housing values for ALL FOLKS WITH HOUSES.

    Which also means a drop in housing prices for ALL FOLKS WHO LIVE IN APARTMENTS BUT WANT TO BUY A HOUSE. (Apparently, all-caps is necessary to get certain points across.) Housing prices historically averaged about three year’s average salary for a given area. This, of course, meant that an average wage-earner who wanted to buy a house could do so without going into ridiculously deep debt holes. But during the bubble years, this traditional price-to-wage ratio was left far behind, and now people want to maintain these wildly unaffordable prices.

    When the hell did the meme “affordable housing is bad for America” become popular? When did “it is bad when non-millionaires can afford a house of their own” become the status quo? And what bizarre pretzel-shape must you twist your mind into, to believe that wanting houses to be affordable somehow means you “hate the poor?”

    I don’t hate the poor, assholes; I AM the poor. And I want the market to be left alone so that house prices will fall back into a range I can afford.

  67. Etc. It would be nice if what stupid people in an economy did only negatively effected those people…

    I think what you’re missing, MNG, is that the stupid people drag the rest of us down regardless of whether we bail them out or not.

    If we don’t, then, as you noted, the drops in housing, spending, etc., affect us all.

    If we do bail them out, though, we do so either with a current transfer of wealth which does not, in a best case, help the overall economy (rearranging deck chairs, etc.), or we do it with borrowed money, imposing a drag on the economy and/or inflation in future years.

    TANSTAAFL, dude.

  68. Housing foreclosures will mean a drop in housing values for ALL FOLKS WITH HOUSES. This will mean less loans they can get against the equity, etc…

    Housing prices were already overinflated. You took a risk and you lost. Deal with it.

  69. “I think what you’re missing, MNG, is that the stupid people drag the rest of us down regardless of whether we bail them out or not.”

    They drag more if you transfer wealth to them. They certainly don’t have the money. Personally, I figure all the institutions that are “too big to fail” are also WAY too big to bail out.

  70. “I don’t hate the poor, assholes; I AM the poor. And I want the market to be left alone so that house prices will fall back into a range I can afford.”

    Admit it, Jennifer! You’re just twisting your handlebar mustache and laughing at the unfortunate! You’ll need to get a monocle, too.

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