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Wednesday, February 18, 2009

Behold, the Future of the Economy!

New York Times columnist David Brooks is syndicated in my local paper on Tuesdays. As conservative columnists go, Brooks lacks the lunatic fervor of an Ann Coulter or the complete disregard for the facts of a Jonah Goldberg. But this doesn't stop him from occasionally writing a column that's just plain odd. I suppose it's some conservative columnist industry standard -- from time to time, at the very least, you have to write something screwy.

With "The Worst-Case Scenario," Brooks fills his quota of goofy for a while -- mostly by breaking out a crystal ball and predicting that the stimulus will fail by 2010.

Why will the stimulus fail by 2010? Because the American consumer is crazy. He starts off sane enough, giving a fairly accurate history of the economic crisis so far, but he slips into conservative goofiness when he starts writing about 2010 in the past tense.

During 2010, the economic decline abated, but the recovery did not arrive. There were a few false dawns, and stagnation. The problem was this: The policy makers knew how to pull economic levers, but they did not know how to use those levers to affect social psychology.

The crisis was labeled an economic crisis, but it was really a psychological crisis. It was caused by a mood of fear and uncertainty, which led consumers to not spend, bankers to not lend and entrepreneurs to not risk. No amount of federal spending could change this psychology because uncertainty about the future remained acute.

Not learning from the example of Phil Gramm, Brooks blames us for economic decline, because of what Gramm called a "mental recession." There's nothing wrong with the economy, you just think there is. Because you've got some sort of psychological problem that only conservative trickle-down, free-market economics can set right. All we have to do is put away all that fancy-schmancy economic theory, forget about all the "models and projections," and -- I don't know -- get together for a national group hug or something. Brooks isn't exactly clear on what we should do, just what we shouldn't. What is clear is that Gramm was 100% right -- we're a "nation of whiners."

It's here that Doctor Frankenbrooks points out that Igor mistakenly stole the criminal brain.

Cognitive scientists distinguish between normal risk-assessment decisions, which activate the reward-prediction regions of the brain, and decisions made amid extreme uncertainty, which generate activity in the amygdala. These are different mental processes using different strategies and producing different results. Americans were suddenly forced to cope with this second category, extreme uncertainty.

Economists and policy makers had no way to peer into this darkness. Their methods were largely based on the assumption that people are rational, predictable and pretty much the same. Their models work best in times of equilibrium. But in this moment of disequilibrium, behavior was nonlinear, unpredictable, emergent and stubbornly resistant to Keynesian rationalism.

You aren't rational, you aren't predictable, you're freakin' nuts. And that's the problem. Keynesian economics won't work because you're not right in the head, like all Americans. It's just too logical. We can't rely on economic systems that make sense, because you aren't a logical being -- you're a monkey in a tree who makes every decision based on fear of pain and anticipation of reward. How this explains people like firefighters and police isn't immediately apparent, but there ya go. The economy is effed up because you refuse to get on the feelgood train and follow your bliss. Disaster follows:

The failure to generate a recovery led to a collapse of public confidence. President Obama’s promises of 3.5 million jobs now seemed a sham and his former certainty a delusion. The political climate grew more polarized. That meant it was impossible to tackle entitlement debt. That and the economic climate meant it was impossible to raise taxes or cut spending or do anything to reduce the yawning deficits. Federal deficits were 15 percent of G.D.P. and growing.

Far from easing uncertainty, the exploding deficits led to more fear. The U.S. could not afford to respond to new emergencies, like hurricanes or foreign crises. Other nations sensed American overextension. Foreign debt-holders grew nervous. Interest rates rose. Congress indulged its worst instincts, erecting trade barriers, propping up doomed companies. Scholars began to talk about the American Disease, akin to the British Disease of the 1970s.

Medicare collapses, we have no money to deal with natural disasters, foreign investors start cashing in their bonds; all because Obama and the Democrats in congress failed to see just how loonie you really are. We don't need to fix the economy, we need to treat your head. Maybe we can put Zoloft in the water supply or something.

"The nation had essentially bet its future on economic models with primitive views of human behavior," Brooks sums up. "The government had tried to change social psychology using the equivalent of leeches and bleeding. Rather than blame themselves, Americans directed their anger toward policy makers and experts who based estimates of human psychology on mathematical equations."

"Leeches and bleeding?" First the problem was that Keynesian economics is too logical, now Brooks calls it "primitive views of human behavior." Consistency isn't a bugaboo conservative columnists let bother them much.

So there you go. Straighten up and fly right, get your head in the game, stop being so obstinately insane. If you don't, we'll slip into a deeper recession and that'll just make you crazier -- which, in turn, will just make everything worse.

Heed the crystal ball of David Brooks. When everyone's a lunatic, logic is useless. And that's why Republican economic proposals are better -- they aren't logical.



vet said...

That's an interesting column, and thank you for pointing it out. Brooks seems to be predicting pretty much a re-run of the 1930s. "Nothing to fear but fear itself." It's pessimistic, but not implausible.

Where I think you're unfair is in characterising him as a Republican shill. Nowhere does he suggest that the Republicans have any better idea what to do than the Dems.

I'm delighted to see Obama conspicuously trying to be "non-partisan". Obama has a chance to rebuild trust, and I think he sees that. It means perservering in two things: talking directly to the people, a la FDR, and continuing to reach out to the Repubs, even though he keeps getting rebuffed.

Wisco said...

I've noticed that you're a lot more of a fan of bipartisanship than I am. When someone is dead wrong, it's not only unwise incorporate their ideas, it's not especially constructive. Going along to get along doesn't really serve any purpose, other than make a more pleasant workplace for legislators.

It's ironic that you see an attack on New Deal Keynesianism as call to FDR's take on consumer confidence. Seems to me you've got a bit of a contradiction there.

And Brooks is a senior editor at the neocon Weekly Standard -- he's always partisan and he is a Republican shill. That's the job he punches in for every morning.

MarDanz said...

"The Worst-Case Scenario...."

Sounds like something he dictated into a butt-smuggled *tape-recorder while pruning for hours in a sensory deprivation tank.

Fak David Brooks and all his lovers and followers.

All stand in shock and awe for the great and powerful, NostraDramaBrooks!

Where do they get this shit?

It sounds like a think-tanky way of establishing the psychological framework for the right wing overthrow of the Democratic-led American government. It's madness.

They're mad!


I can hear the right wing chorus-- "Mu-oo-ah-ah-ah-ah-aaa....!"


*circa-- "Rerun" bootlegging a Doobie Brother's concert--