Man Without Qualities

Tuesday, June 01, 2004

Krugman v. Brooks

New York Times columnist David Brooks is not an economist. So the sophistication of his column today on the economic track record of the Bush Administration is telling when compared to the primitive rantings on the same subject in the column dropped by Herr Doktorprofessor Paul Von Krugman.

One particularly nasty indication of just how intellectually empty Herr Doktorprofessor's effort really is lies in this admission:

For most families, the losses from these cuts will far outweigh any gain from lower taxes. My back-of-the-envelope calculation suggests that 80 percent of all families will end up worse off ...

Herr Doktorprofessor is a full professor of economics at Princeton (lucky them!) with free access to all manner of computer models, lots of economic data, sharp assistants and graduate students, accomplished colleagues (on the other hand, if you were Herr Doktorprofessor's colleague would you talk to him on a regular basis?). He has been ranting regularly for years that the losses from the Bush tax cuts will far outweigh any gain from the lower taxes. His columns have made clear that he is in wide contact with other economists and political operatives and consultants who share his views and also have lots of resources. Yet today he admits that the best he can do to back up his opinion is a back-of-the-envelope calculation. One feels unclean after reading such an admission. In any event, what's to dispute? Why bother arguing with the back of an envelope? Life is too short. In any event, Herr Doktorprofessor again raves as if the deficit were mostly attributable to the Bush tax cuts, where sensible studies keep pointing out that it's increased federal spending and a soft economy that caused about three-quarters of the recent deficit. Federal spending reductions are needed, but to Herr Doktorprofessor a federal program is sacrosanct if it is merely "popular" - and evidence that the White House is girding up for just such necessary reductions is taken as nothing but evidence of its perfidy. He's merely childish - and the silly fourth-grade-level word play he uses to fill up the column inches today should be intensely embarrassing to the Times.

Now Mr. Brooks, on the other hand, has done some homework:

[A] dozen distinguished and politically independent economists ... like Charles Schultze of the Brookings Institution, the longtime Federal Reserve economist Lyle Gramley, David Wyss of Standard & Poor's, among others - a pretty good sampling of mainstream economic thinking ... gave the Bush team a B-plus for short-term fiscal policy, a C-minus for long-term fiscal policy, a B for regulatory policy and a B-minus for trade and international economics. These aren't the grades that win you a Rhodes scholarship, but they're not too bad.

I ... asked a few senior officials to respond.

The senior officials did respond, and the responses are worth reading regardless of whether one agrees with them. Personally, I do not agree with some of what Mr. Brooks says, including that the White House lacks a compelling response to the argument that the stimulus could have been stronger if more of the cuts had been distributed down the income scale. Consumer spending, which might have been increased by such "distributing down," was not the biggest problem - lagging post-dot-com-boom capital investment was. A permanent tax cut structured to increase consumer spending while permanently understimulating capital investment would have been structurally unsound - and Mr. Brooks admits that the White House has good responses to the argument that the cuts should have been temporary.

But Mr. Brooks does have one thing to learn from Herr Doktorprofessor. Mr. Brooks writes:

What I don't understand is why the administration doesn't now pivot and say: O.K., we had a potential crisis. We prevented it. Now the recovery is in full swing. Let's address the long-term problems. Let's talk about the consequences of the aging baby boomers. Let's talk about reforming the tax code to encourage domestic savings.

As noted above, it is Herr Doktorprofessor's panicky conviction that the White House may be preparing to do just that. But probably not enough.

But the main point is that after reading the Brooks column one feels that one has actually been presented with some considered thought, not an empty rant, contemptuous to all Times readers, written on the back of Herr Doktorprofessor's envelope.

UPDATE: Don Luskin points out blatant intellectual dishonesty in Herr Doktorprofessor's rant.

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