Monday 25 June 2012

Why does anyone read David Brooks?

In case you never heard of him, he writes for the New York Times' op-ed page, and is purportedly a moderate. But every time someone refers me to one of his columns, all I see is pompous rehashing of right wing talking points. Take (please), his May 8th column, in which he opines that the reason we have such high unemployment is that people have wrong skills for the available jobs, what economists call structural unemployment.

Back when I was in college, economics was about making models, and seeing how well those models described reality. Macroeconomics was and is hard, because the obvious analogies between families or businesses and countries are wrong. Countries trade mostly with themselves and usually issue their own money, and it took a lot of work to come up with models to reflect that. When I took courses with Nordhaus and Tobin et al, it was all about models and seeing how well they match the data.

On what passes for the left these days, that's still what economists do. Economists on the left, notably Paul Krugman, aren't pushing for more stimulus because they get emotional satisfaction from giving away money, it's because the models that fit what's actually happening (e.g., interest rates remain very low, and businesses aren't investing) say that more stimulus will put people back to work. They also say that when you can borrow money at 1% to finance bridge and road reconstruction and other infrastructure investment, and there's lots of people available to do the work, it's nuts not to do it.

On the right, it's completely different. They already know the answer, tax cuts for the rich and benefit cuts for the poor, and the goal is to come up with arguments that produce that answer. Their arithmetic and predictions are consistently wrong, but they don't care; the goal isn't to understand reality, it's to push through an agenda.

If we review Brooks' article, he says "The diverse people in this camp—and I’m one of them—believe the core problems are structural, not cyclical." Did he say "the data show that the core problems are structural?" Or "economists have been looking at this issue since the 1930s and the best models show that the problems are structural?" No, he just believes that the problems are structural, because that fits his preconceptions and those of his talking point buddies.

The right wing echo chamber has done an amazing job of persuading people that there's a symmetry between the approaches to economics, when there isn't at all.

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