Seriously, when was the last time this man wrote an article that A) can’t be disproved with a Google search and B) doesn’t contradict itself?
Brooks makes two plays in his most recent op-ed: The Two Cultures
- Liberal thought is based on models, which is heartless because models are theoretical and don’t work in the real world.
- His theoretical model shows that fiscal stimulus doesn’t work for America.
As his example, the stimulus:
Yet over the past 21 months, it has been harder to groove to their certainty. To start with, the economy has not responded as the modelers projected, either in the months after the stimulus was passed or this summer, when it was supposed to be producing hundreds of thousands of jobs. It has become harder to define how much good the stimulus package is doing. An $800 billion measure must leave a large footprint, but it is hard to find in a $70 trillion global economy.
The US economy is $13 trillion. Last I checked the stimulus was designed to have an effect on the US economy, not the global economy at large.
The stimulus did what it was designed to do, but the economic situation was worse than anticipated and the Obama administration and the Democratic congressional leadership designed bills that were too small and filled with ineffectual tax cuts and inappropriate spending.
Liberal economists warned the stimulus was too small through models. To be stimulus, it has to be new money that is being spent in the economy, on top of any tax cuts or aid to states. I’ll go back to Krugman in 2008. Krugman’s model (or estimate-semantics!) showed that it would take $200 billion dollars of direct spending to lower unemployment by 1%.
The stimulus was less than $800 billion, 40% of which was tax cuts. We’re left with roughly $500 billion and a lot of that money went to states so state governments wouldn’t cut teaching and public safety jobs. So, roughly, we’re at $200 billion of actual spending, new money in the economy, that decreased the unemployment rate. Krugman’s estimate: $200 billion for every 1% decrease in unemployment.
And you know what, my rough in-between work math works out to Krugman’s estimate. The CBO projected in August 2010 that the stimulus has lowered the unemployment rate by 0.7-1.8%.
So the liberal models can work, it’s the reality that’s colder and harder. The reality is that the Democrats couldn’t pass a stimulus plan that was actually stimulative, because they didn’t have the votes nor the will.
Brooks is throwing things together and mixing them up. Politicians should work towards accurate models, but not ones that justify what they are going to do anyway to provide political cover. Then he finishes his op-ed sounding like an asshole.
It all makes one doubt the wizardry of the economic surgeons and appreciate the old wisdom of common sense: simple regulations, low debt, high savings, hard work, few distortions. You don’t have to be a genius to come up with an economic policy like that.
Uh, ok, because simple regulations and hard work would have saved the economy in 2008 and stabilized the economy in 2009. Idiot.