We all know that New York Times columnist David Brooks has a propensity for patting himself on the back. You've seen him on Meet the Press being the last standing "adult" of the Republican party. But sometimes this indulgence leads to misguided columns like the one he penned yesterday.
You see Mr. Brooks sees two completely different debates going on about economic policy. On the one side, lefties that think this is entirely a demand problem and if the government would only spend more, which would require more deficit spending, then we could get this economy restarted. On the other side, in a number Mr. Brooks believes includes "some on the left but mostly in the center and on the right," (Conveniently, Mr. Brooks declares "I'm one of them.") are people who believe the issue with the economy is structural and that we should be working to fix those structural issues instead of "papering over them with more debt."
In Mr. Brooks attempt to be the adult again, he's presented us with a false choice. Paul Krugman, perhaps the most high-profile Keynesian on the planet, has been saying that this is a demand problem for a long time. But he also hasn't denied that issues of government debt aren't a concern, they just aren't a concern right now. He points to the continually low interest rates on U.S. government bonds throughout the recession as proof, and he's absolutely right.
Right now, today, the issue is demand and the government can take up some of the slack in that demand. Further out, there are debt issues we need to resolve, and we need to set ourselves on a path to fiscal solvency, but we don't need austerity right now. We need to do both, but the hair-on-fire invocations that DC will erupt like Athens are overdone and at the moment just plain wrong.
Somewhat ironically, Brooks admits the false dichotomy later when he says "Running up huge deficits without fixing the underlying structure will not restore growth. " I haven't heard any Keynesian suggest that any of that statement is incorrect so why does Mr. Brooks find it necessary to divide the debate along this line?
And then there's the "structural" challenges Mr. Brooks cite which includes, "globalization and technological change" and "the decline in human capital." I wouldn't disagree that all of those are issues, but to later say "Mitt Romney and Representative Paul Ryan understand the size of the structural problems, but their reform plans are constrained by the Republican Party’s single-minded devotion to tax cuts." Funny that Rep. Ryan's budget and Gov. Romney's policies would seek to undermine government funding of education and national investment in science and technology. It makes any contention that they "understand...the structural problems" sound a bit ludicrous given the goal posts Mr. Brooks has laid down.
And then there's the comment that, "the current model, in which we try to compensate for structural economic weakness with tax cuts and an unsustainable welfare state, simply cannot last." Lest we forget that Mr. Brooks earlier included "the right" in the number of people who want to solve the structural problems despite their dogged and unrelenting advocacy for tax cuts upon tax cuts, but it's "the left" that's having the wrong debate.
On the whole, this is the column you expect Mr. Brooks to write. He's attempting to be the adult. He's implicating Republicans, while exonerating the right. He's lauding solutions that fail to address the problems he lays out. He's giving us a false choice and dressing it up in the trope of small government. It's an alluring argument and it prays on "us vs. them" but it fails the sniff test.
We can and need to do both. While the rates are good the government should double down in the sort of infrastructure investment that will propel the nation's economy forward. The government needs to better fund higher education, research, and basic science. And the government needs to address the long-term fiscal issues we are facing, even if the day of reckoning is some time off (and it is). I'm disappointed that Mr. Brooks doesn't feel like we can do both.