David Brooks, "The Lost Decade?": A Savage Rebuke to Friedman and Krugman

In his latest New York Times op-ed entitled "The Lost Decade?" (http://www.nytimes.com/2011/09/27/opinion/brooks-the-lost-decade.html?_r=1&hp), David Brooks opines that there is no individual factor which is alone responsible for the disastrous state of the global economy and further states that there is no individual problem which is prolonging the crisis:

"This crisis has many currents, which merge and feed off each other. There is the lack of consumer demand, the credit crunch, the continuing slide in housing prices, the freeze in business investment, the still hefty consumer debt levels and the skills mismatch — not to mention regulatory burdens, the business class’s utter lack of confidence in the White House, the looming explosion of entitlement costs, the public’s lack of confidence in institutions across the board.

No single one of these currents prolongs the crisis. It is the product of the complex interplay between them. To put it in fancy terms, the crisis is an emergent condition — even more terrible than the sum of its parts."

Brooks, who appears to perceive the crisis as a "perfect storm," goes on to attack those who believe that bandaging any one of these contributory ills will result in a cure:

"Yet the ideologues who dominate the political conversation are unable to think in holistic, emergent ways. They pick out the one factor that best conforms to their preformed prejudices and, like blind men grabbing a piece of the elephant, they persuade themselves they understand the whole thing.

Many Democrats are predisposed to want more government spending. So they pick up on the one current they think can be cured with more government spending: low consumer demand. Increase government spending and that will pump up consumer spending.

. . . .

Many Republicans, meanwhile, are predisposed to want lower taxes and less regulation. So they pick up on the one current they think can be solved with tax and regulatory cuts: low business investment. Cut taxes. Reduce regulation. All will be well."

Brooks's solution?:

"We need an approach that is both grander and more modest. When you are confronted by a complex, emergent problem, don’t try to pick out the one lever that is the key to the whole thing. There is no one lever. You wouldn’t be smart enough to find it even if there was.

Instead, try to reform whole institutions and hope that by getting the long-term fundamentals right you’ll set off a positive cascade to reverse the negative ones."

I agree with Brooks, but note the distance between his viewpoint and that of Krugman, who has consistently advocated increased spending, and only yesterday, in "Euro Zone Death Trip" (http://www.nytimes.com/2011/09/26/opinion/euro-zone-death-trip.html?partner=rssnyt&emc=rss), focused upon the European aspect of this dilemma, in which he rejected the "hard-money-and-austerity dogma" of the "European policy elites."

Similarly, Brooks is at odds with Friedman, who, in "Help Wanted: Leadership" (http://www.nytimes.com/2011/09/25/opinion/sunday/Friedman-help-wanted-leadership.html?_r=1), would have us believe that all that is needed is a "Grand Bargain," including "short-term stimulus to ease us through this deleveraging process, debt restructuring in the housing market and long-term budget-cutting to put our fiscal house in order." Were it only so simple as Friedman would have us believe.

However, I do agree with Friedman insofar as he believes that "leadership," which he fails to define (see: http://jgcaesarea.blogspot.com/2011/09/thomas-friedman-help-wanted-leadership.html), is required to lead us out of this quandary. Sadly, Obama is currently busy playing the blame game to remain in office: he inherited the problems from Bush, and now it is necessary to increases taxes on the heartless billionaires who brought about this debacle.

Change is indeed required in the White House, but it is nowhere in sight.