Does David Brooks Write Anything in Good Faith?

The answer is: no.

David Brooks quotes Christina Romer out of context--taking her 1994 argument that monetary policy is more flexible and effective at ending small recessions and misinterpreting it to apply to big recessions like today, which are too big to end via monetary policy alone.

The New York Times editors should have killed Brooks's article. The fact that they didn't tells us something about their commitment to ethics in journalism.

David Brooks writes:

The Confidence Surplus: Christina Romer is Barack Obama’s choice to lead his Council of Economic Advisers. In 1994, Romer and her husband, David, wrote an essay entitled “What Ends Recessions?”... The Romers surveyed the recessions of the previous 50 years to try to reach some conclusions about what works. “Our central conclusion is that monetary policy alone is a sufficiently powerful and flexible tool to end recessions,” they wrote.... “Discretionary fiscal policy, in contrast, does not appear to have had an important role in generating recoveries.”... The Romers’ essay exemplifies the economic doctrine that... fiscal stimulus plans that try to time a recession are dangerous, unproven and unnecessary.

That doctrine has suddenly vanished. But not because we suddenly know how to create effective stimulus plans.... Today there is wide support for fiscal stimulus. It’s just that there is no historical experience to tell us how to do it, and there is no agreement on how to make it work. The economists’ prescriptions are all over the map...

I think there is pretty strong agreement about how to try to make it work. When Marty Feldstein is at the same spot on the map as Christie Romer, that tells you something.

Why oh why can't we have a better press corps?

Comments

[Lance]

Prof. Delong, the Romer paper wasn't about the size of the relevant recessions, but the timing of policy responses.

[Which depends on the size of the relevant recessions. Post-WWII inflation-fighting recessions are cut short because the central bank thinks it has accomplished its inflation-control goal. That is not what is going on here.]

[Vladimir]

Agreeing with Lance,many of the post war recessions are the product of monetary policy therefore cured by a reversal of the policies which created the downturn.

[Ken Houghton]

This way lies insanity, or Real Business Cycle Theory--but I repeat myself.

That said, Brooks "there is no agreement on using fiscal policy" is slightly disingenuous, but plays like Chopin to his masters's ears, since the NYT has been running columnists of stronger pedigree (NGM, Cowen) who remain determined to downplay the role of fiscal policy.

(I'll ignore Casey Mulligan's latest, since keeping you away for it would be good for your blood pressure.)

[RW]

Brooks use of the Romer cite appears to be inappropriate given his mis-characterization of the environment in which the cite would be valid; his further invocation of putative economic doctrine within the intellectual mish-mash he has created simply appears to be a non sequitur.

There are many opinion pieces that do nothing to advance dialogue and there are many whose intent rather clearly is to impede it; depending upon ones point of view Brooks column is one of these and nothing more, that is all.

[Robert Waldmann]

"ever" is a weak weak word. I think Brooks often writes in good faith. However, he can't afford to do that always (or more than say half the time) because he can only have a spot on the NYT op-ed page as a conservative. If he were a liberal or a centrist he would not be good enough. As a conservative he is close to the best. So he has to maintain his conservative cred. Given the state of contemporary conservatism, that means that at least half of his arguments have to be made in bad faith. But not all of them.

I'd say the best counterargument is not "how deep were those recessions ? " and certainly not "how long did they last ?" But "what was the lowest federal funds rate during those recessions". Everyone (including Brooks) knows we need a fiscal stimulus, because monetary policy is pedal to the metal (0% nominal) and we're stalling.

[mike]

So it has come to:

conservative cred. == lie, lie, lie

It's so hard to be moderate when the world has, indeed, become black and white (or is it grey?) with respect to our two viable political parties.

[pants]

OK let's pretend that Christina Romer IS on the same page as Marty Feldstein. (Bear with me.)

That "doctrine has vanished" because the Fed TRIED cutting interest rates down to 0-.25 and it didn't work! Yo Brooks, the Fed has already played its last card!

[bob mcmanus]

Christina Romer sure gets misinterpreted a lot.

[lasser83]

Tyler Cowen commended the column.

[RW]

And why should the opinion of a second tier academic such as Cowen become of interest?

[Matt]

Brad,

You're very clearly barking up the wrong tree, owing to your assumption that what's obvious to you is obvious to most people. Brooks doesn't understand the distinction beween small recessions and large recesssions or depressions; he thus doesn't understand why monetary policy is effective for the latter. He doesn't think he's being intellectually dishonest. The Times's editorial board should have enough intellectual capital to catch a mistake like this--but it doesn't. You should have learned this in your stint out of academia, at Treasury. As a general matter, people don't know shit.

[Matt]

I hate to do this. I mistakenly erased some text. As for small vs. big downturns, monetary policy is, of course, effective for the former, but not for the latter.

[mike doughty]

As probably the only retired flooring contractor who uses your site to "snope" the talking heads,I appreciate your observations.Brooks repeated this drivel almost word for word tonight on PBS News Hour and I wondered how this could go unchallenged by anyone on the broadcast.I am no economist,but surely the press could be better informed when someone spouts standard issue Friedman/Greenspan talking points.

[Michael Turner]

"And why should the opinion of a second tier academic such as Cowen become of interest?"

Because:

(1) He's a first-tier econ blogger;
(2) He's (at least) a second-tier op-ed writer.

I mean, Arthur Laffer is maybe a THIRD-tier academic, but seems to be received as royalty by the WSJ. This shit is scary. It has to be fought.

But I'm not sure that accusing the likes of Brooks of lying is the right way to fight. Brooks doesn't have to lie, in order to keep his cred with conservatives. He doesn't even have to keep his cred with conservatives. If anything, he could become even more popular, better paid, sell more books, if he recanted enough conservative crap. He's become damn near a centrist as it is.

Brooks covers a lot of territory, and even when you do that in 100% good faith, you're bound to get it wrong sometimes. If he proves himself incorrigible, then by all means skewer him as a liar. Until then, it would be well to bear in mind that he's a Republican that a lot of Democrats wouldn't mind having over for thanksgiving dinner, precisely because he seems to be the soul of reasonableness.

[bdbd]

This sort of Brooksian formulation is now in the Times news reporting/analysis: from this morning's "stimulus big enough?" story by Andrews and Herszenhorn:

Christina Romer, whom Mr. Obama has designated to be his chief economist, concluded in research she helped write in 1994 that interest-rate policy is the most powerful force in economic recoveries and that fiscal stimulus generally acts too slowly to be of much help in pulling the economy out of recessions, though associates said she now supports a big stimulus package if policy makers roll it out early enough in the recession.

[pgl]

Brooks also misrepresented what was said in the 1963 Economic Report of the President:

econospeak.blogspot.com/2009/01/david-brooks-mendacity-on-fiscal-policy.html

[bakho]

Monetary policy as Superman has met its kryptonite.

Greenspan helped create the current economic crisis because it was widely assumed that monetary policy alone could fix the economy without requiring sound regulatory and fiscal policy. However bad fiscal and regulatory policy distorts the economy so that attempting strictly monetary solutions leads to instability. (This is one reason why monetary policy has never been able to fix under developed economies that have bad fiscal and regulatory policies.) Had Bush provided adequate fiscal stimulus for the 2001 recession, we would have never had the super low interest rates and huge increase in borrowing that created the financial bubble. Fiscal and regulatory mismanagement created an economic environment with no good monetary policies.

Monetary policy has been Superman for too long. Volcker's monetary policy was given ALL the credit for curing inflation. Carter's energy policies brought world oil prices (a major cause of inflation) down for almost 2 decades. The Carter policy that benefited consumers at the expense of wealthy oil men was ignored and discredited politically in an effort to discredit Carter.

Monetarists are still giddy about Volcker but don't understand that his interest rates were way overblown. Monetarists don't look at the effect of energy regulatory policy on the entire economy because they ignore the regulatory and fiscal policies that they deem inconsequential. Because they never understood the dynamics of the past oil shock, they missed the oil shock of 2007-8 as a major cause of the current recession especially for the auto and manufacturing sector of the economy. The oil shock on top of the financial crisis has made this recession much worse.

Of course, ignoring fiscal and regulatory policy makes monetary policy look all the more Superman to monetarists. An analogy would be giving all the credit to a winning football team's supposed star running back and ignoring any and all contributions of the offensive line or defense. In our football analogy, the star running back goes to the Detroit Lions and has a sub par career because he is surrounded by below average talent.

Reaganomics ushered in an area where monetary policy was used to benefit the wealthy at the expense of everyone else. Is it any wonder that monetary policy achieved Superman status given the political environment and the ability to manipulate monetary policy to benefit the wealthy?

There is always a lot of cheerleading for theory that supports political goals. This leads to blind, uncritical support as the theory becomes accepted political dogma. Eventually, monetary theory that has utility within narrow economic conditions, was warped into a Superman. Columnists like Brooks who have learned the dogma but not studied the theory itself utter their truthiness to an awakening public, ignorant of the fact that the underpinnings of their dogma has recently been discredited. It will take some time for the old dogma to tumble into the ashes of its supporting pillar. It will take even longer for a new dogma to arise to replace the ideology that drove the failed economic policies. Meanwhile, it is imperative to kick bad dogma while it is down so we are not haunted by it in the future.

In big crises, monetarism is mostly impotent. In the future, monetary policy will be put in its rightful place as a mundane tool for fine tuning economies within a small range of operating conditions. Future students will wonder how monetarism ever got to be Superman.

[PeonInChief]

Actually there's a fair amount of agreement on the left that tax cuts are a waste of money--that they provide little benefit but cost a lot of money. More emphasis should be put on subsidizing welfare payments to women and children, the aged, blind and disabled, unemployment, food stamps etc. This money will be spent right away, and it helps to bail out the states.

And you have to wonder about anyone who hasn't given up on Social Security "reform," given that there are a lot of near-retirees who have nothing but Social Security. Is the Clinton (oops, Obama) Administration in the world the rest of us inhabit?

[Paul Yarbles]

"And why should the opinion of a second tier academic such as Cowen become of interest?"

Cowen's an ideological asswipe, but have most first-tier academic economists really done such a bang-up job? I'd have to answer no. Why? Because they're ideological asswipes too.

First tier academic economists play with their first-tier overly simplistic models and bloviate about the proper policies to implement. Second tier academic economists play with their second-tier overly simplistic models and bloviate about the proper policies to implement. Nth tier academic economists play with their Nth-tier overly simplistic models and bloviate about the proper policies to implement. The tiering is based on the elegance of the maths and not predictive power. The tiers are meaningless. Garbage in-garbage out.

Scrap the whole field and start again with honest men and women who want to get to the truth and not simply try to impress one another with their cool mind-toys. When I see some valid predictions come out of economics instead of essentially baseless assertions about the right way to run the economy, then I'll think economics has at least ceased being harmful to the general public.