David Brooks vs. Progressives: Genteel Ignorance as Economic Warfare
There are jungle birds that can imitate human speech perfectly. Ever hear one sing a sad song? They can do it so beautifully that human listeners are moved to tears. The bird, on the other hand, has no idea what it's singing about.
David Brooks is like that bird. He may not understand economics or public policy, but his uninformed pronouncements have a music that moves Washington insiders. His misguided opinions are rendered in a prose voice that bespeaks mastery of a subject matter with which he is clearly unfamiliar. These uncomprehending arias may have comic-opera overtones, but they build a consensus for tragedy.
Brooks' latest column, "The Progressive Shift," which wages war on the Congressional Progressive Caucus' "Back to Work" budget -- and on mainstream economic thinking -- is a good example of the art.
Brooks begins by waxing poetic over a statue outside the Department of Labor which depicts a "powerful, rambunctious horse being reined in by an extremely muscular man." Brooks tells us this was meant to be "a metaphor for liberalism."
"The horse was capitalism," Brooks writes. "The man was government, which was needed sometimes to restrain capitalism's excesses."
But lamentably, says Brooks, "liberalism seems to have changed. Today, many progressives seem to believe that government is the horse, the source of growth, job creation and prosperity." Then, perhaps riding his metaphor a little too far, Brooks adds that today's liberals think "Capitalism is just a feeding trough that government can use to fuel its expansion."
Talk about beating a dead horse.
The CPC budget provides short-term stimulus spending to jump-start the economy. It also cuts the deficit more effectively than any Republican alternative (a fact which Brooks fails to mention) and it does so with real-world numbers, not Ryan hocus-pocus. The bottom line: Seven million jobs, followed by deficit reduction of $4.4 trillion.
If it seems bizarre, extreme, and unreasonable to characterize that as an attempt to massively expand government spending, that's because it is. Strip away the prose and Brooks' column is an uninformed, Fox-fueled rant with no more merit than the ravings of your blowhard uncle when he drinks too much at a holiday dinner and starts fulminating about "those damned socialists."
But ya gotta hand it to him. Brooks makes opinionated ignorance sound erudite, well-documented, even genteel.
Perhaps the most destructive assertion in the Brooks column is the one you'll hear repeated often by liberal, or at least Democratic, pundits: that we don't need stimulus spending because the economy is growing. That's based on a misreading of topline economic figures at a time. Sure, they look good when the stock market is booming. But middle-class income has stagnated, poverty is increasing, and unemployment remains at staggeringly high levels.
In the stratospheric fiscal realms of Washington and lower Manhattan, things are looking up. But here at street level there's a recession going on.
Brooks echoes the zero-sum logic of economic amateurs who have failed to grasp the "fiscal multiplier" -- the well-documented fact that a dollar in government spending grows the public economy by more than a dollar, especially in recessionary times like these. But the uninformed Brooks writes that "these Democrats want to take an astounding $4.2 trillion out of the private sector (emphasis mine) and put it into government where they believe it can be used more efficiently."
Solid economic analysis from the Economic Policy Institute shows that, contra Brooks, the private sector would grow substantially under the CPC budget. That also helps the deficit. When the whole economy grows, the Federal debt is a smaller percentage of the GDP. Everybody wins -- except, of course, for people who don't want to pay taxes. And since we've mentioned taxes, let's address that issue.
Or as they say in cowboy bars everywhere: Let's go see a man about a horse.
Brooks claims that "today, especially after the recent tax increases, the total tax burden is already at historic highs." That's an astonishing assertion. The top Federal tax rate under Dwight D. Eisenhower was 91 percent. But Brooks claims that nobody ever paid that much, then boldly asserts that tax rate today are "at historic highs."
Unfortunately for conservative flim-flammers, real economists studied this question a few years back. Thomas Pikatty and Emanuel Saez found that when all taxes were combined the very wealthiest Americans (in the top 0.01 percent) paid a real tax rate of 55.3 percent in 1960 and only paid 34.7 percent in 2004 (the last year for which they had data). Since then the top tax rate has moved up slightly, but hardly "historically."
And yet Brooks blithely -- and falsely -- asserts that "If you combine federal, state, sales and other taxes, rich people in places like California and New York are seeing the government take 60 cents or more out of their last dollar earned." He adds that "the total tax burden was lower since so few people paid the top rate and there were so many ways to avoid it."
(That "last dollar" phrase is a nice touch. It expresses the way marginal tax rates work -- higher rates as your income goes up -- while adding the world-weary resonance of a hard-working entrepreneur earningt his "last dollar" before giving up the ghost. Does Brooks plan this sort of subliminal messaging, or is it a natural gift?)
Brooks' claim is completely untrue. So where did he get that idea? Probably from Fox News. Fox added up the official, or "statutory" rates for Federal and state taxes and came up with a total figure of 52 percent. But they forgot (or deliberately didn't mention) that state taxes are deductible from Federal taxes. You can't add the two figures up, as Fox (and Brooks) did), because you'll be overstating the tax burden significantly.
Fox also forgot (or deliberately didn't mention) that nobody pays the top tax rate for their "first dollar." (See what I did there? I used the phrase "first dollar," hoping you'd subliminally imagine a fresh-faced paperboy beginning a Horatio Alger-like climb to billionaire status. I'm working on my David Brooks chops.)
Since wealthiest among us pay a lower percentage of their income in taxes today, why does radio host Peter Schiff claim that "the share of income paid by the wealthiest Americans has essentially remained flat"? Simple: Because they're earning much more of the national income. And they're doing it at the expense of the middle class, which saw its real income stagnate for decades and then decline after the Great Recession.
Is the CPC budget's top tax rate of 49 percent too high? Won't rich people just stop doing all those wonderful job-creating things they do, just as Brooks says? They had a decade's worth of tax breaks. Do you remember all those jobs at the end of Bush II's presidency? Me neither.
In fact, another study concluded that the optimum tax rate for high earners -- the level above which they'll stop earning and producing -- is 73 percent, well above the CPC's top rate. (That paper was co-authored by a Nobel laureate, Peter Diamond.)
Conservatives like David Brooks are the economic version of climate-change deniers. They ignore mainstream economic thought, carefully compiled data, decades of real-world evidence, and the painful post-austerity experiences of the last several years in order to push a self-service political agenda.
As we were saying, strip away the prose and David Brooks is your ranting right-wing uncle. But Brooks makes that holiday-dinner raving seem socially acceptable -- and he doesn't belch or ask you to pass the cranberry sauce while he's doing it.
It's amusing to read David Brooks, or to writing about him. But innocent people can get hurt by misinformation and misguided notions. They're real, these people. True, they never get invited to dinners with David Brooks, or with Congressional leaders, or with the president of the United States. But they're real, and their future's looking bleak.
If you want to change that, the CPC budget is the horse to ride.
(This page will help you send an email to your Representative supporting the CPC budget.)
(UPDATE: Dean Baker's excellent response to Brooks includes a postscript which tells us that the "extremely muscular" man and his equine adversary are located in front of the Federal Trade Commission, not the Department of Labor. That's called 'backing the wrong horse.')
(UPDATE II: Re Matt Yglesias' commentary on Brooks, especially the closing paragraphs which begin "long story short": Heh.)