Editore"s Note
Tilting at Windmills

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July 22, 2008
By: Kevin Drum

SLEEPER ON BROOKS....If you'd like to read a nice, stemwinding screed against David Brooks, Jim Sleeper has you covered today. Here it is, for your enjoyment. And to prove that it's the real deal, written in a righteous fury, it's even got a bunch of typos that occasionally make it hard to figure out what he's really saying. But, have no fear, he gets his point across regardless.

Kevin Drum 12:19 PM Permalink | Trackbacks | Comments (21)

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Has Brooks written about the fact that White Castle hamburgers have gone from 48 to 56 cents.Give him time and he will come up with a whole article about it.

Posted by: Ye Olde Pitchforks,torches & Pikes Shope on July 22, 2008 at 12:29 PM | PERMALINK

Brooks is *the* major-league enabler asshole of the century, because people like Tom Friedman and Andrew Sullivan can at least get their crap together and write some intelligent stuff after appreciating their past mistakes.

Posted by: ♪ on July 22, 2008 at 12:47 PM | PERMALINK

I read it. Pretty weak screed. Suffers the same faults that Brooks' original article has.

Posted by: SJRSM on July 22, 2008 at 12:50 PM | PERMALINK

Tanta takes Brooks on also...

http://calculatedrisk.blogspot.com/2008/07/brooks-on-morgenson-on-mcleod.html

Posted by: mo on July 22, 2008 at 12:52 PM | PERMALINK

The whole "culture of thrift" vs. "culture of debt" meme irritates me no end.

Every modern economy is build on debt. We finance our capital acquisitions through debt. We finance a large percentage of our consumer durable expenditures through debt. We finance our home (owner-occuppied or rental) construction using debt. We finance home ownership (whether it's owner-occuppied or rental) using debt.

So why is debt per se bad? It isn't.

Does that mean there is no "bad" debt? Of course not. But it's not the debt itself, it's the decisions of the lenders and borrowers that matter. Are there cultural factors here? Of course. But let's not leap, as Brooks and others of his ilk tend to do, to the conclusion that debt is bad for many (poor, lower-income, minority; never, or rarely, while, middle-class, upper-middle, or upper-class, white) people, because they aren't smart or disciplined enough to handle it. (And in doing so, elide the actions of lenders, including the pressures that people working for lenders feel.) Sleeper seems to be OK with the debt is bad for (some) people meme, although he does not ignore the actions of lenders.

Either do the analysis seriously, and correctly or shut the f--- up, Mr, Brooks.

Posted by: Donald A. Coffin on July 22, 2008 at 12:53 PM | PERMALINK

At CalculatedRisk, Tanta thoroughly dismantles Bobo Brooks ideological crap disguised as commentary.

http://calculatedrisk.blogspot.com/2008/07/brooks-on-morgenson-on-mcleod.html

Posted by: -ck- on July 22, 2008 at 12:53 PM | PERMALINK

Brooks seems to want to be seen as a common sense spokesman for the common person which is difficult since he has little connection to either.

Posted by: keith g on July 22, 2008 at 12:55 PM | PERMALINK

*

Posted by: mhr on July 22, 2008 at 12:55 PM | PERMALINK

There are some people who deserve instant shorthand responses because their behavior is so consistently bad. I first developed this for judge Scalia. Scalia is unfit to sit.
For David Brooks here's how I would put it: Brooks is a republican sophist.
Brooks is a republican sophist.
Brooks is a republican sophist.

He's ruining America one column at a time.

Posted by: Northern Observer on July 22, 2008 at 1:11 PM | PERMALINK

Brooks is a Neocon. Like most neocons, they can't wrap their minds around the fact that ALL of their ideas are failures. Supply-side economics is case in point. It concentrates wealth, making rich richer, and poor poor. Thus it contracts demand. Always has, and always will. Our's is a market based economy 2/3rds of which is consumption (demand) oriented.

In 2001 Bush had a deflationary recession to deal with: too little demand chasing too much supply. What did he do? He implemented supply side economics. To shore up demand, he borrowed money from China at artificially low rates. That money made it's way into refinanced home loans, releasing purchasing power providing the economy with demand. When that string ran out, more artful means stepped in: second, flexible and subprime mortgaging.

So demand was butressed, the economy still grew, but at the same time median family income sank over 5%, while the top .1% improved 50% and the top .01% improved 500%. For the median family the recession of 2001 never ended. Just as in 1929, when income goes down, families borrow money to bridge the gap and sustain life styles. When the bridge doesn't make it to the other shore, then things start to unwind.

While their will always be people who mismanage money or take on too much risk at the wrong time, one has to view them in the context of the times they live in. ‘The median family’ has been under increasingly severe pressure for almost 8 years now, and the near future doesn’t look better. Growing up, I recall, whenever my mother was upset, a shopping trip, even if it was only a run to the grocery store for milk, always calmed her down. In the face of a macro-melt down, I don’t think solutions will be found focusing on individual meltdowns. Furthermore, individuals aren’t doing anything different than what the nation as a whole has done since 2001– borrow money to bridge the gap.

Conservatives are denial that their policies don't work. Even now, many are calling for more tax cuts to fix our problems – even though that’s exactly how we got here. Given this denial, it seems likely that some will want to focus on anecdotal individual failure and site it as the source of the problem. Anything but admit that wealth concentration was the source of the problem. Throughout history, whenever wealth concentrates, demand contracts, and with it, the commercial economy. T’was always thus, and thus it t’will always be.



Posted by: Bub on July 22, 2008 at 1:40 PM | PERMALINK

Every modern economy is build on debt. We finance our capital acquisitions through debt. Posted by: Donald A. Coffin

Yes. There is good debt and bad debt. Good debt is buying a house (capital acquisition). Bad debt is talking equity out of that house to buy a jet ski or take a trip to Disneyland. Much of the bad debt is the latter. Anyone who has owned a house long enough to build enough equity in it that could be borrowed against, and then went on some wild spending spree deserves whatever he gets. Same is true for the idiots left holding the bag (or two) in the flipping game.

Sleeper's trying to blame advertising for our culture of consumption in America is as insulting as Brooks is smarmy with his faux concern. Americans were once a thrifty people. Maybe we do need another depression to refocus the nation. You can blame the government to an extent for lack of proper regulatory oversight. But no one held a gun to anyone's head and made them take loans that were, of course, too good to be true.

I'm tired of reading how all the unqualified borrowing is someone's fault other than the borrowers and equally disgusted with the (now fading) excuse that "no one could have predicted so many defaults" from the so-called financial experts. Both were trying to, ultimately get quite a bit for next to nothing.

Posted by: Jeff II on July 22, 2008 at 1:44 PM | PERMALINK

I don't think that it is correct to suggest that Americans were once more thrifty than they are now. I don't have numbers at hand to back this up, but certainly cultural works like The Jungle and The Devil and Daniel Webster at least signify that onerous debt has been a problem in this country for a long time.

To me it's more likely that the American middle class used to be larger and more powerful, and therefore able to command more relative wealth in society and absorb more of the negative consequences of the debt that they incurred. The difference now, it seems to me, is that most people aren't gaining earning power at the rate necessary to maintain their existing lifestyles, and so we see a lot of pain. It's always easy to point at that one jet ski that shouldn't have been bought, ex post facto, to explain why everything fell apart, but this is a proximate problem, not an ultimate one.

Posted by: Ruck on July 22, 2008 at 2:03 PM | PERMALINK

Brooks is such a jerk.

The majority of houses aren't build for home owners.

And probably, the majority of people just wanted to be like everyone else and own a home.

We now have a six-digit income. Why can't we afford a home? Our parents never had six digit incomes.

Posted by: Crissa on July 22, 2008 at 2:15 PM | PERMALINK

The majority of houses aren't build for home owners. Posted by: Crissa

Who or what then, pray tell, are they built for?

We now have a six-digit income. Why can't we afford a home? Our parents never had six digit incomes. Posted by: Crissa

Why not? How much credit debt are you carrying? Where are you trying to buy? How many children do you have?

Posted by: Jeff II on July 22, 2008 at 2:35 PM | PERMALINK

There's a new major-league asshole to compete with Brooks as prime jerk enabler of the rich (owned) economy etc, by the name of James Pethokoukis:

http://www.usnews.com/blogs/capital-commerce/2008/7/21/why-isnt-the-economy-worse.html

Posted by: Neil B. ♪ ♪ ♪ on July 22, 2008 at 2:42 PM | PERMALINK

Shorter Brooks, on this particular column:

"I'm not going to name President Bush, because he never encouraged Americans to show their patriotism by shopping."

What a putz.

Coffin and Jeff II are right. The Jews of Jesus' time recognized that the "no usury" of the Torah was off-putting to business, so they invented the legal fiction of the prosbul.

Posted by: SocraticGadfly on July 22, 2008 at 2:56 PM | PERMALINK

A "Mortgage borrowers of the world unite" kind of piece.

Posted by: Luther on July 22, 2008 at 3:12 PM | PERMALINK

Several years ago, Brooks told the NPR Friday night audience
that there are vigorous and intelligent arguments within
the Bush administration.
Recently, he said that are not enough people
in the administration intelligent enough to have
a useful discussion of any policy.

Posted by: RO on July 22, 2008 at 4:41 PM | PERMALINK

This is a mistake, people. Blog posts, comments, and letters to the editor pointing out Brooks's fatuousity just encourage the bastards by creating BUZZ. Let's just STFU about Bobo, and maybe his employers will get bored with him. I have a small bet riding on William Irvingson Kristol's contract at the Times not getting renewed for demonstrated lack of reader reaction.

Posted by: CJColucci on July 22, 2008 at 4:53 PM | PERMALINK

From "Who is Really to Blame for the Financial Crisis?"
http://agonist.org/numerian/20080720/who_is_really_to_blame_for_the_financial_crisis

"How the system evolved into a debt trap for consumers is altogether different and relates entirely to the banking industry’s self-imposed pressures for profitability. The first ill-fated step in this development began over 25 years ago when Citibank under its chairman Walter Wriston set itself a target of an annual return on equity of 15%. This was a shock to its competitors, since most banks achieved ROE’s of 5% to 8%. But this was a Citibank that was the biggest and baddest bank anywhere, operating in over 100 countries, inventor of the ATM and the certificate of deposit, and altogether drunk on its superiority.

"It actually began achieving 15% returns, but only by pressuring managers to reach for profit in any way possible. The result was predictable. Profits collapsed when loans to Latin American borrowers, which were high yielding but poor risk, turned bad. Something else was needed to achieved superior returns."

It names names, which I think is always the best and most direct way to clear away all the b.s. in the public discourse.

Posted by: Tony Wikrent on July 23, 2008 at 12:13 AM | PERMALINK

Housing is consumption. It is not a 'capital asset'. Capital assets produce something. A tradeable good or service. That's Econ 101.


Dean Baker - "It would be the height of foolishness to create a house price support program to try to sustain the bubble"


"A housing bubble exists because houses are being financed and refinanced by full-value mortgages collateralized only by the anticipated continuing rise in home prices. A liquidity boom generates asset bubbles because liquidity is not wealth, only an illusion of wealth. And the rise in asset prices beyond the growth of gross domestic product is really a decline in currency value. A market rise of 40% against a GDP growth of 3% translates into a currency depreciation of 37% in a year. "
- Henry C K Liu - How currency devaluation destroys wealth
http://www.atimes.com/atimes/Global_Economy/IF14Dj01.html

Posted by: MsNThrope on July 23, 2008 at 9:49 AM | PERMALINK




 

 

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