Friday, August 27, 2010


Today's David Brooks column in The New York Times offers a mildly toxic mix of right-wing conventional wisdom and insipid pop social psychology, all based on a selective citation of facts. First, the right-wing CW:

During the first half of this year, German and American political leaders engaged in an epic debate. American leaders argued that the economic crisis was so bad, governments should borrow billions to stimulate growth. German leaders argued that a little short-term stimulus was sensible, but anything more was near-sighted....

This divergence created a natural experiment. Who was right?

The early returns suggest the Germans were....

The German economy ... is growing at a sizzling (and obviously unsustainable) 9 percent annual rate. Unemployment in Germany has come down to pre-crisis levels....

And now the insipid pop psych:

The economy can't be played like a piano -- press a fiscal key here and the right job creation notes come out over there. Instead, economic management is more like parenting. If you instill good values and create a secure climate then, through some mysterious process you will never understand, things will probably end well.

Germany didn't spend as great a percentage of its GDP on stimulus, but one reason for that was that it had systems in place to combat a severe recession already. As Brooks's own newspaper explained it a couple of weeks ago:

Government officials here are confident they found the right approach, including a better solution to unemployment. They extended the "Kurzarbeit" or "short work" program to encourage companies to furlough workers or give them fewer hours instead of firing them, making up lost wages out of a fund filled in good times through payroll deductions and company contributions.

Keeping money in workers' pockets keeps shopkeepers in business, because those workers can afford to spend. That keeps even more workers from being laid off. That means people can keep making house payments. They means you don't have the downward spiral we have.

Can you imagine if the White House proposed a plan whereby workers and companies paid money to the government so we could almost completely make up lost wages for workers that companies don't need in a downturn? Not unemployment insurance, but near-total replacement (the percentage is 80%) of workers' salaries? It would be derided as a massively socialist, confiscatory big-government program. Right-wingers would howl. David Brooks would quietly tut-tut.

Oh, and I'm not even mentioning the rest of German's social safety net -- y'know, national health care and all that.

Well, it worked in Germany, because Germany isn't a bad "parent" to its ordinary citizens. Unlike America.

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