The Babbling Brooks of the NYT Babbles  and Fantasizes about Financial Reality and Economic Certainties.

Abstract: David Brooks soars into some futuristic world where politics and economics fight to the last penny and drop of blood. In his fantasy he predicts that government efforts will only lead to a stagnant economy and the error in the planning calculations was not properly estimating the effects of social psychology. Our society has to be reformed so that we may rise about our levels of low trust to a new era of high trust in our government and optimism in their promises.  We might conclude from this that our attitudes must be altered from those who chose a critical analysis of how the government is sinking our economy into a True Belief in the splendor of modern government. Get ready for some heavy propaganda as our government has saddled us with a phony economic plan that will ruin our economy and will attempt to convince us that massive debt and inflation will build a better society.  Smile and be happy.

As we stroll through the political rants of the NYT—aka the Walter Duranty Papers[1]--a turn-of-the-crank Marxian fog horn that gets noisier when we are cruising at full power against the rocks, we frequently read quirky predictions for the demise of our society.  Facing a world-wide financial catastrophe, the New York Times features some whimsical tokenic[2] prophecy from their Chief Babbler David Brooks,[3][4][5] [6] cast, interestingly, in the future past perfect subjunctive tense. We must now be entertained by political fantasy.  This will be fun, of sorts.

The dream begins:

“Between 1990 and 2007, the total mortgage debt held by Americans rose from $2.5 trillion to $10.5 trillion. This rise was part of a societal credit bubble that burst in 2008. To cushion the pain of that collapse, federal authorities decided to replace private debt with public debt.”[7]-- The Worst-Case Scenario by David Brooks Op-Ed Columnist Published: February 12, 2009  [Emphasis is mine in all quotes.][All quotes are from this link in this essay today unless otherwise indicated.]

This is a rare beginning for any monograph emanating from the Old Gray Lady.  The fairy tale begins with the facts and carries the implicit implication that there was a tragic strategic mistake on the part of government.  Who checks the output of the non believers at the Times? The proper lead off for this propaganda and mood-swinging piece is to condemn capitalism and tax cuts and ending with a tear-jerking  array of anecdotes on how illegal aliens struggle for self respect while selling  oral sex and drugs in the San Francisco alleyways. How did this piece survive uncensored? At least, we were spared an essay on the splendors of socialism. Perhaps the answer lies later in this commentary from Brooks.

“In 2008, the Bush administration increased spending by about $1.7 trillion, and guaranteed loans, investments and deposits worth about $8 trillion. In 2009, the Obama administration spent $800 billion on a stimulus package, $1 trillion on a second round of bank bailouts and committed another trillion on health care reform and other bailout plans.”

All mistakes.

So, the follies build to a crescendo.

“During 2010, the economic decline abated, but the recovery did not arrive. There were a few false dawns, and stagnation. The problem was this: The policy makers knew how to pull economic levers, but they did not know how to use those levers to affect social psychology.”

Stop here for a reality check. The notion that the economy would bottom out given our inability to service about $600 bln per year in debt repayment is not realistic. We cannot afford this. Our economy may just continue to plummet. If banks start to fail again FDIC will just resort to the printing of money and we are lost.  Our debt will soon soar above our annual GDP level, an amount from which we cannot recover without massive inflation and a bailout from somewhere else.  What is missing in the fumes of this pipe dream is the hard reality of the government versus private spending ratio in the GDP. The Krugman assumption[8] is that the government can spend whatever is necessary to make up for loses in consumer spending to keep the GDP at current levels and can create jobs ipso facto by mere spending.  Theories like this are shown to be utterly false using the USSR, PRC and other failed economic systems as examples. The PRC is also crashing. We are seeing Europe disintegrate[9] and burn in a massive ditch of debt and their phony economic models and social services are exactly what brought them to the abyss.  We should copy this folly? California cannot recover from its current 40% deficit in its budget even if it fires every single government employee [including Arnold] in the state and also closes down all the schools. [10] Apparently, we are expected to follow Europe and California down the path to serfdom with a smile on our face and a deep trust of our government. How many people trusted their governments since 1900 and then went before the firing squads Oh, 100,000,000 souls?

There are two points that need clarification:

[1] The societal credit bubble that Brooks glosses over was not distributed homogeneously among the masses. 80% of us have good debt and have managed our lives in an exemplary fashion. We have built the most successful society in the known world and owe most of this to ignoring the government when it interferes. We may have to do this again. The bad debt was a direct result of  our worthless government forcing banks to loan money to some unfortunates, many incompetents, a host of social misfits, a few million criminals, dozens of millions of parasitic illegal aliens and speculators.  This was the CRA [Community Reinvestment Act].[11][12] The original purpose of this socialist scheme was to redistribute the wealth without equally distributing the cost. Fact: the low class was given wealth with no responsibilities at all to repay its debts and only their vote was desired as payment. The credit defaults come from the low class, mostly Democrats and criminals. Poncho the Parasite made out very well in this scheme.

[2] The blather about social psychology is out of place in a discussion about economics.

This continues:

“Essentially, Americans had migrated from one society to another — from a society of high trust to a society of low trust, from a society of optimism to a society of foreboding, from a society in which certain financial habits applied to a society in which they did not. In the new world, investors had no basis from which to calculate risk. Families slowly deleveraged. Bankers had no way to measure the future value of assets”

Brooks performs the elementary blunder, even in this fantasy, that somehow average Americans have lost their ability to calculate risk and how to manage debt. No educated American should ever fully trust their government for this very reason. Just look at the wars and phony social programs.  We can certainly calculate both risk and the propensity to make profits from any scenario proffered by the government or business if we rise above the welfare and federal penitentiary classes. Banks can easily predict the future value of assets as they have done all along. All they need to do is to stop lending to deadbeats, losers and drug addicts. The insinuation here is that we need to be reeducated in, perhaps, the Maoist themes. We will get a chance to assess the business aspects of the massive 3 trillion debt offering that Little Timmy Geithner mumbles about: "… a process of providing a market for the real estate-related assets that are at the center of this crisis. Our objective is to use private capital and private asset managers to help provide a market mechanism for valuing the assets.”[13][14]-- Except from Geithner [Emphasis is mine in all quotes.] Who will buy this crap? The assets are dead if mortgages cannot be foreclosed upon.  What is the scam here? To sell tax liabilities to the public?

A failed recovery predicted in this phantasm:

“The failure to generate a recovery led to a collapse of public confidence. President Obama’s promises of 3.5 million jobs now seemed a sham and his former certainty a delusion. The political climate grew more polarized. That meant it was impossible to tackle entitlement debt. That and the economic climate meant it was impossible to raise taxes or cut spending or do anything to reduce the yawning deficits. Federal deficits were 15 percent of G.D.P. and growing.”

Most of us have no public confidence to start with now. Why should we? Who got us to this point? The fools at Treasury are printing money and throwing that money willy-nilly at the banks hoping to prevent deflation.  A liquidity trap currently prevents the money from rushing though the banks and multiplying itself by 10 or more[15] and creating high inflation. They have panicked and don’t know what to do. More accurately, the knowledge that phony government spending and high debt can fix an economy in a steep deflationary spiral alerts the investor and home owner to avoid debt and minimize spending thus lowering the GDP.   Certain purchases become a financial and political liability now such as buying a car from GM or Chrysler, two basket cases being coddled by union lobbyists and fevered Democrats who function as union stooges. GM cannot recover from its 60 bln in debt. There is no confidence in our future economy now by more than half the citizens. Brooks mixes the present and future in his construction. The phone calls and e-mails to our elected servants in Washington are running very high on the negative side of the balance sheet. They don’t like this and are fuming. Those who pay the freight in this society, meaning taxpayers and job creators and producers, clearly see a rip-off in the making and their wealth will be shifted to the low class in exchange for votes.  Our worthless government will now prevent foreclosure on homes thus allowing the owners parasites to squat and zero out the debt at the expense of the taxpayer who inherits the mortgage debt. Apparently, the government will ‘buy’ this toxic debt.  How will they pay for this? This is part of a massive tax liability and a gift to Main Street. The proper response to this is an economic revolt.

Brooks sums up with this nonsense that continues to tautologically extend his psychology arguments:

“The nation had essentially bet its future on economic models with primitive views of human behavior. The government had tried to change social psychology using the equivalent of leeches and bleeding. Rather than blame themselves, Americans directed their anger toward policy makers and experts who based estimates of human psychology on mathematical equations.”

This essay is a clumsy attempt to shift the blame off liberal economic ideologies onto a mass of ignorant citizens who stumble around in some kind of social fog and need constant guidance from elitists. The gaping hole in this logic is the phony notion that the success of an economic model depends on human behavior. This is only true for those whose behavior is negative in terms of participating in the economic arena. Extending the Brooks Logic here we might conclude that since the majority of people elected in California want huge tax increases and spending that this will be an automatic success if they just believe it will work. Nobody who participates in capitalism has any blame to share unless they cannot understand the game. Most of us soar well beyond the mental and societal capabilities of our government leaders. They are mostly just a pack of slimy bribe-hunting parasites like Murtha, Rangel, Jefferson, Clinton, Dodd and others who should be in jail now. They have lost our respect.

Brooks scrounges for a politically elastic metric to replace sound economic practices and suddenly finds emotion as a good liberal must. I am surprised the government is not passing out tranquilizers in his little story.  He wants to inject the human equation into the calculus here and ameliorate the response to the doom we face in the financial markets. Happy people spend money! He wants us to feel better about being losers in a world where success will never rewarded and sloth, sodomy and drug addiction are positive attributes. This last little twist was necessary to get this wreckage past Mind Control Central at the New York Times.

Your now absolutely worthless government is frantic for capital and has very few places to get at it. Your 401(k)s and taxable assets are now at risk. Confiscatory inheritance taxes [ Communist Manifesto: 2.A heavy progressive or graduated income tax. 3.Abolition of all rights of inheritance.][16] are now certainly to be proposed. A wealth tax will soon be proposed as it was recently in California.[17]They know that printing money will sink the economy and produce chaos and they will do either that or try to make some kind of convincing argument, based on elitist  views of human behavior, of course, following the theme of this fantasy, that the government needs to grab your wealth and spread it around to be fair.  You are instructed to welcome this opportunity with tears in your eyes to share and participate in the New World Order.

Be a good stooge and work on your human psychology metrics.  Pull your savings out of the banks and shower them upon the unfortunates in the streets. Control your rage as your taxes rise and money flows into hands of welfare queens and drug addicts and illegal aliens. A happy citizen is an asset to socialism. Obama and his elitists know what is best for you.  They know how to spend your wealth for the good of all.

rycK

Comments to: ryckki@gmail.com