Brooks, Cohen and Krugman

Bobo has decided to write to a figment of his imagination.  In “The Credit Illusion” he babbles that today he has some advice for a poor soul filled with confusion about who’s responsible for one’s success.  Mr. Cohen is in Paris.  In “Freer — and Less Free” he says the balance between personal freedom and government oversight has gotten seriously skewed throughout the West.  Prof. Krugman, in “Debt, Depression, DeMarco” he says most of the blame for our persistently depressed economy lies with the scorched-earth opposition of Republicans.  Here’s Bobo:

Dear Mr. Opinion Guy,

Over the past few years, I’ve built a successful business. I’ve worked hard, and I’m proud of what I’ve done. But now President Obama tells me that social and political forces helped build that. Mitt Romney went to Israel and said cultural forces explain the differences in the wealth of nations. I’m confused. How much of my success is me, and how much of my success comes from forces outside of me?

Confused in Columbus.

Dear Confused,

This is an excellent question. It has no definitive answer. There were many different chefs of the stew that is you: parents, friends, teachers, ancestors, mentors and, of course, Oprah Winfrey. It’s very hard to know how much of your success is owed to those people and how much is owed to yourself. As a wise man once said, what God hath woven together, even multiple regression analysis cannot tear asunder.

Nonetheless, this question does have a practical and a moral answer. It is this: You should regard yourself as the sole author of all your future achievements and as the grateful beneficiary of all your past successes.

As you go through life, you should pass through different phases in thinking about how much credit you deserve. You should start your life with the illusion that you are completely in control of what you do. You should finish life with the recognition that, all in all, you got better than you deserved.

In your 20s, for example, you should regard yourself as an Ayn Randian Superman who is the architect of the wonder that is you. This is the last time in your life that you will find yourself truly fascinating, so you might as well take advantage of it. You should imagine that you have the power to totally transform yourself, to go from the pathetic characters on “Girls” to the awesome and confident persona of someone like Jay-Z.

This sense of possibility will unleash feverish energies that will propel you forward. You’ll be one of those people who joined every club in high school, started a side business while in college and spent the years after graduation bravely doing entrepreneurial social work across the developing world.

This may not make you sympathetic when it comes to other people’s failures (as everybody’s Twitter feed can attest), but it will give you liftoff velocity in the race of life.

In your 30s and 40s, you will begin to think like a political scientist. You’ll have a lower estimation of your own power and a greater estimation of the power of the institutions you happen to be in.

You’ll still have faith in your own skills, but it will be more the skills of navigation, not creation. You’ll adapt to the rules and peculiarities of your environment. You’ll keep up with what the essayist Joseph Epstein calls “the current snobberies.” You’ll understand that the crucial question isn’t what you want, but what the market wants. For a brief period, you won’t mind breakfast meetings.

Then in your 50s and 60s, you will become a sociologist, understanding that relationships are more powerful than individuals. The higher up a person gets, the more time that person devotes to scheduling and personnel. As a manager, you will find yourself in the coaching phase of life, enjoying the dreams of your underlings. Ambition, like promiscuity, is most pleasant when experienced vicariously.

You’ll find yourself thinking back to your own mentors, newly aware of how much they shaped your path. Even though the emotions of middle-aged people are kind of ridiculous, you’ll get sentimental about the relationships you benefited from and the ones you are building. Steve Jobs said his greatest accomplishment was building a company, not a product.

Then in your 70s and 80s, you’ll be like an ancient historian. Your mind will bob over the decades and then back over the centuries, and you’ll realize how deeply you were formed by the ancient traditions of your people — being Mormon or Jewish or black or Hispanic. You’ll appreciate how much power the dead have over the living, since this will one day be your only power. You’ll be struck by the astonishing importance of luck — the fact that you took this bus and not another, met this person and not another.

In short, as maturity develops and the perspectives widen, the smaller the power of the individual appears, and the greater the power of those forces flowing through the individual.

But you, Mr. Confused in Columbus, are right to preserve your pride in your accomplishments. Great companies, charities and nations were built by groups of individuals who each vastly overestimated their own autonomy. As an ambitious executive, it’s important that you believe that you will deserve credit for everything you achieve. As a human being, it’s important for you to know that’s nonsense.

Now here’s Mr. Cohen:

On freedom and equality, two of three rallying cries of the revolution of 1789, the French and Anglo-Saxon worlds have differed. Each finds both important, at least if equality is defined as equality of opportunity, but disagrees on how they should be balanced.

Liberty unchecked by solidarity does not make a French heart beat faster the way freedom untrammeled lifts the American spirit. Here the state is cherished as protector rather than reviled as predator. It is seen as the balancer of economic opportunity, not the brake on it.

History and geography explain these differences: French borders have not changed much for centuries while an American’s imagination always stands at some new frontier. The Gallic cake, of static size, needs fraternal division while the U.S. cake demands eternal expansion.

So President François Hollande’s proposal for a 75 percent marginal tax rate on annual incomes over €1 million ($1.2 million) is really no surprise. It is just the latest example of the recurrent Gallic itch to deliver equality by decree and somehow divide the cake in a way that makes the world more just.

Like any fiscal measure that offends common sense, it won’t work. The people targeted will vote with their feet. But on the larger question of freedom, and who has more of it, the time has come for the Anglo-Saxon world (as the French insist on calling it) to shake off the smug assumption — comforted by Hollande’s confiscatory idea — that it enjoys a clear advantage.

Conventional measures of freedom have become inadequate. By those measures the world has been growing freer. Freedom House, the Washington-based human-rights organization, reckons 60 percent of the world’s nations are free, compared with 41 percent in 1989 [pdf]. Of the world population of almost 7 billion in 2011, Freedom House listed 3 billion, or 43 percent, as free, compared with 1.3 billion, or 25 percent, 20 years earlier.

The victories over repressive societies captured by these statistics are important. So why do we often feel less free — more crimped, more watched, more cautious, more fearful, more corralled?

The answer is that the balance between personal freedom and government oversight has gotten seriously skewed throughout the West, and especially the Anglo-Saxon West, over the past decade. Sometimes post-9/11 security is invoked, sometimes health, always safety. The temptation to monitor people’s lives often proves irresistible because the technology now exists to do so. Fear is cultivated to justify technological intrusion and ubiquitous cameras.

But safety should not be paramount; it is not a supreme value; it should not be the altar at which freedom is sacrificed. Just because more and more tools exist to control people does not mean authorities should use them, and just because accidents happen does not mean life should be lived as if they are always imminent.

If I had to pinpoint the moment when a murmur about freedom lost became an insistent clamor I’d say it occurred during the recent rewiring of The New York Times London bureau to install a state-of-the-art telecommunications system. The job involved taking up part of the floor with the result that a labyrinth of cables was exposed.

The first time a technician from the company doing the work warned me about tripping on the cables, I tried to give the appearance of listening. The second time he used the word “danger,” I grew impatient. By the fifth warning of terrible injury the former war correspondent in me lost it. London is now a city where there are signs warning of low branches and talk of padding lamp posts because of the possibility people absorbed in their electronic devices may walk into them.

The Olympics-hosting nation of “Mind the Gap” — the famous admonition on the London tube to watch the space between the train and the platform — has become the country of “Mind the very air you breathe.”

Children at various British schools have been told in recent years to wear goggles when using certain glues, avoid playing with empty egg boxes because of possible salmonella poisoning, wear a helmet when walking under horse chestnut trees, and desist from three-legged races because they are too dangerous.

In the United States, the security mantra and litigiousness and edicts in the name of health (any American should be able to buy a sugary sodas of any size if that is his or her wish) are having a similar stifling effect.

This is not the spirit that took Anglo-Saxon forces into a hail of fire and onto the Normandy beaches — to free the French, it will be recalled.

That liberation left France with complexes that endured for decades. I won’t get into them except to say that French unease with the word “freedom” was probably reinforced by the shame it now recalled.

But France is now freer in one important regard than its Anglo-Saxon cousins. A deep Gallic suspicion of technology and anonymous efficiency — allied to a deep respect for community — has curtailed the imprisonment of modernity. This is an incarceration that fences the soul more than any confiscatory tax rate.

And now here’s Prof. Krugman:

There has been plenty to criticize about President Obama’s handling of the economy. Yet the overriding story of the past few years is not Mr. Obama’s mistakes but the scorched-earth opposition of Republicans, who have done everything they can to get in his way — and who now, having blocked the president’s policies, hope to win the White House by claiming that his policies have failed.

And this week’s shocking refusal to implement debt relief by the acting director of the Federal Housing Finance Agency — a Bush-era holdover the president hasn’t been able to replace — illustrates perfectly what’s going on.

Some background: many economists believe that the overhang of excess household debt, a legacy of the bubble years, is the biggest factor holding back economic recovery. Loosely speaking, excess debt has created a situation in which everyone is trying to spend less than their income. Since this is collectively impossible — my spending is your income, and your spending is my income — the result is a persistently depressed economy.

How should policy respond? One answer is government spending to support the economy while the private sector repairs its balance sheets; now is not the time for austerity, and cuts in government purchases have been a major economic drag. Another answer is aggressive monetary policy, which is why the Federal Reserve’s refusal to act in the face of high unemployment and below-target inflation is a scandal.

But fiscal and monetary policy could, and should, be coupled with debt relief. Reducing the burden on Americans in financial trouble would mean more jobs and improved opportunities for everyone.

Unfortunately, the administration’s initial debt relief efforts were ineffectual: Officials imposed so many restrictions to avoid giving relief to “undeserving” debtors that the program went nowhere. More recently, however, the administration has gotten a lot more serious about the issue.

And the obvious place to provide debt relief is on mortgages owned by Fannie Mae and Freddie Mac, the government-sponsored lenders that were effectively nationalized in the waning days of the George W. Bush administration.

The idea of using Fannie and Freddie has bipartisan support. Indeed, Columbia’s Glenn Hubbard, a top Romney adviser, has called on Fannie and Freddie to let homeowners with little or no equity refinance their mortgages, which could sharply cut their interest payments and provide a major boost to the economy. The Obama administration supports this idea and has also proposed a special program of relief for deeply troubled borrowers.

But Edward DeMarco, the acting director of the agency that oversees Fannie and Freddie, refuses to move on refinancing. And, this week, he rejected the administration’s relief plan.

Who is Ed DeMarco? He’s a civil servant who became acting director of the housing finance agency after the Bush-appointed director resigned in 2009. He is still there, in the fourth year of the Obama administration, because Senate Republicans have blocked attempts to install a permanent director. And he evidently just hates the idea of providing debt relief.

Mr. DeMarco’s letter rejecting the relief plan made remarkably weak arguments. He claimed that the plan, while improving his agency’s financial position thanks to subsidies from the Treasury Department, would be a net loss to taxpayers — a conclusion not supported by his own staff’s analysis, which showed a net gain. And it’s worth pointing out that many private lenders have offered the very kinds of principal reductions Mr. DeMarco rejects — even though these lenders, unlike the government, have no incentive to take into account the way debt relief would strengthen the economy.

The main point, however, is that Mr. DeMarco seems to misunderstand his job. He’s supposed to run his agency and secure its finances — not make national economic policy. If the Treasury secretary, acting for the president, seeks to subsidize debt relief in a way that actually strengthens the finance agency, the agency’s chief has no business blocking that policy. Doing so should be a firing offense.

Can Mr. DeMarco be fired right away? I’ve been seeing conflicting analyses on that point, although one thing is clear: President Obama, if re-elected, can, and should, replace him through a recess appointment. In fact, he should have done that years ago. As I said, Mr. Obama has made plenty of mistakes.

But the DeMarco affair nonetheless demonstrates, once again, the extent to which U.S. economic policy has been crippled by unyielding, irresponsible political opposition. If our economy is still deeply depressed, much — and I would say most — of the blame rests not with Mr. Obama but with the very people seeking to use that depressed economy for political advantage.

 

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