Brooks and Krugman

In “When Cultures Shift” Bobo tells us that we ave experienced a major shift in moral culture. But it happened in the 1940s, not the 1960s.  In the comments “Jeo” from New York had this to say:  “This is such a jumble of half-baked ideas, none of which hold up to the slightest scrutiny. Does David Brooks truly think that self-glorifying, flamboyant figures like Joe Namath never existed before the 1940s or after? Has he ever heard of Al Capone? The flappers? The entire roaring 20s?  This loopy thesis is classic David Brooks, cherry-picking examples from here and there to weave some overarching theory that makes no sense whatsoever.”  Prof. Krugman, in “That Old-Time Economics,” says the United States and Europe are on different paths to recovery from the 2008 financial crisis. Bad new ideas have perpetuated depression in Europe.

Here’s Bobo:

In January 1969, two quarterbacks played against each other in Super Bowl III. Johnny Unitas and Joe Namath were both superstars. They were both from Western Pennsylvania, but they came from different cultural universes. Unitas was reticent, workmanlike and deliberately unglamorous. Namath was flashy and a playboy. He turned himself into a marketing brand and wrote a memoir jokingly called, “I Can’t Wait Until Tomorrow ’Cause I Get Better Looking Every Day.”

The contrast between these two men symbolizes a broader shift from a culture of self-effacement, which says, “I’m no better than anybody else and nobody is better than me,” to a culture of self-expression, which says, “Look at what I’ve accomplished. I’m special.”

The conventional story, beloved especially on the right, is that this cultural shift took place in the 1960s. First there was the Greatest Generation, whose members were modest and self-sacrificing, but then along came the baby boomers who were narcissistic and relativistic.

As I found while researching a book, this story line doesn’t really fit the facts. The big shift in American culture did not happen around the time of Woodstock and the Age of Aquarius. It happened in the late 1940s, and it was the members of the Greatest Generation that led the shift.

The real pivot point was the end of World War II. By the fall of 1945, Americans had endured 16 years of hardship, stretching back through the Depression. They were ready to let loose and say farewell to all that. There followed what the historian Alan Petigny called “the renunciation of renunciation.” The amount of consumer advertising on the radio exploded. Magazines ran articles on the wonderful lifestyle changes that were going to make lives easier — ultraviolet lights that would sterilize dishes in place of dishwashing.

There was a softening in the moral sphere. In 1946, Rabbi Joshua Liebman published a book called “Peace of Mind” that told everybody to relax and love themselves. He wrote a new set of commandments, including “Thou shalt not be afraid of thy hidden impulses;” thou shalt “love thyself.” Liebman’s book touched a nerve. It stayed atop The New York Times’s best-seller list for 58 weeks.

A few years later, Harry Overstreet published “The Mature Mind,” which similarly advised people to discard the doctrine based on human sinfulness and embrace self affirmation. That book topped the list for 16 weeks.

In 1952, Norman Vincent Peale came out with “The Power of Positive Thinking,” which rejected a morality of restraint for an upbeat morality of growth. That book rested atop the best-seller list for an astounding 98 weeks.

Then along came humanistic psychology, led by people like Carl Rogers, who was the most influential psychologist of the 20th century. Rogers followed the same basic line. Human nature is intrinsically good. People need to love themselves more. They need to remove external restraints on their glorious selves. “Man’s behavior is exquisitely rational,” Rogers wrote, “moving with subtle and ordered complexity toward the goal his organism is endeavoring to achieve.”

Humanistic psychology led to the self-esteem movement and much else, reshaping the atmosphere in schools, human-resources departments and across American society.

In short, American popular culture pivoted. Once the dominant view was that the self is to be distrusted but external institutions are to be trusted. Then the dominant view was that the self is to be trusted and external constraints are to be distrusted.

This more positive view of human nature produced some very good social benefits. For centuries people in certain groups in society had been taught to think too poorly of themselves. Many feminists and civil rights activists seized on these messages to help formerly oppressed groups to believe in themselves, to raise their sights and aspirations.

But I would say that we have overshot the mark. We now live in a world in which commencement speakers tell students to trust themselves, listen to themselves, follow their passions, to glorify the Golden Figure inside. We now live in a culture of the Big Me, a culture of meritocracy where we promote ourselves and a social media culture where we broadcast highlight reels of our lives. What’s lost is the more balanced view, that we are splendidly endowed but also broken. And without that view, the whole logic of character-building falls apart. You build your career by building on your strengths, but you improve your character by trying to address your weaknesses.

So perhaps the culture needs a rebalance. The romantic culture of self-glorification has to be balanced with an older philosophic tradition, based on the realistic acknowledgment that we are all made of crooked timber and that we need help to cope with our own tendency to screw things up. That great tradition and body of wisdom was accidentally tossed aside in the late 1940s. It’s worth reviving and modernizing it.

That was just another word salad from Bobo…  Here’s Prof. Krugman, writing from Brussels:

America has yet to achieve a full recovery from the effects of the 2008 financial crisis. Still, it seems fair to say that we’ve made up much, though by no means all, of the lost ground.

But you can’t say the same about the eurozone, where real G.D.P. per capita is still lower than it was in 2007, and 10 percent or more below where it was supposed to be by now. This is worse than Europe’s track record during the 1930s.

Why has Europe done so badly? In the past few weeks, I’ve seen a number of speeches and articles suggesting that the problem lies in the inadequacy of our economic models — that we need to rethink macroeconomic theory, which has failed to offer useful policy guidance in the crisis. But is this really the story?

No, it isn’t. It’s true that few economists predicted the crisis. The clean little secret of economics since then, however, is that basic textbook models, reflecting an approach to recessions and recoveries that would have seemed familiar to students half a century ago, have performed very well. The trouble is that policy makers in Europe decided to reject those basic models in favor of alternative approaches that were innovative, exciting and completely wrong.

I’ve been revisiting economic policy debates since 2008, and what stands out from around 2010 onward is the huge divergence in thinking that emerged between the United States and Europe. In America, the White House and the Federal Reserve mainly stayed faithful to standard Keynesian economics. The Obama administration wasted a lot of time and effort pursuing a so-called Grand Bargain on the budget, but it continued to believe in the textbook proposition that deficit spending is actually a good thing in a depressed economy. Meanwhile, the Fed ignored ominous warnings that it was “debasing the dollar,” sticking with the view that its low-interest-rate policies wouldn’t cause inflation as long as unemployment remained high.

In Europe, by contrast, policy makers were ready and eager to throw textbook economics out the window in favor of new approaches. The European Commission, headquartered here in Brussels, eagerly seized upon supposed evidence for “expansionary austerity,” rejecting the conventional case for deficit spending in favor of the claim that slashing spending in a depressed economy actually creates jobs, because it boosts confidence. Meanwhile, the European Central Bank took inflation warnings to heart and raised interest rates in 2011 even though unemployment was still very high.

But while European policy makers may have imagined that they were showing a praiseworthy openness to new economic ideas, the economists they chose to listen to were those telling them what they wanted to hear. They sought justifications for the harsh policies they were determined, for political and ideological reasons, to impose on debtor nations; they lionized economists, like Harvard’s Alberto Alesina, Carmen Reinhart, and Kenneth Rogoff, who seemed to offer that justification. As it turned out, however, all that exciting new research was deeply flawed, one way or another.

And while new ideas were crashing and burning, that old-time economics was going from strength to strength. Some readers may recall that there was much scoffing at predictions from Keynesian economists, myself included, that interest rates would stay low despite huge budget deficits; that inflation would remain subdued despite huge bond purchases by the Fed; that sharp cuts in government spending, far from unleashing a confidence-driven boom in private spending, would cause private spending to fall further. But all these predictions came true.

The point is that it’s wrong to claim, as many do, that policy failed because economic theory didn’t provide the guidance policy makers needed. In reality, theory provided excellent guidance, if only policy makers had been willing to listen. Unfortunately, they weren’t.

And they still aren’t. If you want to feel really depressed about Europe’s future, read the Op-Ed article by Wolfgang Schäuble, the German finance minister, that was published Wednesday by The Times. It’s a flat-out rejection of everything we know about macroeconomics, of all the insights that European experience these past five years confirms. In Mr. Schäuble’s world, austerity leads to confidence, confidence creates growth, and, if it’s not working for your country, it’s because you’re not doing it right.

But back to the question of new ideas and their role in policy. It’s hard to argue against new ideas in general. In recent years, however, innovative economic ideas, far from helping to provide a solution, have been part of the problem. We would have been far better off if we had stuck to that old-time macroeconomics, which is looking better than ever.


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