David Brooks on the stimulus

The Conversation:

This is going to unleash the familiar debate on what should be the role of policy intellectuals in the White House. Some dumb Republicans are going to get some mileage by attacking the idea of a White House run by geeks. Some smug Democrats are going to claim that of course they have intellectuals since they are the party of reason and intellect.

The correct position is the one held by self-loathing intellectuals, like Isaiah Berlin, Edmund Burke, James Madison, Michael Oakeshott and others. These were pointy heads who understood the limits of what pointy heads can know. The phrase for this outlook is epistemological modesty, which would make a fine vanity license plate.

The idea is that the world is too complex for us to know, and therefore policies should be designed that take account of our ignorance. Whether the Obama administration understands this is an open question.

Geithner seems to. He designed the outlines of a bank bailout plan on the supposition that government can’t accurately price toxic assets, or effectively run banks. That was nicely modest, though the infants on Wall Street, who are seeking a savior, panned the idea.

On the other hand, the stimulus package was designed by people who have complete faith in government technocrats, who think an agency can triple its size overnight and still be managed efficiently, who think government knows enough about business to set salaries. Some people think government officials know enough to run the auto industry.

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This stimulus has two gigantic problems. One. It forever after raises the budget baseline. That means it’s true cost, as The Washington Post reported, is $3 trillion. We’re going to have budget deficits worth 15 percent of gross domestic product, and there is absolutely no political path to addressing them because there is no bipartisan trust. No one party can move alone when it comes to cutting benefits and raising taxes.

In other words, a no-exit-strategy stimulus exacerbates our long-term disaster.

My second problem is the greed. Shoving permanent programs into a stimulus bill means you get a lot of terrible permanent programs. We need a fundamental rethinking of our infrastructure policies, but instead we just throw fast money into obsolete and useless programs (see Popular Mechanics’ reporting on this). Instead of carefully planning a new Head Start, we’re going to try to throw together a bunch of programs in a rushed stimulus fashion. The evidence shows that good Head Start really works but bad Head Start is terrible. We’re going to get the latter.

As for the broader point that capitalists can be pretty dumb. Granted. But the market does have a mechanism for educating itself: prices, and in some cases bankruptcy. Government lacks a self-correction mechanism, or at least a good one.

The odd thing is very few conservatives consider me conservative any more because I am so pro-government. But the events of the past few weeks have made me sound like a raving libertarian. The administration has taken its faith in government to such an extreme I’m turning into Ayn Rand. Help!