Carpe David Brooks. Before He Drives Me Crazy. [Freudian typo now corrected. 3:25 p.m.]

An exchange between reader nitu mishra and me in the Comments thread this morning to this AB post of mine from yesterday.

nitu mishra:

Here’s a good article on 2012 Q4 earnings outlook.

http://tinyurl.com/investing002

Me:

Ah. If only I could actually understand graphs, without having to stare at them for ten minutes or so first, Nitu. But I don’t have to understand the graph posted at that url to know that corporate earnings are TANKING.  I know that because I already read David Brooks’s column today, and he says that Obama should propose a cut in corporate tax rates, because corporations need to have money to use for INVESTMENTS.  And of course Brooks wouldn’t say that unless corporate profits* ARE tanking and corporations, well, just can’t afford to invest.  They need further tax breaks in order to have the money to do that!

Like Apple.

(And, pleeeeease: No one post that aggregate U.S. corporate profits are at all-time highs and that corporations are HOARDING their profits rather than using them to invest.  I know that. My comment is facetious.)

I’m back on my David-Brooks-formulaic-conflations watch today, because, well, he has another column in today’s Times.  And (surprise!) it’s another classic I’ve-found-the-secret-formula-for-phoning-in-NYT-columns column. So I can’t resist.

The formula, of course, as anyone who reads his columns even occasionally knows, is to summarize a new book he’s read about economic or social trends (or both!) and then use the last two or three paragraphs of the column to string together conclusions that are either non sequiturs to the information or ideas he’s just summarized from the book, or to state unexplained conclusions that are contrary to that information or those ideas and pretend that the information or ideas support those conclusions.

It’s easy.  And it’s a very nice gig.

Today’s offering is based on a book called “Innovation Economics.”  I’ve selected two excerpts from the column, that, I trust, together illustrate my point.  The first, from early in the column, is:

As Robert D. Atkinson and Stephen J. Ezell note in their book “Innovation Economics,” American firms are also lagging in their commitment to research and development. Between 1999 and 2006, for example, German firms increased research-and-development spending by 11 percent, Finnish firms by 28 percent and South Korean firms by 58 percent. During that same period, U.S. spending increased by a paltry 3 percent.

Increasingly, companies have to spend their money on retirees, not future growth. Last week, for example, Ford announced that it was spending $5 billion to shore up its pension program. That’s an amount nearly equal to Ford’s investments in factories, equipment and innovation.

And then the denouement:

The political debate, though, is largely oblivious to this mental shift. Republicans and Democrats are so busy arguing about the merits of government versus business that they are blind to the problem that afflicts them both.

In his State of the Union address Tuesday night, President Obama is apparently planning to give us yet another salvo in that left-right war, as he did in his second Inaugural Address. One of his aides, in a fit of hubris, told Politico that the president will be offering Republicans a golden bridge to ease their retreat.

But it would be great if Obama gave an imaginative speech that reframed things as present versus future.

If the president were to propose an agenda for the future, he’d double spending on the National Institutes of Health. He’d approve the Keystone XL pipeline. He’d cut corporate tax rates while adding a progressive consumption tax. He’d take money from Social Security and build Harlem Children’s Zone-type projects across the nation. He’d means test Medicare and use the money to revive state universities and pay down debt.

Would Americans buy that agenda? Maybe. Americans are neglecting the future, but I bet they’re still in love with it.

The title of the column is “Carpe Diem Nation.”  The first excerpt is noteworthy both for its statistics and for the fact that Brooks has built a career on trashing European economic policy and culture as anti-entrepreneurial.  The second excerpt would be notable for its vertigo inducement, were vertigo inducement not a regular part of the formula, column after column.  But it is, so it’s not notable.  

In between those two excerpts, Brooks apprises readers who aren’t regulars, and who therefore don’t know, that his real purpose is to argue for the dismembering of the social safety network for the elderly, because, well, we couldn’t possibly raise taxes to cover that social safety network, as they do in, say, Germany and Finland.**  Raising FICA taxes very slightly would take care of Social Security needs, but rather than do that, or to raise taxes on upper-income folks and on corporations to Clinton-era levels, it’s better to remove basic sustenance income from millions of elderly if we want to build Harlem Children’s Zone-type projects across the nation.  

This is true especially regarding corporate taxes, since record corporate profits and outright hoarding of those profits by corporations doesn’t mean that increasing their taxes by raising tax rates or by closing loopholes would be a better investment for the country than reducing corporate taxes even further. I mean, you never know when Apple might conclude that it finally has enough after-tax profits to start investing them in research and development.

Of course, seniors who rely entirely or mainly on Social Security benefits and Medicare aren’t known for their dedication to Apple MacBooks, iPhones and iPads, so there’s no real need to worry that a reduction in those seniors’ meager income would hurt the economy by depriving Apple of enough money to enable the company to invest.

So carpe diem to cut taxes on corporations while ending Medicare and Social Security.  Just like Germany and Finland. If it’s the future that you’re interested in.

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*The post originally said “corporate taxes ARE tanking….” That was a typo. Or maybe a Freudian slip.

**Sentence was corrected to correct two typos–and to make sense. 11:21 p.m.

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