The David Brooks Phenomenon: He does ‘rewrite’ for Megan McCardle! [UPDATED]
Piketty wouldn’t raise taxes on income, which thriving professionals have a lot of; he would tax investment capital, which they don’t have enough of.
— David Brooks, The Piketty Phenomenon, New York Times, today
Alexandra Petri has a trademark-funny piece today in the Washington Post that she promises tells you “[e]verything you need to know about Capital — the hot summer beach read.” She goes on to say that although many people will buy the 700-page book, and that many already have–Amazon is out of stock!–not many of those people will actually read it. And that most of those lucky enough to already have a copy, have not read much, if any, of it yet.
So I’m wondering: Which category is David Brooks in? As a NYT columnist he probably had access to an advance copy before the book’s English-translation release. But since his claim that Piketty wouldn’t raise taxes on income sounds suspect to me–you can figure out from that comment which category I’m in–I wonder whether, rather than read the book, Brooks just Megan McCardle’s Bloomberg View op-ed three days ago, which Petri links to, and which reads as a rough draft of Brooks’s article.
McCardle, as Petri points out, says she has not read the book. She also says:
What hasn’t improved [since the 1970s in America] is the sense that you can plan for a decent life filled with love and joy and friendship, then send your children on to a life at least as secure and well-provisioned as your own.
How much of that could be fixed by Piketty’s proposal to tax away some huge fraction of national income from rich people? Some, to be sure. But writing checks to the bottom 70 percent would not fix the social breakdown among those without a college diploma — the pattern of marital breakdown showed up early, and strong, among welfare mothers.
Maybe not. So how about writing checks to, say, the University of Michigan, which back in the not-that distant past, when it received roughly 80% of its funding from the state, and large research grants from the federal government, had a student body that consisted of something slightly less than 125% that were from upscale households within the state or from Manhattan and Connecticut? How about writing checks to the Detroit Public School system, or the Lansing Public School system, of the Kalamazoo Public School system, to hire teachers who have excellent credentials and pay them well? How about writing checks for excellent mass transit systems between rural areas, inner cities, and thriving university and research towns like Ann Arbor?
Or how about writing checks for tutors and test-prep classes and informal community learning centers for children and adults? Or for paid apprenticeships and internships?
You get the picture. But Brooks does not. He writes, not for the first time, about the appalling gap between the advantages that the children of educated professionals have and the children of working class parents. He’s spot-on on that. But does Piketty really say that taxes on non-capital “income” of the elite should not be raised? And can Brooks explain why income from capital should be taxed at a lower rate than income from labor? In typical Brooks fashion, he doesn’t even acknowledge that it currently is.
Piketty is French. He is neither an American citizen nor an American resident. He has spent all but (from what I can tell) about five years of his life in France. His Ph.D. is from the London School of Economics, and his first teaching job was at MIT; he taught there for two years, 1993-1995. If he doesn’t expressly recommend a higher tax rate on upscale American salaries and bonuses, might that be because it is only here in the United States where top corporate executes receive such huge compensation and where certain professionals are paid disproportionately well vis-a-vis those lower on the socioeconomic scale? Piketty’s wealth-tax proposals are not narrowly prescriptive to the United States.
Ultimately, of course, it’s the specifics of Piketty’s research, not his policy suggestions, that make the book the phenomenon that it is. But I suspect that Brooks if wrong when he says that Piketty thinks taxes should not be raised on income of high earners in the United States. I’ll have to rely on someone who’s read the book to correct me if I’m wrong. I wish Paul Krugman read Angry Bear.
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UPDATE: As Bruce Webb and Dan Crawford pointedly pointed out in the Comments, there are in fact strong forensic indications (I’m paraphrasing here) that Krugman does read AB.
Bruce:
Paul Krugman DOES read Angry Bear. For God’s Sake he cited me once and has referenced other Front Pagers as well.
AB consistently shows up in lists of top 20 most influential politico-economic blogs. that not so many of those top opinion makers take the time to stay and comment is not surprising. …
Dan:
Usually AB is cited 3-4 times by PK each year.
Actually, I knew that. I replied:
OK, OK, OKayyyy. Yiiikes. Can’t you guys take a joke?!
It’s no fair, though, cuz he’s never, ever cited ME. And until he does, it’s not official that he reads AB!
Unrequited love is so painful.
It is, Paul. It is.
[Italics added; you can’t italicize in the Comments.]
Up to p. 452 here. 🙂
The main place Piketty (see p. 52) weaves income into his narrative as far as I remember is his formula for predicting the ultimate ratio of accumulated national capital to income — which as a practical matter settles out somewhere between five and seven time depending on the percentage of return on capital (a quick re-skimming seems to say — don’t ask me to remember exactly).
By p. 452 (coincidentally) he is most worried that bigger conglomerations of capital can grow at twice the speed.
I haven’t read his RX yet, which is a world-wide tax on high accumulations. Sort of like we had here for decades after WWII. Surely a good idea in itself — how to get there takes practical political understanding.
* * * * * *
To put Cinderella’s carriage before the magic horses: the only way confiscatory taxation will get adopted world-wide is if it is adopted here first — and we sell it hard for our own sake (like we used sell unfettered markets — the world will at least listen to something for its own good).
Before we can do that here we have to reform our labor market (that’s about “income”). Americans will at least listen at least of their own good. Decades old, around the world tested LEGALLY MANDATED, CENTRALIZED BARGAINING (everybody doing similar work in a geo locale negotiating a common contract with all employers) is the only species of labor market mechanism that can restore economic (and political) fairness (political because it gives the average person the same lobbying power along with most all the votes).
Only thing is somebody has to tell Americans how badly they are off (NY Times reports our middle class falling behind world — didn’t even take note that ours works more hours for the less!) — and tell them about the only practical labor market reform way out.
Why do crazy, dumb Repubs stay neck and neck with Dems at the polls? Because they never propose anything meaningful — things that are so easy to explain as perfectly doable like the $15 an hour minimum wage.
Typical: “Obama-doesn’t-care” programs for the poor (cut-and-paste):
Obama’s “My Brother’s Keeper” initiative targets $350 million at poverty = 1/3 of one billion dollars in our 16 trillion dollar economy …
… or $50 million less than NY Mayor (stop-and-frisk) Bloomberg spent on a new Bronx courthouse in 2004 (“old” 1939 court still in perfect, very modern condition; brand new one opened down the block in 1976 to catch the crime wave of that era, which had receded 75% by 2004) and almost $30 million less than he spent on a new (and I presume) equally unneeded new courthouse in Brooklyn …
… together they add up to 1/16,000 of our economy …
… they could be called “Obama-doesn’t-care.”
* * * * * *
Let’s start the progressive political discourse the ultimate answer to most of America’s social ills: centralized bargaining. I’m offering a million (Martian) dollars to anyone who can suggest anything alternative way back else even remotely promising.
PS. It is possible to have the best labor market system in the world and worse than most accumulated wealth inequality — that’s Germany. Piketty says Germany worse that France because estate tax tops out at 20% there instead of 40% in France.
Centralized bargaining and confiscatory taxation — democratic heaven: looks like post WWII, for a time, we had the best overall combination (if you were white).
Cool. Thanks, Denis. So I was right. There’s nothing, at least in the first 452 pages, that suggests that Piketty thinks the U.S. should not increase taxes on high-level labor-compensation income. He simply focuses on two things that would matter worldwide: centralized bargaining and confiscatory taxation (presumably including higher taxation of high-level labor-compensation income).
I’m not surprised that Brooks thinks that recommending centralized bargaining and confiscatory taxation, with no statement that high-level labor-compensation income would be excluded, worldwide means that Piketty wouldn’t raise taxes on income. At least when he needs to write a column about the current hot book and hasn’t read the book.
Interesting, isn’t it, that Brooks and the other conservatives mention the worldwide wealth tax but not the centralized bargaining.
Berverly,
Me thinks you read (past tense) in haste. Sadly, I am the one (the only one in the US) pushing centralized bargaining.
Maybe I should keep my mouth shut — maybe I should let the crowd (here anyway) think Piketty is pushing centralized bargaining. My theory as you may know is that (human) males automatically short-circuit any discussion of anything too different (and God knows we need to do things “too different”) because of primitive pack-hunter instinct (owned by the group). Hey, you seem to think it is a natural move — let’s talk it up and fool the late arriving (human) males into thinking it is a current topic of discussion (allowing them to think without “breaking the rules”). 🙂
Paul Krugman DOES read Angry Bear. For God’s Sake he cited me once and has referenced other Front Pagers as well.
AB consistently shows up in lists of top 20 most influential politico-economic blogs. that not so many of those top opinion makers take the time to stay and comment is not surprising. Hell I embarrass myself with some of my exchanges here in comments, I hardly expect PK or Dean Baker to chime in, they got better things to do than peruse comment threads that too often turn into flame wars. But actual main page posts don’t go totally unnoticed. They may see people like Dale Coberly and me as uncouth barbarians on our pet topic of Social Security and perhaps other FP’ers as same in their own respective areas, but it is not all just shouting down a well.
Bruce,
Are you insinuating that I don’t have better things to do? :-[
Usually AB is cited 3-4 times by PK each year,
“But I suspect that Brooks is wrong”
I always do. About everything.
OK, OK, OKayyyy. Yiiikes. Can’t you guys take a joke?!
It’s no fair, though, cuz he’s never, ever cited ME. And until he does, it’s not official that he reads AB!
Unrequited love is so painful.
Definitely a good rule of thumb, EMichael. You really can’t go wrong with that one.