College graduates are entering the work force with horrible job prospects, into an economy of stagnating wages, and owing an average of $33,000. What’s the solution? Doubling down on school and on debt, says David Brooks in a Friday column that only a 1 percenter could love. OK, college grads may have bad prospects, but people with advanced degrees are doing really well, he argues, in a column designed mostly to throw mud on people who are becoming terrified that all America’s money and power are being concentrated into a tiny class of rich and powerful. The real point of his piece is to throw the word “redistribution” around, a trigger term and bumper sticker that’s designed to frighten anyone who lived through the Cold War.
I’d invite him to, with a straight face, invite an underemployed college grad with a $500-a-month loan payment to jump right into a $30,000-a-year graduate school.
I like David Brooks. I’m a big fan of his books, and when we’ve met, he’s been nothing but incredibly gracious. I’m really surprised at the broken simplicity of his argument here. It’s important to discuss, because it’s the argument you will hear again and again as this election cycle heats up. Here are a few points to note:
Worker productivity trumps all, Brooks claims, which is why better education is the way forward, citing a classical economics tenet that’s kind of true, but not all the time. And certainly not now. Today’s more productive workers are making other people rich, not themselves. That’s an easy claim. Wages have been stagnant this entire century, and really since 1980. Wall Street keeps hitting record highs. You can do that math.
Further, Brooks claims that wages have shown signs of life recently — as in 3 cents signs of life?
Brooks criticizes “redistributionists” who claim that modern capitalism is fundamentally broken, with the same dismissive air that Wall Street ignored Occupy Wall Street. He intentionally avoids mentioning economist Thomas Piketty, who wrote last year’s runaway best-seller “Capital in the 21st Century,” which makes a heck of a scientific case explaining why rich folks actually prosper during down years. The book academically turns classical economics on its head. By classical economics, we all really mean Western post-WWII glassy-eyed economics suggesting a rising tide lifts all boats, and there’s nothing more to say about economics. That’s naive. The truth: Recessions are good for the wealthy. Of course they are. Worker leverage disappears when labor is tight. Brooks knows all this. He knows Picketty’s book is all the rage. It’s sad he would dismiss Piketty without doing so by name, and at least taking on some of the arguments.
Another brief dismissal comes in the form of “small sample size,” which is the fashionable way to sound smart today when disagreeing with someone. As a proxy argument to claim the 99 percent are missing the big picture by complaining about wage stagnation, Brooks says, “the argument that college doesn’t pay is partly a product of a short-time horizon.” What time horizon? It’s unclear, but he’s suggesting the analysis only holds true since the recession. Piketty spent years gathering data about several Western economies dating back to the late 1800s. That’s not a small sample size. Meanwhile, how long would Mr. Brooks and others who see the world this way have everyone else wait for that rising tide? Should this generation of millennialls sacrifice their main earning years until we get to a reasonable sample size?
It’s a common rhetorical tactic to name-call a position you dislike, and to change the subject when the facts are getting in the way of your argument. Here are the facts: Concentration of wealth in America is so bad that even a billionaire plutocrat is publicly worried that the American public will soon take up pitchforks. Forget income for a moment. Let’s talk about assets — homes, retirement accounts, and so on. Most Americans own less than they did in 2005, and odds are 50/50 that you own less than you did in 2000.
Extremes are bad, in whatever form they arrive. You can question concentration of wealth without being called a Communist. I’m no more a redistributionist than a Man on the Moon. But our economy is badly broken, and requires some serious adjustments, and if you don’t see that, your eyes are closed. Telling people to go back to school as a fix is a bit like telling a man to go boil water when his pregnant wife begins to give birth.
If all this talk makes you uncomfortable, let me tell you a story. I’ve never liked the concept of affirmative action, and many of you don’t either. After all, growing up a white male, it sure felt like I was getting picked on for no reason when it came time to apply for college, etc. Then this happened:
As a cub reporter 25 years ago, I was covering school board meetings in a nice New Jersey suburb just a few miles from Newark, N.J. The town wasn’t nearly as diverse as Newark, but it had a sizable African American population — about 10 percent, as I recall. One day, a parent complained about the racial makeup of teachers in the school district. Board members scoffed, and several spoke about their dislike for affirmative action. But the board president dutifully ordered a report with a racial breakdown of instructors. At the next meeting, a clearly embarrassed board released the results. In a district with about 250 teachers, there were only 8 African Americans — and seven of them were either aids or phys ed instructors. There was only 1 Black teacher that students of this town might encounter if they spent the full 12 years in this school district. This, despite the fact that 1 in 10 kids in the classrooms were Black. Those kids were, however, very likely to encounter Black custodians, Black cafeteria staff, and so on. The board president, a kind man, then spoke at length about the trouble the district had recruiting qualified Black teachers, but vowed to do something.
My brain hurt. I no more imagined myself supporting Affirmative Action than wealth redistribution. But here was a situation where clearly something had to do be done. The problem was extreme, and obvious, and there was no time for an absolute philosophy with no breathing room.
So here we stand, at Nasdaq 5,000, with a Restless population driven half-crazy by the costs of basics like mortgage payments and health care. As I’ve chronicled in several places, average families with average incomes can’t afford average homes in many American cities. No, I don’t think the key to our problems is cutting CEO pay, let alone taking away their mansions with pitchforks. That would be a waste of time, and wouldn’t help those restless families either. And yes, I think education is a great idea. But to suggest that “increasing worker productivity is the key” to solving our problems is comical. We’ve done that. To the tune $1.2 trillion in student loan debt. Today, there is more — FAR more — education debt than credit card debt. Doubling down is no solution. Throwing around the word “redistributionist” doesn’t really help much, either. You know what would? A fair tax structure that keeps corporations from hiding profits overseas and sees Mitt Romney pay the same tax rate as working moms. Renewing worker portability by giving them leverage as they bargain with employers, a fighting chance to sell their houses, and creating a world where people don’t stay at jobs because they are terrified of losing health care. Sure, you could cast any of those things as socialist if you like. But yes, you are whistling past the graveyard if you do that.
It is very important to give a good education to children so that they are interested in knowledge in the future and can develop the country and its economy. Therefore, the idea that education will help America to some extent is true.