September 09, 2011
We can infer this based on his confident assertion that tens of millions of workers will absolutely have to experience prolonged bouts of unemployment because of the collapse of the housing bubble. He bases this assertion on a book by Kenneth Rogoff and Carmen Reinhart that reviewed eight centuries of financial crises.
Rogoff and Reinhart find that it typically takes 8-10 years to recover from the effects of a financial crisis. They therefore infer that we should it expect 8-10 years to recover from this crisis. Brooks strongly endorses this view, telling the country to just get used to it.
Of course by the Rogoff, Reinhart, Brooks methodology we should expect most newborns to die before they reach the age of 5. If we looked back over the last 8 centuries and picked random 20 year intervals, in most countries during most of the period, the vast majority of children would die before they reach the age of 5. Therefore we should conclude that this time is not different, most children born in 2011 will not live to be 5.
The reason that we do expect our children to live beyond 5 today is that we have had enormous improvements in nutrition, sanitation and health care. It is now the exception that children don’t live past 5.
We also might think that we have learned something about economics in this period. (Admittedly, the track record of our top economists might suggest otherwise.) This is why it is reasonable to think that the gods have simply not ordered that we suffer through 8-10 years of high unemployment.
Brooks also repeats Republican claptrap about how the stimulus did not create any jobs. Actually, we have some evidence on this one. It shows that the stimulus likely created even more jobs than predicted. The problem was that it was too small, as those familiar with arithmetic said at the time.
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