Tom Friedman - Failed Metaphors And Self-Refuting Analysis

Tom Friedman irks me twice in his latest column on how to restore American prosperity.  First, he delivers the failed metaphor:

How we got into this rut is no secret. We compensated for years of stagnating middle-class wages the easy way. Just as baseball players in the ’90s injected themselves with steroids to artificially build muscle to hit more home runs — instead of doing real bodybuilding — our two parties injected steroids, cheap credit, into Wall Street so it could go gambling and into Main Street so it could go home-buying. They both started hitting home runs, artificially — until the steroids ran dry. Now we have to rebuild America’s muscles the old-fashioned way.

Grrr!  Taking steroids is not a substitute for "real bodybuilding"; steroids promote quicker recovery and a greater training response so an athlete can do more bodybuilding with more results.  People don't just take steroids and sit on the sofa watching their mucles bulge.

By way of contrast with a different performance enhancing drug, amphetamines are often used by athletes (not to mention doctors, lawyers, students, and truckdrivers) as a substitute for getting eight hours of sleep.  That may reflect a lack of discipline, or it may reflect the reality of the job (as with an Air Force bomber pilot on a long mission.)

But enough of problematic drug metaphors; I'll take Friedman's point to be that the motives behind the house-building boom were not "real" in some sense because the low interest rates fueling demand were not "real".  Viewpoints vary and other savants spoke of a global savings glut that needed to be recycled, but with hindsight it is obvious that we had a housing bubble.  Let's move on to Friedman's self-refuting analysis:

How [do we rebuild America's muscle]? In the short run, we’ll probably need more stimulus to get the economy moving again so people have the confidence to buy and invest. Ultimately, though, good jobs at scale come only when we create more products and services that make people’s lives more healthy, more productive, more secure, more comfortable or more entertained — and then sell them to more people around the world.

Let me rephrase Friedman's argument as I understand it: America has long term structural problems we have ignored for at least a decade while relying on a housing boom to fuel phony growth.   These problems remain ignored by the current political "leadership" and there is no consensus as to how to solve them.

However, a quick bout of spending that is widely advertised as temporary will restore confidence so that consumers will go out and spend, and businessmen will go out and hire and invest.

My queston is, why would a temporary stimuus have that effect - because consumers are dumb and businessmen are dumber?  If we can all see that our long term structural problems have not been addressed and won't be any time soon, why will a blip in spending restore anyone's long term confidence? 

Let me try for my own failed metaphor - Friedman is sugesting that we tell a person who knows they have a broken leg to take some morphine and walk it off. Only someone doped up enough to think that morphine heals broken bones instantly will feel good about that advice.

Now, a point I will concede - the stimulus should be able to keep some businesses afloat temporarily.  For example, if a construction crew comes into town to rebuild a bridge, that may keep a local deli in business selling sandwiches to the crew.  But that is a far cry from encouraging that deli owner to expand the shop and hire more help in anticipation of a boom in business for years to come.

In Friedman-world the stimulus will keep this hypothetical deli afloat until the cavalry ride over the hill with real reform and real prosperity.  Yet Friedman doesn't seem to believe the cavalry is anywhere near the horizon.  And who does?

Maybe Friedman believes that we need to get the patient off of the steroids of cheap credit and onto the steroids of stimulus spending.

Comments

[Clarice]

Let's send recommendation letters for him to his beloved Chinese.

[MarkO]

Who is Tom Friedman and why do we care?

Just more fish in a barrel?

Let's just take judicial notice that he is a fraud and leave him out of our lives.

[narciso]

He makes Joe Canseco seem rational

[daddy]

Its scary that that Lisa Mircowskee ad to the left here at JOM thinks its a good thing that "she reached across party lines 300 different times."

The Dem's are all running like scalded dogs from Obama and Pelosi and Reid, yet Lisa's trumpeting it. Gad.

[Jim Ryan]

Can this DeFazio person who wants to impeach Justice Roberts please lose to challenger Art Robinson in his re-election big next week? Thanks!

[maryrose]

Leeza is going for the dem vote pure and simple and I for one do not believe her claim to caucus with the repubs if she wins. I think early morning voters will get their ballot see the 2 candidates for senator and pick either Miller or McAdams. With an entire ballot to fill out I don't see people on their way to work taking the time to write her name in. She's not an institution like Strom Thurmond- she's a daddy's girl and a sore loser. Nobody likes a sore loser.

[Jack is Back!]

Another sterling opinion on economics, business, entrepreneurship and creating sustainable wealth from a guy who has never met a payroll or managed anything more than hiring and firing his lawn maintenance service. But in a way, it probably qualifies him for a cabinet position in the Obama regime.

[Charlie (Colorado)]

Someone with a stronger constitution and more time than I might want to nexis Friedman's columns in the early 2000's and see if he thought the ownership society thing was bad then.

[Charlie (Colorado)]

My queston is, why would a temporary stimuus have that effect - because consumers are dumb and businessmen are dumber?

Because he wants it to be so. Therefore it is so.

[I Won]

I think that my failed metaphor is the best. Sasha came into one of the presidential rooms and she was drinking a Slurpee and I knew I had the Republicans. I called in Jon to finalize the exact verbiage.

[matt]

gutting the manufacturing sector through outsourcing and offshoring certainly played a major part as well...

but hey, all of those laid off workers became mortgage brokers and investment advisers.That worked out well....

and the concept of the ownership society has been a cornerstone of government policy since 1945.

[Neo]

Does Tom ever read his own stuff ? Guess not.

[gmax]

Isnt Friedman a Yankees fan? They all went home early, I saw it on tv.

[Jack is Back!]

OT: TM lists Jules Crittenden in his private collection [left side bar]. I used to read Jules a lot but his last post was end of August. Anyone know what happened to him?

I Won - what flavor?

[Ric Locke]

Bah. The weakness here is economics itself.

Economics studies money flows. Economists tend to forget that money flows are a proxy for what's actually happening, not the thing itself. They thus tend to ignore things that don't show up in money-flow analysis.

There is plenty of money out there waiting to be put to productive use. The problem is stagnation caused by bureaucracy -- it's not so much the amount of taxes as it is the complexity of figuring out what you have to pay. Same with environmental regulations, worker safety, and the whole rest of it.

"Outsourcing" and "offshoring" are a case in point. The problem isn't so much that you can't make money in the US right now, it's that you can't tell whether you might make money or not, given that J. Random Bureaucrat is apt to show up and declare that what you want to do is off limits due to paragraph 27(b)(xiv) of some obscure regulation you never heard of. Instead, prospective employers go someplace where they can at least pretend to make plans -- and the Democrats' solution to that problem is to increase taxes and lard on more, more detailed, and more complex regulations!

Regards,
Ric

[Ric Locke]

And -- economists like Friedman will never figure that out, because it isn't part of their money-flow models. The reality is, we could dump ten trillion dollars of "stimulus" into the economy, and it would get soaked up in the morass of "regulatory compliance" like a bucket of water poured on a dune in the Sahara.

Regards,
Ric

[Rick Ballard]

Friedman's area of morony is foreign affairs. Krugman is the NYT designated credentialed moron for economics.

Which state will be the first to "Just Say No" to intrusive regulation as a 10th Amendment issue? If 30 states (rather than the requisite 37) join in, what happens?

If SF and LA can be sanctuaries for illegal aliens, why can't Dallas and Houston be sanctuaries for capitalists? If Californians can legalize dope in the face of Federal Law, why shouldn't Texans legalize non-payment of Federal Income Tax?

[Ric Locke]

Via Reynolds, poster child for my thesis above.

Regards,
Ric

[jimmyk]

Economics studies money flows. Economists tend to forget that money flows are a proxy for what's actually happening, not the thing itself.

With all due respect, this is about as true as saying "Physics studies fluid flows. Physicists tend to forget..." There is a branch of physics called "fluid mechanics," and there is a tiny branch of economics that studies "money flows," but much of economics has nothing to do with that, and in fact ignores money flows to focus on "what's actually happening."

economists like Friedman

Tom Friedman is an economist? That would be news.

[RichatUF]

jimmyk-

Have a quick question about something that bothers me. Friedman wrote,"We compensated for years of stagnating middle-class wages the easy way", which seems to be unrefuted cant. Isn't one of the reasons that wages stagnated is health care costs were increasing substantially over the same time period, costs that were picked up by compaines as part of the benefits packages of employees? Maybe I'm missing something.

This too, "Everyone today has to be an artisn and bring something extra to their jobs." Not quite the Web2.0 version of Marx's utopia, but getting close.

[Danube of Thought]

I always thought of economics as the study of the allocation of scarce resources.

[sbw]

RichatUF: Isn't one of the reasons that wages stagnated is health care costs were increasing substantially over the same time period

That was the case with us.

[mockmook]

I always thought of economics as the study of the allocation of scarce resources.

Posted by: Danube of Thought | October 25, 2010 at 04:31 PM

Well, sure, if you are a literalist.

You need to factor in the social construct of the dialectical hegemony, and then reconcile that with the imperialistic materialism of the proletariat.

Of course, that must be balanced against the moral relativistic imprint, viewed from an allegorical mysticistic monogamy.

[jimmyk]

Isn't one of the reasons that wages stagnated is health care costs were increasing substantially over the same time period, costs that were picked up by compaines as part of the benefits packages of employees?

Yes, though I'd put it a little more neutrally that the benefits portion of compensation grew relative to the wage portion, partly or largely because of the tax advantage. Health care didn't just become more expensive, employers began offering more expensive plans that covered more things, whether because they could largely come out of pre-tax earnings or because the extra coverages were mandated.

Bottom line: Friedman is pulling it from one orifice to the other. Anything for a catchy, glib, quotable one-liner.

[jimmyk]

And by the way, if you look up "unrefuted cant" in the dictionary, I'm pretty sure it will say "Tom Friedman." And vice versa.

[craig mclaughlin]

Friedman is a fool.

[jorod]

See Don Boudreaux's comments about the British spending cuts that will wreck Britain but the same spending increases in US have no effect.... at Cafe Hayek..

[RichatUF]

jimmyk-

Thanks.

[Canadian Drugs]

Health care didn't just become more expensive, employers began offering more expensive plans that covered more things, whether because they could largely come out of pre-tax earnings or because the extra coverages.

[CGS]

Friedman doesn't do research, he just opines using flimsy metaphors. Why does anyone listen??