David Brooks Gets It Wrong. Again. (Always?)
I read David Brooks to broaden my perspective. I actually enjoy challenging my opinions and politics. But perhaps I read his column as self-inflicted punishment.
That might be a bit harsh. Brooks is a talented storyteller of sorts. His column generally reads well, which is more than I can say for many columnists. Still, his ideas and rhetorical style are often lacking. His piece on private equity’s revival of American capitalism is but one more example.
Forty years ago, corporate America was bloated, sluggish and losing ground to competitors in Japan and beyond. But then something astonishing happened. Financiers, private equity firms and bare-knuckled corporate executives initiated a series of reforms and transformations…The process was brutal and involved streamlining and layoffs. But, at the end of it, American businesses emerged leaner, quicker and more efficient.
Perhaps private equity saved American capitalism by making businesses “leaner, quicker and more efficient.” But as Benjamin Wallace-Wells remarked in his excellent New York magazine piece, The Romney Economy, while private equity and other business reformers created a private sector that is more productive, nimble, and efficient than the one it replaced, “it is also less equal, less stable, and more brutal.”
While there’s no need to demonize the private equity industry, there’s equally no need to glorify the industry, which is precisely what Brooks is doing. As former Obama economic advisor Steven Rattner acknowledges, private equity’s priority is to make profits for its investors. If it means engineering a successful corporate turnaround, so be it. If it means gaming the tax system, so be it.
But where Brooks really gets it wrong is in his celebration of the rebirth of American capitalism, he fails to acknowledge that while businesses were becoming more productive and profitable for investors, things were getting less equal, less stable, and more brutal for American workers.
Brooks would like to see a transformation to the public sector akin to what we’ve seen to the private sector when we could probably stand to see a lot less of it.