Must-Read: Simon Wren-Lewis: David Smith’s Gotcha Quotes
Must-Read: David Smith of the Times and Chris Giles of the Financial Times have annoyed Simon Wren-Lewis.
I must confess I don’t understand the game that they are playing: is gaining a reputation as people who will go the extra mile to whitewash the reputation of the past Conservative-Liberal Democrat government really worth anything to a journalist, or a newspaper?
: David Smith’s Gotcha Quotes): “David Smith of the Times tries a bit of gotcha journalism…
…Chris Giles tweets ‘A justly irritated @dsmitheconomics reminds @sjwrenlewis of some of stuff he has written and forgotten’. Only one problem: it is nonsense… embarrassing nonsense…. The facts are not really in dispute…. The original austerity plan to eliminate the (cyclically adjusted) current deficit by 2015-16 was changed in 2012. David Smith wants to argue, as the government does, that ‘the government has stuck pretty much to its consolidation plan’. Call this claim X. What economists argue from the data could be described as not-X. But how can you make claim X, when the data clearly shows that the pace of deficit reduction between 2012 and 2015 was slower than was originally planned?…
David sets up a third claim, call in claim Z, that austerity was ‘abandoned in 2012’…. David shows claim Z is false, and attempts to suggest (erroneously) that claim X is therefore true. It is crucial that the term ‘abandoned’ here is unqualified. Claim Z could not mean temporarily abandoned just for a year, or put on hold, because the data is quite consistent with that claim….
I argued that claim Z was a straw man…. David… provides two quotes from Paul Krugman and two from myself where we say austerity in 2012 was ‘put on hold’, that the government ‘essentially stopped tightening fiscal policy before the upturn’, or that austerity was ‘temporarily abandoned’. This is quite different from claim Z, involving complete abandonment…. David knows this… writes ‘I am not sure when the suspension or (temporary) abandonment of austerity Simon refers to is supposed to have come to an end.’ That is cover to translate what I wrote into claim Z. But just a few sentences down from the first of his quotes from me I write: ‘followed by a projected return to austerity from 2014 onwards’. Whoops.
Why is David (alongside others) so keen to argue that the government stuck to its consolidation plan, when the data clearly suggest otherwise?… Because the moment you admit that the pace of deficit reduction was slowed (by action or inaction), people will ask why, and the obvious answer was that the original plans were hurting the economy and delaying the recovery. Most economists and the OBR know this, but the government has tried very hard to make sure that knowledge is not disseminated more widely.
And some backup from Paul Krugman:
: Stupid Austerity Tricks: “Against willful stupidity, the gods themselves contend in vain…
…So it’s no surprise that Simon Wren-Lewis is having a hard time of it. Still, it’s amazing just how dependent the pro-austerity camp has become on one dumb trick…. The story Simon has been telling… is that the Cameron government did a lot of fiscal tightening in its first two years, but not much thereafter…. You’d expect… the current level of GDP would still be below what it would have been otherwise, but that the negative impact on the rate of growth of GDP would have occurred only in the first couple of years…. [A] pickup in growth since 2013 isn’t inconsistent with the view that austerity is a drag on the economy….
Yet what we get over and over are pieces that get this simple point wrong…. You said that cutting spending depresses the economy relative to where it would have been otherwise–aha, you’re all wrong, because the economy started growing again in 2013! This is… willfully stupid…. The people writing such stuff have to know better. I’m actually used to such things… pulling phrases… claiming… I was saying something I wasn’t… a pull-quote… out of context…. Anyway, what you really learn from this ‘debate’ is how weak one side really is…