I read the Huffington Post almost every day. Niall Ferguson has written three attacks on Paul Krugman which have appeared in that publication which has me wondering about what’s going on? I was under the impression that Ferguson’s hit piece on Obama has been so awful that his credibility had taken a substantial hit but apparently not a substantial enough hit for the Huffpost not to publish him. I find Ferguson’s beliefs appalling, his attacks on Krugman ridiculous and I am pleased that so many are firing back at Ferguson’s attacks. Here is one from the web site, Beat the Press.
The Ravings of Niall Ferguson, the Real World, and the Needless Suffering of Tens of Millions | Beat the Press
But it is hardly worth wasting time and killing electrons in a tit for tat with Ferguson. What matters is the underlying issues of economic policy. These affect the lives of billions of people. The absurdities pushed by Ferguson and like-minded people in positions of power, in direct defiance of massive evidence to the contrary, have ruined millions of lives and cost the world more than $10 trillion in lost output since the crisis began.
First, contrary to what Ferguson claims, the downturn is not primarily a “financial crisis.” The story of the downturn is a simple story of a collapsed housing bubble. The $8 trillion housing bubble was driving demand in the U.S. economy in the last decade until it collapsed in 2007. When the bubble burst we lost more than 4 percentage points of GDP worth of demand due to a plunge in residential construction. We lost roughly the same amount of demand due to a falloff in consumption associated with the disappearance of $8 trillion in housing wealth. (FWIW, none of this was a surprise to folks who follow the economy with their eyes open. I warned of this disaster beginning in 2002, see also here and here.)
The collapse of the bubble created a hole in annual demand equal to 8 percent of GDP%
From around the web.
From the web site, This is Ashok.
Niall Ferguson’s grand theory is devoted to a time of big government,
but of a different kind. He yearns for the day when big governments
taxed the poor to finance colonial adventures and fought with each other
for glory and nothing else. Indeed, as he’s written before, he yearns
for the day when “Britannia bestrode the globe”.
We today owe our intellectual and humanitarian heritage to Franklin
Roosevelt. Not because he vindicated principles of easy money or public
finance. Not because he vindicated principles of modern liberalism. But –
for the first time in the history of our nation and all nations – he
demonstrated that government can exist for the great benefit of the many
at the minor cost of the few. For almost a century both political
parties have lived by this end, if disagreeing on the means.
There is an ideology that accommodates the worst of efficient
markets, supply side economics, and neoliberal economists like Milton
Friedman. It is called right wing hackery, with Niall Ferguson as its
- Niall Ferguson: A Well-Rounded Hack (lawyersgunsmoneyblog.com)