“Oh boy! There was nothing wrong with fiscal policy under Labour, says top economics prof”
That was the headline on a piece by Jeremy Warner, assistant editor of the Daily Telegraph. He was reacting to this post, which apparently “blogs to the effect that there was no real problem of overspending under the last government”.
But he is puzzled. “By the way, the really weird thing about Wren-Lewis's analysis is that in an earlier post, he seems to accept that fiscal policy was way too loose towards the end of Mr Brown's tenure. Indeed, he had put his finger on the nub of the delusion that took place – Mr Brown began to believe that higher than expected tax receipts represented a structural and permanent shift in the tax base. He could therefore spend accordingly.”
All very strange. But lets go back the post Warner does not like, and look at the third paragraph, which he does not quote. After presenting the data which fails to show fiscal profligacy before 2008, I say “Of course it is possible to find fault, and I do. In hindsight it would have been better if the debt to GDP ratio had been kept nearer 30% of GDP, or even reduced further. But debt to GDP was lower before the recession than when Labour took office, and the current balance was almost zero. Hardly a profligate government.”
That is the point of the post. I was not saying that there was nothing wrong with fiscal policy under Labour, and in the paper I reference I am critical on a number of levels. What I was saying is that Labour’s performance does not justify the myth that its profligacy is responsible for most of our current economic woes. Its not a very difficult idea to grasp. But rather than grasp it, Warner prefers to suggest that I am just inconsistent, confused or worse.
He also plays the arrogant academic card, which is usually a significant tell that you do not want to address the real issue. He says “what really gets my goat about the Wren-Lewis blog is the arrogant suggestion that only qualified academics are capable of speaking the truth on matters such as these.” Funny that I don’t remember writing anything like that. Indeed I was saying the complete opposite: this was not a myth that required any expertise to unravel - you just needed to look at the data. My complaint against the media was not that it was incapable of speaking the truth, but that it was unwilling to do so.
Yet some journalists really do believe the myth. How can they do so, when it is a myth that is easy to unravel? Well maybe the same way they can take a piece of text, and so obviously misrepresent what it says. The same way they can have a headline which is not just untrue, but which the headline writer knows is untrue.