David Smith's gotcha quotes

In response to this post, 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, and slightly embarrassing nonsense at that.

The facts are not really in dispute. A number of economists have drawn attention to the fact that 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? I argued in my post that David sets up a third claim, call in claim Z, that austerity was “abandoned in 2012”. By then showing, correctly, that the deficit was reduced between 2012 and 2015, 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. Nor do I think I’m mistaken in my reading of what claim Z was. In the last two sentences from his original post David writes: “Did the austerity stop? No, and the economy's stronger recovery in the second half of the parliament ran alongside continued austerity.”

In my post I argued that claim Z was a straw man. I had not seen anyone make claim Z. David responds first by quoting a Guardian leader that uses the word abandoned in an unqualified way, and I must admit I do not read Guardian leaders. But he then 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. So they are hardly support for his straw man.

It is also pretty clear David knows this. He 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.

If all this seems a bit silly to you (as it does to me), you need to understand the bigger picture. Why is David (alongside others) so keen to argue that the government stuck to its consolidation plan, when the data clearly suggest otherwise? Well I think I know why the government wants to pretend that there was no change of plan in 2012. 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.