A Final Word With Ferguson
In the UK austerity debate, Niall Ferguson’s case against the Keynesians hinges on the assertion that Chancellor of the Exchequer George Osborne's package of spending cuts in 2010 was necessary to restore business confidence, and that it did so. But, given that Ferguson now concedes that it did not, he has no argument.
LONDON – Like any skilful controversialist, Niall Ferguson knows that when you have lost the main battle, it is time for diversionary tactics.
His latest charge against me is that I “changed my predictions after the fact.” He quotes me as saying in November 2010 that Chancellor of the Exchequer George Osborne’s policies doomed the United Kingdom to “years of interminable recession.” He claims that the pickup in UK GDP growth in 2013 – nearly three years after Osborne’s austerity budget of June 2010 – refutes my prediction.
But this is nonsense, and Ferguson must know it. Has he never heard of ceteris paribus? Every prediction in economics is conditional on some things staying the same. If he took the trouble to read what I said in November 2010, he would see that my prediction was conditional on existing policies.