AS Award #9
Niall Ferguson, a professor of history at Harvard, is he winner om my ninth award. In his op-ed piece in the New York Times on November 15, he took great liberty with his use of “facts”.
He claimed: “China was able to quadruple its gross domestic product from 2000 to 2008 (and) raise exports by a factor of five”. These imply annual growth rates for GDP of about 18% and for exports of 22%. I do not know where he got his numbers, but they do not correspond with the reported performance of China’s economy during this period.
Ferguson also chose the year 2000 as his starting point for stating: “Overconsumption meant that from 2000 to 2008 the United States consistently outspent its national income.” Actually, the U.S. has been overspending for a much longer period of time. But starting in 2008 enables Ferguson to implicitly blame much of the current economic problems in the U.S. on the Bush administration. The U.S. had a large trade deficit under Clinton as well.
Ferguson added that intervention by China to control the external value of its currency “caused a growing distortion in the global cost of capital, significantly reducing long-term interest rates and helping to inflate the real estate bubble”. Well, he is partly right. China’s role in the global economy has kept inflation rates low and this has contributed to low interest rates. I guess he does not believe this is a good thing. Maybe he is a closet gold bug.
The real estate bubble was the result of Federal Reserve policy under Greenspan, archaic corporate governance practices, and lax regulatory oversight. Blame Bush and China for all of the U.S. ills.
Finally, he refers to the 10:10 deal, whereby the Chinese get 10% growth; and the U.S. gets 10% unemployment. I seriously doubt that 10% unemployment in the U.S. has anything to do with China’s growth rate.
By clearly demonstrating that historians should stick with history, preferably ancient history, I congratulate Niall.