Fox Business anchor Lou Dobbs dismissed the discovery of errant data points in a recently dismantled Harvard economics study that had formed the cornerstone for arguments supporting U.S. and European austerity as merely "a small mistake."
On the April 30 edition of Fox Business' Lou Dobbs Tonight, Dobbs discussed with former Reagan administration economic adviser Arthur Laffer a "contretemps" between New York Times columnist and Nobel Prize-winning economist Paul Krugman and historian Niall Ferguson over national debt and the economy. Dobbs stated that Krugman and Ferguson were referring to a recent Harvard study that contained "a small mistake," then asserting that the study's errors "doesn't change the fact," as advocated by Ferguson, that "high debt constrains opportunity for growth."
Laffer responded by saying he'd rather talk about taxes and spending. Dobbs added: "I'd rather they all start talking about both the creation of jobs and how to spur economic growth and be done with the bunch of nonsense and the debt. It's so dreary."
In fact, the Reinhart-Rogoff study -- which asserted that nations with public debt of more than 90 percent of GDP faced a tipping point of economic decline, an idea embraced by right-wing politicians and media alike, including Fox News -- suffered from much more than "a small mistake." The study was dismantled by Thomas Herndon, Michael Ash, and Robert Pollin of the University of Massachusetts, Amherst, who found that Reinhart and Rogoff's data includes calculation errors and selective exclusions that biased the results and invalidates the 90 percent tipping point finding. Rogoff and Reinhart conceded the calculation error but "adamantly deny the other accusations," which has been criticized as a weak rebuttal.
Dobbs' stance of finding discussions of debt to be "dreary" is a shift from how he led his program as recently as March 29, when he called for reduced government spending in response to President Obama's proposed improvements to infrastructure. "It shouldn't be a partisan issue because neither political party should be calling for higher spending when the federal government is running almost trillion-dollar deficits and the national debt amounts to almost $17 trillion," Dobbs said. "That doesn't seem to me to be a partisan issue at all, just one of common sense and good judgment and responsibility."