The recent visit of Joseph Stiglitz and his glowing comments about how the Rudd Government handled the GFC seems to have stirred the conservative media into a campaign to discredit stimulus spending.

Last week historian and apologist for imperialism Niall Ferguson turned out for The Australian to attack Labor and its claim that its stimulus package had saved Australia from a damaging recession. In fact, according to Ferguson, John Howard, the RBA, the Chinese and the mining industry did.  Ferguson might not have been too flash on hard facts – evidently he didn’t check employment levels in the mining industry over the last 3 years – but then again his own views on the need for stimulus spending are of weathervane-like consistency.

On Friday, in a much more measured piece, the AFR’s David Crowe attacked the Government’s claims about the impact of its stimulus packages, selecting data from Treasury forecasts and ANAO reports to argue it had delivered stimulus too late. Last week, too, Warwick McKibbin, RBA board member and long-time critic of the Labor Government over its emissions trading scheme and the stimulus, had another go at it, in comments that got a huge run in The Australian. Kerry O’Brien even had a run at the theme last night when interviewing the Prime Minister.

Yesterday, 50 economists responded to the attacks on the stimulus package.

The stimulus packages had two components – cash handouts to prop up the retail sector, and programs and tax breaks to prop up the construction sector. In doing so, the Government aimed at two of the biggest employing sectors of the economy, and at sectors where the spending could be rolled out quickly.

There are few now who will seriously claim the cash handouts didn’t work, especially given the massive prop to consumer confidence they provided after the second stimulus package. But it wasn’t always the case. In March last year, Malcolm Turnbull, not long after the second package was announced, declared “the cash splash had failed as an economic stimulus.” Turnbull was influenced by his advisor Henry Ergas, the right-wing economist who found his own business eventually needed a stimulus package, and couldn’t get one.

Ergas, taking his cue from conservative American economists, insisted that cash handouts wouldn’t be spent, but hoarded, because people wouldn’t spend a non-permanent rise in income. “Rather than once-off bonuses, the tax cuts should be locked in for a sufficiently lengthy period to genuinely stimulate consumption and encourage initiative,” said Ergas.

Rarely has reality provided such a robust contradiction to academic economic theory.

But that too was briefly used against the Government, when we had that bizarre turnaround by Joe Hockey after the 2009 Budget, when he went within six weeks from claiming Treasury was too optimistic in its economic forecasts to claiming it was too pessimistic and stimulus needed to stop.

One of the arguments deployed against the Government was that the RBA had done the heavy lifting of stimulus, despite considerable evidence that most borrowers hadn’t reduced their mortgage repayments in line with falls in the cash rate to emergency lows.

With the battle to attack the cash handouts lost, The Australian, including some of its Press Gallery journalists, began a dishonest campaign against the education component of the stimulus packages, a campaign that has twice now, once by the ANAO, and a second time last week in the first Orgill report, been comprehensively and systematically discredited by independent analyses. The ABC has enthusiastically backed up News Ltd in this campaign, with its “Online Investigations Unit” misrepresenting the ANAO report.

A quote from each report serves to provide some context for the current campaign against the effectiveness of the stimulus. “Lead economic indicators, including construction approvals,” concluded the ANAO, “show that the introduction of BER P21 contributed to a reversal in the decline in non-residential construction activity that resulted from the global financial crisis.”

And the first report of the Orgill inquiry, based on its consultations with construction sector companies, concluded “the BER provided the construction industry with a significant economic stimulus which prevented many construction organisations from reducing staff and/or the size of their operations to match an otherwise decreasing workload resulting from the GFC. Some indicated that without the work generated by the program they may have had to cease operation.”

In the jurisdiction where costs for BER projects were greatest, NSW, Orgill identified the rapid pace at which NSW rolled the projects out as a key reason for higher costs. So the Federal Government, which has been attacked over projects being rolled out quickly, with the intention of maximising stimulus, is now under fire because projects weren’t rolled out quickly enough, therefore failing to provide stimulus.

Given the current plunge – and that is not overstating it – in the housing construction sector, that the schools component of stimulus package is still providing some limited support for the construction sector as stimulus components like the First Home Owners’ Boost wind down may not have been entirely intentional, but it is fortuitous.

The reason why criticism of the stimulus package is inconsistent and lacks an evidentiary basis is that it is both partisan and ideological. As Niall Ferguson’s completely contradictory positions on stimulus under Bush and Obama attest, you can be assured the hostile attitude of many commentators toward stimulus spending would have been entirely opposite if a conservative Government had engaged in the same sort of program.

But ideology is at the root of opposition to stimulus spending. It is motivated by a reflexive dislike of government, the notion that smaller government is always, and automatically, better. It’s a view that demonises the public sector, taxation and regulation in and of themselves. Government of course is not innately good or bad, it is a tool to maximise community welfare, an outcome that will be achieved at different times in different ways. It is, in the view of many of us, usually achieved by keeping government as small as possible. But it doesn’t logically follow that that will be the case in every circumstance.

There are, undoubtedly, types who feel that the economic downturn wasn’t severe enough, that a repeat of the early 1990s was required to grind inflation once again out of the economy, as if economic policy should be a purgative exercise designed to make the patient suffer as much as possible for previous excesses – or, in the case of the GFC, of the excesses of a few. And there are, undoubtedly, businesses – mainly large business, who are well-placed to survive a downturn – who regard high unemployment as an attractive environment, enabling them to keep down, or cut if possible, wages and conditions, skimp on training their own staff pick up talent on the cheap. For such businesses, an extended period of high unemployment is the perfect operating environment.

But the basic motivation is an ideological desire to enfeeble the public sector permanently and utterly, regardless of consequences, to impose an acquired helplessness on the community in response to the vicissitudes of the free market, to ingrain the habit of standing by while economic cycles, or artificially-engineered crises like the GFC, wreak havoc on the lives of working people.

Its advocates are commentators, academics, consultants and business executives who have no fear of the labour market, who have the skills to prosper in any environment, no matter how harsh. They are mortified that the GFC has been blamed on deregulation and unfettered free markets, and bitter that the public sector has led the response to it across the world, in terms of both re-regulation and stimulus spending.

And its victims are people with few skills, with limited options in the labour market. Those are the sort of workers who spent months and perhaps years out of work in the early 1990s as that long, slow, jobless recovery ground on, exacerbating the impact of microeconomic reforms that began the painful process of restructuring our manufacturing sector and the finance sector mismanagement of state Labor Governments in Victoria and South Australia. It inflicted untold misery on households across the country.

That recession, and the way policymakers in Treasury, the Government and the RBA handled it, changed lives – changed them for the poorer. And that is the fate the stimulus packages saved similar people from in 2009, when policymakers in the same institutions responded far more effectively. To deny it is to callously wish away the real human misery of those less skilled and less fortunate than us.