I wrote recently about Niall Ferguson's struggles with the banking regulatory framework. How facts got in the way of pretty much every conclusion he was drawing.

Well, now he seems to be having problems on the macro front. That his problems have been primarily with folks like Krugman and De Long, you'd think he'd be a little careful before picking up his shovel once more.

However, it seems not.

The genesis of Ferguson's problems - if you discount what seems to have been an unwise detour into economics - was this seminar hosted by the NY Review of Books.

His opening gambit in his most recent article in the UK Financial Times is to assert that the recent decline in 10-year Treasuries is proof that financial markets buy his argument, that interest rates will rise under the weight of expected debt issuance.

He is right about what has happened with 10-years Treasuries; is he correct about the reasons for the decline? Well, he says the decline coincided with warnings about the US fiscal condition, and indeed it did. It also coincided with a significant stock market and oil price rally, and the continued descent of the housing markets. Also, it seemed to have tracked the decline of Joe the Plumber, and the rise in good news regarding Tom Brady. Or it could have reflected little more than a correction after an overshoot at the apex of the liquidity crisis at the end of last year.

Bottom line - he can't know now definitely why the market moved as it has. Nor can anyone else.

Yet he decides, "it settled a rather public argument between me and the Princeton economist Paul Krugman." (cf. NY Review of Books link)

The public argument, essentially, is that in Ferguson's view expansionary monetary policy and expansionary fiscal policy are contradictory, because the latter drives up interest rates.

In Ferguson's latest estimation, Krugman is disagreeing with him because Krugman has a book to sell which requires us to see comparisons now with the 1930s. According to Ferguson, now is more like the early 1970s. Curiously, though, Fergusion heaps praise on Ben Bernanke, "whose knowledge of the early 1930s banking crisis is second to none, and [who] has averted a pandemic of bank failures."

Got it? Krugman is wrong to say now is like the 1930s, but the hero of the hour is the Chairman of the Fed who has acted the way the Fed should have in the 1930s.

With this level of intellectual coherence, it's kind of hard to see what Ferguson has to contribute to any debate about the current economic crisis.