I’m in Madrid, doing 45 trillion interviews, so not blogging much. But I was alerted to a remarkably stupid attack on me over the subject of Iceland from the Council on Foreign Relations — and I use that term advisedly.

The CFR people take me to task for measuring economic performance in Iceland and the Baltics relative to the pre-crisis peak, which they suggest is some kind of scam. Why not measure relative to the post-crisis trough, under which the Baltics look better?

Oh, boy. Economists have been studying business cycles for something like 90 years, and done comparisons to previous peaks all that time; apparently these guys don’t know about any of that. So let’s try this slowly.

First of all, we think of a recession as a period in which the economy falls below its potential; the natural way to gauge a recovery is to see how much of the lost ground has been regained.

Better yet, compare two hypothetical countries — call them country I and country L. Both suffer from a severe economic setback, but country I does a better job of responding to the shock, so that output falls only 10 percent in I but 20 percent in L. Then both economies recover. In that recovery, output in L grows more from the trough than output in I — but only because the country did so badly in the first place. Yet the CFR people would have us believe that L, not I, is the success story.

Or do a bit of history. The US economy grew 10.9, yes, 10.9 percent in 1934. The New Deal triumphant! Or maybe not. Real GDP was still about 20 percent below its 1929 level.

So by comparing output to the previous peak I’m doing the obvious, natural thing; the CFR alternative makes no sense.

Oh, and Ryan Avent takes on the other, earlier CFR argument that the Baltics have grown more since 2000. This is a different kind of confusion, mixing up long-run growth in potential with shortfalls below potential. Iceland was and is a rich country; the Baltics were poor countries playing catch-up, which isn’t relevant either way to the crisis story.

One place where I do disagree with Ryan is in his desire to stop talking about Iceland. Yes, it’s a small island exporting mainly fish and aluminum. But you take your natural experiments where you find them. (Milton Friedman made his original case for floating exchange rates in part by invoking the example of, believe it or not, Tangier). Iceland was the only European-periphery country that received huge capital inflows, then responded to crisis not with a grim determination to stay on or pegged to the euro, but by devaluing. In the process it demonstrated that devaluation is a lot easier than “internal devaluation”, which is actually the main point.

Anyway, time to go off for 300 million more interviews.