Niall Ferguson's "Newsweek/Daily Beast" Cover Story Ignites a Firestorm
8-20-12
Table of Contents
The Newsweek/Daily Beast Cover Article
Niall Ferguson: Obama's Gotta Go
I was a good loser four years ago. “In the grand scheme of history,” I wrote the day after Barack Obama’s election as president, “four decades is not an especially long time. Yet in that brief period America has gone from the assassination of Martin Luther King Jr. to the apotheosis of Barack Obama. You would not be human if you failed to acknowledge this as a cause for great rejoicing.”...
It is a sign of just how completely Barack Obama has “lost his narrative” since getting elected that the best case he has yet made for reelection is that Mitt Romney should not be president. In his notorious “you didn’t build that” speech, Obama listed what he considers the greatest achievements of big government: the Internet, the GI Bill, the Golden Gate Bridge, the Hoover Dam, the Apollo moon landing, and even (bizarrely) the creation of the middle class. Sadly, he couldn’t mention anything comparable that his administration has achieved....
The voters now face a stark choice. They can let Barack Obama’s rambling, solipsistic narrative continue until they find themselves living in some American version of Europe, with low growth, high unemployment, even higher debt—and real geopolitical decline.
Or they can opt for real change: the kind of change that will end four years of economic underperformance, stop the terrifying accumulation of debt, and reestablish a secure fiscal foundation for American national security....
The Response
There are multiple errors and misrepresentations in Niall Ferguson’s cover story in Newsweek — I guess they don’t do fact-checking — but this is the one that jumped out at me. Ferguson says:
The president pledged that health-care reform would not add a cent to the deficit. But the CBO and the Joint Committee on Taxation now estimate that the insurance-coverage provisions of the ACA will have a net cost of close to $1.2 trillion over the 2012–22 period.
Readers are no doubt meant to interpret this as saying that CBO found that the Act will increase the deficit. But anyone who actually read, or even skimmed, the CBO report (pdf) knows that it found that the ACA would reduce, not increase, the deficit — because the insurance subsidies were fully paid for.
Here's a tour of some of the more factually-challenged sections of Ferguson's piece.
"Certainly, the stock market is well up (by 74 percent) relative to the close on Inauguration Day 2009. But the total number of private-sector jobs is still 4.3 million below the January 2008 peak."
Did you catch that little switcheroo? Ferguson concedes that stocks have done very well since January 2009, but then says that private sector payrolls have not since January 2008. Notice now? Ferguson blames Obama for job losses that happened a full year before he took office. The private sector has actually added jobs since Obama was sworn in -- 427,000 of them, to be exact. For context, remember that the private sector lost 170,000 jobs during George W. Bush's eight years.
[T]he main reason to mistrust Ferguson is that, for years now, his argument has been wrong.
Almost since the crisis began, Ferguson has pushed a very specific theory with a very specific prediction: The bond markets, he has said, are going to revolt against American debt. And if that doesn’t happen, inflation is going to run amok.
As Joe Weisenthal details, back in September 2009, Ferguson was warning that “long-term rates have risen by 167 basis points in the space of five months,” which “settled a rather public argument” Ferguson had been conducting with Paul Krugman, in which Ferguson argued the markets were turning on our debt and Krugman argued that they were not. So who was right? Well, the interest rate on 10-year Treasuries was 3.73 percent when Ferguson wrote that column. Today, they’re 1.81 percent. Point, Krugman.
My old and good friend Niall Ferguson has written an essay arguing against re-electing Obama. So for the second time in four years, we will be backing separate candidates. One reason is that I believe that the Bush-Cheney wars turned out to be disastrous and a second war against Iran could be catastrophic. Niall has had no such change of heart and remains an advocate of American imperial power. Another is that I do not share Niall's view of the Obama administration's record, which I think he massively - and rather self-evidently - distorts.
As a Harvard Alum, I Apologize....
You should read the article for yourself, but a few other highlights:
- "Remarkably the president polls relatively strongly on national security."
Remarkably the name Osama bin Laden does not appear in this article.
- On Afghanistan and Iraq: "Understandably, the men and women who have served there wonder what exactly their sacrifice was for, if any notion that we are nation building has been quietly dumped. Only when both countries sink back into civil war will we realize the real price of Obama's foreign policy."
The men and women who served in Iraq and Afghanistan were not told that "nation building" was the reason for their sacrifice. A review of the relevant history will reveal that they were sent in to rout the Taliban and al Qaeda, and to prevent Saddam Hussein from exercising his impending threat to use weapons of mass destruction. Everything since then has been "mission creep" of a spectacular variety, and unlike Ferguson most Americans view it as a success rather than failure of Obama's to be reducing rather than expanding America's commitment in both wars.
So basically, what we have here is a pedestrian, poorly written, poorly-thought-out, self-contradictory, often counterfactual anti-Obama screed. But it is not enough for me to simply point this out. Instead, I want to examine why Niall Ferguson has thrown away the ancient Western traditions of logic and reason in a frenzy of partisan animus. I submit to you that Ferguson's true motivations are fairly transparent. Witness his ideal of what foreign policy should be:
Meanwhile, the fiscal train wreck has already initiated a process of steep cuts in the defense budget, at a time when it is very far from clear that the world has become a safer place—least of all in the Middle East.
For me the president’s greatest failure has been not to think through the implications of...challenges to American power...(emphasis mine)
Niall Ferguson wants the United States to be an empire. An historian, Ferguson has always been enchanted with the British Empire of his forebears. He has also long been enchanted with the notion that the United States can and should become the successor to the British Empire, and that we Americans have been shirking our duty by pretending to be just another live-and-let-live nation-state. He seems to have been especially enchanted by that magic moment in 2003 and 2004, when it seemed that under George W. Bush and the neoconservatives, America was finally taking up the mantle of empire. The failure of the Iraqi adventure, and the collapse of popular support for similar adventures, must have felt to Niall Ferguson like something beautiful was being snatched from his hands.
Now, Ferguson hopes, under a Romney/Ryan (or Ryan/Romney?) presidency, America has a chance at completing the mission that George Bush started, and returning to its path to glory as British Empire II.
Ferguson's Defense
Niall Ferguson: Paul Krugman is Wrong
You know you have hit the target when Paul Krugman takes time out from his hiking holiday to accuse you of “multiple errors and misrepresentations” ... but can only come up with one truly feeble objection.
In my piece I say: "The president pledged that health-care reform would not add a cent to the deficit. But the CBO and the Joint Committee on Taxation now estimate that the insurance-coverage provisions of the ACA will have a net cost of close to $1.2 trillion over the 2012–22 period."
Krugman counters in his Conscience of a Liberal blog by saying: “The ACA would reduce, not increase, the deficit—because the insurance subsidies were fully paid for.” But I very deliberately said “the insurance coverage provisions of the ACA,” not “the ACA.” There is a big difference.
Krugman suggests that I haven't read the CBO's March 2010 report. Sorry, I have, and here is what it says:
“The provisions related to health insurance coverage—which affect both outlays and revenues—were projected to have a net cost of $1,042 billion over the 2012–2021 period; that amount represents a gross cost to the federal government of $1,390 billion, offset in part by $349 billion in receipts and savings (primarily revenues from penalties and other sources).”
The Counterpunch
“The provisions related to health insurance coverage—which affect both outlays and revenues—were projected to have a net cost of $1,042 billion over the 2012–2021 period; that amount represents a gross cost to the federal government of $1,390 billion, offset in part by $349 billion in receipts and savings (primarily revenues from penalties and other sources).”
Seriously? That's it? By accounting only for the costs of ACA — that would be the insurance provisions — and not for any of the savings, Ferguson concludes that ACA increases the deficit? And then uses the CBO to back up his claim?
I'm speechless. How do you even react to something like this? Ferguson is like some clever middle schooler who thinks he's made a terrifically shrewd point by inserting "insurance coverage provisions" into his sentence so that he can later argue that it's technically correct if anyone calls him on it. You can almost hear the adolescent tittering in the background.
For the rest of us, the facts are simple: Covering 30 million people does indeed cost money, and Obamacare includes a number of offsetting savings to pay for that. This is what Obama promised to do: to pay for ACA. And CBO says he did.
Fire his ass.
Fire his ass from Newsweek, and the Daily Beast.
Convene a committee at Harvard to examine whether he has the moral character to teach at a university.
There is a limit, somewhere. And Ferguson has gone beyond it.
Of all the wrongheaded claims in Niall Ferguson’s much-mocked effusion of trite right-wing talking points, this is my favorite:
Welcome to Obama’s America: nearly half the population is not represented on a taxable return—almost exactly the same proportion that lives in a household where at least one member receives some type of government benefit. We are becoming the 50–50 nation—half of us paying the taxes, the other half receiving the benefits.
In fact, America has a barely progressive tax system, in which rich, poor and middle-class people all pay roughly comparable percentages of their income in taxes. As this study illustrates, last year people who had an average income of nearly $1.4 million (the blessed 1 percent) paid almost the same percentage of their income in taxes as the bottom 99 percent of the population. Indeed, at the very top of the economic pyramid our tax system becomes actually regressive – people who made $10 million or more in 2006 paid 20.9 percent of their total income in taxes: a lower percentage than all but the poorest Americans.
Reflections
Many commentators have shrugged off [Ferguson's] projection [that China's economy will overtake America's by 2017]. China has four times more people than the U.S., so even if they only attain one-fourth the per-capita output of Americans, it is inevitable China must overtake the U.S. Nothing to be done about it, therefore nothing to worry about, therefore shocking bad form for Ferguson to raise the point at all.
I dissent....
Ferguson's polemical point is the true one. ... [S]hrugging off Ferguson's grim warning with self assurances about higher U.S. consumer welfare utterly misses the mark: those who have power can take wealth from those who possess wealth, but lose power.
What is pretty remarkable about the latest dustup is the weakness of the arguments presented by Ferguson, a streetwise public intellectual who, according to his Web site, now holds positions at four different élite academic institutions. If called upon three months before an election to pen a provocative cover story in a national newsmagazine clamoring for the President to be chucked out, most writers would make every effort to avoid giving the other side easy opportunities to tear down their arguments. And yet, here comes Ferguson blatantly twisting a report from the Congressional Budget Office and presenting numerous other distortions and half-truths that anybody with access to Google could discredit in a few hours.
It all got me pondering anew a question that’s been been on my mind every day since Mitt Romney picked Paul Ryan as his running mate: Where are the real conservative intellectuals these days? Surely there must be some, but sometimes it seems like all the right has to offer is a soap-box mountebank like Ryan, a trio of embittered Supreme Court Justices, and a few gnarled old Washington fixtures like Bill Kristol, George Will, and Charles Krauthammer. Given this vacuum, it’s relatively easy for an energetic and disputatious blow-in like Ferguson to emerge as one of Obama’s most visible, if not exactly persuasive, critics.
Round Six: Ferguson's Second Riposte
My critics have three things in common. First, they wholly fail to respond to the central arguments of the piece. Second, they claim to be engaged in “fact checking,” whereas in nearly all cases they are merely offering alternative (often silly or skewed) interpretations of the facts. Third, they adopt a tone of outrage that would be appropriate only if I had argued that, say, women’s bodies can somehow prevent pregnancies in case of “legitimate rape.”
Their approach is highly effective, and I must remember it if I ever decide to organize an intellectual witch hunt. What makes it so irksome is that it simultaneously dodges the central thesis of my piece and at the same time seeks to brand me as a liar. The icing on the cake has been the attempt by some bloggers to demand that I be sacked not just by Newsweek but also by Harvard University, where I am a tenured professor. It is especially piquant to read these demands from people who would presumably defend academic freedom in the last ditch—provided it is the freedom to publish opinions in line with their own ideology.