Tina Brown fooled by Onion article about Obama, runs it as Newsweek cover story
At the Origins of the Internet...

And Matthew O'Brien's Full Fact-Check of Niall Ferguson's Very Bad Argument

This has sprawled out. It's time to sharpen this back down:

Dylan Byers:

Ferguson decides to edit the CBO report to satisfy his own conclusions.


It is unclear whether such a reduction can be achieved through greater efficiencies in the delivery of healthcare or will instead reduce access to care or the quality of care (relative to the situation under prior law.)


Here’s the CBO....

It is unclear whether such a reduction can be achieved…

Indeed, it is, which is why I wrote what I wrote.


[C]ontrary to what Ferguson leads readers to believe, the CBO report does not state that the reduction is "unclear." What is "unclear" is whether the reduction will come through greater efficiencies in healthcare delivery or reduced access to care. So, one more time: The Oxford-trained, Harvard-employed, Newsweek contributor Niall Ferguson just edited the CBO report to change its meaning. With all due lack of respect: What are you thinking?

Matthew O'Brien:

A Full Fact-Check of Niall Ferguson's Very Bad Argument Against Obama: Celebrity historian Niall Ferguson doesn't like President Obama, and doesn't think you should either.

That's perfectly fine. There are plenty of legitimate reasons to disapprove of the president. Here's the big one: 8.3 percent. That's the current unemployment rate, fully three years on from the official end of the Great Recession. But rather than make this straightforward case against the current administration, Ferguson delves into a fantasy world of incorrect and tendentious facts. He simply gets things wrong, again and again and again. (A point my colleague James Fallows makes as well in a must-read).

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….

"Meanwhile real median annual household income has dropped more than 5 percent since June 2009."

I can't replicate this result. It's difficult, because Ferguson does not cite his source. The Census bureau only has data on real median household incomes through 2010 -- and it shows them falling 2.28 percent from 2009. The Bureau of Labor Statistics has numbers on real median weekly earnings that go through 2012, but those only show a 3.7 percent decrease from June 2009.

"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."

It is true that 46 percent of households did not pay federal income tax in 2011. It is not true that they pay no taxes. Federal income taxes account barely account for half of federal taxes, and much less of total taxes….

"By the end of this year, according to the Congressional Budget Office (CBO), [debt-to-GDP ratio] will reach 70 percent of GDP. These figures significantly understate the debt problem, however. The ratio that matters is debt to revenue. That number has leapt upward from 165 percent in 2008 to 262 percent this year, according to figures from the International Monetary Fund."

This is incorrect. Ferguson had it right the first time -- the number that matters is debt-to-GDP, not debt-to-revenue. The former reflects our capacity to pay; the latter our willingness to pay right now. Moving on.

"Not only did the initial fiscal stimulus fade after the sugar rush of 2009, but the president has done absolutely nothing to close the long-term gap between spending and revenue."

Ferguson wasn't always a critic of the stimulus. Back in August 2009, he wrote that "the stimulus clearly made a significant contribution to stabilizing the U.S. economy." Perhaps he thinks the stimulus should have been bigger so the "sugar rush" would last lasted longer? It's not clear. What is clear is that Obama has tried to close long-term deficits -- several times!…

"The most recent estimate for the difference between the net present value of federal government liabilities and the net present value of future federal revenues--what economist Larry Kotlikoff calls the true "fiscal gap"--is $222 trillion."

That's a lot of trillions! But if our fiscal gap is "really" this many trillions, why can we borrow for 30 years for a real rate of 0.64 percent? It's because this number is meaningless…. This is like projecting, in 1942, that the Empire of Japan will rule the entire Asian continent for 70 years based on a few years of battle outcomes. It's an interesting prediction, but it's not an empirical vision of the future.

"The country's largest banks are at least $50 billion short of meeting new capital requirements under the new "Basel III" accords governing bank capital adequacy."

This would be damning if we had already fully implemented the Basel III bank rules. We have not. As this handy timeline from Deloitte shows, the bank capital ratios don't take effect until January 2013…. Ferguson not only get the facts wrong; he gets the economics wrong too.

"The Patient Protection and Affordable Care Act (ACA) of 2010 did nothing to address the core defects of the system: the long-run explosion of Medicare costs as the baby boomers retire, the "fee for service" model that drives health-care inflation, the link from employment to insurance that explains why so many Americans lack coverage, and the excessive costs of the liability insurance that our doctors need to protect them from our lawyers."…

[I]t's wrong to say it does nothing to address them. Here's a partial list of the things Obamacare does….

"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."

Maybe Ferguson doesn't understand the meaning of the word "deficit"? The only other explanation is that he is deliberately misleading his readers….

"Having set up a bipartisan National Commission on Fiscal Responsibility and Reform, headed by retired Wyoming Republican senator Alan Simpson and former Clinton chief of staff Erskine Bowles, Obama effectively sidelined its recommendations of approximately $3 trillion in cuts and $1 trillion in added revenues over the coming decade. As a result there was no "grand bargain" with the House Republicans--which means that, barring some miracle, the country will hit a fiscal cliff on Jan. 1 as the Bush tax cuts expire and the first of $1.2 trillion of automatic, across-the-board spending cuts are imposed. The CBO estimates the net effect could be a 4 percent reduction in output." 

Now, Obama did not push Congress to adopt Simpson-Bowles, but neither did Congress adopt it. Among those who voted against it? Paul Ryan, who Ferguson later lauds for his fiscal courage…. And then there's the cognitive dissonance of it all. Noah Smith points out that Ferguson reproaches Obama for both running big deficits and for closing them. 

"The failures of leadership on economic and fiscal policy over the past four years have had geopolitical consequences. The World Bank expects the U.S. to grow by just 2 percent in 2012. China will grow four times faster than that; India three times faster. By 2017, the International Monetary Fund predicts, the GDP of China will overtake that of the United States."

China has 1.3 billion people. The United States has 300 million people. China's GDP will pass ours when they are only four times poorer than us. That might happen in 2017; it might happen later…. There's nothing Obama can do to prevent China from catching up -- nor should Obama want to! Economics isn't zero sum. The more money China has, the more money they have to buy things from us and other countries. This is good news, and yet Ferguson treats it like a modern-day equivalent of "losing China".

"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."

It's bizarre that Ferguson thinks government policies didn't help create America's middle class….

In the world as Ferguson describes it, Obama is a big-spending, weak-kneed liberal who can't get the economy turned around. Think Jimmy Carter on steroids. But the world is not as Ferguson describes it. A fact-checked version of the world Ferguson describes reveals a completely different narrative -- a muddy picture of the past four years, where Obama has sometimes cast himself as a stimulator, a deficit hawk, a health care liberal and conservative reformer all at once. And it's a world where the economy is getting better, albeit slowly.

It would have been worthwhile for Ferguson to explain why Obama doesn't deserve re-election in this real world we actually live in. Instead, we got an exercise in Ferguson's specialty -- counterfactual history.