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Was Newsweek Author's Criticism of Obama Inaccurate?

"There are multiple errors and misrepresentations in Niall Ferguson’s cover story in Newsweek..."

When Newsweek decided to let conservative author Niall Ferguson dominate its cover with a call for President Obama to be ousted from the White House, it arguably marked a dramatic ideological shift for a magazine that has consistently run lead stories that infuriate conservatives. Perhaps conscious of this tonal difference, Newsweek has even taken to Youtube to defend the article:

This time, it's liberals who are tearing their hair out and screaming at the magazine. Ferguson went right for the jugular, attacking Obama's record with an eye for budget and policy minutiae that one typically only sees in academic articles by Harvard professors, of which Ferguson himself is one, and it showed. Nor was Ferguson's attack limited to one particular policy of the president's, or even the president's policies alone. In describing Obama, Ferguson painted a picture of a President too amateurish to make his own decisions and too sensitive to take criticism. In describing Obama's policies, Ferguson described a litany of shattered promises and unfocused ideas. Some highlights from the article follow:

Unemployment was supposed to be 6 percent by now. It has averaged 8.2 percent this year so far. Meanwhile real median annual household income has dropped more than 5 percent since June 2009. Nearly 110 million individuals received a welfare benefit in 2011, mostly Medicaid or food stamps.[...]

On paper it looked like an economics dream team: Larry Summers, Christina Romer, and Austan Goolsbee, not to mention Peter Orszag, Tim Geithner, and Paul Volcker. The inside story, however, is that the president was wholly unable to manage the mighty brains—and egos—he had assembled to advise him.

According to Ron Suskind’s book Confidence Men, Summers told Orszag over dinner in May 2009: “You know, Peter, we’re really home alone ... I mean it. We’re home alone. There’s no adult in charge. Clinton would never have made these mistakes [of indecisiveness on key economic issues].” On issue after issue, according to Suskind, Summers overruled the president. “You can’t just march in and make that argument and then have him make a decision,” Summers told Orszag, “because he doesn’t know what he’s deciding.” (I have heard similar things said off the record by key participants in the president’s interminable “seminar” on Afghanistan policy.)[...]

Pelosicare was not only a political disaster. Polls consistently showed that only a minority of the public liked the ACA, and it was the main reason why Republicans regained control of the House in 2010. It was also another fiscal snafu. 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.[...]

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.

But was Ferguson's article inaccurate? New York Times columnist Paul Krugman has already penned a rebuttal, and while Krugman's opinion usually doesn't carry much currency with his ideological foes, his response made the sorts of accusations that can't properly be ignored. Specifically, Krugman accused Ferguson of lying about the effects of Obamacare on the deficit, claiming that Ferguson had blatantly misinterpreted the CBO report he was quoting. From Krugman:

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.

Ferguson fired back in short order, pouring snark into his response to Krugman:

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).”

But thanks for trying, Paul. You reminded me of a point I really should have made in my piece: that in pushing though ACA, Obama violated his most famous pledge of all—made on the campaign trail back in 2008—not to raise taxes on the middle class.

Tart stuff. Too bad not everyone is impressed. Business Insider has accused Ferguson of deliberately misleading people and trying to cover it up with a glib explanation. They also point out what they believe is another error in Ferguson's piece:

In Ferguson's new post he quotes the CBO as saying:

If you are wondering how on earth the CBO was able to conclude that the net effect of the ACA as a whole was to reduce the projected 10-year deficit, the answer has to do with a rather heroic assumption about the way the ACA may reduce the cost of Medicare. Here’s the CBO again:

“CBO’s cost estimate for the legislation noted that it will put into effect a number of policies that might be difficult to sustain over a long period of time. The combination of those policies, prior law regarding payment rates for physicians’ services in Medicare, and other information has led CBO to project that the growth rate of Medicare spending (per beneficiary, adjusted for overall inflation) will drop from about 4 percent per year, which it has averaged for the past two decades, to about 2 percent per year on average for the next two decades. It is unclear whether such a reduction can be achieved ...”

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

Ferguson italicized the last line about it being unclear if such reductions can be achieved, as if this line undermines the whole thing.

But Ferguson is truncating the CBO's quote.

According to Business Insider, the CBO quote Ferguson truncates actually doesn't question whether the government can raise enough revenue to cover the costs of Obamacare. They simply aren't sure which of several approaches the government will use to do it.

Ferguson has yet to respond to this new attack, though if he does, it will probably be to point out some argument or other for why this apparent misquotation on his part doesn't actually draw blood. Until then, it should be noted that one mistake in an article does not invalidate the rest of its contents. The vast majority of Ferguson's criticisms are unaffected by this apparent error, and still stand, in the absence of contrary evidence.

One last thing…
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