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Home Publications Blogs Beat the Press Newsweek's Pinata of Errors: Niall Ferguson's Trashing of Obama

Newsweek's Pinata of Errors: Niall Ferguson's Trashing of Obama

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Monday, 20 August 2012 20:26

It's hard to believe that progressive bloggers didn't get together to pay Newsweek to run Niall Ferguson's piece on Obama. The thing is so shot full of easily identifiable errors no serious publication would ever allow it into print. It already has been picked to pieces by Paul Krugman, Ezra Klein and Mark Thoma, among others.

My personal favorite was this little item picked up by Josh Holland. It seems that Ferguson can't even get straight who he supported in 2008. In the latest piece he was a McCain backer who hoped for the best from the Obama administration. But back in 2008 he was an Obama supporter who had become disenchanted with McCain's lack of understanding of economics. At that time Ferguson was ecstatic over the prospect of the first African American president in the White House.

Okay, but enough of the cheap fun, there is an issue here for which Ferguson needs a serious whacking. On page 2 Ferguson has a figure that shows the predicted and actual levels of unemployment for 2009 and 2012. (He has predicted unemployment for 2013, but I guess the fact checker pulled the bar showing "actual.") Not surprisingly, the predicted unemployment rates are well below the actual. Therefore Ferguson seems convinced that he has done his job, Obama failed to deliver.

But Ferguson got the nature of the failure wrong. Obama and his economic team, like the rest of the economics profession, badly underestimated the severity of the downturn. Being world class economists it was too difficult for them to recognize something as simple as an $8 trillion housing bubble and to understand the damage that would be done by its deflation. They certainly deserve to be harangued for that, but unfortunately all of Ferguson's friends would be equally guilty on this count.

Obama's team was not wrong on the impact of their stimulus. They projected that the original package would generate 3-4 million jobs. (That's in black and white as of January 2009, you can read it.) After it was whittled down by Ferguson's deficit minded friends in Congress, the predicted effect was on the order of 2-3 million jobs. This is roughly the number that most independent analysts have estimated as well.

In short, we got a stimulus designed to create 2-3 million jobs in a context where we needed 10-12 million. We can and should blame the Obama team for a faulty economic forecast, but their policy did almost exactly what was expected. In short Obama did come through with what he promised, unfortunately when it came to jobs, he didn't promise very much.

Comments (10)Add Comment
Thank you...
written by Carl Weetabix, August 20, 2012 11:29
Unfortunately your point is lost in all of the current election back and forth. If you read the comments at the Daily Beast where this execrable diatribe sits, there seems to be two viewpoints:

1) Niall is wrong and therefor all is good with Obama.
2) Niall is right and therefor all Obama supporters should vote for Romney.

There's not a ton of room left in this dialog who find Obama a failure but don't think the resolution is more to the right. That Obama failed not because of his "leftist" policies, but lack of leftist policies (or at least, more leftist).

Of course what I called "leftist" was at one time considered "centrist" - that's the sad thing.
2010 ...
written by David, August 21, 2012 12:27
The electorate kicked out the Dems who failed to support a larger stimulus, and then got a bunch of do nothing Republicans in their place, who put a deliberate drag on any further progress on the job front.
Brooks alert
written by Jerry, August 21, 2012 1:05
Silly old Brooks over at NYT is pushing his politics under the guide of economics once again.
Enough Is Not Enough When It's Not Enough: Spending Never Creates Jobs, Period
written by Last Mover, August 21, 2012 8:35
The claim of stimulus deniers is clear, that the associated spending simply does not and cannot create new net jobs.

This is like claiming for cars designed to withstand a head-on collision of 30mph that were instead destroyed in a 70mph collision, they would have been destroyed in a 30mph collision as well.

As long as only 30mph collisions are predicted in the face of 70mph actual collisions the deniers will continue to claim no design can withstand any collision.
obama, romney, ferguson & others
written by mel in oregon, August 21, 2012 5:04
the economy is going nowhere. obama promised much, produced little. but romney especially with his vp choice will only make a very bad economic situation worse. speaking of vp choices, wasn't it strange that mccain picked numbskull palin instead of romney? think old john may know something about mitt's taxes? when the moratorium on illegal offshore tax frauds was enacted, 30,000 tax felon millionaires got off scott free. pretty good deal, just pay the back taxes, interest & penalties, but no prison time because of their clout. not saying willard is a felon, but you cannot say he isn't either. maybe a federal employee with access might shed some light on this, after all the romney/ryan administration would be horrible news for a government employee. might as well go down swinging.
Yet another misleading Niall statistic
written by AndrewDover, August 21, 2012 5:53
Niall wrote:
"Meanwhile, since 2008, a staggering 3.6 million Americans have been added to Social Security’s disability insurance program. This is one of many ways unemployment is being concealed."

However, the facts don't support that claim:
http://www.ssa.gov/policy/docs/statcomps/di_asr/2011/sect01b.html#table3

"All Disabled Beneficiaries"

Year Total (December)
2007 8,118,382
2011 9,803,581 (or 4.6% of resident 18-64 population.)

Niall's 3.6 million addition would have resulted in 11.7 million.
Not necessarily a bad stat
written by Matthew, August 21, 2012 7:01
@andrewdover, it's possible that his stat is correct. It's safe to assume a certain number of ss recipients died during that period of time. If that were the case, then niall's number could be right. In the absence of his methodology, or the stats for people who left ss system (died, cured), then that might be a valid stat.
Matthew is correct.
written by AndrewDover, August 21, 2012 11:37
The number reported was the additions, not the growth in the total number of people in the program. About 2.7 million people left the disability program from 2008-2011.

http://www.ssa.gov/policy/docs/statcomps/di_asr/2011/sect03a.html#table35
'Correct' but deliberately misleading
written by stringph, August 22, 2012 7:13
If within 3 or 4 years 2.7 million people either were cured of disability or died or otherwise left the program, would you expect zero people to join it? I don't think so. Reporting the number of people who join without also reporting those who leave is just a sophisticated form of dishonesty when the only thing that matters is the net change.

Ferguson's phrasing strongly suggests there was a net increase of 3.6 million due to some deliberate action by the government. A false and deliberately misleading impression, as you would expect from a political shill.
Kiss-Arse Insanity
written by Jon, August 28, 2012 5:28
There can't really be any doubt about Ferguson's desperate struggle to become the new Kissinger for McCain, can there? If you doubt it, please watch this particularly insane piece of kiss-arsery by Ferguson, delivered to the Brookings Institution in April 2008 - http://www.youtube.com/watch?v=4mli7OjrB3M

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Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.

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