U.S. elections 2012: Krugman vs. Ferguson

Written by  //  August 21, 2012  //  Politics, U.S.  //  No comments

A new chapter in the campaign rhetoric was opened this week by Niall Ferguson’s cover story in Newsweek, Obama’s Gotta Go which has created a firestorm. Response was both instantaneous and initially somewhat gleeful, however the protagonists are not amused:
Niall Ferguson Says Paul Krugman ‘Is Being Disingenuous,’ Defends Newsweek Story On Bloomberg TV

“The critics are the ones who are splitting hairs because it’s absolutely clear what the CBO has said, is that the costs of the ACA [Affordable Care Act] will not be met by the new sources of revenue,” Ferguson told Bloomberg TV’s “Market Makers” anchor Erik Schatzker. “You have to distinguish here between the direct sources of revenue created by ACA and the indirect ways the CBO says it will not increase the deficit. … Krugman is being disingenuous.”
Several bloggers, including the Washington Post’s Ezra Klein and the Atlantic’s Matthew O’Brien, pointed out Ferguson’s health care mistake as well as others in the story. Brad DeLong, an economics professor at the University of California at Berkeley, even called for Newsweek to fire Ferguson and for Harvard to consider revoking Ferguson’s tenure.
“I don’t think you can claim that this is in any way undermining my academic reputation because the facts are absolutely clear,” Ferguson said on Bloomberg TV. “What we’re dealing with here is a very carefully orchestrated campaign to try and discredit the piece by those who are ideologically loyal to the president.”
20 August
Paul Krugman Bashes Niall Ferguson’s Newsweek Cover Story As ‘Unethical’ [with updates]
“There are multiple errors and misrepresentations in Niall Ferguson’s cover story in Newsweek — I guess they don’t do fact-checking —”
(HuffPost) Krugman, the Nobel Prize-winning Princeton economics professor, wrote in a Sunday New York Times blog post titled “Unethical Commentary” that Ferguson misrepresented the costs of health care reform. …
Krugman concluded
: “We’re not talking about ideology or even economic analysis here — just a plain misrepresentation of the facts, with an august publication letting itself be used to misinform readers. The Times would require an abject correction if something like that slipped through. Will Newsweek?”
Krugman and Ferguson have been bashing each other in public for years. Ferguson has been advocating austerity to prevent interest rates on government debt from rising. But Krugman has pointed out that interest rates on government debt are at historic lows. …
UPDATE
: 12:56 p.m. — Newsweek did not fact-check Ferguson’s cover story, according to Dylan Byers, a media reporter at Politico. Byers wrote on Twitter that a Newsweek spokesman said the magazine does not have a fact-checking department [emphasis added], and that “we, like other news organisations today, rely on our writers to submit factually accurate material.”
UPDATE
: 1:25 p.m. — Matt O’Brien, associate business editor at The Atlantic, wrote a stinging blog post fact-checking Ferguson’s cover story, writing that “we got an exercise in Ferguson’s specialty — counterfactual history.” Head over to The Atlantic for the full fact-check.   James Fallows, national correspondent for The Atlantic add his own perspective in As a Harvard Alum, I Apologize [that a] “tenured professor of history at my undergraduate alma mater has written a cover story for Daily Beast/Newsweek that is so careless and unconvincing that I wonder how he will presume to sit in judgment of the next set of student papers he has to grade.”
Slate weighs in: Niall Ferguson’s Absurd Critique of The Obama Administration in One Chart which describes Professor Ferguson as “the once-distinguished economic historian turned crank political pundit
As  John Cassidy puts it in the New Yorker:

There’s nothing like a scrap between two seasoned brawlers to liven up a Monday in the dog days of August. In the red corner, Niall Campbell Douglas Ferguson, Laurence A. Tisch professor of history at Harvard and conservative bomb-thrower in residence at the Daily Beast/Newsweek. In the blue corner, Paul Robin Krugman, Nobel-winning economist, Princeton prof, and designated liberal curmudgeon at the Times.
As fans of political sparring will recall, these two have mixed it up before—numerous times, in fact, mainly over the Obama stimulus. The cause of their latest spat: a characteristically overstated Newsweek cover story by Ferguson arguing that it’s time to replace Obama. (Headline: “Hit the Road Barack: Why We Need a New President.”) Krugman, who has been spending the last few weeks hiking through some pretty-looking hills, interrupted his vacation to accuse his old nemesis of misrepresenting the facts in claiming that Obamacare will add more than a trillion dollars to the deficit over the next ten years

Nothing very surprising there, you might say. Ferguson, a prolific author whose “end is nigh” worldview makes him a popular speaker on the hedge-fund/Davos circuit, has been railing away at the Obama Administration since 2009, warning that its profligate spending policies were sending the U.S.A. the way of Greece. The equally indefatigable Krugman has been lecturing Ferguson for almost as long about his ignorance of elementary (Keynesian) economics and the bond market. (If people in the markets truly believed Ferguson’s analysis, the U.S. government would never be able to issue ten-year bonds with a yield of well under two per cent.)

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.

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