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. 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.
Of course, it's not really fair to blame Obama -- or Bush -- for jobs lost in their first few months before their policies took effect. If we more sensibly look at private sector payrolls after their first six months in office, then Obama has created 3.1 million jobs and Bush created 967,000 jobs.
"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, if you count the state and local level. Many of those other taxes can be regressive. If you take all taxes into account, our system is barely progressive at all.
But why do almost half of all households pay no federal income tax? Because they don't have much money to tax. Here's the breakdown from the nonpartisan Tax Policy Center. Half of these households are simply too poor -- they make under $20,000 -- to have any liability. Another quarter are retirees on tax-exempt Social Security benefits. The remaining households have no liability because of tax expenditures like the earned-income tax credit or the child credit.
In other words, the poor, the old, and children. Not exactly the "50-50 nation" of makers and takers -- or "lucky duckies" -- that Ferguson imagines.
"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! And the sequester scheduled for next January is his deal with Republicans to rein in spending. More on that in a bit.
"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. First of all, it seems to project many decades of growth figures and budget decisions that we simply don't know will happen. It assumes the Bush tax cuts never ever expire and that the healthcare cost curve never ever bends. 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. And even if they had -- which again, they have not -- it would be a bad idea to change risk-weighted capital too much too soon. Europe's banks have done just that, and the results have left something to be desired. The IMF projects their banks will deleverage some $2.6 trillion over the next year and a half -- starving their economies of credit when they most need it. In other words, 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."
There are reasons to think the ACA will fail to address the core defects of the health care system. But it's wrong to say it does nothing to address them. Here's a partial list of the things Obamacare does. It tackles the long-run explosion of Medicare costs. It tries to move away from the fee-for-service model that drives healthcare inflation. And it cuts the link between employment and insurance. In other words, Obamacare does everything Ferguson says it doesn't do, with the exception of tort reform. Matt Yglesias of Slate has a good explainer on how Obamacare tries to do these things -- everything from IPAB, to Accountable Care Organizations and guaranteed issue. Read it.
"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. The CBO is quite clear about Obamacare's budgetary implications. It reduces the deficit. Here's what the CBO said exactly:
[T]he effects of the two laws on direct spending and revenues related to health care will reduce federal deficits by $210 billion over the 2012-2021 period.
In other words, the law is more than paid for. As Paul Krugman pointed out, it does spend $1.042 trillion covering people, but it pays for this coverage by finding savings in Medicare and levying a surtax on investment income for high-earners. That Ferguson looked up the CBO's estimate of the bill's cost and didn't notice that those costs are paid for is peculiar indeed. Even more peculiar is that he is apparently doubling down on this falsehood. And yes, it is a very deliberate falsehood.
"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. Although that wasn't the last attempt at a so-called "grand bargain". That came during the debt ceiling standoff the Republicans forced. Obama offered a long-term deal heavily tilted towards Republican priorities -- read: spending cuts -- that the Republicans spurned. Among those who pushed the Republicans to reject it? Paul Ryan, who worried that a deal would burnish Obama's bipartisan credentials and make his re-election a foregone conclusion.
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 if China's current slowdown is more than a blip. It doesn't really matter if and when this happens. 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. America was the first country to make high school compulsory. It was also the first country to make college widely accessible with the G.I. bill. This democratization of education went a long way towards laying the foundation for broad-based prosperity. And as for big things the government has achieved lately, surely moving to near-universal healthcare coverage counts?
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 the real world we actually live in. Instead, we got an exercise in Ferguson's specialty -- counterfactual history.
One hundred years ago, a retail giant that shipped millions of products by mail moved swiftly into the brick-and-mortar business, changing it forever. Is that happening again?
Amazon comes to conquer brick-and-mortar retail, not to bury it. In the last two years, the company has opened 11 physical bookstores. This summer, it bought Whole Foods and its 400 grocery locations. And last week, the company announced a partnership with Kohl’s to allow returns at the physical retailer’s stores.
Why is Amazon looking more and more like an old-fashioned retailer? The company’s do-it-all corporate strategy adheres to a familiar playbook—that of Sears, Roebuck & Company. Sears might seem like a zombie today, but it’s easy to forget how transformative the company was exactly 100 years ago, when it, too, was capitalizing on a mail-to-consumer business to establish a physical retail presence.
E!’s 10-year-anniversary special celebrating its flagship family was surprisingly honest and strangely tragic.
On Friday, as Puerto Rico contended with the aftermath of a hurricane that had left much of the island without power, and North Korea threatened to detonate a hydrogen bomb in the Pacific Ocean, the internet-gossip complex grappled instead with the momentous news that an unmarried 20-year-old reality star was pregnant. Kylie Jenner, TMZ reported, the youngest scion of the Kardashian family, had been telling friends that she and her boyfriend, the rapper Travis Scott, were going to have a baby. Unidentified family friends promptly confirmed the news to People. And some fans began to wonder—had Kylie’s mother, Kris Jenner, leaked the news herself to boost the ratings for E!’s Sunday night 10-year-anniversary special of Keeping Up With the Kardashians?
Five days after Hurricane Maria made landfall in Puerto Rico, its devastating impact is becoming clearer.
Five days after Hurricane Maria made landfall in Puerto Rico, its devastating impact is becoming clearer. Most of the U.S. territory currently has no electricity or running water, fewer than 250 of the island’s 1,600 cellphone towers are operational, and damaged ports, roads, and airports are slowing the arrival and transport of aid. Communication has been severely limited and some remote towns are only now being contacted. Jenniffer Gonzalez, the Resident Commissioner of Puerto Rico, told the Associated Press that Hurricane Maria has set the island back decades.
The foundation of Donald Trump’s presidency is the negation of Barack Obama’s legacy.
It is insufficient to statethe obvious of Donald Trump: that he is a white man who would not be president were it not for this fact. With one immediate exception, Trump’s predecessors made their way to high office through the passive power of whiteness—that bloody heirloom which cannot ensure mastery of all events but can conjure a tailwind for most of them. Land theft and human plunder cleared the grounds for Trump’s forefathers and barred others from it. Once upon the field, these men became soldiers, statesmen, and scholars; held court in Paris; presided at Princeton; advanced into the Wilderness and then into the White House. Their individual triumphs made this exclusive party seem above America’s founding sins, and it was forgotten that the former was in fact bound to the latter, that all their victories had transpired on cleared grounds. No such elegant detachment can be attributed to Donald Trump—a president who, more than any other, has made the awful inheritance explicit.
More comfortable online than out partying, post-Millennials are safer, physically, than adolescents have ever been. But they’re on the brink of a mental-health crisis.
One day last summer, around noon, I called Athena, a 13-year-old who lives in Houston, Texas. She answered her phone—she’s had an iPhone since she was 11—sounding as if she’d just woken up. We chatted about her favorite songs and TV shows, and I asked her what she likes to do with her friends. “We go to the mall,” she said. “Do your parents drop you off?,” I asked, recalling my own middle-school days, in the 1980s, when I’d enjoy a few parent-free hours shopping with my friends. “No—I go with my family,” she replied. “We’ll go with my mom and brothers and walk a little behind them. I just have to tell my mom where we’re going. I have to check in every hour or every 30 minutes.”
Those mall trips are infrequent—about once a month. More often, Athena and her friends spend time together on their phones, unchaperoned. Unlike the teens of my generation, who might have spent an evening tying up the family landline with gossip, they talk on Snapchat, the smartphone app that allows users to send pictures and videos that quickly disappear. They make sure to keep up their Snapstreaks, which show how many days in a row they have Snapchatted with each other. Sometimes they save screenshots of particularly ridiculous pictures of friends. “It’s good blackmail,” Athena said. (Because she’s a minor, I’m not using her real name.) She told me she’d spent most of the summer hanging out alone in her room with her phone. That’s just the way her generation is, she said. “We didn’t have a choice to know any life without iPads or iPhones. I think we like our phones more than we like actual people.”
NFL athletes are protesting on behalf of America’s founding values––and Donald Trump neither loves nor understands them.
Donald Trump, who has a disturbing history of praising brutal dictators, possesses no better than a Twitter troll’s understanding of what it means to be an American patriot. He spent the weekend trolling the NFL over the players protesting police violence during the national anthem, though any other president would have been attending to the millions of fellow citizens suffering in Puerto Rico; and the NFL athletes who defied him by taking a knee Sunday in solidarity with protests against police killings had the high ground, as good students of American history will understand.
When the Founding Fathers affixed their signatures to the Declaration of Independence, the first act of political courage in United States history, the American flag as we know it did not yet exist. And it would be more than a century before the Star Spangled Banner was adopted as the national anthem. Yet the Founders were not deficient in love of country for lacking the Stars and Stripes. In bravely dissolving political bonds with Britain, Thomas Jefferson set forth the premise of the United States, the core ideas around which his countrymen rallied: “that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.”
The alliance between presidents and sports was perhaps the last fully functioning bipartisan tradition left in Washington. This weekend, Trump blew it up.
It’s hard to imagine Major League Baseball inviting President Trump to throw out a ceremonial first pitch before any World Series games next month. And he definitely won’t be tossing the coin before the Super Bowl next February. Over the weekend, Trump ignited a firestorm in the sports world by harshly criticizing the NFL for failing to punish players who take a knee during “The Star-Spangled Banner.” Then he withdrew his invitation to Stephen Curry of the NBA champion Golden State Warriors to visit the White House because Curry was “hesitating” about accepting the invitation. Curry’s teammates subsequently announced that none of them would go to the White House but instead would use the team’s February trip to Washington to “celebrate equality, diversity, and inclusion.” On Saturday night, an Oakland A’s catcher Bruce Maxwell became the first MLB player to take a knee during the anthem. On Sunday morning, Trump was back at it, calling on fans to boycott NFL games.
The president has already backed down from his most strident attacks on athletes and adopted a less controversial celebration of the American flag.
After spending the weekend picking fights with the two best basketball players in the world, President Trump woke up Monday morning in a more contemplative, jingoistic mood—shifting both his emphasis and his tone.
The issue of kneeling has nothing to do with race. It is about respect for our Country, Flag and National Anthem. NFL must respect this!
These missives fit with the way Trump often handles his many feuds and crises, starting from an extreme position and then slowly groping toward one where he can find popular support. While the fights that the president picks are often comically unpredictable—if you had “Twitter fight with Steph Curry and LeBron James” on your presidential bingo card for the weekend, step up to the table to take your winnings—but the way that he conducts himself, having chosen a fight, seems to display a pattern.
“This fear is very deeply felt and not understood in the West—and it comes from a real place rooted in history.”
Over the past month, a crackdown by Burma’s military has forced more than 400,000 Rohingya Muslims from Rakhine state to flee to neighboring Bangladesh in what the UN human-rights chief has called a “textbook example of ethnic cleansing.” The military crackdown was prompted by an attack August 25th by the Arakan Rohingya Salvation Army (ARSA), a Muslim militant group with reported links to Pakistan and Saudi Arabia, on security outposts.
The international community has condemned the violence unleashed by the Burmese military on Rohingya civilians. It has also voiced sharp criticism of Aung San Suu Kyi, the Nobel laureate and de-facto Burmese leader, for, in the view of her critics, not doing enough to protect the Rohingya, who have been stateless for more than three decades. But where humanitarian groups and Western nations see the world’s most persecuted minority, the government of Burma (also known as Myanmar) and an overwhelming majority of its people see a foreign group with a separatist agenda, fueled by Islam, and funded from overseas. It’s this difference in perception that will make any resolution of the Rohingya issue extremely difficult.
The president’s latest comments shouldn’t be surprising—but his deliberate inflammation of tense situations is no less stunning.
During last year’s presidential campaign, I conducted a running feature called the “Trump Time Capsule.” Its purpose was to chronicle the things Donald Trump said or did that were entirely outside the range of previous presidents or major-party nominees. This, in turn, was meant to lay down a record of what was known about this man, as the electorate decided whether to elevate him to presidential power.
By the time the campaign ended, the series had reached installment #152. Who Donald Trump was, and is, was absolutely clear by election day: ignorant, biased, narcissistic, dishonest. As Ta-Nehisi Coates argues in our current issue, everyone who voted for him did so with ample evidence about the kind of person they considered the “better” choice, or even as a minimally acceptable choice for president. Almost nothing Trump has done since taking office should come as a surprise.