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.
The MIT economist Peter Temin argues that economic inequality results in two distinct classes. And only one of them has any power.
A lot of factors have contributed to American inequality: slavery, economic policy, technological change, the power of lobbying, globalization, and so on. In their wake, what’s left?
That’s the question at the heart of a new book, The Vanishing Middle Class: Prejudice and Power in a Dual Economy, by Peter Temin, an economist from MIT. Temin argues that, following decades of growing inequality, America is now left with what is more or less a two-class system: One small, predominantly white upper class that wields a disproportionate share of money, power, and political influence and a much larger, minority-heavy (but still mostly white) lower class that is all too frequently subject to the first group’s whims.
As the president nears his hundredth day in office, he seems increasingly concerned about how he’ll measure up.
As he approaches his hundredth day in office, Donald Trump appears to be suffering—once again—from an acute case of presidential status anxiety.
In public, of course, he has labored to play it cool, strenuously insisting (and insisting, and insisting) that he does not care about the “first hundred days” metric that historians and pundits have used to evaluate the success of new administrations since FDR. Trump has called this milestone “ridiculous” and “artificial”—a meaningless media fixation. And yet, the less-than-laudatory press reviews seem to have left him seething. For evidence, look no further than the president’s pathos-drenched Twitter feed, where he recently took to vent, “No matter how much I accomplish during the ridiculous standard of the first 100 days, & it has been a lot (including S.C.), media will kill!”
In 1985, Neil Postman observed an America imprisoned by its own need for amusement. He was, it turns out, extremely prescient.
Earlier this month, thousands of protesters gathered at Washington’s National Mall to advocate for an assortment of causes: action against global climate change, federal funding for scientific research, a generally empirical approach to the world and its mysteries. The protesters at the March for Science, as scientists are wont to do, followed what has become one of the established formulas for such an event, holding clever signs, wearing cheeky outfits, and attempting, overall, to carnivalize their anger. “Make the Barrier Reef Great Again,” read one sign at the March. “This is my sine,” read another. “I KNEW TO WEAR THIS,” one woman had written on the poncho she wore that soggy Saturday, “BECAUSE SCIENCE PREDICTED THE RAIN.” Three protesters, sporting sensible footwear and matching Tyrannosaurus rex costumes, waved poster boards bearing messages like “Jurassick of this shit.”
President Trump, in an interview with Reuters, also said while he would “love to solve things diplomatically … it’s very difficult.”
President Trump says “[t]here is a chance that we could end up having a major, major conflict with North Korea.” The comments, which were made to Reuters in an interview, come two days after senior members of his administration, in a joint statement, tried to defuse tensions with the communist state, saying the U.S. remained open to talks.
Trump suggested in the interview that while he would “love to solve things diplomatically … it’s very difficult.” The subject of North Korea’s nuclear-weapons program has been a U.S. priority since at least the Clinton administration—though efforts to denuclearize the Korean peninsula began during the George H.W. Bush administration. But despite bilateral and multilateral diplomatic efforts undertaken by Presidents Bill Clinton, George W. Bush, and Barack Obama, North Korea’s nuclear technology has improved, and many experts believe that it could be capable of firing a nuclear-armed missile that could reach Seattle in the next few years.
The House and Senate voted to extend federal funding for another week, averting a shutdown to buy more time for negotiations on a large spending bill.
Updated on April 28 at 12:05 p.m. ET
President Trump isn’t getting a health-care vote to mark his 100th day in office, but he won’t be saddled with a government shutdown, either.
The House and Senate voted in quick succession on Friday morning to extend federal funding for another week past a midnight deadline as negotiators try to reach an agreement on a large spending bill for the remainder of the fiscal year.
Democrats had briefly threatened to hold up the stopgap measure if Republicans tried to jam through their stalled American Health Care Act. But GOP leaders still can’t find enough support among their members for the proposal, and their decision on Thursday night to again put off a vote defused—for now—the shutdown threat.
If 2016 was the year of populist victories, there are signs this year will be different.
If 2016 was the year that populist protest triumphed in Britain (Brexit) and the United States (Trump), 2017 is shaping up as the year that political normality reasserts itself. Three events in three different Western democracies confirm that some of the familiar laws of political gravity do still operate.
The most spectacular of the events is unfolding in the United Kingdom. The Conservative party under Prime Minister Theresa May is rolling toward a crushing victory over a Labour party that veered to the hard left under Jeremy Corbyn. Corbynjoins radical views and stated sympathies with extremists—IRA, Islamist, and pro-Russian—to a personal befuddlement nicely captured in a Vice documentary that showed him autographing apples in permanent marker to distribute to admirers. (Who wants an autographed apple? You can neither eat it as a snack nor save it as a memento.) The befuddlement might be endearing were it not laid atop a paranoid management team staffed by the hardest of the British hard left. As an incredulous Politicoreported of Corbyn’s chief of communications, Seumas Milne:
“Somewhere at Google there is a database containing 25 million books and nobody is allowed to read them.”
You were going to get one-click access to the full text of nearly every book that’s ever been published. Books still in print you’d have to pay for, but everything else—a collection slated to grow larger than the holdings at the Library of Congress, Harvard, the University of Michigan, at any of the great national libraries of Europe—would have been available for free at terminals that were going to be placed in every local library that wanted one.
At the terminal you were going to be able to search tens of millions of books and read every page of any book you found. You’d be able to highlight passages and make annotations and share them; for the first time, you’d be able to pinpoint an idea somewhere inside the vastness of the printed record, and send somebody straight to it with a link. Books would become as instantly available, searchable, copy-pasteable—as alive in the digital world—as web pages.
Recent border battles have once again redrawn the lines of the metro area.
On the Saturday before Election Day last November, Jason Lary, a former insurance executive, crouched on a rough patch of grass at the center of a busy intersection 20 miles outside of Atlanta in DeKalb County. Lary was holding a hammer, and he tapped carefully on the thin wire base of a campaign sign. “My hand is like Fred Flintstone’s right now because I banged my hand in the night,” he said, noting his latest sign-related injury. This hazard, though, was worthwhile: “If you don’t start [the sign] with your hand, it will bend. It takes longer—guys are 10 times faster than I am. But my sign’s still gonna be up.”
This was a non-trivial advantage for Lary, who for the past month had begun most mornings with a kind of ground-game whack-a-mole. He would put up signs under the cover of night, only to have his opponents dislodge them by hand or, when that failed, run over them with their cars. Nevertheless, Lary was feeling good. “My opposition? Worn down,” he told me. “They don’t even have any more signs. And I kept a stash, knowing this time was coming. This is not my first picnic with nonsense.”
Princeton freshman Tal Fortgang was right that "privilege" is a problem, but not about why.
Poor Tal Fortgang. (Well, perhaps “poor” isn’t the right word.) Not long ago, the Princeton freshman’s white male privilege was known only to those in his life. Then he published an essay about this privilege in a conservative student publication, arguing that because his ancestors had struggled, he personally doesn’t benefit from unearned advantage. If he’s not privileged, no one should be asking him to check his privilege, right? After all, some of his advantage was earned; he just doesn’t happen to be the one who earned it.
Because “privilege” is clickbait, Fortgang’s piece made the rounds, culminating in the New York Times interviewing his classmates about his privilege and whether he had, in fact, checked it. The consensus is that he did not. Fortgang’s privilege has now been checked not only by his classmates and Facebook friends but by the entire Internet.
All over America, people have put small "give one, take one" book exchanges in front of their homes. Then they were told to tear them down.
Three years ago, The Los Angeles Times published a feel-good story on the Little Free Library movement. The idea is simple: A book lover puts a box or shelf or crate of books in their front yard. Neighbors browse, take one, and return later with a replacement. A 76-year-old in Sherman Oaks, California, felt that his little library, roughly the size of a dollhouse, "turnedstrangers into friends and a sometimes-impersonal neighborhood into a community," the reporter observed. The man knew he was onto something "when a 9-year-old boy knocked on his door one morning to say how much he liked the little library." He went on to explain, "I met more neighbors in the first three weeks than in the previous 30 years."