Paul Krugman says that Newsweek needs to issue a correction for columnist Niall Ferguson's new cover story on why President Obama does not deserve reelection.
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 wrote:
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.
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.
Ferguson, a Harvard history professor and Newsweek columnist, wrote in the magazine's Aug. 27 cover story that Obama should lose the upcoming election because the president has broken his promises. Ferguson says Obama has not created enough jobs, fixed the financial system or controlled health care costs or the national debt.
He also wrote that in "Obama's America, nearly half the population is not represented on a taxable return. [...] half of us [are] paying the taxes, the other half receiving the benefits."
This is not exactly true. Although roughly half of Americans do not pay federal income taxes, most of them still pay some combination of payroll taxes, state taxes, local taxes and sales taxes, according to the Washington Post.
Ferguson's story also included a chart that seemed to blame Obama for letting the U.S. economy lose ground to China's. The chart shows China's GDP as projected to surpass U.S. GDP in 2017, a projection whose inclusion Business Insider's Joe Weisenthal and Slate's Matt Yglesias called unfair. Yglesias wrote: "Ferguson is implicitly making two points with this graphic and it's difficult to know which of them is more absurd -- the idea that Obama is responsible for rapid economic growth in China or the idea that if he were responsible that would be blameworthy."
UPDATE: 11:10 a.m. -- Ferguson fired back at Krugman in a Newsweek blog post on Monday. He took issue with Krugman for suggesting that he had not read the CBO report. Ferguson wrote that the CBO did say in its report that health care reform will cost the government money, which would be partially offset by taxes. "Thanks for trying, Paul," Ferguson wrote.
UPDATE: 11:48 a.m. -- Another noted economist has blasted Ferguson for his cover story, this time going further than Krugman by calling for Ferguson to get fired. Brad DeLong, economics professor at the University of California at Berkeley, wrote in a blog post on Monday:
Fire his ass. Fire his ass from Newsweek, and the Daily Beast. Convene a committee at Harvard to examine whether he has the moral character to teach at a university. There is a limit, somewhere. And Ferguson has just gone beyond it.
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, 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.
Check out the reaction on Twitter to Niall Ferguson's Newsweek story below: