Submitted by Tyler Durden.
Two days ago, historian Niall Fergsuon had the temerity to voice a personal opinion, one which happens to not exactly jive with the rest of the media's take on current events, on the cover page of Newsweek (Newsweek is still in print?) titled, succinctly enough, "Hit the road Barack: Why we need a new president."
The response was fast, furious, and brutal, particularly emanating from what Ferguson has dubbed the "liberal blogosphere." Naturally in an election year, said blogosphere has much CPM-generating rumination to do (after all who knows what happens to all those ad revenues if the US corporate base implodes and all that cash on the sidelines stays there due to "policy uncertainty"), so Ferguson merely provided the chum in the water (once the time comes to pick up the calculators again after the presidential election, things will immediately quiet down but until then there is, sadly, at least two more months of ever rising cacophony).
So did Ferguson back off having said his piece? Hell no. In fact, he has just made sure that the "liberal blogosphere" will be burning the midnight oil for weeks to come engaged in completely meaningless point-counterpoint between itself and the historian, when, in reality nothing changes the simple fact that come August 2016, the US will have a simply idiotic 130%+ debt/GDP completely independent of who is in the White House, or in other words, there very well may not be another presidential election. For now, however, we have much needed bread and circuses. Below is Ferguson's just released interview from Bloomberg TV in which he responds to the salient accusations that have been leveled at him (a more essayistic version can be found here).
Ferguson on whether he’s surprised by the response to his story:
“No because the liberal blogosphere has a very tried and tested method of attacking an argument it disagrees with. That’s what has happened in this case. The first tactic is to ignore completely the arguments of the piece. The second is then to engage in nitpicking and claim to be fact checking when in fact all you're offering is a series of alternative opinions. And then you round it off by making hysterical calls for the office resignation. This is such a tried and tested method and I was fully expecting it. The usual suspects, led of course by Paul Krugman, have obliged. But they have not addressed any of the arguments I have made in the piece so I will dismiss them pretty briskly today.”
On why it makes sense to compare the net cost of the Affordable Care Act vs. the gross cost:
“The critics are the ones splitting hairs. It absolutely clear what the CBO has said, which is the costs of the ACA will not be met by new sources of revenue. They will only be met, in full, if the cost of Medicare ceases to grow at around 4%. In fact, that rate of growth will have to be halved if that is to be the case. You have to distinguish here between the direct sources of revenue created by ACA and the indirect way the CBO says it will not increase the deficit. By the way, if you go to the CBO’s long-term forecast for health spending, just take Medicare from 3% of GDP all the way up if you go to the very end of their forecast in the 2080s, to something around 13%. Either that will require a substantial increase in taxation, which is another thing President Obama pledged would not happen, or it will increase the deficit. I really do not think there is any middle ground there. This is really quite unambiguous. Krugman is being disingenuous. And sadly, my old friend Andrew Sullivan does not really understand the issue that well, which is clear from his recent post.”
On acknowledging that Obama and his team could not have foreseen how bad the economy would be:
“Right. I say that. That is why this is a classic storm in a blogger’s teacup. The point of the piece is not to go through the economic record and say, you see, he did not produce an economic miracle. I think that is not a reasonable standard. The point of the piece is to say, under those very difficult circumstances, how effective was the president as the head of the executive branch. The core of the argument, which not one of my critics has address, is that he did not manage well his economics team. More seriously, he delegated the legislation. He delegates the detail on the key issues: stimulus, health care and financial reform to his own party in Congress. We should really talk about Pelosicare, not Obamacare. That’s the key issue. It’s not about how the economy performed. We all know this was a tremendously difficult inheritance. It is about how he has performed as the leader of the executive branch and I feel it is very clear he has fallen short.”
“What I say that it is not that we should judge him as an economist. We should judge him on the promise of effective leadership and decisive change. If you assess him as a leader, not as an economist, I think it is not an impressive record. That is really the sad truth.”
On how Obama scores as a leader compared to past presidents:
“I think a fair comparison, if you accept the argument that this is more like a depression than an ordinary post war recession, would be how does he compare with Franklin Roosevelt. It is clear if you look at the economy or the boldness of the policy response, that it is not in any way of a comparison favorable to Mr. Obama. Roosevelt had a far more decisive grip on his own party and a far greater mastery of the detail of the New Deal legislation. The other point which we have not touched on is a crucial point: how effective is President Obama as a commander in chief. I think there are two points here which are absolutely crucial. The first is the really serious mishandling of what we have come to call the Arab spring, but is more understood as the general revolution in the Middle East going back to Iran in 2009, if not Iraq with Saddam Hussein. The other point is that there's not been a coherent strategy on China. The single biggest challenge this country faces is China, which will be a larger economy according to the IMF in four years’ time. That seems to be the things the critics to not want to engage—that there has not been a coherent strategy in the White House. Really, since Barack Obama entered it.”
On how he can be sure that companies will invest and hire in a Romney/Ryan administration:
“Of course, we cannot be sure about anything of that sort. What we do know is that both Mitt Romney and Paul Ryan are committed to raising the growth rate and it is achieving higher growth that is the key to solving most of the domestic economic issues. Remember, we were promised back in the 2010 financial year budget financial growth by this year of 4.6%. What we are actually going to get is more like 2%. What is encouraging for example about Paul Ryan’s path to prosperity is that it is fundamentally aiming at achieving growth using in some cases, Reaganite tactics which I think would be bound to have a positive impact on business confidence. If there were not a big bounce in business confidence after a Romney/Ryan victory, I would be very surprised indeed.”
On where the economy would be if Romney/Ryan were in the White House in January 2009:
“I wish we could put them in the White House in 2009. It seems to me the first thing you would not be dealing with would be the extremely time consuming exercise that we call the Affordable Care Act. That would not have been undertaken. If there had been a Republican administration, it would have been a John McCain administration rather than a Romney-Ryan administration. I certainly think there would have been significant economic pain. Would they have embarked on the same as fiscal strategy? The stimulus that the Democrats designed? No. This would have been a tax-cutting strategy rather than a spending strategy. That would have had a very different effect. What is certain is that policy would have been very different and foreign policy would have been radically different. It is hard to imagine John McCain sitting on his hands while people were in the streets of Tehran trying to overthrow one of the most dangerous regimes in the world. So, I think the differences would have been very significant.”