NIALL FERGUSON IS FULL OF SHIT WITH NO FRIGGIN FACTS TO BACK UP HIS BS. I READ HIS ASCENT OF MONEY.

IT WAS A GOOD PIECE. WHY DID NIALL GO ROGUE. SELF AGGRANDIZEMENT

The Age of Niallism: Ferguson and the Post-Fact World

inShare 6 AUG 24 2012, 10:32 AM ET 311 Bluster cannot make untruths true.

(Reuters)

People who believe facts are nothing think you'll fall for anything. Call it Niallism.

This is my last word (well, last words) on Niall Ferguson, whose Newsweek cover story arguing that Obama doesn't deserve a second-term has drawn deserved criticism for its mendacity from Paul Krugman, Andrew Sullivan, Ezra Klein, Noah Smith, my colleagues James Fallows and Ta-Nehisi Coates and myself. The problem isn't Ferguson's conclusion, but how Ferguson reaches his conclusion. He either presents inaccurate facts or presents facts inaccurately. The result is a tendentious mess that just maintains a patina of factuality -- all, of course, so Ferguson can create plausible deniability about his own dishonesty.

Exhibit A is Ferguson's big lie that Obamacare would increase the deficit. This is not true. Just look at the CBO report Ferguson himself cites. Paul Krugman immediately pointed this out, and asked for a correction. How did Ferguson respond? He claims he was only talking about the bill's costs and not its revenues -- a curious and unconvincing defense to say the least. But then Ferguson reveals his big tell. He selectively quotes the CBO to falsely make it sound like they don't think Medicare savings will in fact be realized. Here's the section Ferguson quotes, with the part he ellipses out in bold. (Note: Pseudonymous Buzzfeed contributor @nycsouthpaw was the first to notice this quotedoctoring. The italics below are Ferguson's).

In fact, CBO's cost estimate for the legislation noted that it will put into effect a number of policies that might be difficult to sustain over a long period of time. The combination of those policies, prior law regarding payment rates for physicians' services in Medicare, and other information has led CBO to project that the growth rate of Medicare spending (per beneficiary, adjusted for overall inflation) will drop from about 4 percent per year, which it has averaged for the past two decades, to about 2 percent per year on average for the next two decades. It is unclear whether such a reduction can be achieved through greater efficiencies in the delivery of health care or will instead reduce access to care or the quality of care (relative to the situation under prior law).

Ferguson completely changes the CBO's meaning. Why not just say he finds the CBO's analysis unconvincing, like Andrew Sullivan suggested, and leave it at that? Well, Ferguson tries that later -- but not before appealing to the authority of the CBO when the CBO is not on his side. The damage is done.

I don't want to go too far down this Ferguson rabbit hole -- we get it, he lied -- but I do want to answer his response to my fact-check. Ferguson's reading of my criticism was as lacking as his fidelity to facts. I tried to make clear that I was cataloging two categories of errors in his piece. There were untruths misleadingly framed as truths and truths misleadingly framed so as to be untruths. Or, as I put it, "a fantasy world of incorrect and tendentious facts."

Let's take a quick detour into the meta. Ferguson objects that I don't identify "a single error" and that I'm just offering my own opinions. The former is not true -- his description of Obamacare and its budgetary impact are demonstrably false -- but the latter is a legitimate point of debate. Ferguson prefers a very narrow definition of fact-checking; I do not think that is sufficient. Facts twisted out of context can be just as deceptive as outright falsehoods -- sometimes even more so, because you can cloak them in claims of truthfulness.

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That said, I want to give Ferguson's rebuttal far more attention than it deserves. This is a tedious exercise, so feel free to skip to the next section. Below are a summary of my critiques in italics, his responses in bold, and then my reply to those. Whew! Let's go.

1. I criticized Ferguson for saying that stocks are up since January 2009, but private sector employment is down since January 2008. I pointed out that private sector payrolls are up 427,000 since Obama took office in January 2009.

NF: Both these statements are true. I picked the high point of January 2008 because it seems to me reasonable to ask how much of the ground lost in the crisis have we actually made up under Obama. The answer is not much. You may not like that, but it's a fact.

Ferguson's fact is deliberately misleading. A better way to make the argument he says he wants to make would be something like, "Private sector payrolls have added 427,000 jobs since Obama took office, but we are nowhere near out of our deep hole -- despite this growth, private sector payrolls are still 4.18 million jobs below their January 2008 peak."

2. I couldn't find Ferguson's source or replicate his result for real median household incomes.

NF: Well, either Newsweek starts publishing footnotes or Matthew O'Brien reads a little more widely than just official statistics, which generally lag months behind. The monthly data for Median Household Income Index (HII) is produced by Sentier

A footnote isn't necessary. A link would suffice. The Sentier numbers are a decent proxy for the official Census numbers, but there are some years where they move in opposite directions. I annualized and normalized the Sentier and Census figures and found an average 2.5 percent difference between their levels from 2001-2010. (I indexed both to 2000, since that's how the Sentier data are presented, and stopped in 2010 because that's the last year for which the Census has numbers). In other words, the Sentier figures are far from authoritative, and could use some context.

3. I criticized Ferguson for saying that half of Americans don't pay taxes, since that's only true of federal income tax.

NF: In other words, my fact is true. Because I specifically said "taxable return." You don't tend to record your sales tax payments on those.

This is wrong. Other taxes like state income tax and certain excise taxes also come on taxable returns. Even more wrong is when Ferguson writes that "we are becoming the 50-50 nation -- half of us paying taxes, the other half receiving the benefits." Ferguson does not address this unequivocal error.

4. I said debt-to-revenue was not the measure that "really mattered" when assessing fiscal health.

NF: Again, O'Brien is offering here an opinion as a fact. He should read my book The Cash Nexus (2001) to understand why he doesn't know what he is talking about. Governments don't pay interest and redemption with GDP but with tax revenues. If it were easy to increase the tax share of GDP, we wouldn't be heading for a fiscal cliff. My numbers are correct and can be checked using the IMF's World Economic Outlook online database.

Ferguson is right. It is my opinion that debt-to-GDP is more relevant than debt-torevenue. But that's a widespread opinion. It's the measure Harvard professor and former IMF chief economist Ken Rogoff looked at when he tried to figure out what level of indebtedness hurts growth. Countries can't pay debts in GDP, but it is much easier to increase taxes than it is to increase GDP. Ferguson inadvertently makes that point himself when he says the chance of hitting the fiscal cliff shows how hard it is to increase the tax share of GDP. He apparently doesn't realize that hitting the fiscal cliff would increase the tax share of GDP!

5. I said that Ferguson seemed to contradict himself on the stimulus and the debt.

NF: This earlier statement does not contradict my article. As anyone who looks at the data knows, the stimulus had a positive but very short-run impact and failed to achieve self-sustaining growth in the way Keynesians hoped.

For his part, Ferguson has looked at the data so closely that he erroneously thinks the surge of Census hiring in 2010 shows the short-run impact of the stimulus. This mistake aside, the point remains that Ferguson 1) supported the stimulus, 2) criticizes the stimulus for not doing enough, 3) criticizes Obama for too much spending.

6. I said that the "$222 trillion fiscal gap" Ferguson cited from economist Larry Kotlikoff was a meaningless number -- chery-picked to make the debt sound worse than it is.

NF: Well, O'Brien is welcome to share his opinion with Larry Kotlikoff, the world's leading authority on generational accounting and long-term fiscal stability. What he can't claim is that my statement is factually inaccurate. As for the argument that current low borrowing costs mean we don't need to worry about the debt--which is like saying that mortgage default rates in 2006 meant we didn't need to worry about subprime--that has been comprehensively demolished in a new paper by Carmen and Vincent Reinhart and Ken Rogoff.

Kotlikoff is projecting policies that won't continue forever, forever into the future. You can choose to believe him or not. I consider it a scare number that Ferguson highlights to make our debt sound scarier. In either case, Ferguson's subprime analogy is meretricious. Yes, financial markets sometimes get things wrong in big ways, but our debt is not the same as an option-ARM mortgage. We certainly need fiscal consolidation over the medium-turn, but there's no reason for investors to dump Treasuries en masse -- despite Ferguson's repeated and repeatedly wrong predictions to the contrary. Markets think our credit risk is lower now than when Obama took office, as this chart from Credit Suisse of credit default swaps on Treasuries shows.

7. I pointed out that we haven't adopted Basel III's banking capital requirements yet.

NF: But I didn't say that we had already implemented Basel III. So that's another fact "checked" and found to be ... correct.

Ferguson is right. He didn't explicitly say Basel III had already been implemented. He just strongly implied it. Why criticize Obama for not forcing banks to comply with a regulation if that regulation is not in effect? And not tell your readers the regulation is not in effect?

8. I criticized Ferguson for saying that Obamacare does not do things that it does.

NF: Now let's check O'Brien's facts. So the ACA "tackles the long-run explosion of Medicare costs." Right. That's why the net cost of Medicare is still projected by the CBO to treble from 3.2 percent of GDP to between 9 and 10 percent by 2087.

The CBO thinks Obamacare will slow the increase in Medicare spending. Full stop. Ferguson should know this. It's the sentence he lopped off from the CBO report in his doctored quote. Also notice Ferguson doesn't dispute that the provisions he said were not in Obamacare are in fact in Obamacare.

9. I criticized Ferguon's partial history of the Simpson-Bowles commission and the debt ceiling standoff. He left out the part about his fiscal hero, Paul Ryan, nixing a deal both times.

NF: So that's another fact "checked" and found to be correct. And if you want to gauge the president's share of the responsibility for the failure of a fiscal grand bargain, read Matt Bai in The New York Times.

I didn't say it was incorrect, just incomplete. Ferguson harangues Obama for not tackling the long-term debt, and names Paul Ryan as a counter-example of someone serious about getting our proverbial fiscal house in order. It seems relevant that one of those people (Obama) offered a long-term debt deal, and the other (Ryan) turned down that deal.

10. I said it was silly to blame Obama for China's GDP likely passing ours in the near future, since they have more than four times as many people as we do.

NF: Well, there you have it. It "doesn't really matter" that for the first time since the 1880s the United States is about to cease being the world's largest economy. Fact checked, found to be correct, and countered with an utterly naive opinion.

Ferguson's argument is one without any implications. The Solow Model tells us poorer countries should generally grow faster than richer countries -- in other words, they should converge. It's unclear what Ferguson thinks Obama should do to repeal this law of economics. Start a trade war? That would certainly hurt China's growth, but at great cost to ourselves as well. In any case, Ferguson doesn't say. Fearmongering replaces arguments.

11. I said the government had helped created our middle-class society thanks to pushing mass education.

NF: Fact checked and--oh no! I really did get that wrong. It was the government that created the middle class, as well as the Golden Gate Bridge! Remind me to tell Karl Marx about this. It will come as news to him that, contrary to his life's work, the superstructure in fact created the base. (Come to think of it, this is going to come as shock to a lot of American liberals too. Imagine! The state actually created the bourgeoisie! Who knew?)

If thinking that public goods can help the economy makes me a communist, then I'm a communist. And so was Adam Smith.

***

Is this nit-picking? Maybe. Ferguson gets some facts wrong. Ferguson gets some facts right, but frames them incompletely. Why the outrage? Because he's treating facts as low-grade and cheap materials that are meant to be bent, spliced and morphed for the purpose of building a sensational polemic. Even more outrageous is that his bosses didn't mind enough to force him to make an honest argument, or even profess embarrassment when its dishonesty came to light.

Let's try a counterfactual. Say Ferguson hadn't made his big errors about Obamacare. Then his smaller errors of omission would not seem quite so serious -- or deliberate. But Ferguson did make his big errors. And he defends these omissions with more elisions. It makes it impossible not to read his entire piece as an effort to deceive. Ferguson should consider what kind of grade he would give an undergraduate who turned in a paper that treated facts and counter-arguments so cavalierly.

Of course, it's not just Ferguson. There is an epidemic of Niallism -- which Seamus McKiernan of the Huffington Post defined as not believing in anything factual. It's the idea that bluster can make untruths true through mere repetition. We expect this from our politicians, not our professors. Consider Mitt Romney's attacks on Obama for supposedly eliminating the work requirement in welfare. That sounds damning, unless you know it's a complete lie -- as Alec MacGillis of The New Republic has tirelessly pointed out. Or consider the economic white paper Romney's campaign put out. As Ezra Klein has pointed out, the papers Romney's team cites do not say what they say they say. In other words, Romney's team draws conclusions from these papers that the authors who wrote them do not agree with. Romney adviser and Stanford professor John Taylor defended their work on the grounds that they quoted their sources accurately. This was never in dispute. The question was whether they selectively quoted their sources, not whether they selectively quoted their sources accurately.

We live in a post-truth age. That's the term David Roberts of Grist coined to describe the way the way lies get amplified in our media ecosystem. (If I were feeling cynical, I might say we live in a pre-truth age -- maybe things have always been this deplorable). It's bad enough when politicians do it. It's even worse when journalists do too. Now, everybody has biases and those biases unwittingly slant the way we frame facts -myself included. That's why I try to follow best practices of writers like Felix Salmon. I try to show my work, and admit when I make mistakes. The irony is that there's an academic who would probably agree with all of the above. His name is Niall Ferguson.

His early academic work was as good as his punditry is bad. It's a shame that Niall Ferguson wasn't the Niall Ferguson who wrote the Newsweek story.

There's a counter-factual to ponder.