Conservative author Niall Ferguson used discredited research to overstate the negative impact of regulations on the economy.
In an op-ed for The Wall Street Journal titled "The Regulated States of America," Ferguson, a Daily Beast contributor, claimed that the increase of regulations is holding back economic growth.
Ferguson's argument hinges upon the promotion of statistics compiled by the oil and pharmaceutical industry funded Competitive Enterprise Institute's (CEI) annual report on the cost of regulations. According to Ferguson, the report shows:
Excluding blank pages, the 2012 Federal Register - the official directory of regulation - today runs to 78,961 pages. Back in 1986 it was 44,812 pages. In 1936 it was just 2,620.
The cost of all this, [CEI's Cyde Wayne] Crews estimates, is $1.8 trillion annual - that's on top of the federal government's $3.5 trillion in outlays, so it is equivalent to an invisible 65% surcharge on your federal taxes, or nearly 12% of GDP.
The research that Ferguson cites, however, is inherently misleading and has been criticized by experts.
The way in which CEI tallies the overall burden of regulations -- counting the number of pages in the Federal Register -- is more focused on shock value than sound analysis. In an email correspondence with Media Matters, James Goodwin, a policy analyst at the Center for Progressive Reform, noted that CEI's focus on the pages in the Federal Register overstates regulatory burden:
Bad case law, "filter failure," and the explosion of analytical requirements have more to do with those numbers than do some alleged "overreaching and unaccountable bureaucracy."
Furthermore, Ferguson, like the CEI report, completely ignores any potential benefits that regulations contribute to the economy. According to the Office of Management and Budget (OMB), which calculates the costs and benefits of regulations, over the past 10 years major rules have provided a net positive benefit to the economy.
Ferguson's focus on the CEI report ultimately leads him to "wonder if all this could have anything to do with the fact that we still have nearly 12 million people out of work," a conclusion that is in direct contrast to economic evidence. Many economists have consistently cited lack of demand in the economy as the main contributor to slow growth - demand that is held back by reduced government spending.
Indeed, independent surveys support this position. According to an Economic Policy Institute (EPI) analysis, during the Obama presidency, businesses have reported poor sales as the single most important problem facing their business, while a smaller percentage of businesses named regulations as their most important issue. EPI's results are confirmed by surveys that find lack of customer demand to be the main hindrance to business growth and employment.
A gaffe according to the oft-repeated definition is getting caught saying something you actually believe.
Last week Harvard Professor and Daily Beast contributor Niall Ferguson offered an "unqualified apology" after remarking that the economic theories of John Maynard Keynes should be ignored because of his purported sexuality.
In the Harvard Crimson he seems to withdraw at least the "unqualified" nature of his remorse claiming "not for one moment did I mean to suggest that Keynesian economic as a body of thought was simply a function of Keynes' sexuality." According to the economist, "nor can it be true--as some of my critics apparently believe--that his sexuality is totally irrelevant to our historical understanding of the man."
Ferguson goes on to state "Keynes' sexual orientation did have historical significance. The strong attraction he felt for the German banker Carl Melchior undoubtedly played a part in shaping Keynes' view on the Treaty of Versailles and its aftermath."
Pop psychological gay baiting economic analysis is nothing new for Ferguson. UC Berkley economist Brad Delong highlighted the following passage of a 1995 American Spectator article:
"the ideas contained in The Economic Consequences of the Peace" "owed as much to his homosexuality as to his Germanophilia..." for "there is no question that the attraction Keynes felt for [Carl Melchior] strongly influenced his judgment..."
Furthermore University of Michigan economist Justin Wolfers located a passage in The Pity of War where Ferguson makes this claim: "Though his work in the Treasury gratified his sense of self-importance, the war itself made Keynes deeply unhappy. Even his sex life went into a decline, perhaps because the boys he liked to pick up in London all joined up."
In fairness to Ferguson, conservative economists have launched attacks on Keynes' sexuality for decades.
It's clear that Niall Ferguson was not apologetic for making the remark, instead he was contrite about being caught making the remark in public -- the economic equivalent of Todd Akin and Richard Mourdock.
Ferguson's attack on Keynes comes at a time when his own economic fundamentals are on the defensive. The academic grounding of the austerity crowd's recent efforts, the Reinhart-Rogoff study, is now the subject of late night mockery. The Keynesian view, now carried forward in public policy debates most strongly by Paul Krugman, is resurging and Ferguson is lashing out.
What Ferguson should really be apologetic for is not his simply economic homophobia -- there is no other appropriate term for claiming the beliefs of one of history's most noted economists should be distrusted because he enjoyed sex with men. J.K. Trotter of The Atlantic cut to the heart of the matter when he summed up Ferguson's argument as "being gay means you don't actually care about the welfare of children or the future of mankind."
Instead, the austerity economics Ferguson has pressed in the media has pushed policies condemning millions to the unemployment line. For this, I doubt any apology -- unqualified or not -- is forthcoming.
Daily Beast contributor Niall Ferguson has offered an "unqualified apology" for suggesting that John Maynard Keynes, the British economist whose theories are the basis of macroeconomics and the foundation of progressive economic policy, was unconcerned with future generations because he was gay and childless.
Ferguson, a Harvard history professor who has issued flawed denunciations of President Obama's economic policies, made his original comments during a May 2 speech. According to a May 3report by Financial Advisor magazine (emphasis added):
Speaking at the Tenth Annual Altegris Conference in Carlsbad, Calif., in front of a group of more than 500 financial advisors and investors, Ferguson responded to a question about Keynes' famous philosophy of self-interest versus the economic philosophy of Edmund Burke, who believed there was a social contract among the living, as well as the dead.Ferguson asked the audience how many children Keynes had. He explained that Keynes had none because he was a homosexual and was married to a ballerina, with whom he likely talked of "poetry" rather than procreated. The audience went quiet at the remark. Some attendees later said they found the remarks offensive.
It gets worse.
Ferguson, who is the Laurence A. Tisch Professor of History at Harvard University, and author of The Great Degeneration: How Institutions Decay and Economies Die, says it's only logical that Keynes would take this selfish worldview because he was an "effete" member of society. Apparently, in Ferguson's world, if you are gay or childless, you cannot care about future generations nor society.
Ferguson quickly came under fire following the publication of the Financial Advisor piece. On May 4, he acknowledged on his website that his comments were "as stupid as they were insensitive." He wrote:
But I should not have suggested - in an off-the-cuff response that was not part of my presentation - that Keynes was indifferent to the long run because he had no children, nor that he had no children because he was gay. This was doubly stupid. First, it is obvious that people who do not have children also care about future generations. Second, I had forgotten that Keynes's wife Lydia miscarried.
Ferguson further stated that he "detest[s] all prejudice, sexual or otherwise," but that his colleagues, students, and friends "have every right to be disappointed in me, as I am in myself." He concluded: "To them, and to everyone who heard my remarks at the conference or has read them since, I deeply and unreservedly apologize."
This is not the first time Ferguson has been the subject of scrutiny following an offensive comment. He was harshly criticized for a 2009 column in which he compared Obama to the cartoon character Felix the Cat, writing that Obama was "not only black" but "also very, very lucky." More recently he claimed that New York Times columnist and Princeton economist Paul Krugman's supposed "inability to debate a question without insulting his opponent suggests some kind of deep insecurity perhaps the result of a childhood trauma."
The research consistently cited by media figures to support cutting government spending has recently been invalidated, raising questions about how mainstream coverage of economic policy promoted incorrect data.
In January 2010, economists Carmen Reinhart and Ken Rogoff released a study that suggested when countries reach debt levels of 90 percent relative to GDP, economic growth would be compromised. Conservatives in politics and media alike repeatedly cited the figure in discussions about the economy.
A study released on April 16, however, found that the conclusions reached by Reinhart and Rogoff were based on data that was riddled with errors. Reinhart and Rogoff's response to the critique -- in which they maintain they never implied that rising debt caused lower growth, just that the two were associated -- shows that media's handling of the figure was wrong all along.
These new developments show that media consistently used an apparently incorrect figure for the past few years to call for austerity measures. Here's a look back at how major cable networks cited the figure in its coverage of the budget and economic policy:
Video by Alan Pyke.
Niall Ferguson's Newsweek cover story on President Obama exemplifies a deficiency in today's media. As criticism of Ferguson's shoddy work mounted -- both from outside and inside of Newsweek/The Daily Beast -- Newsweek explained to Politico's Dylan Byers that Newsweek "rel[ies] on our writers to submit factually accurate material." Indeed, Byers also noted that Newsweek does not even have a fact-checking department.
This admission is disturbing on face. Newsweek wants to sell you stories and news about the world but can't even be bothered to check the claims it publishes. Even worse, they didn't seem all that uncomfortable with the admission. Newsweek's defense is that others are this lackadaisical at journalism, which is to say Newsweek has no defense. In a media environment without fact-checkers, it's no wonder we have fabulists and problems with facts and the media. But there's a more pernicious ramification of Newsweek's abdication of journalistic practices: This is what the predatory conservative echo-chamber and Fox News count on.
Fox and the right-wing echo chamber exploit these vulnerabilities in the media. When the media process seems shoddy (regardless of whether it actually is) and the result produces news that is inconsistent with conservative ideology, right-wing media pounce and attack the outlet as part of some left-wing media cabal. We've seen Fox do this from Dan Rather to Politico to ABC News to MSNBC and more. On the other hand, when they find the argument useful, the right-wing echo chamber can herald the piece and ignore inaccuracies within.
It's no surprise that while discussing Ferguson's article across multiple programs, Fox never discussed the myriad factual problems in Ferguson's piece that one could find with a rudimentary Google search. This is even as Ferguson's self-professed friend who writes for the same outlet called the piece "absurd propaganda."
From the August 11 edition of MSNBC's Countdown with Keith Olbermann:
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