• With: Niall Ferguson and Byron York

    This is a rush transcript from "On the Record," August 20, 2012. This copy may not be in its final form and may be updated.

    (BEGIN VIDEO CLIP)

    RUSH LIMBAUGH, RADIO TALK SHOW HOST: Now the reporters are -- are harassing Romney! They're trying to create gaffes. They are trying -- they're working on behalf of Barack Obama!

    SARAH PALIN, FOX NEWS CONTRIBUTOR/FORMER ALASKA GOVERNOR: But because the media so willingly protects Barack Obama and his failed policies, it's tough, through the filter of the mainstream media, to hear that message.

    KARL ROVE, FOX NEWS CONTRIBUTOR/FORMER BUSH SENIOR ADVISER: The only thing that he's got going for him is he's going to have a compliant mainstream media that's going to do, in many cases, everything they can do to pump him up.

    (END VIDEO CLIP)

    GRETA VAN SUSTEREN, FOX NEWS HOST: Well, the media has been accused of being in the tank for President Obama, but now a mainstream media publication is taking on the president. Check out the latest Newsweek cover with a blistering headline, "Hit the Road, Barack: Why We Need a New President." Its author, Niall Ferguson, joins us.

    Nice to see you, Niall.

    NIALL FERGUSON, AUTHOR OF NEWSWEEK COVER STORY: Hello, Greta. How are you?

    VAN SUSTEREN: I'm very well. All right, Niall, well, you must know that this cover certainly has caused a firestorm. In fact, even Paul Krugman has come out against you, and others. What prompted you to write this story?

    FERGUSON: Well, hell hath no fury like a liberal blogger scorned. My prompting was simply frustration at the way the debate is going on during this election. As you can tell from my strange accent, I'm not an American. I'm a newcomer to this country. But I love this country and I want to see it turned around.

    And I don't really hear the right questions being asked of the president about his record over the past four years. And despite all the furious denunciations I'm currently receiving from the likes of Paul Krugman, they are not addressing the key issues that I raise.

    Number one, is the president an effective leader in Washington? Has he led effectively on the domestic policies of the day? And two, is he an effective commander-in-chief?

    If you put aside all the nitpicking arguments about this and that, cost of Medicare and "ObamaCare," and knuckle down and ask those key questions, Has he delivered as a leader? Has he led effectively? I don't think the answer can be yes.

    Now, I shared many people's high expectations of the president when he was elected. Though I was a McCain supporter, I had to concede that he had made the most effective campaign. But now four years on, we have to ask the tough questions. Has he really delivered as president? I don't think he has.

    VAN SUSTEREN: Well, the story is quite tough on the president. And basically, I assume -- I mean, you teach at Harvard. I assume that by at least what I read of the story, you'd probably give him an F as a grade. Is that a fair -- I mean, that's what I'm guessing from the article. Is that what you would give him on his presidency?

    FERGUSON: Well, of course, as you know, very rarely are Fs given out at Harvard, Greta. This is more or less unheard of.

    No, I think you have to allow for the fact that he inherited a tremendously difficult economy. And my argument is not that he should have waved the magic wand and taken us back to full employment. That would have been hard for any president.

    I think the key problem with President Obama was, first of all, that he delegated the detail of legislation to his own party in Congress. And that is why the key legislation of this administration, the health care act, the stimulus, and of course, the Dodd-Frank financial regulation bill -- why this legislation is so defective.

    It was essentially handed to Nancy Pelosi, Harry Reid, et al in Congress, and left to them to design. And that was, I think, a very poor use of presidential power, say nothing of the fact that he had the greatest difficulty managing his team of economic experts, which contained some of the biggest egos on this planet.

    So it's really that for which I would give him -- let me be tough in Harvard terms -- a B-minus.

    VAN SUSTEREN: I wish I'd been so lucky as to get into Harvard. I didn't know it was so easy -- I mean, that they only gave B-minuses. That's pretty good.

    FERGUSON: I think we have to be fair, Greta. It was an extremely difficult situation he inherited. And the point of my piece is not to say, Oh, he should really have got us back to full employment. The point of my piece is to say, Was he an effective chief executive? And I think on that kind of question, when you look at how he's handled the power of the chief executive, the power of the president, he was not an effective leader.

    Now, to go back to your introduction, the mainstream media, generally speaking, have shied away from saying that. Every now and then, we got the detail -- Ron Suskind's extraordinary book, "Confidence Men," which revealed the chaos that surrounded policy making in the first two years of the administration.

    I mean, that's the kind of thing I'm talking about. That's the kind of which is in the piece. The other thing, the very interestingly, my critics in the liberal blogosphere admit, is my critique of President Obama's foreign policy. They have -- look back and ask yourself how far was he able to build on what turned out to be a revolutionary wave in the Middle East? And the answer is he was completely wrong-footed by it.

    VAN SUSTEREN: And -- and...

    FERGUSON: It was the last thing he expected was a democratic wave in the Middle East.

    VAN SUSTEREN: Niall, thank you very much.

    FERGUSON: Greta, my pleasure.

    VAN SUSTEREN: Well, as Newsweek takes on President Obama, will more media outlets follow? And is his campaign in trouble? Washington Examiner's chief political correspondent, Byron York, joins us.

    Byron, your thoughts.

    BYRON YORK, WASHINGTON EXAMINER: Well, I think, first of all, Newsweek was trying to achieve a little balance, after having gotten a lot of criticism for publishing the "Is Romney a Wimp?" cover of a few weeks ago. It was by a liberal author, very liberal author named Michael Tomasky, who also wrote a story called "The coming Obama landslide" for the DailyBeast, which is Newsweek's sister publication.

    So I think in this specific case, they were trying to get a little balance after taking a lot of heat earlier.

    VAN SUSTEREN: Well, it certainly has created a stir that Newsweek, which is, you know, that Newsweek would come out and do -- whether Newsweek had another motive and -- and I've actually been critical of Newsweek, thinking it's doing -- you know, it's got a financial problem. It's trying to stay alive.

    But what about what the statements -- I mean, the story itself?

    YORK: Well, I think the striking thing about the story is it does come from Niall Ferguson, who's kind of a member of this global, glamorous elite, people who are at home in London, they're at home in New York. And it's very fashionable among most of them to support President Obama.

    So for someone to come out and give an across-the-board denunciation of the Obama presidency -- and he's right. He spends a lot of time on Obama's foreign policy, as well as accusing him of failing on economic policy -- for somebody to give such an across-the-board indictment, I think, of his stature was pretty unusual.

    VAN SUSTEREN: Well, you know, what struck me is how quickly Paul Krugman came out to respond to it. And also, there was a professor from -- an economics professor from the University of California at Berkeley who said, Fire his -- whatever. You know, is that what I thought -- what struck me is that how quick and furious the response. Usually, when someone writes something provocative, I mean, it doesn't -- doesn't hit so many nerves.