What are the nation’s leading economists freaking out about these days?
Not so much plunging into recession (due to a possible trade war) or, alternatively, an overheated economy (due to a possibly ill-timed fiscal stimulus).
Instead, they’re worried that we won’t actually know whether either scenario materializes — because some of our best economic measurement tools may soon be compromised.
Here in Chicago, the meetings of the American Economic Association, an annual confab attended by 13,300 economists, just concluded. This year, as I do every year, I interviewed about 20 leading scholars from a variety of institutions, political orientations and fields of specialty. As always, I invited these academics to discuss their research, and any issues they believe the public should be paying more attention to.
Almost to a person, they mentioned concerns about the continued integrity and availability of government data. The prospect of yet more funding cuts for the statistical agencies, layered with Donald Trump’s repeated efforts to discredit government numbers, bode ill for academics, businesses, households and policymakers alike.
Ensuring the accuracy and robustness of public data may not exactly be a kitchen-table issue for most Americans. But that’s only because they probably don’t realize how much these numbers affect their daily lives.
Consider, for example, the besieged American Community Survey, which has been around in some form since 1850.
The results from this mandatory, annual survey are used to allocate more than $400 billion in federal funds to state and local areas each year for schools, health care, roads, housing; to fight crime, including by mapping the likely locations of meth labs; and to inform business decisions made by home builders, retailers and entrepreneurs, among others.
Over the past several years, congressional Republicans have repeatedly attacked this critical survey as unnecessary and intrusive. In 2012, they voted overwhelmingly to eliminate its funding entirely.
Among those voting to zero it out? Rep. Mick Mulvaney (R-S.C.), Trump’s pick for Office of Management and Budget director, the position responsible for crafting the president’s budget.
More recently, Mulvaney argued that participation in the survey should be voluntary, which would make the numbers collected much less accurate (or alternatively much more expensive, because more follow-up would be required to preserve accuracy).
The budget for the Bureau of Labor Statistics, which produces monthly unemployment numbers and other key economic indicators, fell 10 percent from 2010 to 2016 in inflation-adjusted terms. As a result, it was forced to discontinue some of its data series on mass layoffs and international labor comparisons.
Sequestration likewise forced the Commerce Department’s Bureau of Economic Analysis to eliminate products that provide insight into offshoring. Because, hey, it’s not like that’s a hot-button issue these days.
Few statistical agency alumni I’ve spoken with said they worry about outright manipulation of government data. There are protections in place to guard against political meddling, and armies of career civil servants would scream bloody murder if any appointee — Democrat or Republican — violated them. On some level, too, presidents know that having credible economic data is in their own interest.
The bigger risk, they say, is that Republicans on the Hill and in the White House will decide that these data-collection efforts — as well as some related data-sharing agreements with cutting-edge researchers — are at best expendable, at worst politically inconvenient.
For one, they may not realize that many of the activities of the statistical agencies don’t scale very well.
“If you’re the Occupational Health and Safety Administration, and you get more or less funding, you can do more or fewer inspections,” said Katharine Abraham, a University of Maryland economist who served as Bureau of Labor Statistics commissioner from 1993 to 2001. But nipping at the budget of a statistical survey may require cutting down the survey sample size so much that it’s no longer useful at all.
The robustness of the 2020 Census — mandated by the Constitution — is especially vulnerable, given lingering uncertainty about funding for testing that needs to happen this year.
More cynically, axing data collection also allows politicians to preserve deniability when policies fail. Hence Kansas’s decision to eliminate bad economic news by no longer reporting it.
For those who want to hold our political class accountable, accurate data is a need-to-have; for members of the newly unified Washington political leadership, it’s instead somewhere between a nice-to-have and a nice-to-not-have. No wonder, then, that so many scholars are wringing their hands.