Government Statistics Are Always Political

Authored by Tho Bishop via Mises.org,

In the age of Trump, even the most boring of political positions can find themselves in the center of the political news cycle. In recent weeks, it has been the Bureau of Labor Statistics. After severe revisions to previous job reports, Trump fired BLS Commissioner Erika McEntarfer and has nominated E.J. Antoni, who—if nothing else—has claimed to be a fan of Murray Rothbard.

Usually a changing of the guard at a position such as this would go on with little fanfare. In fact, one of the reasons why BLS Commissioners typically overlap from presidential administration to presidential administration is that it has traditionally been seen as a low-priority position for a president’s agenda.

So why has this become an issue now?

The obvious answer is that President Trump is a man who cares about headlines and his social media venting about the disastrous job numbers understandably raises the spectre of concern about the “politicalization” of the statistics bureau. The fact that bad jobs data would traditionally be viewed as an asset in his feud with crusade for rate cuts from the Federal Reserve is secondary to his desire to project his vision of a “Golden Age.”

The backlash to Trump’s focus on BLS is predictable, but also revealing. After all, what is not in question is the bad track record of monthly BLS data in recent years. The news that sparked Trump’s fury wasn’t just the economy underperforming in the area of job creation, but significant revisions downwards from previous reports. This was also true under the prior administration.

While revisions to BLS data isn’t new, the unreliability of their monthly reports have increased in recent years. One clear issue is that survey participation rates used to form their original report have fallen as low as under 43 percent, resulting in estimates increasingly reliant upon projections and modeling. These rates improve in later reports, resulting in the significant revisions.

Antoni has pointed to these underlying issues as a potential reason to suspend the monthly jobs report in favor of just releasing the more accurate quarterly report, which was met by horrifying gasps from critics. While it’s easy to identify a political motivation in preventing unflattering economic data from being released to the public, it is worth noting that it is the inaccurate monthly reports that have projected a rosier depiction of the economy.

The real question is why is a monthly jobs report viewed as so significant, given that there is universal recognition of systemic issues with their methodology and their recent record of poor past performance? The issue is that government statistics are themselves essential to the operations of how Washington operates.

As Murray Rothbard noted in his article, Statistics: Achilles’ Heel of Government:

Only by statistics, can the federal government make even a fitful attempt to plan, regulate, control, or reform various industries — or impose central planning and socialization on the entire economic system…

Statistics, to repeat, are the eyes and ears of the interventionists: of the intellectual reformer, the politician, and the government bureaucrat. Cut off those eyes and ears, destroy those crucial guidelines to knowledge, and the whole threat of government intervention is almost completely eliminated.

The perceived importance of government statistics is precisely because they are the tools used to justify and execute the labyrinth of interventions in society. Real-world conditions—be they in markets or the safety of neighbors—are secondary to the ability of politicians to point to the officially-credentialed statistical measures to tout the wisdom of their desired policy aims. In recent years, we’ve seen politicians tout the safety of cities that stopped reporting meaningful violent crime statistics.

As such, questioning the credibility of the government statistics is a means by which to erode credibility in the state itself. Perceiving the collection of government statistics as being partisan, erodes the credibility of the state itself. It is better, then, to maintain the tradition and the perception of norms in the accounting and releasing of government statistics than it is to meaningfully consider the underlying value of what is being recorded in the first place.

This does not mean, of course, that Washington is reflexively against profound changes into how government statistics are compiled. The Consumer Price Index (CPI) has undergone a number of changes over the last several decades, resulting in markets for alternative measures of inflation. Sometimes the Federal Reserve will simply decommission certain data sets. These changes, however, are granted the credentialed veneer of acceptability by the expert class, and often done in an understated way far from public attention.

In short, despite the transparent political aims of the current administration in the battle over the future of the BLS data sets, the emphasis placed on government statistics is inherently intractable to the operations of the interventionist state and, therefore, they should always be viewed through a lens of cynicism. Much like romantic notions of “Federal Reserve independence,” “a federal system of checks and balances,” or the “independent nature of professional bureaucracy,” to suggest otherwise is to ignore the realities of how Washington operates in practice.