Can We Trust Government Statistics In The Future?

Donald Trump didn't like the latest numbers from the Bureau of Labor Statistics so he fired the commissioner of that organization. Is he going to appoint a sycophant to replace her - someone that will fake the numbers to make Trump happy? Can we trust future government numbers? 

Here are former Labor Secretary Robert Reich's thoughts on the matter: 

I spent much of the 1990s as secretary of labor. One unit of the Labor Department is the Bureau of Labor Statistics.

I was instructed by my predecessors as well as by the White House, and by every labor economist and statistician I came in contact with, that one of my cardinal responsibilities was to guard the independence of the Bureau of Labor Statistics.

Otherwise, this crown jewel of knowledge about jobs and the economy would be compromised. If politicized, it would no longer be trusted as a source of information.

So what does Trump do? In one fell swoop on Friday he essentially destroyed the credibility of the BLS.

Trump didn’t like the fact that the BLS revised downward its jobs reports for April and May.

Well, that’s too bad. Revisions in monthly jobs reports are nothing new. They’re made when the bureau gets more or better information over time, which it often does.

Yet with no basis in fact, Trump charged that Erika McEntarfer, the commissioner of labor statistics, “rigged” the data “to make the Republicans, and ME, look bad.” Then he ordered her fired and replaced with someone else — presumably someone whose data Trump will approve of.

How can anyone in the future trust the information that emerges from the Bureau of Labor Statistics when the person in charge of the agency has to come up with data to Trump’s liking in order to stay in the job? Answer: They cannot.

Trump has destroyed the credibility of this extraordinarily important source of information.

When Trump doesn’t like the message, he shoots the messenger and replaces them with someone who will come up with messages he approves of. So we’re left without credible sources of information about what is really occurring.

Trump is in the process of trying to do the same with the Federal Reserve — demanding that Jerome Powell, the Fed’s chair, cut interest rates. Trump is even threatening Powell with a Trumped-up expose of Powell’s supposed extravagance in refurbishing the Fed as a means of forcing Powell to do his bidding or resign.

What happens to the Fed’s credibility if Powell gives in to Trump? It evaporates.

In the future, we wouldn’t have confidence that the Fed is fighting inflation as rigorously as it should. And without that confidence, longer-term interest rates will spike, because investors will assume that there’s no inflation cop on the beat and therefore will demand a higher risk premium.

Trump hates facts that he disagrees with. That’s why he’s dismembering the Environmental Protection Agency, which has repeatedly shown that climate change isn’t a “hoax,” as Trump claims, but more like a national emergency.

It’s why Trump is attacking American universities, whose scientists are developing wind and solar energy and whose historians have revealed America’s tragic history of racism and genocide of indigenous people.

He is killing off the Centers for Disease Control and the National Institutes of Health, which are showing the sources of sickness and disease and how we can guard against them.

This is a man and a regime that doesn’t want the public to know the truth. He is turning America into George Orwell’s dystopian 1984.

The Trumping of America is happening so fast and in so many places that it’s hard to see the whole. Which partly explains why he doesn’t want the facts out. He doesn’t want us to know how bad it really is.

And those of Nobel Prize-winning economist Paul Krugman:

Trump summarily fired the commissioner of the Bureau of Labor Statistics, accusing her without evidence of manipulating the numbers for political purposes.

Who could have seen this coming? Anyone paying attention. The picture at the top is a screenshot from a post I put up just before Trump took office. I was mainly focused on politicization and corruption of inflation data, but it’s the same principle — and would involve the same organization.

People who don’t follow these things closely may not realize how important the Bureau of Labor Statistics is. But it’s our prime source of short-term information about economic developments. The BLS conducts a monthly survey of households that is, among other things, how we estimate unemployment. It conducts another survey, of employers, which is where we get estimates of payroll growth like the one above. A third survey, of prices, is the basis for the Consumer Price Index, and supplies the basic data for other inflation measures too.

The BLS isn’t always right, nor should you expect it to be. It’s trying to track a complex economy, and sometimes it revises its past estimates — as it did this morning. But it is extremely professional, rigorously nonpartisan, and everyone in the business considers it the gold standard for economic data.

Or maybe I should say “it was” rather than “it is”. I have to admit that I expected Trump’s corruption of economic data to be insidious and take place gradually. Instead he just fired the head of the BLS because he didn’t like the numbers it reported — a clear signal to the remaining staff not to report bad news.

And just like that, we can no longer treat BLS data as the gold standard. (Maybe Trump will use the gold on the walls of his new ballroom.) Maybe, just maybe, the staff at the BLS will hold to their principles and continue to report honestly. But how can we trust what they report — especially if Trump flunkies are put in charge, filtering what gets released? 

From here on, I’m going to be paying a lot more attention to private surveys. And when they tell a different story from the official numbers, there will no longer be a reason to take the official data more seriously.

It’s one more step on our rapid descent into banana republic status.