The Historic Danger of Trump Undercutting the BLS

Time​ Magazine

3 days ago

The United States labor market shrank in May and June. The following month, the U.S. Bureau of Labor Statistics (BLS) reported as such. Then, President Donald Trump fired the commissioner of the BLS. The move isn't just a reflection of Trump's extraordinary exercise of executive power. It also dealt a major blow to trust in information provided by the U.S—and thus, both to America's economy and wider reputation abroad.
Unfortunately, this is not an isolated incident. President Trump has also, for instance, directed the Commerce Department to begin work on a "new" census that would exclude millions of people from the population tally and would leverage "the results and information gained from the Presidential Election of 2024."
The credibility of the American government's most fundamentally important data, and its word on major issues, is critical both to American prosperity and to allied confidence.
At the beginning of the Cuban missile crisis, President John F. Kennedy asked former Secretary of State Dean Acheson to meet with French President Charles de Gaulle to brief him on the reasons for America's blockade of Cuba. Acheson offered to show him pictures of Soviet nuclear weapons in Cuba to justify the decision. DeGaulle's response was clear and definitive. "No.No.No.No," he responded, "The word of the President of the United States is good enough for me."
This clear demonstration of trust proved to be an enormous benefit in mobilizing French and other international support for the U.S. vis-à-vis the Soviet Union during this period. In the years that followed, it wasn't always that way. Trust in President Lyndon B. Johnson faltered when foreigners questioned the validity of the information presented to justify the Tonkin Bay Resolution to support escalating the U.S. presence in the Vietnam War. Many countries, especially France (it turns out, quite correctly), questioned the validity of the information presented to justify President George W. Bush's decision to engage in the Second Iraq War.
Read More: How Trump's Decision to Fire BLS Commissioner Echoes Putin's Strategies
Trust and credibility with leaders abroad, along with many Americans, have long been important components in support (or lack thereof) for Washington's foreign and military policy.
But this subject is not confined to these areas of policy. Trust and credibility are critical for confidence in economic and financial matters as well—and for the sustained prosperity of our country.
One of the reasons Americans and foreigners invest in the U.S. is, of course, the size and dynamism of the U.S. economy. And President Donald Trump has worked hard, and in many cases quite successfully, to encourage more domestic and foreign investment here.
But another key factor that makes investment attractive here is the history of trust in statistics provided by Washington. Distrust of Government Data would work against that goal. Investors operate under the assumption, justified by practices and experience over many decades, that this country will allow market forces to drive the economy and encourage the kind of innovation that has been so vital to creating new jobs and innovative companies. They also want to have the confidence that government sources will provide accurate data on the economy; this is vital to decisions in financial markets and to those considering a wide range of investment decisions from building new factories, starting new companies, or making new products for sale here.
Having worked in senior economic jobs in the White House, U.S. Trade Representative and other agencies in the administrations of five presidents—three Republicans and two Democrats—I can attest to the value foreign governments and businesses attach to the credibility of the U.S., the statements of its leaders, and the information its government agencies provide about its policies and the state of the U.S. economy. Trust in the word of the U.S. government is critical to the credibility of American leadership abroad. And the reliability of economic information Washington provides to foreign governments, businesses and investors is vital to their confidence in our economy.
When I worked as Undersecretary of State for Economic Affairs, one of my jobs was to meet with leaders of companies in other countries to encourage investment here: it was a process known as "economic statecraft." And faith in the data and transparency provided by the U.S. government on such things as inflation, growth, jobs, and fair enforcement of laws and regulations were essential as an inducement. This was seen as a sharp contrast to the often-questionable information provided (or at times totally withheld) by countries such as China and Russia. U.S. government statistics were seen as apolitical data. It was assumed that data and other information provided by the government were not susceptible to political pressure on the institutions that provided them or their leadership.
The U.S. government is the source of a wide range of vital data. The Federal Reserve is highly respected worldwide for the financial and economic statements it makes. The International Trade Administration in the Commerce Department is a valuable and credible source of trade information. Information provided by the Food and Drug Administration is seen as the gold standard on new drugs.
The BLS falls into this category. Data on jobs is a politically charged number; it is often a signal for decisions by the Federal Reserve, as well as by financial and corporate investors. The president has the authority to appoint or change the Commissioner. But in the past, this has been seen as a non-political position. The information provided by the BLS Commissioner simply relies on data from a wide range of non-political and highly credible civil servants. While the president has the authority to replace the Commissioner, the bigger question is whether doing so serves the national interest—or even his own economic policy objectives.
Read More: U.S. Enters Uncharted Waters With Next Jobs Report
In considering the latter, it is important to recognize that removal of the Commissioner adds to already significant doubts abroad about the reliability of the U.S. and raises the question as to whether information emerging from the BLS or other agencies in Washington is based on factual data or on political pressure or partisan considerations. The next Commissioner, however qualified, will enter that job under this cloud.
This is hardly reassuring to efforts or policies to convince foreign companies to invest here (a commendable goal) or to reassure many of the world's financial institutions to buy U.S. bonds in order to help finance the rising deficit we face.
To reassure buyers of our debt, attract new business investment, and support American international interests, President Trump must take steps to strengthen trust in the economic data and statements of the U.S.
When our president, or another senior official, next meets with de Gaulle's distant successor President Emmanuel Macron, or any other world leader, will the response to information provided by the U.S. be similar to that so powerfully given by Charles de Gaulle?
The results will speak for themselves.