Perspective: Complaining about the scorekeeper doesn't help you score more

Yahoo

3 days ago

In 1628, at the height of Sweden's naval power, King Gustav Adolph designed what he envisioned as his crown jewel and flagship: the Vasa. He planned for three decks of guns — one more than traditionally used — and adorned the warship with gold and oak (a precious commodity at the time). Fatally, however, the ship was too narrow and too short to support the extra weight.
The King's engineers knew the Vasa would not float. But, eager to stay in his favor, they remained silent and built the ship to his specifications.
On its commissioning day, the Vasa sailed just 1,400 yards into Stockholm Harbor before disaster struck. As witnesses recorded, 'she heeled right over and water gushed in through the gun ports until she slowly went to the bottom under sail, pennants and all.'
The dimensions of the ship simply could not support the extra weight insisted upon by the King. In fact, the ship sank so quickly that it remained almost perfectly preserved on the seabed until Swedish divers rediscovered the vessel in 1961.
Today, the Vasa sits in a temperature-controlled museum in Stockholm's Djurgården — an enduring monument to royal ego and the perils of silencing experts.
The recent release of monthly U.S. jobs reports — and their subsequent quarterly revisions — echo similar themes. Each month, the Bureau of Labor Statistics surveys employers across the United States. In a country this large, it's impossible to reach everyone, so the bureau projects employment numbers based on collected responses and recent trends.
At the end of each quarter, the BLS compiles a more comprehensive report — the Quarterly Census of Employment and Wages — which covers about 95% of employers. Using this data, the BLS revises prior estimates. The most recent revisions marked the largest downward adjustments since the pandemic, rivaling the corrections required for April 2020.
Several factors contributed: falling response rates, headwinds in the labor market driven by the trade war, and major layoffs in the federal government and grant-funded sectors. Ironically, the federal government is notoriously late reporting to the BLS and most employers hold back when they are not sure if they will be hiring or firing.
Economists expect large swings in the data when the economy changes rapidly, particularly within a couple month period. For example, the largest downward revision in recent memory was spring 2020 with the onset of the pandemic.
Rather than a sign of something nefarious, revisions actually are a sign of quality data given the agency's commitment to getting it right when full information is available. But the more surprising news was the administration's firing of the BLS commissioner following these less-than-rosy revisions.
Most Americans don't spend much time thinking about labor statistics or who runs a given statistics agency in Washington, D.C. Still, this firing crosses a troubling line — representing another breach in the norms and institutions designed to protect the integrity of public data.
We need trusted federal data to decide which programs are effective, whether our children are proficient in school, or which interstate highways need repair.
Politics may be a full-contact sport, but it still needs umpires. Greece learned during its debt crisis that falsely accusing its statistics chief of inflating deficit numbers didn't restore investor confidence in Greek bonds or make their financial woes disappear. Likewise, few economists trust GDP growth rates from authoritarian regimes, which routinely inflate their figures to intimidate rivals and project Potemkin strength.
Despite the recent kerfuffle, the U.S. economy and its data systems remain the global gold standard. But each time innuendo or political interference casts doubt — without evidence — we erode public trust and the credibility of our numbers.
If any administration insists on hearing only feel-good stories from Lake Wobegon — where all the women are strong, the men good-looking and all the children above average — it's setting itself up for a world of hurt. As with youth basketball, complaining about the scorekeeper doesn't help you make more baskets.
Reliable data do far more than help academic economists secure tenure by publishing in dusty journals. They guide state and local revenue projections. They help businesses decide whether to hire workers or build new factories. Data provide feedback when good intentions go awry and course corrections are needed. Ignoring bad news doesn't make it disappear, and discouraging honesty only ensures a more painful reckoning.
The economy is in flux. And the labor market is cooling amid policy uncertainty. Real citizenship demands grown-up decisions. Some households will have to change their spending, and some dreams may be deferred. But our leaders need the best possible information to keep the ship of state afloat.
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