Washington, DC—Better knowledge leads to better policies which leads to better well-being for people. That is the valid premise on which, and the purpose for which, the Peterson Institute was founded. Getting better knowledge takes disciplined analysis and objective scrutiny against reality, with a commitment to self-criticism when you get something wrong. Independent transparent rigorous sources of economic data, primarily from the public sector, are necessary for that reality check.
Thus, we have been concerned for some time about the Trump Administration undermining the provision of economic data and statistics. Their disregard for technical expertise has been evident in their firing or driving retirements of experienced technocrats, their disbanding of longstanding advisory panels to data collecting agencies, their cutting of funding to statistical and associated research activities, and their public calls to redefine or withhold data in politically comforting ways. This attack on the public's ability to see reality and judge policies against it encompasses environmental and health data, as well.
Sadly, there is a clear historical record of what happens to economic policy when a government willfully repudiates expert opinion and objective self-assessment by denying access to the information needed to assess reality. Whether in Brexit Britain or pre-Euro Crisis Greece or the economic nationalisms of India and Latin America or in the extreme the dictators of the Soviet Bloc and China's Great Leap Forward then, or of Venezuela and North Korea today, massive self-harm was enabled by telling lies about economic reality. That all starts with disparaging independent data and analysis as politically motivated, and stifling government statistics.
President Trump's firing of the U.S. Commissioner of Labor Statistics therefore is unquestionably wrong. We join economists and research institutions from across the political spectrum in condemning this act. Rationalizations after the fact that this was really about failures of the public sector – in this case the BLS – to improve data collection are transparently false. U.S. economic data, and our labor statistics in particular, are the world's best in terms of real-time accuracy; the regular reproducible data revisions are part of maintaining that quality, not an indicator of incompetence or bias. If that accuracy were what is really cared about, then invest in a sustained way in greater technical expertise, open expert discussion of how to improve, and public mobilization and standardization of private data sources.
In the end, reality will win out over lies, whatever the seeming political benefits to advancing a radical agenda. Pretty much by definition politicians must be pursuing something radically at odds with mainstream best practice or else they would have nothing to gain by denying objective analysis its lifeblood, data. History, however, demonstrates that once a government goes down this road, it is the people who suffer from economic hardship, social instability, and ultimately weakened national security. Removing the reality check also makes it take longer to halt such a slide.
The Peterson Institute will continue to be as objective as we can be in our analysis with the best data we can get. Part of that duty is independently establishing the costs of denying reality. Look for more from our scholars to come.
—Adam S. Posen
The Peterson Institute for International Economics is committed to transparency and reproducibility of its research, including clear sourcing of all data used in our analyses and disclosure of all funding. Please read our transparency policy here.
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About PIIE
The Peterson Institute for International Economics is an independent nonprofit, nonpartisan research organization dedicated to strengthening prosperity and human welfare in the global economy through expert analysis and practical policy solutions.