I normally refrain from simply running sections of a press release as the basis of a post, but this proposed statistics-based exercise in propagandizing is so-ham-handed that it’s not hard to grok what is at issue.
Mind you, not only is there a proud American tradition of fudging official data releases to make the incumbent Administration’s performance look better than it really is, but this issue was actually a hot topic in the econoblogosphere in 2007. It’s died down in part because the Bureau of Labor Statistics did an effective messaging campaign against John Williams, the publisher of ShadowStats. And unfortunately, Williams does have some large weaknesses in his efforts to develop alternative measures that made him a legitimate target for criticism. However, Williams has done a very good job of compiling how the data collection behind and computation of various official statistics has changed over time.
This extract from a May 2007 post has the unintended effect of reminding readers how much the world has changed in seven years. Believe it or not, this was a bold statement by the standards of that day:
I’m certain you’re familiar with the expression “death wish.” I am beginning to wonder whether America has a banana republic wish. The country has been taking steps towards being a small-minded, elite-dominated, sham democracy.
Mind you, I am pointing to a tendency, not an established fact. The US isn’t Haiti, or even Argentina. But we are moving in that direction on a variety of fronts, and the devolution seems so concerted that I wonder if there is some unconscious mass desire to give up on the messiness and ambiguity of an open society and surrender to the certainty of one with institutionalized inequality, more authoritarianism, but greater certainty, and perhaps an illusion of greater security.
What triggered this line of thought? Something surprisingly minor: the April employment report, which by any standards was weak. The Bureau of Labor Statistics said that 88,000 nonfarm jobs were created in April, when it takes 150,000 new jobs to absorb labor force growth, and consensus forecasts were for 100,000 new positions.
But even this disappointing figure may have been the product of manipulation, as we will discuss in due course. And we’ve now had so many instances of what charitably may be called artful reporting that it’s beginning to undermine my faith in government statistics. Unreliable government statistics are a Banana Republic Indicator.
Now to the latest offense on the statistics front. The Administration has released a proposal to change the classification of American firms that send production offshore as “factoryless goods” producers, which would also make them manufacturers. Representatives Rosa DeLauro and George Miller are issuing letters to the OMB and the Census Bureau challenging this scheme. From their press release:
If the factoryless goods proposal were to be implemented, the value of U.S. brand-name products made outside of the United States and imported here would be counted as manufacturing “services” imports, not imported goods. Furthermore under the Administration’s broad trade data reclassification proposal, white-collar workers at firms that have offshored their production would be counted as manufacturing workers.
DeLauro, Miller and other members of Congress rely on official data when formulating public policy and the new proposal would severely hamper their ability to write laws that help working and middle class Americans. In their letter, the representatives note that “OMB acknowledges the enormous effects our data classifications systems can have, yet at the same time claims that fact will have no bearing on any revisions.”
Lori Wallach of Public Citizen sent an e-mail that pointed out that this con effort is not going unnoticed. This proposed change is subject to public comments. The last time the Administration proposed a trade data classification revision, it got all of 11 comments. By contrast:
By close of business Monday, when the “factoryless goods” comment period closed, there were more than 26,000 opposition comments filed.. This is the lunatic proposal that would count most of the value of imports of iPhones from China as manufacturing service imports and the white collar workers at Apple as ”factoryless goods” manufacturers… This just adds to Congressional ire about USTR using the uncorrected Census data to try to hide the trade deficit by counting re-exports rather than the accurate USITC trade data.
Needless to say, this also attests to the desperation of the Administration in disguising the fallen state of American manufacturing. But this is worse than just trying to tart up appearances. If you deliberately undermine the caliber of data about economic performance, it makes it impossible to come up with sensible policy. Of course, since Team Obama has never seemed to care much about good policy, this outcome is probably an additional feature rather than a bug.