May 07, 2012
The War on Data Collection
Ignorance is bliss edition.
[The Census Bureau, BEA and BLS] have always had to fight for more funding. Now they may have to fight just to keep their budgets intact. As part of $19 billion in nondefense discretionary cuts in Paul Ryan’s (R-Wis.) budget—recently passed by the House of Representatives—the agencies are likely to get less funding.
The Senate is unlikely to embrace the Ryan budget in its entirety. Yet specific proposals show what the House has in mind. The House Committee on Appropriations recently proposed cutting the Census budget to $878 million, $10 million below its current budget and $91 million less than the bureau’s request for the next fiscal year. Included in the committee number is a $20 million cut in funding for this year’s Economic Census, considered the foundation of U.S. economic statistics.
Some people argue that trying to track the economy is a waste of money as the bureaucrats will just manipulate the data to (e.g., Ricardo in his DickF incarnation in 2009). From the article:
Some believe the Census Bureau does too much already. “They waste a share of their budget on studies that no one actually uses,” says Chris Edwards, an economist with the Cato Institute, who cites periodic surveys on such items as the total hog count in the U.S. to prove his point. “A lot of that could be done by the private sector.”
For the rest of us who think it's important to know what is happening in the world, I think there are clear dangers of shortchanging statistical agencies .
Update, 9pm: I would be remiss in my duties if I didn't mention the latest Economic Report of the President contains several "Data Watch" boxes, highlighting the data acquisition and analytical issues facing the Nation. From Data Watch 2-1:
as the U.S. economy continues to evolve, the work of accurately measuring service activity grows accordingly. Despite recent innovations in the collection of primary source data, there are still conceptual issues pertaining to the appraisal and definition of services that remain unresolved. As an example, improvements in health care have contributed to longer life spans and better quality of life, but there is not a consensus about how to value and incorporate these benefits in a national income accounting framework. Similarly, industries such as finance largely produce intangible outputs that are difficult even to identify, much less quantify. Furthermore, although estimates of international trade in services are now more detailed than was the case before the 1980s, the statistics still could and should be improved. Data on the prices of traded services are extremely limited, and even the most disaggregated data collected by the BEA on services extend to only 36 categories, in contrast to thousands of categories for manufactured goods. Continued research and investment in the development of data on services are needed to ensure timely and accurate measurement of the U.S. economy.
Posted by Menzie Chinn at May 7, 2012 06:13 PMdigg this | reddit
While Chris Edwards is at it, he might tell us why the private sector has failed so miserably in producing survey data of remotely the quality, consistency and usefulness (including for business!) that the federal agencies do, they being lazy bureaucrats not subject to market discipline and all that good Galt stuff.
Posted by: jonm at May 7, 2012 07:16 PM
It's really a war on independent data and government. In Ryan Land (related to the Walker World we have here in Wisconsin), government work should be done by appointed hacks who spin, lie, and kiss the right backsides over giving accurate information that can identify and solve problems. That way, you don't have to identify the increased taxes or military spending cuts that have to appear if your 5% growth and 2.8% unemployment doesn't appear, because you can just hire a hack that'll say it'll magically happen!
Not surprisingly, the politicians who rely on voters to be informed through Fox "News" to give them the "facts" are the same ones who really dislike independent civil service.
Posted by: Jake formerly of the LP at May 7, 2012 07:34 PM
Can't blame Paul Ryan. Having less economic data around would make his job a lot easier, since his entire reputation depends on his ability to ignore economic data.
Posted by: Ryan at May 7, 2012 07:41 PM
Under the Spanish Inquisition, wasn't the phrase "Let no new thing arise"?
Posted by: jonathan at May 7, 2012 08:19 PM
Yes, maintaining good data is very important and we are talking about relatively small sums here--essentially rounding error. I'd look for cuts elsewhere.
Posted by: Rick Stryker at May 7, 2012 08:30 PM
makes total sense they want to cut it. Austrians dont use data (ick), and i hear the use of actual data in economics models in some circles is passe too. i highly recommend we start by cutting funding for any data that can replaced efficiently with the ouput of model simulations from an RBC model. ignorance is bliss, life is simpler with blinders on.
Posted by: dwb at May 7, 2012 08:55 PM
It's like in Wag the Dog when they try to fabricate merchandise to go with their fake war, they want to popularize a Albanian dish. They ask "who knows anything about Albnian food?" Answer "Nobody"...Then Denis Leary says "Good, then we can make up whatever we want."
Posted by: joe at May 8, 2012 01:11 AM
Isaac Asimov: "If knowledge can create problems, it is not through ignorance that we can solve them."
Posted by: Phil Rothman at May 8, 2012 01:34 AM
i've seen the same complaint several times from climate scientists...they even want to defund the weather bureau...
Posted by: rjs at May 8, 2012 01:53 AM
And this "...any data that can replaced efficiently with the output of model simulations..." is why so many of us think climatology and economics are too similar. If the data don't match the models change it! http://wattsupwiththat.com/2012/05/07/trenberth-takes-on-uah-satellite-data-in-a-new-paper/
Posted by: CoRev at May 8, 2012 03:32 AM
Markets can provide excellent data if there are customers. In oil and gas, there are many good providers (ourselves among them). Indeed, the EIA, for example, purchases in a good bit of the data used in the STEO.
Having said that, the public provision of data fills some important functions:
- the government is not always a good customer. They made not buy the right data, consistently, at the right time
- data can be very expensive. SNL Energy on the US power market is simply dazzling; it is almost two orders of magnitude better on the topic than the EIA--but for $12,000 per year. Not everyone can afford it. Thus private data can create "insiders" and "outsiders" with respect to knowledge and decision-making. This would adversely affect the press and independent analysts like Econbrowser and its commenters.
- non-appropriable data won't be produced. No customer, no data.
Government data is often not user-friendly. But most of the relevant data is available, if you know where to look. (One of the spectacular things about the internet.) So, while I agree that statistics could be better presented and gathered, I value the ready availability of data to understand the world.
And for the record, fiscal conservatives (classical liberals) love data; social conservatives and egalitarians do not, as a rule.
Posted by: Steven Kopits at May 8, 2012 03:50 AM
The BLS should be abolished. By constantly adjusting the data to fit the political goals of its masters it keeps the naive public in the dark about what is going on in the real economy. The unemployment rate is closer to 20% than it is to 8%. The fact that some people who can't find full time jobs take part time work where they can to make ends meet does not mean that they are employed. And when you stop counting those that have given up looking because they can't find any jobs those people do not disappear.
The BLS is an enabler to a Fed that wants to keep expanding the money supply and to politicians who want more and more government.
Posted by: VangelV at May 8, 2012 04:12 AM
Lockstep here in Canada too. Our current right-wing government, who got a majority last year after four tries with the aid of Republican strategists, just proposed cuts to StatsCan, the national archives, the CBC and Parks Canada, among many others.
A starting place, if you're interested if following the train wreck, here at Globe and Mail, May 3rd: http://tinyurl.com/7nbasg7
Posted by: Noni Mausa at May 8, 2012 04:19 AM
Ironically, the viral anti-HFT meme is more of the same. HFT collects data, and acts rationally on it. And in doing so, it provides a valuable economic function (much lower trading costs, more accurate prices given what's knowable). However, those whose ox is gored by the shift in technology of market data processing, have demonized it in an effort (at first) to save their jobs, and lately, having failed utterly to compete, to extract a measure of mindless revenge, quite at the expense of the average investor. One imagines the buggy whip maker railing against the terrible dangers and costs of motorized transportation.
Posted by: s jay at May 8, 2012 04:32 AM
“A lot of that could be done by the private sector.”
That statement is offered as if it is an argument in itself. The first question that comes to my mind is "So?". I can't tell whether that kind of statement is pure numb-skullery - a non-sequitor - or great propaganda. Throwing that kind of sentence out unsupported assumes the rest of the argument is a given - "...and the private sector is always and everywhere superior to the public sector."
That's probably why Blackwater had to change its name.
Posted by: Anonymous at May 8, 2012 05:02 AM
World governments are running head-long into their own blindness. Menzie has written a few posts on programs of "austerity" but what he and other Sudoku players don't understand is that austerity is not a program but a consequence. When the money drys up the cuts are not optional, austerity is not optional.
In the US the cuts in state government employment is not because of cruel taxpayers not willing to pay their fair share, but because hard working people have been thrown out of their jobs and their homes by horribly destructive government policy and they cannot pay the same taxes they have in the past. Government revenues are down because people are hurting not because they are greedy.
I am reminded of a friend. Her husband sits in front of the TV playing video games (Sudoku?) all day while his wife works to put food on the table and pay the bills. Her husband is constantly yelling at her because she does not provide more for the family. When she asks him to help he says he can't find a job and he becomes more angry saying all she does is talk about austerity. Then he goes back to his video games as the kids go to bed hungry again.
But her husband is one of the top gamers on the site, and he is really excited because another game is coming out soon. He and his friends are already collecting statistics to be the top gamer the minute it is available.
Posted by: Ricardo at May 8, 2012 05:08 AM
Look to Canada to see what conservatives are capable of. The Harper government axed the mandatory long-form census in favour of a voluntary census at three times the cost and who can even tell at what fraction of the accuracy. Information and data collection for the environment are also being reduced, so we can't tell if the tar sands oil extraction is harming the water.
As several commenters have mentioned, governmental philosophies that don't depend on information, but base policies on belief and faith, don't need data.
Posted by: Charles Johnson at May 8, 2012 05:38 AM
Kudos to Charles Johnson comment. The Harper regime does not want knowledge and information...belief and faith are the drivers of policy for this conservative govt. However we do see conservatives and their policies eg: F-35 fighter, prison building and omnibus budget bill C38, dropping their popularity 12 points. They want to ensure voters do not get the information they need to assess their government and Stats Canada is the object of their budget cuts. The emperor is naked!!
Posted by: ECON at May 8, 2012 10:18 AM
One way that the federal government could save data collection costs would be to adopt the Census Bureau's recommendation to use sampling rather than a pretend total population count. The general view among govt statisticians is that a sample data based census would be more accurate than a 100% count. Of course that's exactly why the GOP opposes the idea...they don't want any change that would count more of the underclass even if it saved money. I think that tells us all we need to know about the GOP's commitment to cost conscious government.
If the GOP wants to reduce data collection, then I hope they remember that the next time us govt workers get some dumb ass tasker from some dumb ass Congressional staffer wanting some obscure data dump.
Posted by: 2slugbaits at May 8, 2012 05:12 PM
I used to work at a government statistical agency. I believe that we absolutely need strong data reporting agencies - in fact, the BLS and the Census should expand their operations.
However, these agencies waste an obscene amount of money. With the funding they receive, they should be doing much more. We need to give more attention to government efficiency and quality, and not just funding levels.
Posted by: dudebroman at May 8, 2012 06:16 PM
Willful ignorance is a form of insanity. That our rulers are insane does bode well for our future.
Posted by: greg at May 8, 2012 08:07 PM
Ricardo: Great story! Care to share names so we can verify? The story would go well right next Reagan's "wefare queen" story (and the "trees produce more pollution than man" story).
Posted by: Menzie Chinn at May 9, 2012 10:57 AM
The government should absolutely have data collection, however, they waste to much time in short term analysis.
They should be in the ok, alright, I remember that, hmm hmm, yup clear now ete ete ete.
Plutocratic data could be security threat to America.
Posted by: The Rage at May 9, 2012 03:25 PM
"Great story! Care to share names so we can verify?"
No, I don't trust you to keep such things confidential.
Posted by: Ricardo at May 10, 2012 05:55 AM
Ricardo: I'm clearly not asking you to send them to me in a confidential form, if I'm asking you to post the names online, in the comments section of this blog...
Posted by: Menzie Chinn at May 10, 2012 07:09 AM
That is exactly my point. Since the important information is the story not the personalities, I will not subject my friends to online exposure or investigation by you or anyone else. I doubt you care anyway but are trying to make a rhetorical point.
But it actually seems a little petty. The again, form our current crop of government central planners, invasions of privacy, private investigations, personal exposure, harrassment lawsuits, and threats of intimidation of private citizens seems to be SOP.
Posted by: Ricardo at May 10, 2012 07:44 AM
Ricardo: OK, as you wish. I (and I suspect most readers) will file this story right next to Reagan's welfare queen story, the polluting trees story -- and right next to your October 16, 2006 comment/casus belli for invading Iraq (this time in your Dick incarnation):
Those now fighting in Iraq had extensive training in Saddam's terrorist camps and from Al Qaeda operatives such as al-Zarqawi.
Posted by: Menzie Chinn at May 10, 2012 01:29 PM
I am hugely flattered that you keep my posts, and I mean this seriously not rhetorically.
Posted by: Ricardo at May 11, 2012 05:33 AM
Ricardo: I don't. The software does.
Posted by: Menzie Chinn at May 11, 2012 07:33 AM
Sorry, I thought I read that you said that you were going to file my story.
Posted by: Ricardo at May 11, 2012 12:01 PM
Ricardo: Oh, you mean your story about the gamer. Yes, that I will mentally store, as I said, right in the mental bin with the welfare queen and the polluting trees. You are very welcome.
Posted by: Menzie Chinn at May 11, 2012 12:43 PM
Can we take a moment to appreciate the ruthlessness of the GOP?
It's not that they reach different conclusions based on the data. It's not even that they contest the accuracy of the data. It's the fact that they are fighting to prevent the data from even being *collected*.
It's a sort of ruthless mendacity that is almost beyond my comprehension. This is a war, and they intend to win it.
Hat tip to Ricardo as well - it would never occur to me to link a lazy gamer anecdote with government data collection. The two things have absolutely nothing to do with one another, but there it is, in his post...
Posted by: Anonymous at May 20, 2012 06:35 PM