America is in a strange place right now, with upheavals in the federal government, the courts, and the international trading system. Institutions that we took for granted a few months ago are changing in real time. With all that’s happening, what I’m about to say may seem trivial, but as a forensic economist, I need to say it anyway.
Please don’t mess with my data.
Reliance on Data
I’m a heavy user of data, in particular government-produced economic statistics. I know the major data websites like the back of my hand. But it isn’t just me. Small businesses, big corporations, financial institutions, state and local governments, nonprofits, and academic researchers all rely on high-quality data from the federal government.
If government data were taken away or distorted to the point that they were unreliable, the quality of my work could suffer significantly. More importantly, the plaintiffs and defendants in the lawsuits on which I work could suffer. It’s true that when I work in litigation, much of what I provide is, well, myself. I provide my insights, my research skills, my testifying ability, and ultimately, my expert opinion. But I also provide data.
When I calculate a growth rate for a person’s earnings, I typically use data from the U.S. Bureau of Labor Statistics. I also use BLS data on inflation, benefits, and time use. I go to the U.S. Census Bureau for statistics on home construction, retail sales, and income by education level. I use demographic data from the Centers for Disease Control to calculate life expectancies. I consult data from the U.S. Treasury Department on interest rates.
I’ve also used data from other government agencies, including the U.S. Bureau of Economic Analysis, the Federal Reserve Board of Governors, and the U.S. Energy Information Administration.
No Data Are Perfect
I’m not unusual in this regard. All forensic economists depend on data published by the federal government, and we all need it to be as accurate and reliable as possible. We understand that no data are perfect. Data come with sampling errors, and occasionally other factors create problems for data users.
For example, I wrote in these pages a couple of years ago about the effect of the COVID pandemic on life expectancy statistics. Because of the COVID virus’s effect on mortality rates among older people, the 2020 edition of the CDC data to which I just referred was understating life expectancies for younger people. Fortunately, there was an easy work-around – use the pre-COVID 2019 edition for a few more years.
Would there be a work-around if our tradition of nonpartisan provision of economic statistics was declared to be political and in need of “correction”? Are we one bad jobs report away from a presidential administration taking matters into its own hands?
For professional reasons, the prospect makes me nervous. Like all readers of this article, I have political opinions, but this isn’t about politics. It’s about data.
Could It Happen Here?
Fortunately, if an attempt were made to politicize economic data, it probably wouldn’t succeed. The governments of some other countries, such as Russia and Hungary, have managed to do it, but they do it subtly. Rather than falsifying data outright, they exert significant control over the media and suppress news about economic indicators that don’t promote their political messages.
In the U.S., however, it’s harder to control the media and restrict the flow of information. If legions of government statisticians were summarily fired, there would be a flood of news reports and outraged opinion pieces about what had happened and what the implications were.
Yet the concerns remain because the stakes are high. Not only would the politicization of data provision damage the civil litigation process, but it would have far-reaching negative effects throughout the American economy. Let’s make sure it doesn’t happen.
