← Bulwark Takes
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- [00:00]
A
Hey guys, it's Andrew Egger with the Bulwark, joined here today by our economics reporter Katherine Rampel to talk economic data, government data, all kinds of data. This has been in the news a little bit or a lot actually over the last few days as the sort of great economic data collection machine of the federal government sort of starts to come unstuck after being, after being frozen in place during the government shutdown. So Katherine, let's just start there real quick. What's going on this week with, with, with us finally getting a little bit of some of the economic data we should have had a month or so ago.
- [00:34]
B
Right. So when the government was shut down, it meant that the statistical agencies that normally collect data on inflation, gdp, the jobs report, stuff like that, they were shuttered too. And as a result, reports that were supposed to have come out in October, early November didn't come out. And also data that was supposed to be collected as part of their ongoing surveys and things like that wasn't being collected. So now we're getting some things coming out that were like, that had been more or less ready to go before the government shut down. They're now coming out late. But the government has also said that some data will just be missing forever. So for example, the jobs report for October and the inflation data for October, those are just going to forever be a black hole in, in any sort of economic history book or data series because the government was shut down and they can't like go back and do surveys that, you know, in real, real time surveys that, that they, that they missed. So there will be some, you know, blind spots. And this matters not just for like economic historians, but also for the Federal Reserve, which has another meeting coming up where they will be deciding whether to cut interest rates further, keep them the same, potentially raise them. That doesn't seem like it's in the cards. But in any event, they want to have the most recent snapshot of the economy available so that they can make an informed decision and they're just going to have these blind spots.
- [02:09]
A
Yeah, it's such a weird spot to be in where like now we are finally getting some data after this lengthy blackout. But then, you know, we get this little dribble out of data. And then because nobody's been in the field, you know, collecting these surveys, now we're going into another little, any blackout, at least one that has like a, an expiration date at least. But as you say, kind of, kind of difficult a headache for all of these policymakers.
- [02:29]
B
It's hard for the policymakers. It's hard for businesses, investors, anyone who is reasonably trying to get a sense of where the economy is headed. And it's been confusing to be clear, even without this government shutdown and these holes in the data, because we don't exactly know how tariffs are being, are affecting companies and their pricing decisions and their investment decisions and their hiring decisions. There are a lot of different ways in which higher prices on inputs could, could cut in terms of decision making for businesses and for workers. There was already like a little bit of fuzziness about where the economy was. And then now you have what, what little evidence had been useful, you know, that businesses and policymakers and others rely on, consumers rely on, even that is now in short supply.
- [03:23]
A
Yeah. So this has all been in the news, obviously, the last few days. Like I said. You wrote a newsletter just yesterday that I thought was really interesting, kind of jumping off of some of this stuff to talk about some of these indicators that we are not so used to. Just, I mean, I guess we in the media and especially you guys who cover the economy, you have your regular rhythms of monthly job reports that drop every 30 days, the monthly inflation reports chewing them over, everything they mean. But you were writing about some of the, like, smaller scale, more sort of niche, different sorts of data that the government collects, which are also experiencing some difficulties under Trump. Can you just talk a little bit about what you, what you reported there?
- [04:04]
B
Absolutely. So, like I said, there's been a lot of focus on this temporary lapse in data collection, particularly economic data collection, because of the shutdown. But well before the shutdown, this administration had been snuffing out data series, either censoring things, defunding them, or otherwise leaning on the civil servants who, who produce analyses of the data. And oftentimes this was when we're talking about statistics that were sort of politically inconvenient for the administration. So, for example, there have been cancellations of an annual hunger report that goes back 30 some odd years. Every year that report came out and it helped the government have a better sense of who was struggling with access to food. Well, that's just gone. Same thing with the people at Health and Human Services who are responsible for determining what's called the poverty guidelines. The poverty guidelines are used to determine eligibility for snap, for Medicaid, for all sorts of other safety net programs. The people who now who had been making those calculations, which happen once a year, are just gone. So then there's a question of, well, how are we going to determine eligibility? Is no one going to be eligible for food stamps going forward. I guess that would be one convenient way to wash their hands of the expense of feeding Americans. And so there are a lot of things like that that most of the time people just take for granted, right? Like you're not thinking about who's writing the poverty guidelines. You're not thinking about who's collecting data on adolescent mental illness, which is another thing that has been cut, or the racial makeup of who's on the government payrolls. There are a lot of things that, like, we just sort of assume this stuff is happening. Weather data collection as well. You know, you just take it for granted. And slowly but surely, the administration is gutting and purging the institutions that collect these numbers. In some cases, they are specifically targeting things like the hunger report that I was talking about. In other cases, they're just cutting funding so much that the agencies have to find something to let go. So, like, for example, the Bureau of Economic Analysis is the agency that produces the GDP report, the Fed's preferred measure of inflation, consumer spending. A lot of really marquee data. They have to do those things. But they've also lost about 20% of their headcount so far this year between Doge purges and early retirements and hiring freeze and all and all of that. So they just can't do everything that they are normally supposed to do. They're not going to cut the GDP report. They're probably not going to cut the inflation report. So instead they are. They have recently announced, including this week, that they were cutting some of the calculations that they normally do on foreign direct investment. Again, that sounds like wonky. Who cares? Except that our President has been running around touting the fact that he's boosting foreign direct investment. Right. He just claimed that he got a trillion dollars committed from the Saudis to invest in the United States, which seems somewhat improbable as you have exhaustively investigated. He's, he's in. He's claimed that he's gotten big commitments from South Korea, from. From Switzerland, from a lot of other countries. Now, normally I would be a little bit skeptical about whether those kinds of commitments would be delivered because they don't have a great track record, even if the numbers aren't on their face. Obviously ludicrous. But now it's going to be harder to actually fact check those numbers because the government just doesn't have the resources. Again, the independent statistical agencies that are supposed to be tracking numbers like this don't have the resources to continue doing so, which again, Pretty useful for Donald Trump if we're no longer tabulating hunger, we're no longer tabulating whether this money that he's been promising is being delivered. That's quite useful because he can sort of fill the void with whatever facts he prefers. You know, he can paint, he can curate his own portrait of reality, either through you know, boastful statements or kind of like BS data, which he's been increasingly grabbing for as well.
- [08:42]
A
Yeah, let me, let me just zero in on, on this, this foreign investment metric real quick because like you said, I've been kind of fascinated with this too. And it would be one thing if this were just like a random sort of like economic statistical indicator that, like the President is just sort of like letting go to seed. But when you hear Donald Trump talk about his economy, I mean, it is increasingly clear this is like the main thing that he himself cares about. When it comes to his painting this picture of the strength of the economy. He keeps getting asked, you know, in interviews, like, what do you make of poll data that we're seeing that Americans still have quite a bit of economic anxiety, in fact, that might be on the rise. And he discounts that. He says he thinks those polls are cooked and fake. And the thing that he really looks at, he always pivots to what he says is 20 or 21 trillion dollars in foreign investment coming into the country. So like, for him, this is like the tent pole thing. And the idea that they are actually deliberately, at this moment, while Trump is trying to make this like his central economic pitch, also actively harming their own ability to sort of track that in a nonpartisan way. I mean, it's just like you think about like the sorts of economic narratives that you associate with like Stalinist Russia, where it's like, you know, you have your, your party line of like, this is great, you know, like, like, you know, wheat yields are up 112% year over year, like stacked over against like actual famine, like, like that's, that's gripping the country. And you think of this as like just an artifact of these like cartoonishly repressive, insane, broken regimes. And we're not quite there. I mean, like these, these data are at least have been out there and there are a lot of metrics that are still being collected. There's a lot of, you know, non government metrics on a lot of this stuff. But we're closer to that at least. It kind of seems from my laypoint, if you were closer to that, as far as our government strategy is concerned, than we Necessarily have been in the past.
- [10:37]
B
Oh, yeah, look, there is, in fact, one particularly horrifying story from Stalinist Russia, you know, Stalin's reign, that comports with all of this, which is the guy who was in charge of the 1937 census in the Soviet Union. His name was Kvitkin. He was executed by firing squad because the numbers he produced were inconvenient. They found that there were 6 million fewer people in the Soviet Union than Stalin had promised or had. Had declared there to be, probably because there had been a famine around that time. And again, yeah, we're not at the firing squad stage of things, but we are fortunately. Don't want to give the president any ideas, of course, but. But there are, you know, plenty of other authoritarian regimes out there that have used this same bag of tricks, if you will, to. To similar effect without resorting to violence. Like if you look at Chinese President Xi and how many data releases there are, economic data releases there were before he became president and after, it has steadily declined. Like, there's one particular example that got a lot of attention maybe two or three years ago when youth unemployment hit like, a record high. I forget what the number was, but it was very, very high in China, and there was a lot of bad press about it around the world. All of the sudden they just stopped tracking youth unemployment, which, you know, made the problem go away. But. But he's done that in Argentina. They've also manipulated statistics or blocked statistical releases. So this is not a new concept. I think what's unusual here is that historically, the United States has produced the gold standard in government statistics. Yeah, they get stuff wrong, certainly, and measurement is hard, particularly since survey responses have been going down both before COVID and especially since COVID It's not like they're perfect, but they are trying to get it right. They are trying to, you know, to make everything methodologically sound so that they are producing the most useful data. That's part of the reason why we have a good business environment, because people, businesses, entrepreneurs, workers, have have, you know, relatively reliable information about where to locate a new store or what to buy, how to price, how much to ask for in a raise. You can get that kind of information as soon as you start to sow doubts in the reliability of that information, that degrades the whole business environment. Right. It's like you don't even need to have outright manipulation. And in this case, there are some examples of outright manipulation or censorship that we haven't even gotten to you, but you don't even need to have that as long as people don't trust that the information that they're getting is accurate and reliable, that's going to make decision making much harder. And it's not good for capitalism.
- [13:39]
A
Yeah. I mean, it's crazy that we've had this entire conversation about the ways in which the White House is sort of cooking or just sort of letting this stuff go to seed. And we haven't even brought up the fact that Trump fired the head of the Bureau of Labor Statistics this summer because he didn't like one of the job reports that came out. I mean, like, yeah, we are not yet to the, the firing squad level on all this. Certainly we're far from that. It's not necessarily clear that we are all that far from the Trump tweets out, this is sedition, punishable by death sort of thing about the Director of the Bureau of Labor Statistics. You know, we're getting that for Democratic lawmakers right now. So, yeah, I guess one other question or two other questions. The first is you make the point just now about the, like, the real economic value, like the economic, you know, wealth generation that comes from just having this, like, gold standard set of economic measurements. Obviously, we have been in a place for a long time where the government has, has provided that service to great effect. If, if there is a vacuum that's created here now by, by people no longer being able to, to, you know, trust these numbers. In theory, there is still economic, like, opportunity there. Is there any, like, kind of, like, halting way that, that, that, you know, private data collection is stepping in on this stuff? And what's that look like right now?
- [14:57]
B
Yeah, and to be clear, private data, proprietary data, still extremely useful even when you don't have all of this, like, data manipulation, censorship, disappearances stuff that's happening with the federal statistical agencies. I use private data all the time in my reporting. And so I'm not suggesting that it's like, inherently bad, but there are some data series that you can really only rely on the government for, like the census. Right. There's no private institution that is capable of, of collecting survey information of every single human in this country. It just doesn't exist. And there are similar problems where if you're looking at one particular data source, like, you know, there are these credit card transaction releases where like MasterCard or Visa or others will say, here's what we see in spending patterns across our customers, that's definitely useful, but it's not going to necessarily be representative of the entire population because, like, not everybody has a Visa. Some people only transact in cash even today. So these, these private data sources are useful. They can help fill in the gaps in some cases. And there are, in some, and at some firms where they have like a chief economist or a data scientist or somebody like that, they are doing their best to try to, to make sure that the data are reliable and cleaned up and they account for these, these holes and things like that. But there are also more opportunistic cases where you have like, I get what I refer to as data, as PR pitches all the time. It'll be like some random company that claims that they have a statistic, you know, like 33% of young men went out and like bought flowers for their girlfriend this weekend and it's like, oh, and this happens to be a company that sells flowers or whatever. So there's a lot of like trying to get their name in the press by providing pseudo facts or at least not very reliable facts. And you do have examples of that. Walmart maybe is an example of that recently where they released their pricing for a Thanksgiving meal bundle that they said was quite a bit cheaper. I think it was like 25% cheaper, except it wasn't apples to apples or pumpkins to pumpkins or whatever analogy you wanted, turkeys to turkeys because it had different stuff in the bundle this year versus last year. They had, you know, some more private label stuff, it fed fewer people, etc. So it was, you know, normally, like if you were actually doing a comparison year over year, you would try to keep things the same, right? Or you would have some fancy way of adjusting for the fact that like, I don't know, maybe there are different kinds of pumpkins in the pie this year than last year because of a blight, a pumpkin blight. Like you would figure out a way to adjust for it. They're not trying to do that. Walmart's incentive here is to say, hey guys, we have a great deal for you. Right? So of course they're going to say things are cheaper. Like, what company in their, what publicly traded company in their right mind is going to send out a press release saying, guess what stuff is super expensive this year? Don't bother shopping, you know?
- [18:14]
A
Yeah.
- [18:15]
B
So like, you have to think about the incentives of the companies themselves. And of course, this Walmart example is something that the White House latched onto. Whether because they didn't realize that the numbers were not consistent and not apples to apples and turkeys to turkeys, or they didn't care. Similarly, the White House blasted out data from DoorDash's annual survey, which, you know, good. On DoorDash, they're welcome to like put out whatever information they want, but their information about like getting breakfast foods delivered to your home has gotten cheaper year over year, which is literally a chart that they put out that should not be cited by the White House as it was, as evidence of prices falling. You know, it's just, it's not the same thing. Like, their incentives are different and, and this is also like breakfast food delivery, not really representative of the overall basket of groceries that Americans purchase. But when there was a void, when there was a gap in the data, because as we started out by saying the government was shut down, maybe this was more forgivable, right? Like, oh, they're looking for whatever indicators they can. If you really want to give them the benefit of the doubt, they're looking for whatever indicators they can to figure out what's happening with prices.
- [19:32]
A
They.
- [19:33]
B
Given that we have this data blackout, I don't think that's what happened here. But whatever, maybe you can make that excuse. The problem is that they are themselves creating more voids, more vacuums in the data by deleting data series. And one thing I do want to make clear, it's not just about economic data. Like, I mostly focus on economic data because of what I cover, but it's all sorts of other data on like mental illness, STDs, climate change, natural disasters. I'm thinking of what else I've come across. Immigration, of course, gender identity. They're, they're purging and deleting lots and lots of other data series. They're like thousands of data series at this point that have been deleted that have suddenly disappeared from government websites. There are some efforts by external institutions affiliated with universities and libraries to archive that information, but it's still not actively being collected anew. So it's not just economic data. There's a lot of ways in which we have more gaps in our knowledge about the world around us. And like I said, that affects normal people. It affects what they sh, you know, how they shop. It affects like how physicians diagnose your illness if you come in, if they're not getting good information about trends in communicable diseases, for example, there are a lot of ways in which these Trump enforced holes in the information we have around us can affect our lives.
- [20:57]
A
Yeah, well, I'm a little surprised that you are not entertaining the alternate hypothesis here, which is that all of these data collectors throughout our government were actually nefarious agents of the deep state, obviously looking for active ways to sort of undermine Donald Trump's truth telling about our great hot economy, the new golden age of America, all of these sorts of things. Katherine, thanks for coming on to talk all of this through for us. Obviously, you're gonna keep watching it. We're all going to keep watching it. Thanks to you all out there for, for watching the stuff, for heading over to the bullwork.com Get Catherine's newsletter. It's great. This is all in there in her one that came out yesterday. Subscribe to the feed, like all our stuff. Buy merch on our website. You know, do it all, do it all. Be a, be a bulwark superfan. Why not? Thanks for watching and we'll see you next time.