Erica Groshen, a highly-regarded former chief of government statistics and current labor economist at Cornell University, has sounded alarms on a dangerous proposed rule from the White House’s Office of Personnel Management. Groshen is a former commissioner at the BLS. This rule threatens to destroy any remaining integrity of the federal agencies tasked with producing our critical economic data. Groshen fears that in combining budget cuts and a rush to modernize, the reliability of United States statistics may be threatened. Continuing down this path could be catastrophic for democracy and the country’s reputation in the world democratic community.
Today, Groshen’s concerns are all the more justified given the profound potential impact of this rule, which could further compromise the impartiality of data-producing agencies. She cited recent cautionary tales from places such as Argentina and Greece. In each of these countries, governments have misrepresented statistics to protect their own political interests. Meanwhile in Argentina, the International Monetary Fund (IMF) deemed the official inflation numbers fraudulent. At the same time, as some critics argue, Greece’s government cooked its books to conceal inflation and large budget deficits, allowing the country to enter the euro in the European Union’s Maidenhead.
Groshen cautioned that even a short-term interruption to the US’s newly-formed data-collection infrastructure would be a “real catastrophe” in and of itself. She cautioned that such disruptions could form to completely wipe out critical expertise. This understanding is the bedrock of informed decision-making in a healthy, functioning democracy.
“The fate of US democracy could hinge on the continued production of accurate figures,” Groshen asserted, emphasizing that the nation’s global reputation as a stable economic power is closely tied to its long history of producing reliable data, dating back to the establishment of the BLS in 1884.
The proposal has received significant public outcry due to its chilling consequences on statistical integrity. Groshen expressed her concern that diluting data agencies’ impartiality could land the US in a similar category as countries where economic statistics are openly doubted. The Trump administration’s sensitivity to good economic news would make a teen self-conscious. This sensitivity magnifies the threat of an economic slowdown exacerbated by punitive tariffs.
Worries about the administration’s cavalier attitude towards economic data are hardly confined to these recent misadventures. Shifting risk Kitty Richards, a former treasury and White House official under both the Biden and Obama administrations, reiterated Groshen’s concerns. Richards described any attacks on government data collection as attacks on journalism itself. He noted that these attacks served to erode the public’s faith in knowing what is true.
“Undermining data collection and casting doubt on data that is released is part of a program of undermining the public’s ability to learn the truth.” – Kitty Richards
Conversations are already happening in several circles around reforming the way we calculate Gross Domestic Product (GDP). Commerce Secretary Howard Lutnick has suggested an alternative approach that would yield more positive numbers, though experts say his approach risks departing from accepted methodology and international standards.
Richards cautioned against the long-term implications of such changes, stating, “You can’t go back and fix it. If you have a data series stretching back 50 years, then it gets cut for two or three years, you no longer have that 50-year data series. You’ve lost knowledge forever.”
Groshen’s call to action is a challenge for any users of government statistics. Click here to send comments urging the Board to withdraw these civil service changes before this 30-day notice period expires on May 23. She indicated that allowing these alterations could have lasting effects on how economic data is perceived and utilized in policymaking.
“There are a number of changes to the civil service that make it much easier for the administration to try to interfere with the activities of the statistical agencies and that worries me.” – Erica Groshen
The stakes are very high, especially so considering that the winners would likely set a precedent for the future of public policy and governance itself. Groshen cautioned that cooking or dumbing down measures is perilous. It permits powerful actors to create a version of reality that supports their narrative, rather than one based in fact.
“In a democracy, you want to be feeding people the right information so they will make the right choices. But if the goal is to destroy democracy, you’d want to control the statistics to fit your story … you want to be promoting your own version of reality.” – Kitty Richards
The public is losing its cool over economic forecasts. A lot of this fear is rooted in speculation over what might happen under this administration. Not surprisingly, some analysts believe that could create an incentive to “cook the books.” Manipulating them is not a simple, straightforward thing to do.
“I would say that there’s definitely an incentive to cook the books, but I don’t think that it is going to be very easy or feasible to do.” – Erasmus Kersting