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Lost Pages: Eroding our confidence in public data

The effects of a recent executive order purging advisory boards working with federal agencies include dismantling the Bureau of Labor Statistics’ Technical Advisory Council, and Data Users Advisory Committee. Boards advising Census and the Bureau of Economic Analysis were also dismissed.

These advisors are experts in their fields, with broad understanding of the BLS’s different series, and their strengths and idiosyncrasies. They have significant experience in sample design, modeling, analysis and interpretation of large structured and unstructured data sets, formulating survey questions, and accessibility. In addition, they advise on technicalities, and on changes in what data users need, and on new series that would be more relevant in our changing economy, and less relevant series that could be trimmed, especially important as the BLS is chronically underfunded. The TAC specifically excludes anyone subject to federal registration requirements covering lobbyists. Terms generally last two years, and board members provide their expertise and guidance for free.

We cribbed some of that text from the BLS’s page on the committees yesterday. Today that page is gone.

Of course, accurate data is critical both to policy makers striving for rational outcomes in our disjointed economy, and to investors. Neil Dutta recently highlighted the importance of our federal data, calling it the gold standard, and wondering what a glitch in one of our major economic reports would do to global markets. He’s far from the first analyst to do so.

In an interview with Politico’s Weekly Shift, former BLS commissioner Erica Groshen points out that if senior BLS leadership were to be suddenly serving at the “pleasure of the president,” that might make BLS statisticians afraid to point out data points they consider statistically unsound. And we’ll add that if it became known that the BLS had been politicized, that itself might rattle confidence, built as it is on a fragile structure.

There are always complaints, especially when the actual release throws egg on your forecast’s face. (Don’t tell anyone, but we’ll admit to guiltily checking the birth/death model on such mornings.) In the last decades the tenor of those complaints has become increasingly alarming, including accusations of outright fraud. When asked if the public would have a way of knowing if there were erroneous data, Dr. Groshen, with her usual candor, responded that in addition to ensuring that “every tax dollar is well spent,” by advising on most appropriate technologies, and allowing data users themselves to have a voice, the advisory boards provide transparency. “…if there were attempts to manipulate BLS in some way that was unprecedented, illegal [or] something inappropriate, it would be more obvious in the context of the give and take of an advisory committee than in many other ways.”

Over the years, to address legitimate complaints, say about lagged data, Dr. Groshen has promoted ways to restructure our statistical sources to provide more timely and granular data. Her widely supported suggestions include funding the Department of Labor to reframe the weekly UI claims reports to function as an economic indicator instead of the administrative record those reports were built to be, and to publish the full data set based on UI data, the Quarterly Census of Employment and Wages, with a shorter lag. Despite the complaints, apparently there’s no money for that.

According to Dr. Groshen, in disbanding the TAC, we “lose one more means to counteract baseless accusations…one more means to communicate exactly what you did and why,” and to clarify questions. “I would say that if an administration wanted to try to manipulate data, then they would not want to have these advisory committees around.”

Business owners in the Capitol region are hiring uprooted federal workers, and offering perks, like free yoga classes, discounted degree programs, and medical care for their pets, acknowledging that the “federal workforce is a wildly important part of our economy.”

There will be no free yoga classes or any other form of enlightened self-interest that will offset the damage caused by the degradation of our public data sources. Come to think of it, on the first Friday of the month, instead of fielding calls from clients who suspect the employment report has been manipulated, we may all be wondering about that ourselves.

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Bedlam hits the states

Federal agencies are required by federal statute to provide 60-day notice of workforce reductions to offset potential strains on state systems and mitigate harms to workers in affected regions. The agencies also reveal to state boards if terminations were performance based or part of a workforce reduction.

As we all know, the new administration has fired workers in the hundreds and thousands without following procedures, perhaps most importantly without notifying the states involved. Apparently, some agencies are citing restructuring, others performance issues, as the reason for terminations, and state agencies have to look carefully at each claim, a process likely to become overwhelming time consuming as purges continue. Until verifications are completed, employees cannot be “released,” meaning that in addition to having no job, they have no benefits. (Lawsuit here.)

It will be a long time before we know the details but, for example, MSN reports that in March 2024, 189 federal workers applied for UI in Maryland. So far this month, offices are receiving 30 to 60 filings a day, which would ratchet up to a 630 to 1,260 total by the end of the month. In the highly unlikely event the current rate remains steady, that is.

federal workers by state

“Economic pain is contagious,” said Michele Evermore, senior fellow at the National Academy of Social Insurance, in a recent interview, so let’s take a look at state concentrations.

Nationally, federal workers make up under 2% of total nonfarm employment, about the same as “insurance carriers and related activities.” A fifth work in DC and environs, constituting 5.8% of total nonfarm employment there. Many states are working to bring federal workers into their own offices, yet some states may not be able to accommodate willfully terminated employees in either private or public sectors. States with largest shares of federal workers, over 2.5%, include Alaska, Hawaii, and New Mexico. In Oklahoma, Wyoming, and West Virginia shares run from 2.0% to 2.5%, followed by 1.5–2.0% in Alabama, Georgia, Mississippi, Maine, Montana, Puerto Rico, and Washington. In the rest of the country, the rates are lower than the national average, with South Dakota’s <0.5% the smallest share. To us, that’s a worrisome mix.

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Tariffs over time—in words and pictures

As we were wrapping up this issue, the president-elect announced the creation of an “External Revenue Service” (ERS). It will, as he put it, demonstrating his idiosyncratic understanding of trade, “collect our Tariffs, Duties, and all Revenue that come from Foreign sources. We will begin charging those that make money off of us with Trade….” Almost no one aside from him and his circle of advisers thinks that foreigners, rather than US consumers, pay tariffs, but let’s set that aside for now.

Instead, let’s look at tariffs over the long sweep of history. According to a useful factsheet from the Congressional Research Service, tariffs were an easy way to collect revenues in the early history of the country, which didn’t have a developed administrative structure. There were only so many ships sailing to unload goods in so many harbors, so taxing those goods was not much of a technical challenge. The government was small and didn’t need that much revenue anyway.

The tariff and revenue histories are illustrated in a quartet of graphs below. From 1792 to 1930, federal revenue averaged less than 3% of GDP. (Obviously those old GDP figures are guesses, but let’s take them as a decent approximation of reality.) From 1792 to the eve of the Civil War, 1860, tariffs provided an average of 86% of total federal revenue. (There were some bumps before the Civil War, notably the War of 1812, which juiced expenditures and savaged imports.) Besides borrowing heavily, the federal government increased excise taxes, reducing dependence on tariffs and leaving them accounting for just over half of federal revenues in the last third of the 19th century. With the introduction of the personal income tax (PIT) in 1913, tariffs receded in importance; since 1945, the PIT has accounted for 45% of federal revenues.

(Speaking of federal revenues, the popular notion that taxation has been growing like Topsy can’t survive fact-checking. As the graph shows, federal revenue as a share of GDP has been nearly flat for the last seven decades; in fact, the 2024 share, 17.1%, is below the 1951 share, 18.4%.)

With the growth of the PIT, and federal revenues generally, tariffs (or customs duties, to use the technical term) have largely disappeared as source of federal revenue. (In the graph on the lower left, you can see a spike around 1930, the time of the infamous Smoot-Hawley Tariff, which many, though not all, economists believe contributed to the Great Depression.) Customs receipts barely cracked 1% of total revenue in the 1990s and 2000s. With the tariffs imposed during the first Trump administration, and preserved by Biden, that share doubled to 2% in 2019–2022, but they’ve eased back to 1.6% in 2024. That looks poised to change

Since Trump has floated the idea of replacing the PIT with tariffs—switching from “taxing our Great People using the Internal Revenue Service,” as he said in the Truth Social announcement of the ERS—it’s interesting to experiment with how large those tariffs would have to be to plug the revenue gap. In the first three quarters of 2024, goods imports were $3.3 trillion at an annual rate, and the PIT brought in $2.5 trillion. Matching that would require a tariff rate of 70%. The effective tariff rate last year—revenues divided by the value of goods imports—was under 3%. Obviously a 70% tariff would decimate imports, but we’re not even considering that.

It all seems like a stretch.

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A Truly “Who Knew?” Survey

Montana grizzly bears forage in the dusk

We came across a survey covering public support for the Endangered Species Act, including among different demographics, over roughly the last twenty years.

Jeremy Bruskotter and Ramiro Berardo, who teach at Ohio State, and John Bruskotter, at University of Michigan, compiled polls taken over the last twenty years and found support of the Act to be remarkably stable.

As background, visible declines in game species and those taken for millinery use, like the Carolina parakeet whose flocks once darkened the skies, led John Lacey, a Republican representative from Iowa, to introduce the Lacey Act of 1900, the first legislation regulating commercial animal markets. Later came the Migratory Bird Treaty of 1929, between the US and Canada, and others leading up to the broader Endangered Species Act of 1973.

Some animals protected by these acts have recovered, like our iconic bald eagle, bison, manatee and grizzly bear, while others, like the whooping crane, remain endangered with slowly recovering populations. That’s not so shocking: science-based conservation science is often effective and takes time.

What is shocking: the broader Endangered Species Act of 1973, written at Richard Nixon’s request, passed with a 355-4 vote. And the public likes it.

The authors compared  results of the base survey conducted in 1996, and those conducted in 2011, 2014 and 2015 and found them “statistically indistinguishable.” Overall, four in five American support the Act, and one in ten oppose it, while some don’t know what they think. And, while gun control and climate change have become increasingly polarized, the majority of self-identified liberals, 90%, moderates, 77%, and conservatives, 74% support the Act. No surprise that 92% of environmentalists support the Act, as do 73% of hunters, who often partner with ecological conservation groups, but it is stunning that 71% of farmers and ranchers support protecting vulnerable species, as do 69% of property rights advocates, who have been among the most verbal opponents.

Another surprise: Some supporters of the Act have expressed concern that protecting “controversial” animals, like gray wolves, may turn people in wolf territory against the Act, but both trust in the Fish & Wildlife Service, which administers the Act, and opinions about wolves within and without wolf territory are equivalent.

If this all seems odd given the unflagging pressure in Congress to weaken the Act, other research, specifically this study of wolf reintroduction in Scotland, shows that leaders of special interest groups often hold more extreme views than their members.

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Kaiser Foundation on “Limited Empirical Validation”

In their most recent Misinformation Tracking Poll, the Kaiser Family Foundation found that Republican respondents are more likely to believe false claims made by politicians and elected officials about immigrants than are Democrats, followed by Independents. For example, 45% of Republican respondents say it is “definitely true” that immigrants elevate violent crime, as do just 6% of Democrats, and 20% of Independents. Add in those who think it’s “probably true,” and you get to 81% among Republican respondents, 53% among Independents, and 22% among Democrats. Similar, slightly lower, shares are misinformed on immigrants raising unemployment among the US-born, and on relieving labor shortages, with more Democrats believing the latter to be true than Republicans.
But the real shock might be the small shares of those of every political stripe who have not heard the true claim that immigrants pay more into the tax system than they receive in benefits. This has been documented for decades, and by those with very different principles.
Although 80% of American adults have heard the false claims about violent crime, and 69% have heard the true claim about immigrants relieving labor shortages, just 31% have heard the true claim about contributions to the tax system. And here there’s a greater disparity between Democrats and Republicans. Although Democrats are more likely to have heard the true claims about relief of labor shortages, and Republicans more likely to have heard the false claims about crime and unemployment, shares average within five points of each other, in the 90% range. However, thirty-eight percent of surveyed Democrats have heard the claims about tax payments, as have just 23% of Republicans, dropping the share to 61%.
And while, for example, 90% of Democrats believe immigrants surely or probably reduce labor shortages, as do 86% of Independents and 75% of Republicans, 59% of Democrats believe  immigrants pay billions into the tax system every year, as do 40% of Independents, and just 22% of Republicans. Note the highest share on that count is lower than the lowest share who have heard the news on labor shortages.
We might ask the immigrants themselves—a more accurate sixty-five percent correctly believe they pay more in taxes than they receive in benefits, a belief shared by just thirty-six percent of adults overall.
Kaiser also highlights our “muddled middle.”  Fifty-six percent of American adults are unsure if claims about crime are true, with 28% believing they are either probably false or probably true. Margins are tighter among immigrants causing unemployment, 27% probably true, 30% probably false, and on relieving labor shortages, where 44% believe that’s probably true, and 11% probably false.
Thirty-six percent of immigrant adults say former President Donald Trump’s rhetoric has had a negative effect on how they are treated, rising to 45% among Asian immigrants. About three-quarters of immigrants say Vice President Harris’s words have not affected their treatment, with about thirty percent of Asian immigrants believing her words have had a positive effect on their treatment.
A quarter of immigrants believe it will make no difference in their own lives which candidate wins the White House, but 55% believe they will be better off under a Harris presidency, while 19% believe Trump will be more beneficial.
Seventy-three percent of immigrants who identify as Democrats believe immigrants will be better off under Harris, and just under half of those who identify as Republicans believe they will be better off under Trump, a bit of a blow to the concept of enlightened self-interest.
KFF’s President Drew Altman commented on the survey, calling the claims about violent crime the “ultimate example of amplification of misinformation by political figures based on the intentional use of anecdotes.”
He points out that politicians have a long history of using the vulnerability of those who feel left behind to fears about immigration. And that is most visible in the claim that immigrants are “widely committing murder,” through the use of one or two outlier anecdotes, a case of “limited empirical validation,” in social-science lingo.
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