The BLS Can't Be Replaced by the Private Sector

I understand why articles like this are written and why we have these conversations but it all feels like we're sane washing this administration. Any other administration (especially a Democrat) firing the head of BLS due to unsavory numbers would be a scandal on its own. Yet, we're seven months into this one with multiple corruption scandals flooding the zone. It just seems crazy that we're here justifying basic concepts of government/public service and not outright calling this out for what it is.

Exactly. Instead of battling with their own internal departments when they show lack-luster numbers in good faith, they can just blame the "agendas" of the non-blessed private sector companies who show the same data.

Even better, they can exult the virtues of select private sector companies who show "good" "approved" data.

What? No, no conflict of interest that members of the President's immediate family happens to hold board seats in those "approved" companies.

Love it. You can then just pick the numbers from the firm that is saying what you want to hear.

We have been seeing news reporting, media, and education private organizations knuckling under from pressure by the administration - is there any reason to believe that we would not see the same from data reporting companies

What I really would like to see is a historical trend analysis seeing whether BLS and nongovernment estimates (public or private) start to decouple about now.

If you have enough sources you presumably at least can start to make observations about which sources agree and which disagree.

Actually I presume something like this already exists, but I'm not an economist so I don't know.

(Great post/article!) I was so confused as to why you said counterpoint -- it is deep in the article, if at all.

> If the government’s jobs data is considered biased or unreliable, Wall Street will have other places to look. ADP reports figures on private payrolls, for instance. (And it also tells a bearish story: ADP showed a net loss of jobs in June, for instance.) Meanwhile, Gallup once tracked employment numbers on a weekly basis based on its large-scale surveys and could resume that effort. Or investment banks like Goldman Sachs might conclude they could have a competitive edge by tracking their own economic data.

But in the following paragraph he points out that the numbers aren't likely to be as accurate, comprehensive, or as reassuring as numbers generated by the government. Overall though it is a really good article worth a share of its own.

Doesn't seem to be a counterpoint?

Maybe the best move at this point is to move toward the BLS releasing all the raw data, but do not publish conclusions of their own? Then at least you have a central "unbiased" (if that's ever an actual state) agency responsible for collection, and leave it up to the more polarized outlets/statisticians/... to produce their own interpretations.

E.g. similar to Census data -- central data collection managed by govt, generalized anonymous data released for interpretation by anyone.

Yes, if the executive branch is trustworthy. We need to send a clear signal to the Republican Party that this sort of general behavior is not acceptable to Americans.

See, what they really need to do is release the politically-desired results in press releases while sending the real information using steganographic concealment in the page's logo. We must construct a Truman Show around Dear Leader for our own survival. /s

Previous users of this data will seek alternative, less precise signals elsewhere and likely use conservative, pessimistic guesstimates that will tend to be risk-adverse and not encourage expansion or investment.

I mean, they already don't. Investors aren't stupid. Half of financial analysis is converting financial metrics from GAAP to other more meaningful structures that allow for proper forecasting and comparison. They spend billions on alternative data, trying to get an edge. They take nothing at face value.

I think the government stuff is a bit of a farce. They have an incentive like any other institution. For instance, inflation metrics are tied to trillions of dollars in terms of retirement benefits or other programs that are indexed to inflation. They have a gigantic incentive to play with the numbers. And I'm 100% convinced that they do. Does anyone believe food prices went up only 28% since pre-covid? Did something go from costing $4 to $5? No, most things close to doubled. But they're able to play with the numbers changing the basket (beef getting more expensive, we'll just swap that out with Tofu!).

I think this pattern of behavior needs to be cast as incompetence and cowardice rather than immorality. Avoiding transparency, rigorous analysis, and competitive disagreement and review is a sign that one cannot make a convincing argument, or does not have courage to do so. I don't think they care about the morality of it, or see themselves as morally justified.

The problem is the BLS was putting out wildly incorrect facts

The whole paragraph explains it:

> Private companies are in the business of making a profit, and to do that they need to attract customers. Some customers are more profitable than others. As a result, a company’s data will tend to reflect the needs of its clients — it won’t capture the economy as whole.

Honestly, it is a very, very good paragraph. There is a slavish devotion to the idea that markets are efficient and that is the most desirable outcome in all situations. If you are in the business of being a government and running a country for all of your citizens, you need all the data, not just select aspects of it, and not just those that tell a particular story.

Everyone needs trustworthy employment data as this affects every single business in the country. If you don't know what the real employment rate is and you see your business going down you might think the problem is your business and not the whole economy.

You can't run a modern country without collecting real world data about the country's economy.

People who are not the clients could need accurate information about how the total market is doing?

Karl Marx used the British government Blue Books he found in the Reading Room of the British Museum to write Capital. If the British government wasn't publishing Blue Books in the 19th century, he would have had more difficulty forming his theories.