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Economic statistics

Back in the late 1980s early 1990s, when I was a (poorly) paid economics correspondent (one of the first to write about the dangers of derivatives, by the way), I was a constant and regular user of government statistics, and also statistics from the various industry trade associations in the U.S. This is a brief summary of what I learned about government statistics and statistics keeping back then.

The U.S.  Department of Commerce and its Bureau of the Census used to do a fair job tracking the real economy back in the 1950s through 1980s, until Reagan took office and the first wave of privatization was begun. Economic statistics, at that time, were much more than just the Gross Domestic Product. You used to be able to get what were called Current Industrial Reports for such things as Inventories of Steel Producing Mills, Iron and Steel Castings, Knit Fabric Production, and so on. All these Current Industrial Reports were quarterly, and many of the important indicators of basic economic activity, such as cement production, or iron and steel production, were monthly. Most of these Current Industrial Reports have been discontinued, including the first three I mentioned. . Just go through this list and see how many Current Industrial Reports have been discontinued - and for which industries.
http://www.census.gov/cir/www/alpha.html

Why is this important? Because the best econometric models of the time used hundreds of inputs such as these to track the economy. These econometric models are probably the best that have ever been developed, but now they probably don't function very well, because the raw statistics are simply no longer available. So now the Bush administration can claim that GDP grew by 3.8 percent, and that inflation was a feeble three percent or so, and who can gainsay the numbers? The numbers are no longer available - unless you're willing to pay the private firms and the trade associations that have taken over. Today -- and I've been looking the past few months, since it seems I'm about the only moron on the planet who has some ideas about these things AND is willing to share it on the blogosphere without any remuneration whatsoever -- you can still get most of the trade association reports, but they are all several hundred dollars.

The Commerce Dept. used to put out an annual tome called The U.S. Industrial Outlook. The contents were pretty much broken down along the lines of the list of Current Industrial Reports I linked to above. Each separate chapter pulled together all the statistics for that particular industry, provided a summary of the past years' developments in that industry, and listed the sources of information for that industry, including the address and phone number of the Commerce Dept. specialist that wrote that chapter. I used to call those specialists for my economics news articles, and they were founts of information. They were national treasures. And they were all being slowly removed through attrition. The first time I really became aware of the insidiousness of the Reagan assault was when I called the specialist on power generating equipment - the turbines and boilers and pressure vessels that go into electric power generating plants. After getting the industry information I needed for an article, he mentioned he would be retiring at the end of the year. Assuming that he had been given an assistant that he was training to replace him, I asked for the name. There was no name. There was no assistant. There would be no replacement. When this specialist retired, the U.S. government - our government, your and my government - would no longer be following what happened in the power generating equipment industry.

Think about that for a minute. Have you experienced brown-outs or black outs the past few years? Well, our government has not kept tabs on the one industry vital to rebuilding the electric power generating industry for the past twenty plus years. How can intelligent policy be made if the government is not keeping track of such a vital industry? Well, duhhhh... And this is just ONE example of dozens. You really need to go through that list of Current Industrial Reports and see what is no longer being tracked.  
http://www.census.gov/cir/www/alpha.html

This dearth of real economic statistics helped facilitate the transformation of the U.S. economy from industrial capitalism to financial capitalism. How could anyone protest the wrecking of the manufacturing economy, if essential facts and statistics were no longer freely available to the public?  

These trends were not reversed nor even slowed down by the Clinton administration.

At the time I was writing, there was a very careful, deliberate debate going on within the U.S. Labor Department about the labor statistics. There are two sets, one based on surveys of work places, and the other based on surveys of households. I dimly recall that the latter has a sample universe of around 60,000. It was recognized that there were serious shortcomings with the surveys, and with the models used to transform the survey results into accurate and trust worthy snapshots of the entire national labor force. My assessment is that at the time, the people involved were very concerned and dedicated to getting the best data, models, and analysis possible. But, they were slowly but surely leaving, and without being replaced. And that was 15 years ago and more.

By the way, there is something out there that appears to be the successor to the U.S. Industrial Outlook. I think it's called the U.S. Trade Outlook. It is compiled, published, and distributed by a private company, and costs, if I recall (I was looking at it - or the ads, actually - online about six months ago) $285 or some other amount that scares me off.

About the only thing left in the U.S. now that I think is worth looking at (unless you have a few thousand dollars to buy all the private reports) is the annual industry assessments done by the U.S. Industrial College of the Armed Forces. These are online available one year after publication here: http://www.ndu.edu/icaf/industry/reports.htm

One other thing I would like to note. The U.S. government used to have all sorts of documents and studies on various manufacturing industries. I remember getting one on gear cutting and making. They were excellent. A lot of these came from the Office of Technology Assessment, which was abolished during Clinton's tenure. There also used to be lots of private studies and assessments of various manufacturing industries available from trade associations, and a host of companies. From what I've seen that past year or so looking for them, they no longer exist. But the really interesting thing to note is that there are now a lot of them available for various manufacturing industries in India. For example, check out this link.
http://www.bharatbook.com/general/aboutus.asp

by NBBooks on Sat Jan 5th, 2008 at 12:49:21 AM EST
[ Parent ]
This is a fascinating post - worth posting as a diary here (and on dKos): in fact I'd like to frontpage it.

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sat Jan 5th, 2008 at 05:21:04 AM EST
[ Parent ]
Fascinating? I find it infuriating.

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Sat Jan 5th, 2008 at 06:48:34 AM EST
[ Parent ]
I was just talking about the quality of the information - you're talking about your reaction to the information!

In the long run, we're all dead. John Maynard Keynes
by Jerome a Paris (etg@eurotrib.com) on Sat Jan 5th, 2008 at 09:40:26 AM EST
[ Parent ]
Thank you, NBBrooks, for such a detailed description of your experiences.  The statistics base used for all kinds of policy and reporting analysis does not deserve the highest level of trust, imo.

You point out in detail that many statistics tracking industry sectors have now been privatized to trade associations.  These associations have an axe to grind in favor of their industry, as i know even from my own.  Further, much of the data necessary for a complete overview is held as confidential, therefore not being considered or analyzed.

Your point that India now has some better manufacturing stats than the US is telling.  As i asked above, i wonder to what level the accuracy or availability of stats changes from country to country.  For example, my impression, as opposed to analysis, is that econ stats in Germany carry a higher level of trust than in the US.

As an aside, i always used to be fascinated by the news reports of previously released stats in the US being revised two or three months after the fact.  I wish i had kept a record of both the justifications and the upshots.

But thanks again for your thought-provoking experience.

"Life shrinks or expands in proportion to one's courage." - Anaïs Nin

by Crazy Horse on Sat Jan 5th, 2008 at 06:13:30 AM EST
[ Parent ]
I intended to write an answer to the top-level comment to the effect that government statistics (a pleonasm since the word statistics derives from state) are necessary for good governance: if you don't know the state of the country (and the trends) how are you going to decide on policy? Therefore the quality of government statistics is in proportion to the interest that the government has in good governance. As you indicate,
The U.S.  Department of Commerce and its Bureau of the Census used to do a fair job tracking the real economy back in the 1950s through 1980s, until Reagan took office and the first wave of privatization was begun
the Reagan/Thatcher types have no interest in good governance.
Most of these Current Industrial Reports have been discontinued, including the first three I mentioned. . Just go through this list and see how many Current Industrial Reports have been discontinued - and for which industries.

...

Why is this important? Because the best econometric models of the time used hundreds of inputs such as these to track the economy. These econometric models are probably the best that have ever been developed, but now they probably don't function very well, because the raw statistics are simply no longer available.

What kinds of models are we talking about?

We have met the enemy, and he is us — Pogo
by Migeru (migeru at eurotrib dot com) on Sat Jan 5th, 2008 at 06:43:54 AM EST
[ Parent ]

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