When Rhetoric Distorts Statistics


On Friday morning, Donald Trump appeared on Fox & Friends to talk about running mates and bad-mouth the economy, which, he said, was “terrible,” proof that the Democrats don’t know what they are doing. “The real unemployment rate is probably twenty per cent. Jobs are leaving. Look at Carrier,” he said, referring to a manufacturer moving jobs from Indiana to Mexico, “look at so many companies. They’re leaving.”

Never mind that, on the same morning, the Labor Department reported that the unemployment rate was five per cent, unchanged from the previous month, and that a modest hundred and sixty thousand new jobs had been created in April. Also released were reams of supporting material, on jobs by industry and region, and on six different unemployment rates that vary by how the survey question is asked and what degree of employment people experience.

For Donald Trump, all that data was worthless. It is true that the official unemployment rate often understates real unemployment, as it excludes the so-called discouraged workers—those who have given up even looking for a job. But by another measure, which includes both discouraged workers and part-time workers who would like to be full-time workers, and which was also released by the Labor Department on Friday, the rate was more like 9.7 per cent—certainly nowhere near twenty per cent.

Legitimate questioning of how we measure and what we measure is not only defensible; it’s imperative. We live in a fluid world, and it is almost inevitable that the pace of change will exceed our ability to capture that statistically in real time. More people are working in the gig economy—driving for Uber and the like—as well as living in a world of cell-phone numbers that undermines the reliability of the traditional land-line surveys, which form the raw material for most of these official statistics. If you cannot easily survey twentysomethings on their smartphones, you are missing a vital piece of the puzzle.

There’s a vast difference, however, between such healthy questioning and a flat-out assertion that the numbers are lies or fake or phony. For most of the past sixty years, since these economic statistics were first calculated and released after the Second World War, there has been a general agreement that, at the very least, they are the product of good-faith efforts to gauge what’s what. Without an accepted common ground of shared statistics politicians can claim whatever they like. Donald Trump is running in part on the narrative that the “official” unemployment rate is a lie. “Don’t believe those phony numbers,” he exhorted earlier this year. That claim clearly resonates with many millions who are unemployed, underemployed, or poorly paid. The problem is that when you reject the basic legitimacy of government statistics (as opposed to questioning their methodology), you run the risk of entering a fun-house world.

This is what happened in Argentina. Back in 2007, the President at the time, Néstor Kirchner, fired the staff of the official agency responsible for reporting inflation numbers. The official inflation for years after was, conveniently, much lower—as much as fifty per cent lower—than what neutral analysts calculated. When Cristina Fernández de Kirchner succeeded her husband as President, she went even further, and tried to prevent the dismissed staff from publishing independent reports. Mauricio Macri, who took over as President last year, reversed course and announced that a complete overhaul of official data was needed. He turned to the U.S. Department of Commerce for help, and suspended publication of official numbers until sometime later this year.

In Argentina, fake statistics were passed off as legitimate. In this country, legitimate statistics are denounced as fakery. But it leads to the same muddled place where reasonable discourse is impossible. Trump is only articulating what others have asserted. Take Paul Singer, a noted hedge-fund investor and Republican donor who, yes, targeted Argentine bonds. He has been on “the numbers are lies” bandwagon for some time, largely stemming from a belief that the policies of the Federal Reserve are terminally distorting the real economy. A 2014 investor letter from his firm summed up those sentiments: “We think a lot of the data is cooked or misleading.”

Trump hasn’t called for ousting statisticians at the Bureau of Labor Statistics—his charges are at this point mere rhetoric. Yet it is a small but consequential step from blasting the numbers as lies to the territory of conspiracy, imagining reasons for why we are being lied to, none of which augur well for the thread of collective trust that is very nearly frayed already. That poses a challenge to any who prefer to argue in terms of an agreed-upon set of facts and numbers, even accepting how limited and incomplete those numbers often are. Argentina has reversed course and is rejoining the community of the fact-based. How odd it would be if the discourse in the United States went in the opposite direction.

Source: http://www.newyorker.com/business/currency...