Total Fake

SEPTEMBER 10, 2019

President Donald Trump holds up a National Oceanic and Atmospheric Administration map of a previously projected path of Hurricane Dorian.Michael Reynolds/EPA, via Shutterstock

Sharpiegate started out being funny, insofar as the president of the United States acting crazy can ever be funny. At this point, however, it’s not looking funny at all; it’s actually deeply worrying, because we’ve just learned that top administration officials demanded that the National Weather Service — which you might have imagined was the least political agency out there — make false claims on Trump’s behalf. And among the people most worried by this story are economists, who are wondering what this may presage for the parts of the government that produce economic data.

The story so far, if you somehow missed the past couple of weeks: First, Donald Trump declared that Hurricane Dorian was a menace to Alabama, when the National Weather Service was forecasting no such thing. In fact, soon after his warning the service office in Birmingham, fearing that the public would panic unnecessarily, issued a statement that Dorian would not, in fact, pose any threat to its area.

Then Trump refused to admit having been wrong, and appeared on TV with a forecast map that appeared to have been crudely altered with a black Sharpie to include Alabama in the “bubble” showing areas at risk.

So far, so hilarious. But then the National Oceanic and Atmospheric Administration, of which the Weather Service is a part, released an unsigned statement claiming that Trump had been right. And yesterday reporters at The Times revealed the back story behind that statement: Wilbur Ross, the Commerce secretary — whose department includes the NOAA — had threatened to fire agency officials unless they backed up his boss.

This was an incredible violation of the norms of good government. And it was all over something trivial; that is, nothing was at stake besides Donald Trump’s ego. What will happen if and when government agencies begin reporting bad economic news, which could cost Trump the election?

Right now the economic data are looking not terrible but somewhat weak. The last jobs report was disappointing, especially when you bear in mind that employment is being inflated by hiring for the 2020 census. Manufacturing appears to be shrinking slightly. The Federal Reserve Bank of New York’s “nowcast” — an educated guess at G.D.P. based on currently available data — puts growth at 1.5 percent and falling; this isn’t recession territory, but it is slow enough that the unemployment rate could start to rise a bit.

These are not the kinds of numbers a president who faces strong disapproval on many issues, but has claimed the economy as his great strength, will want to see going into an election. I don’t think it’s at all far-fetched to imagine that after a string of disappointing reports Wilbur Ross will put pressure on the Bureau of Economic Analysis — the arm of the Commerce Department that produces G.D.P. estimates — to report better numbers, and that the Bureau of Labor Statistics, which produces job reports and inflation statistics, will face similar pressure.

One reason to be especially concerned is that Republicans in general, and Trump in particular, already have a history of refusing to accept economic data they didn’t like. You may recall that Trump dismissed good job reports under Obama as “fake.” And a broad swath of conservatives, having predicted that Obama-era policies would produce runaway inflation, spent years insisting that official numbers showing low inflation were wrong.

So it’s all too easy to imagine that when the economic numbers start coming in bad or at least disappointing, the Trumpists will claim that they’re being sabotaged by the deep state, and put pressure on the statistical agencies to cook the books.

One way we knew that official inflation numbers were right and the inflation truthers wrong was that independent estimates of inflation, which were developed to track prices in countries where governments actually did cook the books, closely matched the official Consumer Price Index.

More about the history of the Billion Prices Project, which was so useful in showing that Obama-era inflation was not, in fact, understated — and might help us keep track if the Trumpists actually do pressure the statistical agencies. One reason this might happen is that Trump’s tariffs are now starting to hit consumer prices, and may mean somewhat higher inflation for a while.

On the other hand, some statistics really are sort of fake, although not falsified: a large part of reported foreign investment is actually “phantom investment” designed to avoid taxes.

 

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