My view is that if we pay hundreds of millions of dollars per year (we should probably spend more) on collecting and analyzing economic data, we should use that data. Yet, when Mr. Trump debates trade policy with the Canadian prime minister, by his own admission he makes up numbers.
Does he not trust the numbers provided by the U.S. government? Apparently not. But there is a White House agency (not one located in some distant cabinet department), called the U.S. Trade Representative (USTR). Mr. Trump has a policy level officer in place, Robert E. Lighthizer, so you would think Mr. Trump could trust USTR. And the USTR states explicitly that the US has a trade surplus with Canada of 12.9 billion (USD).
People can argue (disingenously) that the merchandise bilateral trade balance is in deficit, so Mr. Trump was “right”. But this is not the same as the trade balance. People could assert the StatsCanada measure of the trade balance indicates a US trade deficit. This might be the case (I haven’t been able to find a number for 2016, let alone 2017). But why would the US head-of-government cite Canadian statistics over US statistics?
Unless the current US head-of-government doesn’t care about facts at all. Which is indeed the inescapable conclusion.
@ Menzie
Menzie, you’re going to be attacked for this post, and I think you knew you were going to be attacked for this before you touched your keyboard to write it, and (much to your credit as a person of character and ethics, and a person with a personal moral code, which is becoming as rare as rhodium) you wrote this anyway. This is getting to an important point Krugman has been making for years now. That just because you are a teacher or a journalist, does not “require” you to give “equal time” to “both sides”, when one of those “sides” is so far removed from reason and/or has sadistic purposes for society as a whole. This column is an example of that:
https://www.nytimes.com/2016/07/18/opinion/both-sides-now.html
Krugman has written more recent columns on this topic, and my web search skills seem short of meeting the task of finding the more recent posts (maybe “pgi” can find more recent Krugman posts directly addressing this as she seems to have a prolific grasp of great resources online). We hear the term “activist journalism” said in derogatory fashion sometimes, but I wonder when caring about and addressing in an educated fashion the systemic problems of society became a faux pas??
As long as Menzie doesn’t take this up to Rachel Maddow level melodrama—>> https://www.youtube.com/watch?v=0eB-xjDMGdQ and keeps things facts and numbers based (something I NEVER worry about as regards to Menzie’s blog posts or papers), I hope he will not “filter” himself or restrain himself from writing this “type” of post when he finds the circumstances appropriate.
I dunno. Instead of spending hundreds of millions of dollars gathering data for a dim witted President, maybe we’d be better off if Congress reallocated those monies towards entertaining Trump with strippers and Russian prostitutes that Trump seems to like so much. He could tweet about the shows instead of insulting comments to world leaders and public servants.
The problem with this president is not where the data comes from but rather his inability to comprehend and retain key bits of information. He appears to have a significant case of attention deficit hyperactivity disorder.
At his age, heavy substance abuse (booze, weed) could produce ADHD but I suspect that Trump’s condition is more related to his golf and MacDonald’s habits. That and an obsessive, compulsive drive to follow social media and his own personal popular ratings. The hyperactivity starts early in the morning on the big white telephone from where he chronically sends out weighty edicts via twitter.
By the time the day unfurls and an aid puts a lengthy, complicated briefing paper on his desk, he is simply too excited and wound up to bother paying too much attention.
Besides who ever scored huge ratings by being a policy wonk? Who needs to grasp details in order to be inspirational and the very best president that the USA has ever had?
“At his age, heavy substance abuse (booze, weed) could produce ADHD but I suspect that Trump’s condition is more related to his golf and MacDonald’s habits.”
Trump does not drink or take drugs. He is clearly off but substance abuse is not the cause.
pgl Trump does not drink or take drugs. He is clearly off but substance abuse is not the cause.
Actually, that’s only partly true. Trump does not drink, and that’s largely due to what alcohol did to his brother. And I doubt that he has recently taken illegal drugs. However, according to his (first) ex-wife’s initial account, he was addicted to pain killers after he had some surgery on his scalp. She claimed that the pain killers would cause him to go into violent rages. That was her explanation as to why her raped her. She then recanted her story after receiving a large monetary settlement and having signed an NDA. This is documented in a 1993 book interview with Ivanka Trump.
http://www.newsweek.com/donald-trump-rape-sexual-assault-minor-wife-business-victims-roy-moore-713531
Surgery on his scalp? I did not know that. No wonder his hairdo is so incredibly ugly!
BTW – I had surgery and got off the damn pain killers the moment they were honest with me what was in them. Since them I’m on a campaign to end opium use.
Here is the statcan link http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/gblec02a-eng.htm
Paul Jacobson: Sorry, does this include services?
“Imports, exports and trade balance of goods on a balance-of-payments basis, by country or country grouping”.
Goods not services per the heading. Also it seems to be in Canadian $ not US$.
Paul Jacobson: Sorry, does this include services? And, is your source’s guess better than Menzies’s for the same time period? And if by accident it does meet these criteria, doe it actually show TRUMP’S policy influences as does Menzies’s 2016 data? Clearly Trump’s 2017 Tariff’s are so strong to influence the prior year’s data.
Menzie, I can feel RTD warming up his keyboard. This series of articles are clear examples of RTD’s complaints. Where Should POTUS Get His/Her Data From? when it doesn’t yet exist?
Econoomist’s like Climate scientists are special breeds of tea leave readers, by projecting/predicting the impacts by using non-existent data.
CoRev: Actually, courtesy of Ed Hanson and pgl, we know the 2017 US-Canada bilateral goods and services was +$2.774 billion (see Exhibit 20). This release was posted 7 March. He didn’t have the 2017 numbers when he met with Trudeau, but he would have had the 2016 numbers (i.e., those on the USTR website), and as well could have calculated the sum of four preceding quarters of data available at the time.
He seems to be using the Census 2017 data – which we have noted many times excludes services.
Alas – Dean Baker has been declaring Trump to be correct using some bizarre argument that also excludes services. The good news is that his readers have put in some very good comments which I think you will appreciate.
@ pgi
I’d be curious to see the Dean Baker links on that. For a man (Baker) who is infamously partisan that one is hard for me to buy. In fact it starts to make me think there might be a segment of truth in it, as it goes against the grain of how Baker usually looks at things.
@ Menzie
Excuse me if I am being slow-witted or missing part of the picture hear—but assuming you can find a Canadian number for goods AND services (summed together obviously), theoretically wouldn’t the trade number mirror whatever America’s number is, or at least come close to mirroring the number?? I suppose Canada might not be as good at tabulating these stats, but the question is being asked in earnest on my part.
Above should obviously read “missing part of the picture here”. Damn man, that’s what staring at a NCAA bracket all damned day long and then looking at import/export links will do to your brain. I just had a heat overload in sector Vacant.
I think those figures are in Canadian dollars and one US$ is currently worth C$1.31. Those figures also referred to goods not services.
@pgi
Apparently the point is “moot” since you found the other BEA link (which you deserve kudos for). But please give me some damned credit, I am not that damned dumb after we have hit on this point (services) about 50 million times now. If you scroll down in the damned link it has a specific heading that related to import services and export services. it is in the damned heading and I don’t know how anymore clear they or I could have F’ing made it. I can make an image link if we’re at the point we’re going to have to dumb down things THAT much.
@ Menzie
Menzie, I think I MAY have found the “magical link” (or Canadian government agency) you have been looking for. Roughly 1/8 scroll down the page it specifies Services exports and Services imports for 2016. I assume these are the most up-to-date numbers, unless the quarterly numbers are done somewhere. (Forgive me if you are already aware of this):
http://www.international.gc.ca/economist-economiste/performance/state-point/state_2017_point/index.aspx?lang=eng
There is also some kind of pdf in the upper right portion of the page, which I think you can download for FREE
Another attempt at perspective. Some Canada goods and services quarterly trade balance numbers.
2016
https://www.bea.gov/newsreleases/international/trade/2016/trad0416.htm
Goods and Services by Selected Countries and Areas: Quarterly – Balance of Payments Basis (Exhibit 20)
The first quarter figures show surpluses, in billions of dollars, … Canada ($2.0).
https://www.bea.gov/newsreleases/international/trade/2016/trad0716.htm
Goods and Services by Selected Countries and Areas: Quarterly – Balance of Payments Basis (Exhibit 20)
The second quarter figures show surpluses, in billions of dollars, .. Canada ($2.9)
https://www.bea.gov/newsreleases/international/trade/2016/trad1016.htm
Goods and Services by Selected Countries and Areas: Quarterly – Balance of Payments Basis (Exhibit 20)
The third quarter figures show surpluses, in billions of dollars, … Canada ($4.4)
https://www.bea.gov/newsreleases/international/trade/2017/trad0117.htm
Goods and Services by Selected Countries and Areas: Quarterly – Balance of Payments Basis (Exhibit 20)
The fourth quarter figures show … Deficits were recorded, in billions of dollars, with … Canada ($1.5).
Above were the quarterly reports from the BEA of Canada goods and service trade surplus or deficit with the US
2.0 + 2.9 + 4.4 + (-1.5) = 6.8 billion
This number is not meant to conflict with the 12.9 billion number which is from later and which has been subject to revision. But the reason to publish this number is to compare to below, the 2017 reported quarterly numbers. A final annual figure of the trade balance from the BEA will not be out until June 6, and from the Trade Representative, I do not know because they seem to lack the facility to date their reports. And one other bit of trivia, even at this date the USTR says they are estimating the trade balance in services with Canada. I suspect this doesn’t mean much, you have to use the best numbers you have, but I suspect I will write more on this little bit of trivia in a subsequent post.
——————————————————————————————————————————————
2017
https://www.bea.gov/newsreleases/international/trade/2017/trad0417.htm
Goods and Services by Selected Countries and Areas: Quarterly – Balance of Payments Basis (Exhibit 20)
The first quarter figures show … Deficits were recorded, in billions of dollars, … Canada ($1.2)
https://www.bea.gov/newsreleases/international/trade/2017/trad0717.htm
Goods and Services by Selected Countries and Areas: Quarterly – Balance of Payments Basis (Exhibit20)
The second quarter figures show … Deficits were recorded, in billions of dollars, … Canada ($1.0)
https://bea.gov/newsreleases/international/trade/2017/trad1017.htm
Goods and Services by Selected Countries and Areas: Quarterly – Balance of Payments Basis (Exhibit20)
The third quarter figures show surpluses, in billions of dollars, … Canada ($4.3)
https://www.bea.gov/newsreleases/international/trade/2018/pdf/trad0118.pdf
Goods and Services by Selected Countries and Areas: Quarterly – Balance of Payments Basis (exhibit 20)
The fourth quarter figures show surpluses, in billions of dollars, … Canada ($0.6).
——————————————————————————————————————————————————
(-1.2) + (-1.0) + 4.3 + 0.6 = 2.7 billion
This number is less than half of the unrevised 6.8 billion number from 2017. The balance of goods and services with Canada looks to be deteriorating. So another idea the Presidents is dealing with the trend.
Ed
We can make this easier by going here:
https://www.bea.gov/international/index.htm#trade
Scroll down and you will find a link that pulls up an Excel file that shows the bilateral balances on goods and services (see table 3). For 2016, this source suggests we had a $7.331 billion surplus with Canada in 2016 and a $2.774 billion surplus with Canada in 2017.
CoRev – take note. This is 2017 but it includes both goods AND services. Census data only includes goods – NOT SERVICES!
Hey Menzie, I’m doing pretty good in the Econbrowser NCAA brackets competition. Did you wander over and notice?? If you’d made a bracket with a little “assistance” from that site I gave you, you and I could have created an “Axis of Evil” to rival North Korea and iran. I’m in 6th place out of 55 competitors. I know it’s “bad form” but I had to brag before 3 of my upset pics destroy my bracket by tomorrow evening. I swear man, Rick Barnes couldn’t coach his way out of a children’s juice box.
https://goo.gl/images/fFESy1
How the hell could I forget Barnes was coaching at Tennessee now??
I think all of the data should go directly to the Fed where it is needed, apparently. https://www.cato.org/blog/economists-fail-forecasting-micromanaging
“economist Mickey Levy included a chart illustrating the inaccuracies of Federal Reserve economic forecasts. Levy is with Berenberg Capital Markets and a member of the Shadow Open Market Committee.”
Does Levy have a better forecasting model? Didn’t think so. Your standard “high quality” Cato research.
This report is kind of amateurish, to say the least. It doesn’t even cite references for its data. An undergraduate that turned in a research paper like that would get a failing grade.
To begin with, the Fed doesn’t target GDP; it targets inflation and unemployment. How anyone claiming to be an economist doesn’t know that is beyond me. Understanding this is key to why the paper is flawed. And even the author admits that the Fed did a pretty good job on those two targets. So why doesn’t the Fed explicitly target GDP? Well, one reason is that the forecasts shown in the report are unconditional forecasts; i.e., what would happen if the Fed did nothing. No one should take unconditional forecasts as predictions of what will happen in the future. You can’t take unconditional GDP forecasts as actual predictions of what will happen precisely because those forecasts are endogenous with the monetary tools used to control inflation and unemployment, keeping in mind that it’s inflation and unemployment that the Fed targets and not GDP. I think this is a subtlety that a lot of laymen (and apparently some economists) just don’t get. You also need to remember that the Fed only controls monetary policy and has no control over contractionary fiscal policies…and after the Tea Party fiasco beginning in 2011, the federal and (especially) state governments embarked on a series of strongly contractionary policies that we exogenous to the Fed’s unconditional forecasts.
2slug, I think this is what Levy was referencing: https://fred.stlouisfed.org/series/GDPC1CTM
I may be reading the information wrong, but the projections are from the Open Market Committee who are the 12 governors of the Fed. I’d appreciate your help on this.
Bruce Hall: Voting FOMC consists of 7 governors and 4 rotating Presidents of Federal Reserve Banks, and the President of the NY Fed.
This is a very important point many people miss. And I think even people such as myself who have learned this already intermittently forget it. I wager this is a fact misreported by the media many times over. Some people will argue “it’s a moot point” since everyone seems to fall in line with the Chair, but I think it’s worthy to remember.
You may be onto something. We could save a ton of money by getting rid of these agencies as it is clear that Trump gets his data from Fox & Friends! Privatization running wild!
Through a public forum competition of professional forecasters. Any organization including academic with minimum 3-year track record eligible. Trailing-weight year-ahead forecasts determine rankings. Consensus of top 20% becomes official number. Virtually impossible for single forecaster to beat consistently. All forecasters must have skin in the game with weighty penalty for poorest performing 20%. Will over time through public visibility realign national and academic priorities toward the true test of an economic theory being its predictive ability. Continuously evolving committee of those with demonstrated prowess can then apprise White House of anything else deemed vital to policy like data.
JBH: We’re talking about reported data, not forecasting. Without the actuals, how can you forecast? I.e., if you don’t know GDP, how can you forecast.
I think the President should get data from advisers. And this very well may be part of the problem. As an example, recall Navarro stating his “function, really, as an economist is to try to provide the underlying analytics that confirm his intuition.” I seriously doubt many presidents have ever spent time on FRED, BLS, BEA, etc websites. I disagree with Menzie as I don’t want my president wasting time pulling data from – rather I would prefer his advisers to provide the proper data.
Menzie also stats “Unless the current US head-of-government doesn’t care about facts at all. Which is indeed the inescapable conclusion” this is a laughably exaggerated emotional response and yet another example of Menzie’s hasty and partisan blogging. Trump cares about facts that suit his agenda so Menzie’s “inescapable conclusion” is easily escapable.
Menzie, I’m still wondering why you continually ignore requests to provide your eviews workfiles from prior posts? Are you hiding something à la Trump?
rtd: I have a hard enough time providing data to legitimate data requesters (i.e., for people writing papers, rather than qvetchers), as opposed to people too lazy to go to the http://www.policyuncertainty.com website or the BEA – industrial statistics website. But I’ll get around to your request as your comments befit. (You remind me of some of my students who can’t be bothered to do a little work searching themselves, even when I provide links.)
“You remind me of some of my students who can’t be bothered to do a little work searching themselves, even when I provide links.” is totally erroneous. Please provide an example of where I have requested data from a link you’ve provided. I can’t recall ever questioning the policy uncertainty website, BEA, or others – you must have me confused with others. It’s when you create data (dummies, manipulations, etc) that I am asking you to provide. Moreover, I could hardly be clearer in my recent requests as here is my comment from your “Is Trump “Special”? Economic Policy Uncertainty Levels in Perspective” post:
“Interesting approach to play around with, yet in doing so I’m (again) unable to replicate your results. I believe that I understand your explanation of specifying the dummies and that’s really all I can think of that I may be doing differently. As such, I’m (again) interested if you’re interested in sharing these eviews workfiles with your readers.”
rtd: I described the creation of the dummies but I’ll eventually post the Excel file. You also asked for the Eviews workfile in this comment, where the only variable of interest was nonfarm labor productivity easily accessible via FRED. That’s pretty trivial (unless you want the ARIMA(0,1,0) forecast, aka random walk with trend, and standard errors — which is also pretty trivial, so trivial I didn’t save the series).
Yes… all are trivial which is why i’m concerned with your posts. Again, my concern has never been the raw series. For the dummies, my regressions yielded vastly different coefficients for some variables. It’s simply a credibility issue that you aren’t firmly on the desired side of – but I still have hope for you… all you need is some very easy work on your behalf, it’s up to you.
rtd: Sure, provide your estimates, by posting or emailing me yours and I’ll post. Then we can iterate.
I’ll say it wasn’t clear from (for instance) your comment regarding labor productivity what you were interested in. Now I know you have difficulty/questions about how to estimate a forecast from a random walk w/drift and/or exponential trend. Wow.
You snidely State “Now I know you have difficulty/questions about how to estimate a forecast from a random walk w/drift and/or exponential trend. Wow.” but I don’t think that is a difficulty of mine. I’m not saying I’m infallible but you seem to be implying that you are. However, we know for a fact that you make elementary errors just as anyone else.
You snidely proclaim “If you’d ever put together a data set for a data repository, you would know it’s not so simple. And there are only 24 hours in a day.” Not that it matters b/c you do not know me, but I’d wager I have created larger data repositories than you ever have in my career. In any case, it doesn’t matter what your excuse is to not release your taxes.
rtd: Fair enough. You tell me your data repositories, and I’ll post links to mine, and we can compare! And along what dimensions (NOBs?) At your convenience. How mch do you want to bet?
Anyway, you can post your ARIMA(0,1,0) forecast, and we can check if you can replicate my graph. No need for me to be at your beck and call for such a simple forecasting issue.
@ Menzie regarding “rtd”
” You tell me your data repositories, and I’ll post links to mine, and we can compare! And along what dimensions (NOBs?) At your convenience. How much do you want to bet? Anyway, you can post your ARIMA(0,1,0) forecast, and we can check if you can replicate my graph.” Master Jedi Menzie, now you finally know THE POW-UUUUUUUHH!!! of the dark side of Phd Economics.
https://www.youtube.com/watch?v=_Avn2nT16FA
https://www.youtube.com/watch?v=CtFLzGRfVnA
Also, you say “I have a hard enough time providing data to legitimate data requesters ” but what’s difficult about providing the workfiles for your very own ‘analyses’? You should have the workfiles for the the work you’ve done.
And again, shame on you for implying I’m “too lazy to go to the http://www.policyuncertainty.com website or the BEA – industrial statistics website”. That was never once my claim or issue in my requests. The more you dodge the request that you release your taxes… I mean workfiles… the more I think you’re in bed with the Russians …I mean questionable analyses.
rtd: I have one very large workfile for my blogging work, not a separate workfile for each post; hence, I’d have to figure out which series are relevant, and download into an appropriate spreadsheet, then document for readers. If you’d ever put together a data set for a data repository, you would know it’s not so simple. And there are only 24 hours in a day.
Obama stated he visited 57 states with one to go. That’s greater ignorance than not knowing the trade balance with Canada. Of course, the narrative has been to downplay Obama’s destructive and divisive economic, foreign, and social policy disasters, while giving Trump 95% negative media, impeachment, resistance, investigations, and hatred.
As usual – you make up garbage which is completely irrelevant to the actual discussion.
My statement is supported by studies and facts, which are garbage to you.
The topic is Trump bashing, which is what you frequently discuss.
Menzie – Dean Baker is claiming Trump is right about our trade balance with Canada. If you would – please comment on this post as well as his follow-up tweet as Dean first confuses the matter but then sort of realizes the error without admitting it:
http://cepr.net/blogs/beat-the-press/trump-was-right-about-the-trade-deficit-with-canada
“It turns out that Trump is actually correct about the Canada’s trade surplus with the United States. The Commerce Department data that reporters used to show a trade surplus includes re-exports. These are items that are shipped through the United States, but are not produced in the United States. For example, if a German car company ships 1000 cars through New York, and 100 of these end up in Canada, the 100 cars would be counted as U.S. exports even though they were not produced in the United States. The United Nations has a data base *** which separates out re-exports. When this is done, Canada’s deficit turns into a surplus in the neighborhood of $20-$30 billion. This means that Trump was correct in his charge.”
https://twitter.com/DeanBaker13/status/974614641182691328
“The full measure of course includes services, but no one re-exports services. I don’t give a damn about giving Trump credit. His opponents should not be making up numbers to attack him, there are plenty of real grounds.”
See also BluePatriot’s tweet which I think is spot on!
@ pgi
This is a very interesting/fascinating link just on the basis Baker is taking a different angle on this than he usually does. THANKS for putting that up.
Actually, there is a major problem with the US -Canada trade and services data.
In a way US-Canadian trade and services data should be among the best data collected anywhere. It is collected by both countries agencies. and both have outstanding data collecting agencies. Moreover, there is very little reporting lag. But a major problem emerged in the 1970s and 1980s and in many years it seemed that both county’s data showed that both were running a deficit with the other. They created a commission to study the problem and concluded that each country was under reporting imports from the other. They resolved the issues by each country using the other countries export data for their import data. Canadian imports were what the US data agencies collected data on and US imports were what Canadian data. For 30 years this system has worked well and the trade data is thought to be extremely accurate.
To see more about this go to https://www.census.gov/foreign-trade/aip/uscanada.pdf
I have had to endure multinationals who cannot get their basic data right. To expect some government agencies to aggregate all this confusing mess and be perfect is a really incredibly high bar. But they try anyway. It is ashamed political hacks like Trump and his defenders abuse their hard work.
“They created a commission to study the problem and concluded that each country was under reporting imports from the other.”
Huh?! If there were tariffs, one could only wonder if the under reporting was due to tax evasion. Of course multinationals could report the actual movement of goods but invoice them at a low transfer price for customs purposes. Although they would have an incentive to tell the IRS that the transfer price was higher. Yes this is illegal but it happens. Google Sunrider as a blatant example.
Yes, a significant part of the data problem was companies using transfer pricing to avoid taxes. But there were other problems as well.
Menzie
File this under does anyone know the trade dats? And I mean you, me, Trump, our Trade Rep, and the Canadian Office of Global Affairs. As you know I have been searching for numbers from various sources. My latest has been with Canada to see what they say. I found this at the Office of Global Affairs.
http://www.international.gc.ca/economist-economiste/performance/state-point/state_2017_point/index.aspx?lang=eng
Scrolling about half way down I found these numbers. Assumption is all values in million Cad $.
Goods Exports, 2016 — U.S. — 392,462
Goods Imports, 2016 — U.S. — 359,954
Services Exports and Imports by Region
United States exports 58,999 — imports 70,323 –difference -11,324
Adding these numbers and using an exchange factor of .75 USd to Cad (close approximate 2016 average)
21,184 x .75 = 15,888 million $ US balance.
That is a heck of a discrepancy. I look for errors but have not found them, but would welcome anyone’s catch of one.
So, Where Should POTUS Get His/Her Data From? Possibly nowhere because no one knows.
The Goods numbers have good agreement with the statCan numbers referenced above, but I have not checked Goods numbers against the US numbers. The biggest uncertainty seems to be in the Service numbers. I have not found how they are collected, only, from the timing, I am fairly certain they are not from IRS data.
Ed
pgl: I know that Trump does not consume alcohol or other recreational drugs. That is why I suggested his MacDonald’s diet and golf habit had contributed to his current state and cognitive difficulties.
I agree with you that he is “clearly off”.
I did not get into this argument.
It Is like an Irish bar this past Saturday. “No one goes there on St Patrick’s Day it is too crowded.”*
Arguing over what data base to put in to a crystal ball….. too crowded for me!
*Idea stolen from Yogi Berra.
Um, so, anybody notice that US and Canadian trade reports are issued on the same day every month?
I’m pretty sure the reason for that is that the two countries make use of each other’s import data. That is to say, there is no question of Canada’s data being better than US data, because they use the same data.
Pretty sure. Could be wrong since the US began releasing advance goods data, but I think the process remains the same.