On mainstream economists hiding information regarding the BEA’s development of distributional national accounts, reader John Hofer wrote in January of 2024:
In an unmentioned recent development, BEA is actually providing data on income distribution, something which should be of interest to macro students.
“ Gross Domestic Product, or GDP, is the constant go-to economic indicator that news anchors and U.S. Members of Congress alike love to dissect. Reading quarterly reports from the U.S. Department of Commerce’s Bureau of Economic Analysis on GDP growth is a form of divination that, in popular imagination, tells us whether the economic fortunes of the United States are trending up or down. Strong GDP growth is considered evidence of good fortune for all Americans under the presumption that “a rising tide lifts all boats.”
He wrote this comment despite the fact Mr. Hofer commented on a 2021 Econbrowser post exactly on this subject. Since Mr. Hofer seems to believe that the mainstream media and/or US government is deliberately or accidentally suppressing data, it might be useful to reprint this rejoinder. From “X-Files, 2021 edition“:
It seems every decade or so, there is a bout of paranoia about government statistics, to wit, a reader asserts the BLS is hiding data on median wages:
Scylla and Charybda. SSA doesn’t have any data since 2019. And BLS has no current data on median compensation at all, except in 1980 dollars or in indices.
I guess the American voter is just not supposed to know how the average American worker is doing in terms of wages at any given point in time. Personally, I’m glad that SSA has actually made data available that is easily comprehensible, even though it’s somewhat dated. It’s better than nothing.
Apparently only educated elites with sophisticated methods of calculating the data are supposed to know.
What’s wrong with that picture? What is the government hiding? And why?
When confronted with BLS series Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over (LES1252881600Q) stored as on FRED, the same reader writes:
The problem is that the BLS data series both track average wages over time. This can be verified by reflating 2019 BLS data from 1982 dollars to 2019 dollars and comparing the result to the SSA data, which is highly reliable, since it relies on IRS data.
In other words, he/she is saying what the BLS has labeled as median is actually average wages…
This episode reflects the general tendency among some commentators to reject or disparage the data (or accuse the government of malfeasance) when the data do not cooperate with a preferred narrative.
Paranoia is everywhere. For instance, regarding employment data, FoxNews is a purveyor, as are these examples: Senator Barraso, Jack Welch, former Rep. Allan West, Zerohedge . And who can forget longtime reader Ricardo (aka Dick/DickF/RicardoZ) writing in 2014:
…Our government is doing a serious disservice by falsifying the employment condition in our country. Policy changes that could actually help are being delayed with false information.
The belief the data is either by design or accident distorting the data is so widespread that even people who have PhD’s in finance have suspicions.
I would be the last one to assert government statistics are perfect. For instance, TIC data are known to have problems in tracking actual capital flows. GDP data are known to be revised. But the misleading conclusions usually arrive with the person with the narrative, not the persons generating the data (unless it’s ShadowStats).
I don’t usually end with a plea — but this time I do. Before one starts asserting that (1) the government statistical agency is hiding the data, (2) the government statistical agency is mislabeling the data, (3) the government statistical agency has miscalculated a growth rate, or ratio, or difference, please, please, please spend 15 seconds on FRED.
And before accusing your blogger of misattributing the data, please, please, please read the notes to graphs and at the data source portal (often FRED).
In other, more recent instances of data paranoia, see the Steven Kopits edition here, Bruce Hall edition here,
Back to one of my favorite soap-box themes – casting doubt on mundane data from conventional sources is part of the “fake science” method of making the public doubt everything. It’s not just know-nothing ignorance that we’re dealing with – it’s a particulat brand of dishonesty, aimed at undermining trust in what is trustworthy. If BEA and BLS and the Census Bureau can be made to seem untrustworthy, then professional crackpots can step in to fill the void. Service to faux news, to Putin, to Xi, to ExxonMobil, to Robert Kennedy Jr. – it’s all done the same way.
Exactly, when you sow doubt about all trustworthy sources of information then where can the public go for “real” information – well come to daddy! When the lies have been completely freed from having to comport with any outside information they can become true monsters – and still survive. I just saw Trump claim that Biden had many more secret documents than Trump. Not according to the FBI reports – but the MAGA cult members will believe it because their dear leaders said so.
Bruce Bartlett notes that this behavior dates back at least 30 years when Newt was allowed to become Speaker. Trump et al. are Newt on steroids. And of course our John Hofer loves his MAGA hat.
It’s interesting what got left out of Menzie’s post!
For example, my main point, directly made in the second paragraph of the quote from Equitable Growth was that: “Strong GDP growth is considered evidence of good fortune for all Americans under the presumption that “a rising tide lifts all boats…This presumption is mistaken. Aggregate GDP growth may once have indicated good fortune for most Americans, but over the past several decades many Americans have been left behind as growth increasingly tilted toward the rich. This reality makes GDP a misleading statistic for the opinion leaders and politicians who rely on it. The consequence is that policymakers’ diagnoses of the U.S. economy, and their prescriptions for what ails it, are based on the wrong metric. “ https://equitablegrowth.org/gdp-2-0-measuring-who-prospers-when-the-u-s-economy-grows/
Then Menzie goes on to criticize me for calling BEA’s distributional data “a recent development.” According to BEA, which Menzie failed to note, is that “The first prototype statistics were published in March 2020.” https://www.bea.gov/data/special-topics/distribution-of-personal-income
Given the fact that the BEA has been around for more than 50 years, the addition of distributional data in 2020 is indeed a recent development.
And then there is the charge that I falsely claimed in May, 2021 SSA had not published any median wage data since 2019. Of course, that is absolutely the case–the data only got published several months later…an inexplicable lag of almost a year after the end of calendar year 2020. Census data appears with a similar lag. Typically such lags are a good indication of the data being assigned n a relatively low priority.
The bigger problem, however is not these spurious charges. It is that so many mainstream economists…despite the availability of some data…choose to ignore the data and the information about inequality that it provides. Menzie published data from the ” Working Paper entitled “Measuring Inequality in the National Accounts” in May 2021. Has he blogged about the BEA income distribution data since then? (By comparison, GDP data gets posted all the time.)
As I pointed out last week, his syllabus for his macroeconomics course does not mention inequality. According to my last search of the UW economics and public policy website, inequality was not mentioned at all. A mere 8 pages of the 500+ page Blanchard text used for the macroeconomics course are dedicated to income inequality. Talk about giving short shrift to one of the major economic and public policy issues of the day!!!
The real question, raised by Equitable Growth, boils down to: when will mainstream economists finally stop obsessing about just GDP growth, which tracks the wellbeing of the Top 10%, and finally start paying attention to metrics that track inequality and the wellbeing of average Americans?
So much BS so little time. I’ll just take one of your disgusting lines:
A mere 8 pages of the 500+ page Blanchard text used for the macroeconomics course are dedicated to income inequality.
I seriously doubt you have read his text. Of course a good 8 page discussion could cover a lot if it were well written as opposed to the on and on and on stupidity we get from JohnH.
ponzi johnny, I am not sure that a person who advocates for high returns on risk free assets has any credibility in the world of economics. you want money for nothing. it is not compatible with how a modern economy operates. you are advocating for communism. it has failed worldwide.
“I don’t usually end with a plea — but this time I do. Before one starts asserting that (1) the government statistical agency is hiding the data, (2) the government statistical agency is mislabeling the data, (3) the government statistical agency has miscalculated a growth rate, or ratio, or difference, please, please, please spend 15 seconds on FRED.”
John Hofer (aka JohnH) routinely claims government statistical agencies are representing misleading data. Latest episode was this troll’s claim that the BEA’s PCE measure of inflation understates true inflation. 15 seconds on FRED – may not but we presented this pathetic lying troll with excellent discussions of how this measure of inflation more properly weights health care costs than CPI and how health care costs have declined in the last few years.
So what was our most dishonest troll’s reaction to these excellent discussions? Jonny boy decided he never made such a claim. That’s right JohnH even lies about what JohnH has said.
Any discussion of serious issues with someone who is dumber than a rock and dishonest as it gets is a waste of time.