Tuesday, May 15, 2012

Conservatives Make Formal Declaration of War on Facts and Data; Want Budget Cuts to Programs That Produce Economic Information

That Will Teach Those Bothersome Statistics to Contradict Conservatives

One of the many reasons that the so-called Conservative positions are just not correct is that the policy and positions are based on ideology and superstition, not on facts and analysis.  When you do that it often turns out that facts and the analysis jump up and make you look stupid.  For example, Conservatives argued that the huge deficits of the U. S. would make interest rates skyrocket.  The fact is, they went down and they stayed down. Not very convenient for Conservatives, is it?

Now a normal and rational person when faced with facts and data that contradicted their positions would re-examine those positions.  If the evidence were overwhelming, which it almost always is with respect to Conservative dogma, the rational person would adjust his or her views to fit the data.  Not so Conservatives.  Their response is to attack the data, and in the extreme, de-fund the government agencies that are responsible for generating the data.

Most U.S. economic data come from three federal agencies: the Census Bureau, the BEA, and the Bureau of Labor Statistics. They have a combined budget of $1.6 billion, less than 0.05 percent of President Barack Obama’s $3.7 trillion proposed budget. These agencies have always had to fight for more funding. Now they may have to fight just to keep their budgets intact. As part of $19 billion in nondefense discretionary cuts in Paul Ryan’s (R-Wis.) budget—recently passed by the House of Representatives—the agencies are likely to get less funding.

What might be the impact of these cuts?  Well with less information government will have less ability to make policy.

in early 2009, after the real estate-fueled financial crisis, Congress gave Census what it had been asking for—an extra $8.1 million. In the view of many, it was too late. “That’s a grand example of how nickel-and-diming statistics agencies can screw up the economy,” says Andrew Reamer, a research professor at the George Washington University Institute of Public Policy and a member of the BEA’s advisory committee. “The government saved $8 million, but how many trillions were lost as a result of not being able to see the crisis coming?”

That extra data, says Reamer, would’ve revealed just how quickly certain parts of the economy were slowing down. For example, in April 2008 the BEA, with no quarterly data to work with, estimated that finance and insurance sector activity fell 0.3 percent in 2007. In July 2011, the BEA recrunched those numbers using quarterly data and showed declines of 2.2 percent, 5.3 percent, and 9.9 percent for those sectors in the last three quarters of 2007.

And even the highly conservative U. S. Chamber of Commerce is aghast at the proposed cuts.

One of the most vocal critics of the proposed cuts is the U.S. Chamber of Commerce, a deficit hawk. “The chamber is in favor of getting the deficit under control, but you’re not going to get there by gutting the statistics agencies,” says the chamber’s chief economist, Martin Regalia, who last July signed a letter in favor of fully funding the BEA. “The total amount of money saved is relatively small compared to the massive loss of information it would lead to. It’s like trying to balance your checkbook by buying cheaper checks.”

But Conservatives are on a mission.  If they can eliminate economic data they can eliminate the one thing that stands between their policies and enactment.  The truth.

1 comment:

  1. At least conservatives are consistent. Jindal made the claim that money spent on volcano monitoring was wasteful.