Wednesday, May 1, 2013

Hero: Rep. Jeff Duncan (R:SC)

I have no idea what Congressman Duncan's positions are on any other issues, but his introduction of a bill that would eliminate the Census Bureau collection of economic data is brilliant. HuffPo is screaming (always a good sign)
 A group of Republicans are cooking up legislation that could give President Barack Obama an unintentional assist with disagreeable unemployment numbers -- by eliminating the key economic statistic altogether.

The bill, introduced last week by Rep. Jeff Duncan (R-S.C.), would bar the U.S. Census Bureau from conducting nearly all surveys except for a decennial population count. Such a step that would end the government's ability to provide reliable estimates of the employment rate. Indeed, the government would not be able to produce any of the major economic indices that move markets every month, said multiple statistics experts, who were aghast at the proposal.

"They simply wouldn't exist. We won't have an unemployment rate," said Ken Prewitt, the former director of the U.S. Census who is now a professor of public affairs at Columbia University.

"I don't know how the market reacts if there is suddenly no unemployment rate at the start of the month," Prewitt said. "How does the market react if we don't have a GDP [gross domestic product]?"

"Do they understand that these data that the Census Bureau collects are fundamental to everything else that's done?" asked Maurine Haver, founder of business research firm Haver Analytics and a past president of the National Association for Business Economics. "They think the country doesn't need to know how many people are unemployed, either?"

A spokesman for Duncan declined to explain why the congressman wants to eliminate such data or even whether he understands that the data would be compromised by his bill, which has 10 co-sponsors.

But the proposed Census Reform Act is explicit in its intent to end nearly every survey the Census conducts, mandating the "repeal" of the nation's agricultural census, economic census, government census and mid-decade census. It would also bar the bureau from carrying out the American Community Survey (ACS), which the House voted last year to end, although the Senate let that measure die.

There is very little done by the government or big businesses that does not at some level depend on the reams of information provided by the Census surveys, from writing regulations and distributing federal services to rolling out new products and finding customers. The ACS is an ongoing survey that collects data every month, instead of every 10 years, so that governments and businesses have current information.

It should be noted that during Hong Kong's period of massive growth few economic statistics were collected. The Hong Kong Institute for Monetary Research wrote:

 Hong Kong’s economic performance in the second half of the twentieth century was among the most impressive in modern economic history.[...]

 On the whole, however, development economists have not hailed Hong Kong as a useful model of economic growth.For the development economist, the enormously successful economy of Hong Kong has so little to offer because the Government steadfastly set its face against the production of adequate statistics.

From Ideas In Action:

 Sir John Cowperthwaite[...] was sent out from London just after WWII to take over part of the administration of Hong Kong and would usually have been expected to implement the same sorts of programs that were going on back home.[...]

However, given the distances and transport problems of the day it took him some time to actually make the trip and "Upon arrival, however," said a Far Eastern Economic Review article about Cowperthwaite, "he found it recovering quite nicely without him."

[Cowperwaite] then decided to violate the most basic rule of all bureaucracies and governmental types. If people were doing OK on their own then he'd let them carry on doing so rather than making things worse by interfering.

Cowperwaite's obituary puts it:

"As for the paucity of economic statistics for the colony, Cowperthwaite explained that he resisted requests to provide any, lest they be used as ammunition by those who wanted more government intervention."

As Murray Rothbard wrote:
Ours istruly an Age of Statistics. In a country and an era that worships statistical data as super-“scientific,” as offering us the keys to all knowledge, a vast supply of data of all shapes and sizes pours forth upon us. Mostly, it pours forth from government. While private agencies and trade associations do gather and issue some statistics, they are limited to specific wants of specific industries. The vast bulk of statistics is gathered and disseminated by government. The over-all statistics of the economy, the popular “gross national product” data that permits every economist to be a soothsayer of business conditions, come from government. Furthermore, many statistics are by-products of other governmental activities: from the Internal Revenue bureau come tax data, from unemployment insurance departments come estimates of the unemployed, from
customs offices come data on foreign trade, from the Federal Reserve flow statistics on banking, and so on. And as new statistical techniques are developed, new divisions of government departments are created to refine and use them.
The burgeoning of government statistics offers several obvious evils to the libertarian. In the first place, it is clear that too many resources are being channeled into statistics-gathering and statistics-production. Given a wholly free market, the amount of labor, land, and capital resources devoted to statistics would dwindle to a small fraction of the present total. It has been estimated that the federal government alone spends over $48,000,000 on statistics, and that statistical work employs the services of over 10,000 full-time civilian employees of the government.

Secondly, the great bulk of statistics is gathered by government coercion. This not only means that they are products of unwelcome activities; it also means that the true cost of these statistics to the American public is much greater than the mere amount of tax money spent by the government agencies. Private industry, and the private consumer, must bear the burdensome costs of record-keeping, filing, and the like, that these statistics demand. Not only that; these fixed costs impose a relatively great burden on small business firms, which are ill-equipped to handle the mountains of red tape. Hence, these seemingly innocent statistics cripple small business enterprise and help to rigidify the American business system.[...]

But there are other important, and not so obvious, reasons for the libertarian to regard
government statistics with dismay. Not only do statistics-gathering and producing go beyond the governmental function of defense of persons and property; not only are economic resources wasted and misallocated, and the taxpayers, industry, small business, and the consumer burdened. But, furthermore, statistics are, in a crucial sense, critical to all interventionist and socialist activities of government. The individual consumer, in his daily rounds, has little need of statistics; through advertising, through the information of friends, and through his own experience, he finds out what is going on in the markets around him. The same is true of the business firm. The businessman must also size up his particular market, determine the prices he has to pay for what he buys and charge for what he sells, engage in cost accounting to estimate his costs, and so on. But none of this activity is really dependent upon the omnium gatherum of statistical facts about the economy ingested by the federal government.[...]

Certainly, only by statistics, can the federal government make even a fitful attempt to plan,
regulate, control, or reform various industries—or impose central planning and socialization on the entire economic system. If the government received no railroad statistics, for example, how in the world could it even start to regulate railroad rates, finances, and other affairs? How could the government impose price controls if it didn’t even know what goods have been sold on the market, and what prices were prevailing? Statistics, to repeat, are the eyes and ears of the interventionists: of the intellectual reformer, the politician, and the government bureaucrat. Cut off those eyes and ears, destroy those crucial guidelines to knowledge, and the whole threat of government intervention is almost completely eliminated.
 It is true, of course, that even deprived of all statistical knowledge of the nation’s affairs, the government could still try to intervene, to tax and subsidize, to regulate and control. It could tryto subsidize the aged even without having the slightest idea of how many aged there are and where they are located; it could try to regulate an industry without even knowing how manyfirms there are or any other basic facts of the industry; it could try to regulate the business cycle without even knowing whether prices or business activity are going up or down. It could try, but it would not get very far. The utter chaos would be too patent and too evident even for the bureaucracy, and certainly for the citizens. And this is especially true since one of the major reasons put forth for government intervention is that it “corrects” the market, and makes the market and the economy more rational. Obviously, if the government were deprived of allknowledge whatever of economic affairs, there could not even be a pretense of rationality ingovernment intervention. Surely, the absence of statistics would absolutely and immediatelywreck any attempt at socialistic planning. It is difficult to see what, for example, the central planners at the Kremlin could do to plan the lives of Soviet citizens if the planners were deprived of all information, of all statistical data, about these citizens. The government would not even know to whom to give orders, much less how to try to plan an intricate economy.
Thus, in all the host of measures that have been proposed over the years to check and limit
government or to repeal its interventions, the simple and unspectacular abolition of government
statistics would probably be the most thorough and most effective. Statistics, so vital to statism,
its namesake, is also the State’s Achilles’ heel.
Dubcan's bill is a great first start, but there are many other data collection activities by the government that must be stopped. Let's hope this is the first of many such bills.


  1. "Do they understand that these data that the Census Bureau collects are fundamental to everything else that's done?"

    What a fool. All the "data" does is aid those wanting to manipulate the masses.

    Who in their right mind thinks the CPI or "unemployment" rate is accurate in any sense?

    The Booboise, that's who.

  2. A good many of those selling economic research are on fact selling nothing other than rehashed BLS crap that was derived politically for political ends. Unemployment data, for instance, is far more accurate when compiled from state generated statistics. Like all things government, decentralizing is key. That is, of course, if you even want government generated data in your set.

  3. "I don't know how the market reacts if there is suddenly no unemployment rate at the start of the month," Prewitt said. "How does the market react if we don't have a GDP [gross domestic product]?"

    its amusing when a government bureaucrat is told that his life's work is worth nothing.