WEBVTT - Bill Beach on How Trump Just Politicized US Economic Data 0:00:02.720 --> 0:00:17.000 Bloomberg Audio Studios, Podcasts, Radio News. 0:00:18.480 --> 0:00:21.360 Hello and welcome to another episode of the All Thoughts Podcast. 0:00:21.440 --> 0:00:23.560 I'm Tracy Alloway and I'm Joe Wisenthal. 0:00:23.880 --> 0:00:27.080 Joe, I kind of missed this on Friday because I 0:00:27.240 --> 0:00:29.880 was not feeling very well, so I was out sick. 0:00:30.000 --> 0:00:32.520 But what was Friday morning like when you were sat 0:00:32.560 --> 0:00:33.920 in front of your Bloomberg terminal. 0:00:34.200 --> 0:00:38.080 Well, the jobs report was pretty shocking. Obviously Friday was 0:00:38.120 --> 0:00:41.080 just a crazy day. Yeah, So the jobs report, obviously 0:00:42.600 --> 0:00:45.000 it was bad. I mean, the last two months massively 0:00:45.040 --> 0:00:48.240 revised down, all of this evidence of labor market momentum 0:00:48.479 --> 0:00:52.080 perhaps seems to be stalling the tariff effect. Maybe we 0:00:52.200 --> 0:00:54.560 really are and it's sort of some sort of terriff 0:00:54.600 --> 0:00:57.480 and do slow down. The only job creation is in 0:00:57.560 --> 0:00:58.880 healthcare and social service. 0:00:59.280 --> 0:01:02.400 Not great, right, Okay, So I saw the initial jobs 0:01:02.560 --> 0:01:06.080 report headline. So we had non farm payrolls coming in 0:01:06.240 --> 0:01:08.680 at plus seventy three thousand, which I think was like 0:01:09.040 --> 0:01:12.920 thirty percent lower than the average expectation. We had the 0:01:13.000 --> 0:01:15.360 unemployment rate taking up to like four point three percent, 0:01:15.400 --> 0:01:19.760 four point almost four point three percent. Oh, let me 0:01:19.880 --> 0:01:21.560 let me sorry, I'm rounding up here. 0:01:21.600 --> 0:01:24.160 Okay, Okay, okay, although maybe I shouldn't. 0:01:23.720 --> 0:01:26.600 Do that on a podcast all about labor market statistics. 0:01:27.160 --> 0:01:29.400 But the big thing that seemed to catch everyone's attention 0:01:29.600 --> 0:01:32.880 was we also had these massive revisions to the report 0:01:32.920 --> 0:01:35.680 for May and June, so we had a combined two 0:01:35.760 --> 0:01:39.880 hundred and fifty eight thousand jobs basically lowered from the 0:01:40.000 --> 0:01:43.760 initial reports. And this was like the biggest revision since 0:01:43.880 --> 0:01:47.400 the depths of the pandemic. And then the headline that 0:01:47.440 --> 0:01:49.920 really caught my eye while I was, you know, laying 0:01:49.960 --> 0:01:54.200 in my sick bed on Friday afternoon, was Trump firing 0:01:54.640 --> 0:01:57.200 the head of the Bureau of Labor Statistics, so the 0:01:57.240 --> 0:02:00.160 agency responsible for putting out the non farm pay Roule 0:02:00.240 --> 0:02:01.480 Report every month. 0:02:01.800 --> 0:02:04.160 Yeah, this is I would say. The key thing is 0:02:04.200 --> 0:02:07.400 that a we've been used to these, you know, seeing 0:02:07.440 --> 0:02:11.080 significant revisions. We've been talking you in particular, have been 0:02:11.120 --> 0:02:14.200 writing a lot in the newsletter about deteriorating quality of 0:02:14.280 --> 0:02:17.600 labor statistics. Response rates to a lot of surveys have 0:02:17.680 --> 0:02:19.760 gone down over time, kind of like we're seeing in 0:02:19.760 --> 0:02:23.280 political opinion surveys and so forth. So there's already been 0:02:23.320 --> 0:02:26.760 this sort of anxiety. You have a lot of people online, 0:02:26.800 --> 0:02:30.720 including President Trumpet himself, you know, been like stoking sort 0:02:30.760 --> 0:02:34.080 of these conspiracy theories about these revisions, these attempts to 0:02:34.160 --> 0:02:37.600 actually be transparent, and then you get the first sort 0:02:37.639 --> 0:02:41.200 of like genuinely negative report under this administration. It's the 0:02:41.200 --> 0:02:44.160 first one that was like, Okay, this was bad and boom, 0:02:44.320 --> 0:02:48.040 Trump fires the person responsible for it. Now again, this 0:02:48.160 --> 0:02:50.640 is one of those things where sort of like Doge itself, 0:02:50.639 --> 0:02:54.680 where it's like, I like the idea of government efficiency, right, yeah, sure, Doge. 0:02:54.760 --> 0:02:57.320 I like the idea of the BLS sort of doing 0:02:57.360 --> 0:03:00.000 a better job in some way or addressing these responses. 0:03:00.440 --> 0:03:04.120 But like Doge, which you know, we all have seen 0:03:04.160 --> 0:03:06.040 how that's turned out. I think there are a lot 0:03:06.040 --> 0:03:08.359 of more than a lot of questions, more than a 0:03:08.400 --> 0:03:11.079 lot of questions about whether firing to be less and 0:03:11.160 --> 0:03:14.040 replacing the head with someone who's you know, a Trumpet 0:03:14.080 --> 0:03:18.560 point t will you know, add a more credible transparent 0:03:18.680 --> 0:03:19.799 data clauding right. 0:03:20.120 --> 0:03:22.440 One thing that we have learned from all our episodes 0:03:22.520 --> 0:03:24.720 on data collection in the US is that it is 0:03:24.800 --> 0:03:29.000 actually a really really insanely labor intensive thing to do. 0:03:29.120 --> 0:03:31.320 You have to actually call up a bunch of people 0:03:32.080 --> 0:03:34.080 homeowners for instance, or you have to call up a 0:03:34.080 --> 0:03:36.560 bunch of businesses and ask questions. You have to go 0:03:36.640 --> 0:03:40.800 out into the field and gather individual prices. And we 0:03:40.800 --> 0:03:43.400 can have a debate over whether or not you could 0:03:43.440 --> 0:03:46.600 maybe use new technology or price scanning data to make 0:03:46.640 --> 0:03:48.960 all of that more efficient, but for the time being, 0:03:49.040 --> 0:03:51.400 that's how it's done, and so you need people to 0:03:51.440 --> 0:03:54.120 do it. And if DOGE comes in and eliminates, you know, 0:03:54.600 --> 0:03:56.720 a big chunk of the budget, then it becomes harder 0:03:56.760 --> 0:03:57.200 to do. 0:03:57.400 --> 0:03:59.640 Or if it just gets more costly and the budget's 0:03:59.640 --> 0:04:01.320 gone up, and then the one thing I would say 0:04:01.520 --> 0:04:04.480 is that in our conversations, and again you have talked 0:04:04.480 --> 0:04:07.840 to the BLS many times, they are really good. They're professionals, 0:04:08.000 --> 0:04:09.640 and they take it very seriously. 0:04:09.720 --> 0:04:13.000 They're very responsive, however, very transparent. We could talk about 0:04:13.000 --> 0:04:15.280 this a little bit, but perhaps less responsive than they 0:04:15.360 --> 0:04:18.440 used to be in recent weeks. So anyway, we should 0:04:18.440 --> 0:04:20.719 talk about all of this. I think it's really important. 0:04:20.760 --> 0:04:22.880 And as you said, there are big questions like what 0:04:22.960 --> 0:04:25.840 happens if a president ouse a BLS chief and then 0:04:25.920 --> 0:04:28.440 introduces a new one. We have the perfect guests. Someone 0:04:28.520 --> 0:04:33.440 we've spoken to before about the decline of America's data infrastructure. 0:04:33.600 --> 0:04:35.560 We're going to be speaking with Bill Beach. He is, 0:04:35.600 --> 0:04:39.120 of course, the former Commissioner of Labor Statistics, former head 0:04:39.160 --> 0:04:41.080 of the BLS. So Bill, thank you so much for 0:04:41.120 --> 0:04:42.159 coming back on all thoughts. 0:04:43.080 --> 0:04:45.200 Yeah, it's just really a pleasure to be back with you. 0:04:45.320 --> 0:04:48.240 I wish we were talking about some other subject besides 0:04:49.120 --> 0:04:52.120 this termination. I mean, it's just yeah, shocked. 0:04:52.279 --> 0:04:56.640 Well, on that note, Friday, Trump tweets or posts that 0:04:56.680 --> 0:05:00.599 he wants to fire Erica mc Andterfer, the Commissioner of 0:05:00.640 --> 0:05:02.960 Labor Statistics. What was going through your mind when you 0:05:02.960 --> 0:05:03.640 saw that news. 0:05:04.000 --> 0:05:07.240 I was dumbcast. I just finished a luncheon meeting at 0:05:07.279 --> 0:05:09.479 a very nice restaurant, and I was sitting in my 0:05:09.520 --> 0:05:12.920 pickup truck and I just couldn't believe. And then I 0:05:12.960 --> 0:05:17.119 sat there for probably thirty forty minutes, car running and 0:05:17.320 --> 0:05:21.440 answering emails, people just sorting it out. It isn't that 0:05:21.720 --> 0:05:23.920 he didn't have the authority to do so. He does 0:05:23.960 --> 0:05:26.479 have the authority. We all, you know, everyone in the 0:05:26.520 --> 0:05:29.160 executive branch serves as the pleasure of the president, except 0:05:29.200 --> 0:05:32.960 those that have been specifically exempted by statute, and where 0:05:32.960 --> 0:05:35.320 that statute has been signed by the President. I think 0:05:35.360 --> 0:05:38.320 what was shocking about this is not that she was dismissed. 0:05:38.320 --> 0:05:41.640 That's shocking enough. It was the possibility that we could 0:05:41.720 --> 0:05:46.560 have now a sustained attack on official economic statistics, and 0:05:46.640 --> 0:05:50.360 that would undermine confidence in those statistics and put us 0:05:50.400 --> 0:05:52.720 in a path that other countries have followed. I mean 0:05:53.000 --> 0:05:56.320 instantly people went to worst case. After a while, that 0:05:56.440 --> 0:05:58.240 sort of settled down, and we began to look at 0:05:58.279 --> 0:06:02.280 the reasons for the dismissal, which then subsequently said on 0:06:02.320 --> 0:06:05.600 Twitter or x that they were they were unfounded. And 0:06:05.800 --> 0:06:09.359 i haven't dropped that position since, so I'm happy to 0:06:09.400 --> 0:06:09.960 talk about it. 0:06:10.279 --> 0:06:12.279 Well, why don't we just back up for a second. 0:06:12.320 --> 0:06:14.880 We talked to you before, because you've been sounding the 0:06:14.920 --> 0:06:18.479 alarm about the capacity constraints to collect good data. But 0:06:19.040 --> 0:06:22.359 just for people who haven't listened to or haven't followed you, 0:06:22.360 --> 0:06:24.840 you were a Trump appointing. I mean, you served at 0:06:24.839 --> 0:06:28.000 the head of the BLS in twenty seventeen, and so 0:06:28.080 --> 0:06:29.560 I do you know, and it's tart of like, okay, 0:06:29.560 --> 0:06:31.240 your credibility. Why don't you just give us a little 0:06:31.279 --> 0:06:35.440 bit of background about who you are, your position, and 0:06:35.480 --> 0:06:38.440 the concerns that you've been raising for some time about 0:06:38.480 --> 0:06:39.960 the constraints at the BLS. 0:06:40.240 --> 0:06:42.919 So I was really honored to be the Commissioner of 0:06:42.960 --> 0:06:47.400 Labor Statistics from twenty nineteen until twenty twenty three. So 0:06:47.440 --> 0:06:50.200 I served a little less than two years under President Trump. 0:06:50.760 --> 0:06:55.840 He nominated me. It is a presidential nomination, Senate confirmed positions, 0:06:56.040 --> 0:06:59.200 it has a statutory for your term. And then I 0:06:59.240 --> 0:07:02.159 served the rest of my under President Biden. So I 0:07:02.279 --> 0:07:05.360 was in both terms. I think that's kind of important 0:07:05.440 --> 0:07:11.680 because the BLS Commissioner has been exempt from the normal 0:07:11.800 --> 0:07:15.960 turning over of the presidency by party. And that's because 0:07:16.000 --> 0:07:18.400 the view as well, these data are so important they 0:07:18.400 --> 0:07:21.480 should not even be a part of the political appointment 0:07:21.560 --> 0:07:23.640 process except when they come to. It's sort of like 0:07:24.240 --> 0:07:26.200 you know, the Federal Reserve chair or something of that 0:07:26.320 --> 0:07:28.240 nature has just seen as we want to keep it 0:07:28.240 --> 0:07:31.880 out of politics. So I served over that period of time. 0:07:32.480 --> 0:07:34.440 You know, that was the COVID period, so there were 0:07:34.480 --> 0:07:36.680 all kinds of real challenges from that, but I think 0:07:36.760 --> 0:07:39.560 the main thing that I drew from that period is 0:07:39.640 --> 0:07:43.480 how important it is crucial, almost were the crisis level, 0:07:43.800 --> 0:07:47.280 to modernize the way we collect data. The response rates 0:07:47.320 --> 0:07:50.600 on the surveys are falling dramatically. I've made that point 0:07:50.640 --> 0:07:54.400 on this program, and our costs arising dramatically, which makes 0:07:54.440 --> 0:07:57.600 it really difficult to conduct those surveys in the future 0:07:57.640 --> 0:07:59.840 and the way we have in the past, and then 0:08:00.280 --> 0:08:02.920 the future is kind of going in the direction of 0:08:03.000 --> 0:08:07.160 the employment survey, and I just said surveys are following 0:08:07.160 --> 0:08:09.920 with the employment surveys a little different. It's not an 0:08:09.960 --> 0:08:13.600 in person survey, it is an electronic survey, and we 0:08:13.680 --> 0:08:17.920 need to invest more in the electronic side of statistical 0:08:18.120 --> 0:08:21.440 creation or production, blended data, etc. I could do a 0:08:21.440 --> 0:08:24.520 whole program on this, but your point was well made. 0:08:24.760 --> 0:08:27.400 BLS has had some challenges in front of it, as 0:08:27.520 --> 0:08:32.200 has the entire statistical system. Unfortunately, for this particular episode, 0:08:32.240 --> 0:08:36.559 those challenges were really not I don't say relevant. They're relevant, 0:08:36.559 --> 0:08:38.600 of course, but they're really not the reason why we 0:08:38.920 --> 0:08:41.160 should have had a change at the top. 0:08:41.920 --> 0:08:44.880 Well, speaking of the employment report, talk to us about 0:08:44.880 --> 0:08:48.760 what exactly happens when the BLS is publishing the initial 0:08:48.800 --> 0:08:51.920 non farm payrolls and then what happens, you know, in 0:08:52.080 --> 0:08:55.680 the couple months or so before it publishes the revision, 0:08:55.760 --> 0:08:58.440 and why does it seem we are getting these large 0:08:58.480 --> 0:09:01.000 gaps at least in recent months and years. 0:09:01.200 --> 0:09:06.560 Right, So the employment survey, the jobs numbers come from 0:09:06.720 --> 0:09:10.680 a survey of businesses. The unemployment rate comes from a 0:09:10.679 --> 0:09:13.760 survey of households. So there's two surveys involved in every 0:09:13.760 --> 0:09:17.080 First Friday report. What we're talking about now is the 0:09:17.120 --> 0:09:19.120 survey that goes out to businesses, and it goes out 0:09:19.120 --> 0:09:22.440 to hundreds of thousands of businesses. Well, of course there's 0:09:22.480 --> 0:09:25.920 still a probability sample, since there's well in excess of 0:09:25.960 --> 0:09:31.840 twelve million businesses in our Census of business, our business register. Well, 0:09:32.040 --> 0:09:36.280 those businesses are supposed to turn their surveys in at 0:09:36.280 --> 0:09:39.960 the end of the month basically, but only about sixty 0:09:40.000 --> 0:09:43.200 eight percent usually that's the average do so, and so 0:09:43.559 --> 0:09:47.160 BLS keeps the window open for two more months, so 0:09:47.360 --> 0:09:49.199 sixty eight percent or so at the end of the 0:09:49.280 --> 0:09:53.120 first month they make the first estimate. Then at the 0:09:53.200 --> 0:09:55.600 end of the second month we've get about eighty three 0:09:55.679 --> 0:10:00.560 percent completion, and they revise that number of the first month, 0:10:00.640 --> 0:10:02.920 and then by the third month we're into the nineties. 0:10:03.000 --> 0:10:05.360 Usually end up around ninety three to ninety four percent 0:10:05.400 --> 0:10:07.800 of all the sent out returns. Come back to us 0:10:07.840 --> 0:10:12.679 with information. So it's a wonderful survey. The revisions are 0:10:12.720 --> 0:10:16.520 done because we get more information from businesses. Oftentimes big 0:10:16.559 --> 0:10:19.280 businesses answer first they have the capacity to do so, 0:10:19.320 --> 0:10:22.559 and then we get smaller entities, state and local governments, 0:10:23.040 --> 0:10:27.720 smaller businesses answer in those next two months. We always 0:10:27.800 --> 0:10:32.800 have revisions. There's there's even when we say the number 0:10:32.840 --> 0:10:35.600 did not change, it doesn't mean we didn't have revisions. 0:10:35.600 --> 0:10:38.240 They just canceled each other out. There's just all these 0:10:38.280 --> 0:10:42.240 revisions are coming in. The revisions have been high recently, 0:10:42.280 --> 0:10:45.240 but this is not a typical of a period when 0:10:45.280 --> 0:10:48.400 the economy is either going back to growth or going 0:10:48.520 --> 0:10:53.040 down to subsidence. So oftentimes turning points in the economy 0:10:53.360 --> 0:10:58.360 are accompanied by changes larger changes in the revisions. Particularly 0:10:58.440 --> 0:11:01.959 in this case where we SUSPEC effect. Smaller businesses are 0:11:01.960 --> 0:11:04.680 feeling the effects of the supply shock coming from the 0:11:04.720 --> 0:11:09.199 tariff policy and from immigration, and that these supply shocks 0:11:09.240 --> 0:11:12.480 are affecting smaller businesses more than they are larger businesses, 0:11:13.040 --> 0:11:16.120 and state and local governments are being affected by another factor, 0:11:16.160 --> 0:11:19.280 and that is the expiration of the COVID era money. 0:11:19.679 --> 0:11:22.360 I think that was actually the root of a lot 0:11:22.400 --> 0:11:25.200 of the changes that you saw on Friday. State and 0:11:25.240 --> 0:11:28.360 local governments are not able to hire at the levels 0:11:28.400 --> 0:11:30.800 they were going to hire at in previous years or 0:11:30.960 --> 0:11:33.679 did hire at in previous years because they did not 0:11:33.880 --> 0:11:37.319 have the subsidies that they had in previous years. So 0:11:37.640 --> 0:11:42.880 these are important revisions. Actually, the research shows, and this 0:11:42.960 --> 0:11:46.760 may shock you, that BLS is getting much better at 0:11:46.800 --> 0:11:50.640 its first estimate than it was thirty years ago. In fact, 0:11:50.640 --> 0:11:55.120 it's really kind of almost a steady progress towards greater accuracy. 0:11:55.840 --> 0:12:00.599 So the big revisions are indicative of not air of 0:12:00.679 --> 0:12:04.480 more information, and the bigger the revisions, the more likely 0:12:04.520 --> 0:12:06.080 we are in a turning point. 0:12:06.440 --> 0:12:08.840 There's so much that was in that answer that I 0:12:08.880 --> 0:12:12.120 found to be very helpful and clarifying, so thank you. 0:12:12.160 --> 0:12:15.200 I mean, just this idea, you know, a that actually 0:12:15.240 --> 0:12:18.040 over time, contrary to what people on Twitter might think, 0:12:18.120 --> 0:12:20.880 that the equality of that first pass has actually gone 0:12:20.960 --> 0:12:24.160 up is very striking. 0:12:24.360 --> 0:12:24.520 You know. 0:12:24.960 --> 0:12:28.400 Let's stipulate that, Okay, the BLIS could use some upgrading. 0:12:28.440 --> 0:12:32.119 As you mentioned that there are these capacity constraints, non response, 0:12:32.200 --> 0:12:34.680 the cost of going out. Maybe it needs to adopt 0:12:34.720 --> 0:12:37.839 more technology in some way to solve for this. Does 0:12:37.880 --> 0:12:42.360 the BLS currently have that capacity, either budgetary wise or 0:12:42.440 --> 0:12:46.600 statutory authority such that a commissioner could just do that 0:12:47.240 --> 0:12:50.040 whatever it is that ideal state, or would it need 0:12:50.080 --> 0:12:52.560 either some sort of budgetary allocation or an Act of 0:12:52.600 --> 0:12:56.040 Congress to get to the point where it's you know, 0:12:56.120 --> 0:12:58.120 getting to the level that we are happy with. 0:12:58.160 --> 0:13:01.520 Again, it has the authority to make the changes, it 0:13:01.559 --> 0:13:04.880 doesn't have the budget to do so. And it isn't 0:13:04.920 --> 0:13:07.680 that BLS just needs more money, right. As a matter 0:13:07.720 --> 0:13:09.800 of fact, I think Congress, if it paid more attention, 0:13:10.240 --> 0:13:12.720 would say, well, what are you spending your money on now? 0:13:12.800 --> 0:13:16.400 And let's make sure that the low priority is canceled 0:13:16.520 --> 0:13:18.559 so that we can support the high priority. I think 0:13:18.679 --> 0:13:21.480 BLS would be very happy with that. But we do 0:13:21.559 --> 0:13:24.360 need more money. And why Well, if you're going to 0:13:24.480 --> 0:13:27.680 change an official statistic, the unemployment rate, let's just take that. 0:13:29.040 --> 0:13:31.199 You want to be really careful, right, You want to 0:13:31.280 --> 0:13:34.200 run tests, you want to test out your new idea. 0:13:34.559 --> 0:13:37.480 You don't want to have a count the number of 0:13:37.520 --> 0:13:39.360 geese in the air, and that's the unemployment rate. You 0:13:39.400 --> 0:13:41.520 want to make sure that that is a particularly good 0:13:41.600 --> 0:13:45.520 indicator of the employment market, and you want to test 0:13:45.559 --> 0:13:48.360 it in real time as well as experimental time. You 0:13:48.440 --> 0:13:51.400 in real time, so run it parallel. We these tests 0:13:51.840 --> 0:13:56.480 expand the costs of your unemployment statistics program because you're 0:13:56.520 --> 0:14:03.040 running essentially two systems simultaneously. That to modify the current 0:14:03.080 --> 0:14:07.080 population survey, which is the survey of households, would cost 0:14:07.200 --> 0:14:11.200 around fifteen million to twenty million in experimental costs over 0:14:11.240 --> 0:14:14.400 a two year period. It's not great. The program itself 0:14:14.440 --> 0:14:17.360 costs about forty five million a year, but it does 0:14:17.480 --> 0:14:19.520 add to the cost for those two years or so. 0:14:19.920 --> 0:14:22.600 Congress could could easily do that. I mean, oh my gosh, 0:14:22.680 --> 0:14:25.000 Congress is spending a lot more money than that on 0:14:25.080 --> 0:14:28.280 things that we might disagree with. But they need to 0:14:28.320 --> 0:14:30.840 allocate a little bit of money to CPS for that. 0:14:31.040 --> 0:14:33.880 Does it have the authority? Here's a really interesting story. 0:14:34.400 --> 0:14:38.480 During COVID, we canceled all travel, all conferences, you know, 0:14:39.080 --> 0:14:41.720 and I was surprised at how many millions of dollars 0:14:42.160 --> 0:14:46.360 went into travel and conferences and meetings. So this became 0:14:46.400 --> 0:14:49.320 for me couch money during the COVID years, and I 0:14:49.400 --> 0:14:52.480 was able to spend that money, you know, on important 0:14:52.520 --> 0:14:54.520 things I thought, So I did a lot of things, 0:14:54.560 --> 0:14:56.720 like I've built a new data center to get us 0:14:56.760 --> 0:14:58.520 out of the basement of one hundred and four year 0:14:58.560 --> 0:15:03.000 old building out to a wonderful above ground local location. 0:15:03.160 --> 0:15:06.280 But I also started a number of research programs. 0:15:06.320 --> 0:15:06.520 You know. 0:15:06.600 --> 0:15:10.280 I made thirty one big modifications to do the CPI. 0:15:11.240 --> 0:15:15.240 We started a whole new approach on looking at consumer expenditures, 0:15:15.360 --> 0:15:21.960 and I subsidized some experimentation on the Jobs Report well 0:15:22.000 --> 0:15:24.600 as it as COVID was over, we started to get 0:15:24.800 --> 0:15:30.080 congressionally mandated programs that then sucked up all that counch money. 0:15:30.960 --> 0:15:33.960 If we had a little bit of extra, we I 0:15:33.960 --> 0:15:36.160 mean be only asked a little bit of extra to 0:15:36.200 --> 0:15:39.280 do these things. Let's just think of the innovation that 0:15:39.400 --> 0:15:41.920 they would happen. I think we would quickly be out 0:15:42.000 --> 0:15:47.160 of the problems that we are facing from a methodological standpoint, 0:15:47.280 --> 0:15:50.320 and that might then reduce the political pressure that we 0:15:50.360 --> 0:15:52.240 saw that was so evident on Friday. 0:15:52.600 --> 0:15:56.280 So we're recording this August fourth, nine, five am in 0:15:56.320 --> 0:15:58.920 the morning and thirty three seconds. I feel like I 0:15:58.960 --> 0:16:02.080 need to be that specific nowadays with the newsflow, so 0:16:02.120 --> 0:16:04.800 who knows what happens between now and when this episode 0:16:04.880 --> 0:16:08.840 actually comes out, but we are expecting the administration to 0:16:08.880 --> 0:16:13.360 announce a new BLS head in the coming days. What 0:16:13.560 --> 0:16:16.840 happens now, you know, there's a Trump appointee for a 0:16:16.880 --> 0:16:21.360 new statistics commissioner after the President has specifically stated that 0:16:21.440 --> 0:16:26.400 he thinks the previous commissioner was politically motivated in some way. 0:16:26.880 --> 0:16:29.520 Are people still going to believe the numbers that are 0:16:29.560 --> 0:16:31.400 coming out? And how do you think that's actually going 0:16:31.440 --> 0:16:36.160 to play internally at the BLS, at an organization whose whole, 0:16:36.320 --> 0:16:40.480 you know, Raison Deutch is to find, you know, factual 0:16:40.680 --> 0:16:43.760 numbers and statistics to portray the American economy. 0:16:44.680 --> 0:16:46.720 Well, I think there has been damage and it will 0:16:46.760 --> 0:16:49.840 take time to recover from that damage. The last time, 0:16:49.960 --> 0:16:54.600 there was a serious political effort on BLSS during the 0:16:54.680 --> 0:16:59.280 Nixon administration and it took some time for BLS to 0:16:59.360 --> 0:17:02.160 recover from that, though the action taken by the President 0:17:02.200 --> 0:17:05.399 at that time visa BLS was not, I think as 0:17:05.880 --> 0:17:09.919 significant as this one. So he just imagined that the 0:17:09.920 --> 0:17:14.080 President decides to appoint Saint Peter, you know, as the 0:17:14.119 --> 0:17:17.760 new BLS commissioner, and of course Saint Peter has a 0:17:17.800 --> 0:17:22.120 reputation for honesty and for clarity of thought. Still it'll 0:17:22.119 --> 0:17:24.720 be the case because Saint Peter won't have any control 0:17:24.840 --> 0:17:27.480 over the way that the data are collected, the data 0:17:27.560 --> 0:17:30.960 are assembled, or the estimates that are done. That's all 0:17:31.000 --> 0:17:33.760 done outside of the of the knowledge of the commissioner. 0:17:33.760 --> 0:17:36.080 Commissioner has no control over that. In fact, you're locked 0:17:36.080 --> 0:17:39.159 out of that whole process. So it will be the 0:17:39.160 --> 0:17:42.480 case that Saint Peter will have a month come when 0:17:42.640 --> 0:17:45.880 the unemployment rate will be disappointingly low, could even be negative. 0:17:46.800 --> 0:17:50.560 But I think given what has just happened, people will say, well, 0:17:51.880 --> 0:17:55.040 Saint Peter probably influenced that number and it's not as 0:17:55.080 --> 0:17:58.520 bad as it really is. So for a while, that 0:17:58.680 --> 0:18:02.679 suspicion that the estimate that's in ount it's really not 0:18:02.800 --> 0:18:06.320 the real estimate, will be in the minds of some people, 0:18:06.359 --> 0:18:08.760 not in my mind, because I know that these people 0:18:08.760 --> 0:18:11.399 who work there, the professionals, the full time staff, the 0:18:11.440 --> 0:18:15.439 patriots that work there, the loyal Americans who are just 0:18:15.920 --> 0:18:20.400 extremely diligent in doing an absolutely objective job. Those people 0:18:20.480 --> 0:18:22.879 are still in place. But if you don't have my 0:18:23.000 --> 0:18:25.960 level of knowledge, or a reasonable level of knowledge of 0:18:26.000 --> 0:18:30.399 how internally BLS works, you're going to be subject to 0:18:30.480 --> 0:18:35.080 these falsehoods and accusations, and that will be damaging, That 0:18:35.160 --> 0:18:38.280 will reduce investment, that will reduce economic activity, That will 0:18:38.280 --> 0:18:42.360 make at least that will create greater uncertainty about what's 0:18:42.400 --> 0:18:47.040 happening inside the US economy. Policymakers will be less clear 0:18:47.240 --> 0:18:49.240 in the direction that they take, So there will be 0:18:49.280 --> 0:18:52.320 a time when we need to recover. No matter who's appointed, 0:18:52.920 --> 0:18:55.719 I hope that it will be a short lived time. 0:18:56.000 --> 0:18:59.680 And my guess is, given the reputation of BLS, if 0:18:59.800 --> 0:19:04.320 someone you know, really reputable is appointed, then yeah, I 0:19:04.359 --> 0:19:06.920 don't think the period of transition will be that a lot. 0:19:07.440 --> 0:19:10.120 All right, Well, Bill Beach really appreciate you coming back 0:19:10.160 --> 0:19:13.119 on the show. Thank you so much for being on 0:19:13.200 --> 0:19:13.680 Off Box. 0:19:13.920 --> 0:19:14.920 Thanks Bill, that was great. 0:19:15.119 --> 0:19:16.480 Thank you very much for asking me. 0:19:29.920 --> 0:19:31.840 Joe so good to get Bill back on to talk 0:19:31.840 --> 0:19:34.400 about this. Really the perfect guest. There are so many, 0:19:34.560 --> 0:19:38.800 I guess ironies involved in this whole conversation. The big one, 0:19:38.840 --> 0:19:41.919 of course, is this idea that like, well, if Trump 0:19:41.960 --> 0:19:44.400 wants to convince everyone that the US economy is doing 0:19:44.440 --> 0:19:47.720 fantastic and job growth is great, then firing the head 0:19:47.720 --> 0:19:52.080 of statistics and having everyone distrust, you know, the subsequent numbers, 0:19:52.160 --> 0:19:55.919 because the subsequent head might be a political appointee who's 0:19:55.960 --> 0:19:58.399 you know, a loyalist to Trump. It seems like you're 0:19:58.440 --> 0:19:59.800 sort of shooting yourself in the foot. 0:20:00.080 --> 0:20:03.720 The other huge contradiction is that he says Powell is 0:20:03.760 --> 0:20:06.200 too late. Yea wait, this is the other huge contradiction, 0:20:06.280 --> 0:20:08.399 which is every day he slams Powell, he's like, oh, 0:20:08.440 --> 0:20:11.600 you're too late, you need to cut rates. Well, if 0:20:11.640 --> 0:20:14.520 the job numbers were weak, then I could understand this 0:20:14.680 --> 0:20:17.080 argument to some extent, oh the job But he's also 0:20:17.920 --> 0:20:20.840 casting expersions on the negative jobs numbers. So how is 0:20:20.880 --> 0:20:23.119 Powell too late? I mean, this is I mean, it's 0:20:23.160 --> 0:20:27.000 an irretrievable contradiction in the two criticism of both of 0:20:27.000 --> 0:20:28.120 the Fed and the BLS. 0:20:28.160 --> 0:20:31.120 It's definitely a contradiction. I don't think, however, that Trump 0:20:31.240 --> 0:20:36.440 necessarily draws a direct connection between the unemployment rate and interest. 0:20:36.160 --> 0:20:36.760 Rates as well. 0:20:37.600 --> 0:20:40.600 You know, he seems to just like low interest rates. 0:20:40.359 --> 0:20:43.280 And he seems to perceive that low interest rates are 0:20:43.359 --> 0:20:48.360 basically a reward for an improving economy. But yes, but I. 0:20:48.280 --> 0:20:51.520 Mean, lots of other contradictions. You're absolutely right. So another 0:20:51.600 --> 0:20:53.760 one is this idea that Okay, a lot of the 0:20:53.760 --> 0:20:56.880 weakness came through on the revision side. The revisions are 0:20:56.960 --> 0:21:00.199 mostly coming from small businesses who reply late. And if 0:21:00.240 --> 0:21:02.639 you think about the Trump administration, you know, they always 0:21:02.680 --> 0:21:06.920 sort of portray themselves as a good business environment for 0:21:07.200 --> 0:21:10.720 smaller businesses, and it might be that that scenario that's 0:21:10.720 --> 0:21:11.880 seeing some weakness. 0:21:12.240 --> 0:21:15.400 I thought your question about sort of internal morale, and 0:21:15.760 --> 0:21:19.440 as Bill said, you know, an agency staffed with patriots, 0:21:20.000 --> 0:21:22.359 I mean, I just you know, is Bilska going to 0:21:22.400 --> 0:21:25.080 be continue to be a destination for people who are 0:21:25.400 --> 0:21:28.359 patriots right or take their job seriously in the future 0:21:28.840 --> 0:21:31.520 is a really interesting question. Also, the idea that like 0:21:31.560 --> 0:21:34.080 maybe we could like get high data quality for like 0:21:34.080 --> 0:21:37.239 twenty million dollars. Given how much that's worth, it's just 0:21:37.359 --> 0:21:39.440 like drives you crazy if that's really all it took. 0:21:39.680 --> 0:21:41.600 But also I really like this idea that it would 0:21:41.600 --> 0:21:44.440 have to always be done in parallel with the current thing, 0:21:44.800 --> 0:21:47.880 such that the new data is sort of provably backwards 0:21:47.960 --> 0:21:50.280 compatible with the old data. Right, so if you're going 0:21:50.320 --> 0:21:53.000 to adopt a new methodology, you need some allocation, run 0:21:53.040 --> 0:21:56.119