BLS integrity attacks are dangerous for economy and evidence-based policy: Aspen's Melissa Kearney

Key Concepts:

• BLS (Bureau of Labor Statistics) credibility
• Evidence-based policymaking
• Politicization of economic data
• Economic resilience
• Wage growth & Household income
• Tariffs and their impact
• National debt
• Spending priorities
• Healthcare and Housing costs
• Inflation Reduction Act

1. BLS Credibility and Political Interference:

• Melissa Carney expresses significant worry about the President's demand for the dismissal of the BLS commissioner.
• She emphasizes the importance of objective, non-political data for businesses, investors, and policymakers.
• She sees this as an unprecedented and dangerous threat to the integrity of economic data production in the United States and modern democracies.
• Carney notes that the BLS uses an incredibly intensive process that involves many different people, not a single hand-picked individual manipulating numbers.
• She acknowledges the existence of revisions to initial data releases, which is a standard practice due to incomplete information.
• She expresses skepticism that the president's concerns stem from a genuine understanding of the BLS revision process.
• Carney questions the credibility of economic data released under a politically appointed BLS commissioner, even if the data is positive.

2. Potential Candidates and the Role of the BLS Commissioner:

• The BLS commissioner should be a technocrat, a serious person focused on data measurement and analysis.
• It's unclear whether any qualified individuals would be willing to take the job given its current politicized nature.

3. Assessment of the Current Economy:

• Wage growth and household income have been strong for many years, including for households at the bottom of the income distribution.
• The economy has shown remarkable resilience to shocks, including the pandemic and tariffs.
• However, millions of Americans face real challenges related to rising healthcare and housing costs.
• Despite economic strengths, significant domestic pressures exist on American households.

4. Fiscal Policy and Budgetary Concerns:

• The tariffs generate revenue but do not fundamentally bring down costs.
• Congress recently passed legislation expected to add $3-4 trillion to the national debt over the next ten years.
• The spending cuts in the bill keep the debt from getting even bigger, but it doesn't bring down the debt.
• There is a need to balance spending priorities with budgetary constraints.
• The bill does cut billions of dollars from Medicaid, from SNAP and other important spending programs.

5. Inflation Reduction Act:

• The Act will lead to incremental increase to the debt.
• The Act does cut billions of dollars from Medicaid and Snap.

6. Conclusion:

The conversation highlights the critical importance of maintaining the independence and integrity of government statistical agencies like the BLS. Politicizing these agencies undermines trust in economic data, which is essential for informed decision-making. While the US economy has shown resilience and positive trends in wage growth and household income, significant challenges remain, particularly regarding healthcare and housing costs. Fiscal policy decisions, including the use of tariffs and the passage of large spending bills, need to be carefully considered in light of their potential impact on the national debt and the well-being of American households.