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Monday, August 17, 2015

Dwindling Data

In Federalist 53, James Madison wrote:
How can foreign trade be properly regulated by uniform laws, without some acquaintance with the commerce, the ports, the usages, and the regulatious of the different States? How can the trade between the different States be duly regulated, without some knowledge of their relative situations in these and other respects? How can taxes be judiciously imposed and effectually collected, if they be not accommodated to the different laws and local circumstances relating to these objects in the different States? How can uniform regulations for the militia be duly provided, without a similar knowledge of many internal circumstances by which the States are distinguished from each other? These are the principal objects of federal legislation, and suggest most forcibly the extensive information which the representatives ought to acquire. The other interior objects will require a proportional degree of information with regard to them.
Accordingly, a legitimate function of the federal government is to gather data that will foster good deliberation on public policy issues.

At The Washington Post, AEI's Michael Strain writes:
Confusion about today’s labor market, anxiety about the future of jobs, a rapidly evolving economy and so many other reasons make now exactly the wrong time to diminish the government’s ability to collect and construct labor market data. But that is exactly what is happening, and may continue to happen.
Jonathan Schwabish at the Urban Institute catalogues the damage: In 2013, the Bureau of Labor Statistics (BLS), the principal agency charged with producing information on the labor market, received $41 million less from Congress than the president requested. Statistics on mass layoffs — an important source of information about the behavior of businesses facing sharp reductions in demand — were eliminated. In 2014, facing a gap of nearly $22 million, BLS pulled back on the Quarterly Census of Employment and Wages, a vital pillar supporting our ability to know detailed information on how many jobs and businesses the economy is supporting and how much workers are earning. The same year, BLS continued to produce information on import and export prices — from which we know how the United States is performing in international markets — by the skin of its teeth.