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Comment: A couple of more guardrails against gaming the system removed.The Trump administration has disbanded two expert committees that advised the government on producing accurate economic statistics. Members of one group, the Federal Economic Statistics Advisory Committee (FESAC), were told Tuesday that Commerce Secretary Howard Lutnick disbanded the committee last week because its mission “has been fulfilled,” in an email seen by The Wall Street Journal.
The Commerce Department also terminated a second expert group, the Bureau of Economic Analysis Advisory Committee, which consulted on a separate group of economic stats. Both committees’ websites say that coming meetings have been canceled.
A FESAC committee member, economist Erica Groshen, said the group played a critical role in guiding the offices that track U.S. inflation, employment and economic growth. “Its work goes to the essential transparency of these statistical agencies,” Groshen said. “When you remove that transparency, then that diminishes trust.”
FFESACesac guided government statistics for 25 years. High-profile academic economists including Daron Acemoglu, John Taylor and the late Alan Krueger served as some of its past members. Current members included academic economists, think-tank researchers and executives from Wall Street and corporations.
The committees’ dismantling comes at a challenging moment for the government statistics agencies, which have faced tight budgets and falling response rates to surveys that are essential gauges of the health of the economy.
The move also follows a suggestion from Lutnick over the weekend that the government could change how it calculates the size of the economy by separating government spending, which would be a sharp departure from academic theory and international norms.
FESAC met twice a year to advise government statisticians and economists on how to improve and refine their surveys and calculations. Members weren’t paid for their work. Members who chose to attend meetings in person could be compensated for travel expenses.
Groshen, who was previously head of the Bureau of Labor Statistics, said FESAC had an especially important role advising on statistics that combine the work of multiple government agencies. That includes the Federal Reserve’s preferred inflation metric, the personal-consumption expenditures price index, which melds analysis from both the Labor Department and the Commerce Department.
“These advisory committees are really essential to maintaining the quality of the data going forward,” she said.
© 2015 Mutual Fund Observer. All rights reserved.
© 2015 Mutual Fund Observer. All rights reserved. Powered by Vanilla
Comments
- Do my fund managers need / rely on these statistics when they invest my money?
- Does the Federal Reserve rely on any of this stuff in plotting the rate curve?
- Will labor contracts with COLA provisions be weakened due to less accurate inflation readings?
- Will the corporations I own as an investor be handicapped in managing financial assets and planning for future growth?
- Will college / post graduate courses in business & finance suffer from not having relevant data?
MADAGet some substance
You are too slow and dim and uninformed and kneejerk for this crowd
Good Morning Eddie. You are up early Texas time.
There's always the Magic Sharpie(tm) and/or a forthcoming EO declaring the "total and unquestioned" use of 'alternative facts' as the basis for US policy....
If they start massaging economic numbers (like they allegedly will be for GDP) we will be no better than China -- release fake data, treat it as fact, and then hope nothing breaks anytime soon.