Mark Twain famously said, “There are three kinds of lies.” “Lies, damn lies, and statistics.”
You already know that statistics published by the government are unreliable. Federal agencies have changed their methodologies over the years, making data sets difficult to compare.
In economic modeling, there is a concept called “GIGO” (garbage in, garbage out). And what we’ve seen certainly looks like a lot of garbage.
Numerical tools then perform adjustments, perform other types of synthesis, and modify that data. A good example is that government data has also become politicized and some methodologies are outdated compared to the structure of today’s economy.
But there’s another reason not to trust this data. Because no one wants to participate in government data collection.
Recent bloomberg This article and several different graphs in circulation show that response rates to government data collection surveys are plummeting. This trend has accelerated in the post-corona mandate era.
Therefore, if you have questionable survey data to begin with, and then the proportion of non-respondents increases more and more, the usefulness and veracity of the data will be further diluted.
Why are more people unwilling to participate in government surveys? The first answer is very obvious. People don’t trust the government or anyone associated with it.
Who would want the government to obtain more data about you, information that could be weaponized? Well, then, if participation in the investigation is not mandatory (some government investigations and data collection activities ), why should you spend time answering them?
People and businesses are also generally more concerned about privacy, making it more difficult to contact them.
Erica Groshen, former director of the U.S. Bureau of Labor Statistics, told Bloomberg News that some companies are using data and information that they consider to be proprietary that could affect their competitive advantage. He suggested that he might not want to let go of it because of this.
It also suggests that if you see rapid changes in your data over a short period of time, part of the reason may be a decline in response rates. In financial economic modeling, there is a concept called “GIGO” (garbage in, garbage out). And what we’ve seen certainly looks like a lot of garbage.
Data collection has become so difficult for governments that agencies sometimes offer financial “incentives” to persuade companies to participate in data collection. That effort can also skew the data with certain biases.
Federal Reserve Chairman Jerome Powell has repeatedly said the central bank continues to rely on data to make policy decisions. But given the lack of high-quality data, it’s hard to believe that Fed directors are making their choices armed with the best information. Rather, over time, they are likely to become hostage to America’s dire financial situation.
Data can be useful, but it needs to be useful from the beginning. Do your own research using your eyes, head, and intuition, and take official data at heart.
