Gore Missed Opportunity to Reinvent Economic Statistics
LOS ANGELES _ I really hate to quibble with Vice President Al Gore's report on reinventing government. It's a thoughtful attempt to untangle the federal monstrosity and I suspect many of the recommendations will be enacted.
Too bad, though, that while Gore and Co. were busy reinventing, more attention wasn't paid to a little-discussed, low-budgeted area of the government that has an extraordinary influence on our lives:
The preparation of economic statistics.
OK, so we're not talking Heidi Fleiss material _ just a bunch of dull numbers that the government churns out almost every day of the week. Stuff goes up and stuff goes down, and who can make sense of what it means anyway?
Those dull numbers, however, are the one benchmark we have to gauge how the economy is doing. From that, your financial life gets shaped. How much interest you pay on a new house, what your stocks are trading at, whether your company is going to hire or fire _ they're all determined, to one degree or another, from government statistics.
Trouble is, government statistics are notoriously unreliable. George Bush found that out the hard way when revisions were recently made in the gross domestic product _ the primary measurement of how well the economy is doing.
The revisions included the last few months of 1992, a critical point in the election year. The Commerce Department now says that the GDP grew at a rate of 5.7 percent in the fourth quarter, a full percentage point higher than what had been reported. That's an amazingly big change, especially considering the thing already had been revised three times.
Third quarter GDP was revised to 3.4 percent from an initial estimate of 2.7 percent on Oct. 27 (and compared with earlier private forecasts of 1.5 percent).
Who knows whether any of this would have changed the election. Voters were in a gloomy mood last fall and it would have taken a lot more than a few positive numbers to change anybody's mind. Besides, much of the fourth quarter spending took place after Bill Clinton was elected _ and had more to do with the post-election jump in consumer confidence than with Bush's policies.
Still, government numbers do set a tone _ from those first cryptic reports by the wires to the more probing analyses by the newspapers to the oversimplified snippets by the network news shows.
At the end of the day, we're left with a neat and tidy conclusion, no matter how misleading it might prove to be. …