[Face Ache]

Movin' right along... (doog-a-doon doog-a-doon)

Bush's Data Dump
The administration is hiding bad economic news. Here's how.
By Russ Baker

The Bush administration is finally facing tough questions about its selective use of intelligence in selling war with Iraq. But Americans shouldn't just be skeptical of what the president says about WMD. They should be skeptical of what he says about GDP. In economic policy even more than in war policy, the Bushies have successfully suppressed, manipulated, and withheld evidence to serve their policy purposes.

Of course every administration likes to trumpet its good news and hide its bad, but what's remarkable about the Bush team is its willingness to stifle data that had been widely released and to politicize data that used to be nonpartisan.

The administration muzzles routine economic information that's unfavorable. Last year, for example, the administration stopped issuing a monthly Bureau of Labor Statistics report, known as the Mass Layoff Statistics program, that tracked factory closings throughout the country. The cancellation was made known on Christmas Eve in a footnote to the department's final report�a document that revealed 2,150 mass layoffs in November, cashiering nearly a quarter-million workers. The administration claimed the report was a victim of budget cuts. After the Washington Post happened to catch this bit of data suppression, the BLS report was reinstated. (Interestingly, President George H.W. Bush buried these same statistics in '92, also during a period of job losses. They were revived by President Clinton.)

The Bush economic team has snuffed its own reports when they reach conclusions that don't match the administration's rosy scenarios. The administration deep-sixed a study commissioned by then Treasury Secretary Paul O'Neill that predicts huge budget deficits well into the future. As noted by the Financial Times in late May, this survey, which asserted that the baby-boom generation's future health care and retirement costs would swamp U.S. coffers, was dropped from a 2004 budget summary published in February 2003�at the same time the White House was campaigning for a tax-cut package that critics warned would greatly expand future deficits. "The study's [analysis of future deficits] dwarfs previous estimates of the financial challenge facing Washington," wrote the FT. According to the FT, a Bush official said the study was merely a thought exercise.

The administration also muffled a customary report whose findings would have forced key corporate supporters to pay more to their employees. The annual Adverse Effect Wage Rate establishes the minimum wage that can be paid each year to about 50,000 agricultural "guest workers" in the H2A Program. From AEWR's 1987 inception until 2000, the Department of Labor released the report in February. But in 2001, DOL withheld the wage figure until August, and only published it after the Farmworker Justice Fund threatened a lawsuit. In 2002, the DOL held up the report until May, again releasing it only after the prospect of legal action. The delays helped big agricultural firms, largely in the tobacco states and the South, by allowing them to pay their field workers last year's lower wages, saving the employers millions of dollars. Among those benefiting politically were Labor Secretary Elaine Chao's husband, Sen. Mitch McConnell of Kentucky, whose state relies on several thousand guest workers in its tobacco fields and who receives large contributions from agricultural interests.

Another administration trick is playing with the length of its economic forecast periods, which puts the best possible face on bad news while exaggerating the projected benefits of its own initiatives. For example, to heighten the impression that Social Security is running out of money (thereby strengthening the case for allowing workers to divert money from the system into private retirement accounts), the administration has predicted shortfalls far in the future by relying on preposterously long forecast periods. In a superb analysis of the budget in the June Harper's, Thomas Frank noted that in 2002 the administration declared an $18 trillion shortfall in Social Security and Medicare�about five times the current national debt. Frank notes that in order to arrive at the $18 trillion figure�since Social Security is currently in surplus�the administration used a "cumulative seventy-five-year estimate [Frank's itals] based on extreme long-term projections ... ." Meanwhile, even as it relies on 75-year projections for Social Security, the same document replaces traditional 10-year budget projections with five-year ones, claiming the longer-term numbers were unreliable.

President Bush also politicized the Council of Economic Advisers, which is supposed to produce straight analysis, not administration spin. CEA staffers complained that top Bush economic adviser Larry Lindsey, not even a member of the council, encouraged them to produce data supporting the president's controversial tax cut initiatives. CEA chairman Glen Hubbard also pushed staffers to find literature supporting the questionable argument that tax cuts created job growth.

On other occasions, the administration has punished economic officials who didn't follow the company line. Treasury Secretary O'Neill left the administration after, among other fits of candor, he expressed skepticism about economic figures the White House had released and suggested that the tax cut could be better used to buttress Social Security. And before Lindsey was made to take a dive, he predicted that the war in Iraq could cost upwards of $200 billion, a figure that infuriated the White House, which was selling the anti-Saddam campaign as a comparatively cheap victory.

Important economic data that casts a bad light on administration policies has been expunged from government Web sites. The Department of Labor removed a report showing the real value of the minimum wage over time, claiming it was "outdated." With no minimum wage hike since 1997, the Web site would have shown minimum-wage workers faring increasingly poorly under the Bush administration, while their real income went up under Clinton. (Some subheadings from the report: "Real Value of the Minimum Wage Continues Decline"; "Minimum Wage Falls Relative to Average Hourly Earnings"; "Minimum Wage Falls Below 2-Person Family Poverty Threshold.")

Earlier this year, a study predicting mediocre job growth from Bush's proposed $674 billion economic stimulus plan disappeared from the Council of Economic Advisers' Web site. The study forecast an average increase of only 170,000 jobs�0.1 percent of the workforce�every year through 2007. The study was pulled just after a major Jan. 7 Bush budget speech to the Economic Club of Chicago. "In the out years, by their own estimate, their plan is a job and growth killer," says Jared Bernstein, economist at the Economic Policy Institute. "Instead of doing what serious analysts would do and going to the drawing board to re-evaluate, they just took the offending document off the Web site."

Certainly, each one of these Bush team moves can be explained: administrative concerns, government paperwork reduction, outdated material, etc. Cumulatively, however, they certainly look suspect. We've seen the future, and it's been deleted.

I don't usually post links to rampantly leftie sites, but...

http://www.counterpunch.org/schaefer07122003.html

Interesting.

[Spheric Harlot]

Um, well, at least they're not lying about a blowjob.

-s*

[Nonsuch]

Already been posted.

[Phanguye]

BALETED!

[theolein]

I read in the Washington Post today about this year's $450 Billion defecit, whcih is supposed to be about 4,2% of the annual GDP of the US. The article also posted a graph about how the budget went from a $260 Billion surplus in 2000 to the level that it is now.

While I'm sure that the left will have a field day with this, citing it as an indication of the Bush administration's incompetence in financial matters, I'm just as sure that the right will have a good go as trying to blame this on a number of factors such as
a. leftovers from the Clinton era economic policies
b. a result of the 2001 9/11 attacks
c. the war in Iraq
d. temporary before Bush's tax cuts begin to lift the economy.
e. the result of the dotcom crash

I think that the true answer is somewhere in the middle. I doubt that any Clinton era economic policies could have influenced the current government negatively for so long. 3 Years should be enough to show whether the economic policies of a government are working or not. I do think that the economic downturn is heavily influenced by the dotcom crash, as almost every country on earth is still suffering the consequences of overinvesting in digital paper tigers and the resulting financial ruin and job losses and the tangent effects on other lines of business. I also think that the 9/11 attacks had a large effect on the world economy as international attention focused on chasing Osama and co. And I do think that the wars in Afghanistan and Iraq have had an effect on international stocks and trade as businesses were uncertain as to what effect these wars would have on the economy. But the primary cost of the wars is being carried by the US, currently to the tune of around $4 Billion a day. I also think that tax cuts only inflate this problem and increased military spending as well.

The wave of financial irregularities by companies such as Enron and Worldcom also add to the misery, but those would probably have gone unnoticed if the economy had not gone sour.

So basically, I imagine that while the Bush economic policies are less than sound, especially in economically depressed times and the war on Iraq is costly and unproven, I don't think everything can or should be blamed on his government.

[Phanguye]

the problem with the bush administration is that they dont seem to understand that they can not cut revenue and increase spending at the same time... i want to know what economist had this bright idea, so that i can not go to that school for my doctorate

[MacGorilla]

I call this the kitchen sink economic policy. Throw everything you can at the economy and hope something, somehow works.

[Nonsuch]

People still seem to imagine that the Bush administration somehow doesn't realize what it's doing, that they're stupid enough to think deficits are No Big Deal and that they can throw money to the wealthy while still maintaining government at its accustomed levels. This isn't the case.

From the New York Times:

Mr. Bush's commitment to tax cuts has not wavered since he began running for president. He has argued that tax cuts are necessary when the nation is flush with prosperity and when it is in the economic dumps, in peacetime and in wartime, to get rid of the budget surplus and to restore it.

From Salon.com:

Are the Republicans stupid? Is the White House advocating policies that have been shown to be both useless and reckless simply because Republicans have no weapon in their economic arsenal other than ever larger tax cuts? For many on the left, it's tempting to think so, but that's probably not the case. There may be method to their madness: Since his campaign, Bush has been calling for a "restructuring" of Medicare and Social Security, and his idea of restructuring rests heavily on the private sector.

Bush wants to allow people to divert some of the money they pay to Social Security taxes into "private accounts" invested in the stock market. In the days of the market boom, this didn't seem like a terrible idea -- at the time, remember, betting your retirement on the fortunes of a high-flying firm like Enron was an eminently sensible thing to do. Well, we know how that story ended. Now, after the Wall Street scandals, voters may be more inclined to keep their money in old-fashioned, government-run Social Security. And so, pro-privatization Republicans find themselves with a problem: How do you get people to think that Enron is a better investment than Social Security? The answer is obvious: You make the government's finances worse than Enron's.

Many Republicans do actually believe, despite all evidence to the contrary, that supply-side tax cuts will result in national wealth like we've never seen. And the finances of the entitlement programs would have been shaky even without Bush's help. Still, there's reason to believe the White House wants to make the entitlements seem untenable, completely broken, and irreparable other than through privatization. The White House's 2004 budget, for example, includes a section called "The Real Fiscal Danger," in which the administration argues that while people are right to be concerned about Bush's current deficits, the shortfalls pale in comparison to the long-term financial problems we'll see in Social Security and Medicare. "Whatever judgment one reaches about the deficit of this year or even the next several years combined, these deficits are tiny compared to the far larger built-in deficits that will be generated by structural problems in our largest entitlement programs," the White House says. Translation: If you think this is bad, just wait.

Nothing uninformed or accidental going on here, just the deliberate evisceration of government-sponsored public services.

[Spheric Harlot]

That's scary.

[BasketofPuppies]

Originally posted by MacGorilla:
I call this the kitchen sink economic policy. Throw everything you can at the economy and hope something, somehow works.

I believe the term is Voodoo Economics, coined in 1980 by George Herbert Walker Bush as a way to describe Ronald Reagan's proposed economic policy.

To be fair, there is a major difference between Ronald Reagan's Voodoo Economics and George (no Herbert) Walker Bush's Voodoo Economics: Ronnie wanted to cut taxes and spending, while Georgie wants to cut taxes while increasing spending.

Of course, Reagan didn't get his way on spending cuts but did get his tax cuts (and then some), so, while the economy grew significantly, it did so at the expense of massive defecits.

[daimoni]

.