Experts worry about degradation of economic data after advisory committees disbanded
Experts worry about degradation of economic data after advisory committees disbanded
Here at Marketplace, we report on economic data from the government all the time: stats on housing, the job market, inflation, and much more. They help us help you understand where the economy is and where it’s heading. Government data informs business decisions, and assists policy makers to, well, make policy.
But now, the Commerce Department has disbanded two groups that worked to ensure the government’s economic data paints a realistic picture. The Federal Economic Statistics Advisory Committee and the Bureau of Economic Analysis Advisory Committee have been around for decades. What happens next now that they’re gone?
Erica Groshen had no idea this news was coming: “This came out of the blue, nothing up until I got the email yesterday,” she said.
And she was on one of the committees. An economics advisor at Cornell University, Groshen was told that the decades-old committee was getting disbanded because its purpose had been fulfilled.
“You don’t fulfill an ongoing mission by canceling this communication mechanism,” she said.
That mission? To get a bunch of experts at the top of their economic fields to help the government.
“When the BEA wants to develop a new methodology or maybe go into a new area they haven’t been before, they can run their ideas by the committee,” said retired economist and committee member Marshall Reinsdorf.
He said advice was one major benefit. The other was government transparency — the committees opened their doors to the public.
“It gives them a chance to reach out and get their message out to a broader community,” Reinsdorf said.
Getting rid of these two committees doesn’t save much money. Mainly because the members weren’t getting paid, said former committee chair David Wilcox with Bloomberg Economics and the Peterson Institute for International Economics.
“So we’re talking about eight plane tickets, twice a year, one night at a non-fancy hotel. This was really inexpensive stuff,” he said.
And it was money well spent, Wilcox said.
Former committee chair Louise Sheiner with the Brookings Institution said with less input, the data that the government gathers will get worse over time. And that data is supposed to provide answers on GDP and productivity and jobs and inflation.
“Depending on what question you’re asking, you’re going to go to the data, and if the data are not good, your answers to those questions are also not going to be good,” she said.
Sheiner said disbanding the committees was a mistake. The Bureau of Economic Analysis declined to provide Marketplace with a comment, and the Commerce Department didn’t respond to our request.
Stories You Might Like
There’s a lot happening in the world. Through it all, Marketplace is here for you.
You rely on Marketplace to break down the world’s events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.
Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.
