Progress Review - From Speaking English to Thinking in English | PEP Session 36

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Look five to buy you often say credit to apartment propaganda and we can have low level political hacks there who get paid $40,000 a year, at least I'm going to save us a lot of money. Hi Justin, this week you released a video about how in August the Commerce Department quietly scrapped its ban on political interference in official statistics. You talked about how official reports can now be delayed, varied, rewarded, or stripped of their uncertainty. Today, I have several follow-up questions from our audience that I would like to ask you. I'm Agasta, I'm a producer here at Platypus. I'm Justin Mulfis, this is the professor is in, think of this as Office Hours. Agasta is going to open the door, come on in and bring me your questions. Open my office, Agasta. Okay, this was by far the biggest question that we got from the highest number of people. In light of this, how can we believe the most recent jobs numbers? Agasta, I don't know if you know this, but when you and I started talking, I woke up this morning. Next mood, I was having the best day just thinking about this, makes me sad, and the reason it makes me sad is because my therapist told me anger doesn't help anyone. Okay, breathe through it. We can get to some of the reasons to be sad or mad, but I'm going to give you the reason to be glad. This whole issue is about the Commerce Department. The Commerce Department just rewrote the Commerce Department's rules to say political interference in statistics is okay. It took the set of rules that providing insulation and said you're not allowed to do political interference, inappropriate influences inappropriate and so on, and it just crossed them out. The Commerce Department is the parent of the Census Bureau, which collects data like housing starts, retail trade, the American community survey, much of our important social data as well as congressional districts. It's also the parent of the Bureau of Economic Analysis, which is most important because it collects the GDP statistics and in fact the personal consumption expenditure deflator, which is the measure of inflation that the Fed uses. The Commerce Department directives applies to the Census Bureau and to the Bureau of Economic Analysis. Collectively, those two are two very important statistical agencies. The US, unlike other countries, has many, many, many statistical agencies, which is by contrast, the Australian has the Australian Bureau of Statistics one. The jobs numbers come from the Bureau of Labor Statistics, which whose parent is the Department of Labor. This directive was a Commerce Department directive that flows straight down through Commerce to the Census Bureau and the BEA, but until the Labor Department adopts something similar, then it still has its existing set of protections. Now because of that, I don't believe there's been any interference in later statistics and it's not just because of that, I also have friends on the inside and also the numbers make sense and the sort of conspiracy that would be required to just start telling lies about the unemployment rate is very, it would involve so many people in this administration leaks any time there's two people in the room. So I feel like we're in pretty good shape there. I also want to point out one really important thing for our audience, for how you think about how statistics get manipulated. The easiest thing to do is think of a conspiracy of bloke with a big cigar at the corner of his mouth, picks up the phone and orders up, orders up, hey, could you make the unemployment rate 2.8% and you just lie, you just go into Microsoft Word and you delete 4.1 and you type 2.8. In the history of statistical manipulation, it's almost never how it happens and I think it's really important for people to understand what you do is you, for instance, change the definition of unemployment or you change the statistical weights that are used or instead of relying on the household survey, sorry, the firm survey, you rely on the household survey or you change the industry definitions or you only look at citizens or only look at non-citizens or there's so many ways you can make this month's number incomparable with last month's number or you just bury the number, you just stop publishing. If they change the definition of unemployment, we'd see. So the thing is it actually happens in broad daylight and it's partly because trying to manipulate statistics in the dark requires a conspiracy to difficult to pull up. Let me look folks in the eye and make your promise. As soon as I think we can't believe the numbers I will tell you, I want to point out, I think this is very important. What they did is they changed the rules to allow the Census Bureau to create propaganda in the future. That is different from a claim that Census Bureau data are unreliable. It says look out this could happen and so far there's nothing that looks, in fact, I believe that the career public servant can continue doing their job and continue doing good economic measurement and if you get nihilistic about this and this may be what they want, then you say we can't believe the Census Bureau statistics. Then there's no truth and if there's no truth, there's no foundation for any. So you've partially answered this question, but I think it's worth posing directly because a lot of people asked this as well, which was in a broader sense, does this mean that we can trust any numbers that are coming out of this administration? So far there's no evidence that any numbers have been messed without at this administration. One exception, the exception is the report on so-called voter fraud in the 2020 election. We made a video about that. I lived up to my promise to our audience, which is I looked over on the eye and I said, "This is a lie. This is incoherent. This is more wrong than it is right. This is the result of political interference. This isn't serious." Well, that ruined my day when they did that because what it did is it destroyed a century, you know, a decades-long tradition of attachment to and dedication to the truth by people who work so hard to defend the reputation of an organization that will now take decades to put back. But again, we don't live in a world where you get to make up your own facts. I'm angry about this change at the Commerce Department because it moves as close to a world in which a trusted source of truth may become less trusted. But so far, this is one of the world's leading statistical agencies and with the exception of one report that I've ever released, it has been absolutely relentless in publishing its best understanding of the truth. And I know that there are people who are so mad at politics right now, all they want to do is throw away inconvenient truths. That might help you feel good and it might help you when a debate at the basketball court, but throwing away our only understanding of the truth will not lead us to a clearer view of the world, better policies and better economics. I'm not asking anyone to be a fool, a fool is someone who says, "Well, the president may have lied in the past, but I'm going to believe him this time." I don't want that naive at all. The rule of thumb was if it comes out of the White House, if it comes out of a cabinet secretary or a political appointees' mouth, in the past, that would have meant the number was true but cheery bit. In the present, it's not even true. It's literally making up numbers, drug prices haven't fallen 600%, I know that's surprising. The US has not had $20 trillion worth of investment under President Trump, because that would be nearly all of GDP. So those numbers have all gotten to the point of being so relentlessly unalive, or they're not even cheery picked and true, they're just false. Numbers that came out of an official statistical agency, the Bureau of Labor Statistics, the Census Bureau, the Bureau of Economic Analysis, the most prominent ones. Those numbers have always been true. They're muddying up the information. environment to make it hard to know what if anything is true. This upsets me because I come from a world in which I think truth is the only way to freedom. I think the stakes can't be overstated and with this new directive and what that signals for the future is putting us in the same set of tinpot dictators like Russia and Argentina and Venezuela that is a club we don't want to be in. And this is a story that has never ever ended well. Today's episode is sponsored by Nerdwallet Smart Money Podcast. Every Google and Money question and end up 12 tabs deep with 12 different answers. This podcast is your shortcut back to clarity. Nerdwallet Smart Money Podcast breaks down financial decisions with a team of trusted journalists. They explain the why behind decisions like investing, home buying, and choosing credit cards with clear research-backed insights. No jargon, no misinformation. Make your next financial move with confidence. Follow Nerdwallet Smart Money Podcast on your favorite podcast app. So, if that is the case, if this is a potential step down a very terrible path, what are the chances or what are the incentives for the next administration to re-implement these protections? Is this high-end anyone's priority list? There's a reasonable chance that the next administration at some point will ask me for some advice on some stuff. My commitment to truth is absolute. I will tell them. Let's get statistical agencies in the business of truth. Hiring a lot of PhDs, statisticians, in order to create propaganda, apart from anything else is just an expensive way of creating propaganda. Look, if I have to buy you off and say, create a department of propaganda and we can have low-level political hacks there who get paid $40,000 a year, at least I'm going to save us a lot of money. It's an economist perspective for you. Every serious social scientist I know thinks that the value of data is very high, that adding propaganda to data by sheet very little propaganda value, but undermines the value of all statistics you've collected because instead of knowing you have the truth, now you know there's some chance you have the truth and some chance you have propaganda. This is a very real question is if what we're going to do is allow the statistical agencies to produce propaganda, maybe we should just slash their budgets, because the data they're collecting literally has very little value if we know long enough it's the truth. I don't want to overstate it and say let's get rid of all statistics, but it's not clear that having statistics mixed with propaganda has much value at all. So for sure, I'll be in favor of it. Every serious Republican I know, serious. It might be doing a lot of work there, says that knowing the truth is useful for creating useful policy. So the only counter argument is well our guys can use it to our advantage, we'll leave it to the next guys to clean up. And actually I think this is a piece of a broader part of the Trump agenda, which is the present through a range of things, whether it's taking, taking power from Congress, whether it's moving to a world in which the White House lies rather than cherry picking truths and so on. It buys himself short term political gain, but he hasn't thought about the future. And the future is, you know, if he appoints deep partisans to the Supreme Court, what do the Democrats have to do? If he blows out the budget without caring about the future so he can spend money on Republican priorities, what should the Democrats do? And if what we get is the next party says, well, you guys did only see responsible stuff for short term political gain, well, we need that gain no less. We're going to do that. Then we end up in a country that basically turned carbon itself. And that's why I really think on all of these issues, Congress just needs to be a whole lot more active because if all you're doing is governing for the next news cycle and you've set up the incentives for the other side to govern for the next news cycle, then you'll never do anything like put the budget anywhere back on a sustainable fiscal trajectory again. This style of short termism, which, you know, essentially, you can think about the old rules were, we're mostly going to tell the truth. We're mostly going away at doing our long term better interests and occasionally we'll put thumb on the table out, thumb on the scale our way. And if what you do is you jump on the scale and you don't bother doing any governing in between, then you break the system from outside, touching into your pride for Americans. So this is my last question. And this is something a few people alluded to. Do you have a rule of thumb or a way for people to assess statistics who are not trained in it? Any way that they should look at these statistics and think about what they really mean because many of us, and I'm including myself in that, do not have a PhD in economics and don't know how to really think deeply about this. Yeah. Um, yeah. So first of all, let me just describe the foundational story of platypus economics. I want to empower you to be able to do this. If what we did was left at all the talking heads on TV, there are a bunch of dopey left-wing talking heads and a bunch of right-wing dopey talking heads. And when you watch TV for too long, all you realize is you've got a whole lot of dumber and heart and arrow of your life just slipped away. So the current ways we think about this or communicate it is, I think it quite broken. And so the goal of platypus economics is to teach the world economics. I want to give you the skills to be able to think through these issues for yourself. My theory of the case, we all have different theories, but my theory of the case is the world will be a better place if people have the economic skills to navigate a little more settled. So, Glyber and so watch platypus economics. Let me give a more serious answer. When you're thinking about statistics, the rule of Dhammai Cave earlier was if it comes out of a statistical agency, and I want to be clear, that's the Bureau of Economic Analysis, the Bureau of Labor Statistics, the Census Bureau, for client and stuff knower, these are official statistical agencies, the Federal Reserve, the Congressional Budget Office. They'll tell the truth. If it comes out of someone who you've ever visited Washington on a school trip, the White House is at 1600 Pennsylvania Avenue, there's a big fence around it, and inside that fence, there's a whole lot of other organizations and accrues. There's obviously the President, the Vice President, there's also the Cabinet, there's the Office of Management and Budget, OMB, there's the Council of Economic Advisors, CA, there's the National Economic Council, NEC, these all sound very official, but the important thing to understand is their address is 1600 Pennsylvania Avenue. 1600 Pennsylvania Avenue is a political organization devoted to achieving political ends, and at the moment, despite the truth, and in fact at war with the truth. So, recognizing what comes from 1600 Pennsylvania Avenue versus the official statistical agencies, and it gets hard because when we're talking about the budget, a lot of the budget numbers come from the Office of Management and Budget, which is full of lying lies who lie, but a lot of the better projections come from the Congressional Budget Office, which in fact is independent and totally serious. But we can keep track of OMB versus CBO, it feels like there's a lot going on and everything's got a TLA, a three-letter acronym, and so this all becomes typical. The other thing then is to suggest that you become a discerning consumer of economic news. So, this is not an advertisement for me, or for airplanes, but it is thinking about who has a track record of relentlessly telling the truth. A very simple rule of thumb is that someone has lied to you once or lied to you again. And so, in academic life, if you're guilty of intellectual misconduct of lying, we drum you out. We say you're not welcome here anymore. And that, I think, is actually useful guide for thinking about all these things. So, there are many so-called experts that you'll see turn up on cable TV, Larry Cutlow, Stephen Moore, Peter Navarro, who are lying lies who lie. And once they're lied to you once, they will lie to you again. Get rid of them. They're a very good and very serious conservative economist. Greg Manck, he was a very dear friend of mine. Doug Haltsley can ask him almost integrity. They're a very good and very serious left-wing economist. So, be very thoughtful in that diet. And then anything that has a name like America first or America's super duper, all these think tanks in groups. They all seem to be called America Eagles, fireworks, guns, who they're not very imaginatively named. But if they sort of sound like a bad college rock band, they're probably in the propaganda business. Again, not uniformly true. They're very good and very serious think tanks. The Heritage Foundation is a joke that hasn't told the truth in decades. The American Enterprise Institute is a center-right organization that I help quite high esteem. The Brookings Institution is a very serious out that I hold very high esteem close to the center left. So, thinking about the who, unfortunately, is a very easy shortcut to thinking about whether something is likely to be true. Thank you, Justin. And thank you so much to our audience for these questions. We really hope that you enjoyed and learned something from this episode of The Professor Is In. If you would like your question answered in a future segment, leave a comment if you're watching this or listening to this. And make sure to like and subscribe to Justin and his two plot of the secondomics on YouTube, on Substacks. for an audio-only format, you can subscribe to us wherever you listen to your podcasts. Thank you so much. In one last thought before we go, Washington won't care about this issue or any issue unless photos care about it. A whole point of trying to describe all of this is so that folks out there can understand what's going on and if you get active then we can get a step closer to the truth. Look none of us know exactly what the truth is which is why I've always end on "Stay curious." Ring Central's AI receptionist uses voice AI to answer on the first ring so you'll never miss a call again. 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