Trump can’t turn US statistics into banana republic numbers

Banana-republic governance has been evoked to describe US President Donald Trump’s firing of the government’s top labour statistician after a poor jobs report and threats against the head of the Federal Reserve for not lowering interest rates faster. The Oval Office’s disdain for anything considered bad news and the instinct to dispose of those who deliver it, is not only corrosive, but sets a bad example.

Also Read: Trump’s tariff drama is playing out as a tragicomedy in five acts

Not that long ago, the argument for countries in dire straits was to become like America. Certainly, that was the message that much of Asia received a generation ago. Now, the world ought to look in horror. If favourability is the benchmark by which numbers are considered credible, then the global economy will be flying without a pilot. Investors from Singapore to New York depend on the authority of reports that indicate the direction of prices, employment and growth. And they trust what comes out of the US more than just about anywhere else.

I have reported on economic data from places that, at various stages of political and economic development, could have been equated with bananas—and some economies that, while quite sophisticated industrially, had shoddy practices. In a majority of instances, the flaws suggested something was wrong with not just policy, but the overall approach to decisions. Antipathy towards scrutiny was also present.

Malaysia was an eye-opener. Like many in the mid-1990s, I internalized the idea that there was a secret sauce to East Asia’s booming economies. So I was shocked to discover that when it came to documenting those impressive growth stories, how behind the curve they were. There was no fixed date of release; figures just rolled out from the state’s news agency in an incomprehensible manner.

I found a better way, but only just. If a reporter could call a particular person, at around a certain time each month, flatter them and then go to the statistics bureau, they could receive a hard copy before almost anyone else. In Indonesia, to get such data, you just had to be at a certain location at the right time for someone to meander out of an office and casually read out a number.

Also Read: Nouriel Roubini: The US economy could thrive in spite of Trump’s disastrous policies

In early 1999, Japan, at that time the second-largest economy in the world but beset by a series of bank collapses, also had its work cut out. I was stunned to see a quarterly assessment of GDP—with all kinds of detail—appear in the Nikkei newspaper before its official release. Then I realized that’s how they do business—and to a great extent still do.

I came to realize that the US system at the departments of labour and commerce was superior. Lengthy media lock-ups were aimed at ensuring equal access to data and a consistent release time, and experts were available during that window who could answer technical questions. Investors knew that while there might be the odd glitch, the numbers that flashed on trading screens at 8:30am Washington time were at least grounded in reality and more or less reflected trends in the economy. They still do, no matter how Trump may try to create an alternative reality.

These departments are not perfect. Sometimes officials would break their own embargo. Nor was the whiff of politics always entirely absent. In 2012, an election year, the labour department tried to greatly constrain the media’s access to lock-ups, citing a security risk that wasn’t satisfactorily explained at the time. (Trump abolished the lock-ups in his first term.) Questions about equitable access arose after a Bureau of Labor Statistics analyst last year corresponded with major Wall Street firms about a key inflation gauge. He sent several emails to a group called ‘my super users.’ There is work to be done, irrespective of Oval Office tantrums and claims of bias.

Also Read: Kaushik Basu: The real costs of Trump’s economic agenda are staggering

Terms like ‘banana republic’ can often serve a galvanizing purpose. Former Australian Prime Minister Paul Keating caused a sensation in the 1980s when, as treasurer, he warned that yawning trade deficits presaged a banana republic unless addressed. The ship was eventually righted, and the country enjoyed decades without a slump until the covid pandemic.

Things didn’t end as happily for Carter. He lost re-election partly because of a nasty recession. His advisor found another euphemism after complaints from a powerful fruit company about bananas and settled on ‘kumquat,’ according to the New York Times. But bad news can only be massaged so much. US statisticians do a decent job, no matter what Trump says. I’ve encountered plenty worse. ©Bloomberg

The author is a Bloomberg Opinion columnist covering Asian economies.