Truth or consequences or neither

Michael Boskin, an economist at Stanford and head of the Council of Economic Advisers under President George H.W. Bush, has written a very important piece about abuse of data by governments. There is a long history of egregious abuse in some nations. As Boskin recalls:

When President George H.W. Bush sent me to help Mikhail Gorbachev with economic reform, I found out that the Soviet statistics office kept two sets of books: those they published, and those they actually believed (plus another for Stalin when he was alive).

And the U.S. government has not been immune from relatively minor abuses. “Every president is guilty of spinning unpleasant statistic,” says Boskin.
However, Boskin argues that President Obama has taken this phenomenon “to a new level.” Thus:

The administration has introduced the new notion of “jobs saved” to take credit where none was ever taken before. It seems continually to confuse gross and net numbers. For example, it misses the jobs lost or diverted by the fiscal stimulus. And along with the congressional leadership it hypes the number of “green jobs” likely to be created from the explosion of spending, subsidies, loans and mandates, while ignoring the job losses caused by its taxes, debt, regulations and diktats.

Another of Boskin’s several examples relates to health care reform:

Even more blatant is the numbers game being used to justify health-insurance reform legislation, which claims to greatly expand coverage, decrease health-insurance costs, and reduce the deficit. That magic flows easily from counting 10 years of dubious Medicare “savings” and tax hikes, but only six years of spending; assuming large cuts in doctor reimbursements that later will be cancelled; and making the states (other than Sen. Ben Nelson’s Nebraska) pay a big share of the cost by expanding Medicaid eligibility. The Medicare “savings” and payroll tax hikes are counted twice–first to help pay for expanded coverage, and then to claim to extend the life of Medicare.

The damage from Obama’s abuse of data is not limited to the likelihood that bad decisions have been, and will be, implemented under false pretenses. The greater damage is to the credibility of the office Obama holds. As Boskin puts it, “squandering. . .credibility with these numbers games will only make it more difficult for our elected leaders to enlist support for difficult decisions from a public increasingly inclined to disbelieve them.”
But then, reckless disregard of truth and consequences is becoming the hallmark of this administration.


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