Trump Shoots the Messenger

Firing the BLS Commissioner moves us into banana republic territory

One basic character of the politicization necessary to create an authoritarian regime is that public employees are reluctant to share information that displeases their political bosses. When those bosses can fire them, the incentives to suppress uncongenial information, or provide false information, become overwhelming.

Over time, life in these countries become bifurcated. Statistics become propaganda. There is an official reality, which many proclaim but few believe, and actual reality. And at some point actual reality catches up with the fantasy.

We have seen examples of this dynamic already play out in the Trump administration. Career civil servants have been reluctant to contradict, for example, Musk’s false claims about fraud in government, or Kennedy’s nonsensical claims about vaccines, knowing that doing so would probably cost them their jobs. In certain areas, such as environmental policy, the people that produce factual information that the administration dislikes are being fired.

Trump just took his attack on reality to a different level, by firing the head of the Bureau of Labor Statistics. Why? Because he did not like the job numbers her agency produced.

In related news, we just saw the last credible BLS data for the rest of the Trump administration.

The most recent jobs report is indeed quite bad. The number of new hires for July were anemic. Worse yet, the BLS revised down numbers for previous months. The broader picture is of an economy that is sputtering rather than booming, which makes the recent stock market highs looking increasingly out of touch with reality. And the markets duly dropped upon seeing the job reports.

Trump’s claim is that the head of the BLS is somehow “rigged” the data “to make the Republicans, and ME, look bad.” “We need accurate Jobs Numbers” that reflect Trump’s opinion that “The Economy is BOOMING.” We can now add economic data to the list of things that Trump claims are rigged against him, alongside court cases, elections, and Emmy awards.

What Trump Got Wrong

Dr. McEntarfer was appointed by Biden, but there is a lot that Trump leaves out. She was a career civil servant who served for decades under different Presidents. She was elevated by Biden, rather than coming in as an outside political appointee with the Biden team. That made her more credible as a non-partisan actor. A widely respected economist, she was backed by four former BLS Commissioners when nominated, and was approved overwhelmingly by the Senate with 86 votes in favor (including then Senator JD Vance) and just eight against.

As Trump fires an official because he does not like the job numbers, he proclaims that says that such numbers “can’t be manipulated for political purposes.” But revisions to job numbers are routine, and there is no reason to assume that an official would willingly publish false data knowing the ire that would follow from the White House.

At a time when Trump is promising to cut drug prices by 1500%, a statistical impossibility, he also determined that the government’s most important statistician is incompetent. The White House launched a PR war against her.

What’s more, Trump gets the basic fact wrongs. He suggests the BLS “overstated the Jobs Growth…right before the 2024 Presidential election.” But the opposite is true. The large downward revisions to job numbers under Biden that Trump refers to —818,000 — happened in August before the 2024 election.

In other words, the timing of the revisions hurt the Harris campaign. If you don’t believe me, here is a Daily Caller headline that the White House bizarrely points to in its attack on the BLS.

Here is what Trump posted in response to the August 2024 revisions to the jobs numbers, which he is now saying was rigged to benefit Biden/Harris.

The claim that the BLS delivered positive numbers to help Harris right before the election is also false. It was a weak jobs report, bad for Harris. Here is a headline from the time.

My University of Michigan colleague Justin Wolfers points out Trump’s double standard: revisions under Biden support the incumbent President, but revisions under Trump undermine the incumbent President.

The head of the BLS does not make policy; they count the numbers. A new official cannot adopt a new strategy to save Trump from his economic policies. Their only options are to count the numbers honestly, or not. We should start to become really worried if the process for collecting jobs estimates starts to be tampered with.

And lets remember, this is what the monthly jobs reports are: estimates based on surveys, with imputations to fill in the gaps. The numbers are revised as more responses come in. BLS could wait longer to provide more accurate estimates, but the value of having more timely data, even with errors, outweighs the value of knowing where the economy is going.

The truth is that Trump has no evidence for his claims. He simply does not like reality, and will do what he can to deny it. And as tariffs kick in, and Trump’s layoffs of public employees becomes incorporated into jobs data, that reality will look worse and worse.

Hours after her firing, McEntarfer posted he first comment, illustrating the gulf in class between those who think of public service as a noble calling, and the President removing them from out government.

Why Policy Experts and Market Watchers are Terrified

Here is the how Trump’s first pick as BLS Commissioner, William Beach, responded to the news:

And here is an excerpt from the statement that Beach links to. The “Friends of the BLS” is a nonpartisan group is made up of former BLS Commissioners and economic data experts. They debunked Trump’s claims:

The President seeks to blame someone for unwelcome economic news. The Commissioner does not determine what the numbers are but simply reports on what the data show. The process of obtaining the numbers is decentralized by design to avoid opportunities for interference. The BLS uses the same proven, transparent, reliable process to produce estimates every month. Every month, BLS revises the prior two months’ employment estimates to reflect slower-arriving, more-accurate information.

Professional associations that rely on accurate data weighed in, including the head of the American Statistical Association, who described the firing as “calamitous”:

The firing undermines Americans' trust in federal statistics, with adverse ramifications for the broad swath of decisions that these data inform, affecting all Americans…Faltering trust in US economic statistics by the international community and private sector will have untold consequences for the financial health and economic well-being of the nation and the world.

To be clear, this should not be a partisan issue. Free market advocates have every reason to abhor what has happened, because free markets function less well when government distorts information about those markets. Scott Winship, of the conservative American Enterprise Institute said: “President Trump firing the BLM Commissioner is appalling and honestly would be impeachable in a better world.”

Trump is within his legal rights to fire McEntarfer, but by firing a non-partisan figure because he does not like the data, he is very much encouraging her successor to manipulate those numbers for political purposes. After all, who will take the job knowing that they will lose it if the numbers are not acceptable to the President?

The only sliver of good news is that the new Acting Commissioner, Bill Wiatrowski, is a credible professional who has held this position before. But how long will he last under these conditions?

Concerns about the credibility of BLS has been an issue since the start of the Trump administration. Cuts to BLS means they have fewer staff to collect data. BLS is also cutting back resources from inflation estimates. If Trump wanted a credible BLS, he would not be removing the means for it accurately collect information.

Former BLS staff have warned about how Trump’s politicization of agencies will damage the credibility of the resulting data. Their warnings are coming to pass:

Bureau of Labor Statistics’ leaders could be fired for releasing or planning to release jobs or inflation statistics unfavorable to the President’s policy agenda. They might also face pressure to change methodologies or reveal pre-release information. By making it easier to remove employees if a President determines that they are interfering with his or her policies, it increases the potential for passivity or political loyalty to be prioritized over expertise and experience.

The cycle of politicization will be hard to correct. BLS staff worried about politicization will depart. Staff who do the right thing will be fired — have been fired. Potential new hires who value the truth over political loyalty will not join the agency. The people who replace them will be less capable and less credible. The markets will grow increasingly doubtful of the Trump administration’s data.

Bad for Markets and for Democracy

Collecting public data is a classic public good. It benefits everyone, but is too expensive for individual actors to take on. In addition, private actors would have enormous financial incentives to manipulate economic data. So, we instead ask government to do it, and try to establish structures where they can do it with integrity. Trump is tearing down those structures.

And so, this particular firing stands out among Trump’s many firings of public employees as a very clean indicator of how damaging state capacity cannot be easily undone. Removing experts who believe intrinsically in the value of their work casts a long term cloud on the credibility of public sector work. The lesson broadly applies beyond economic data, even if markets may be less able to see it in other sectors.

It is not just economic data: Trump is engaged in a broader war on all sorts of public data, ranging from maternal mortality, drug use, and climate change, car injuries and adverse drug reactions, federal employee demographic data, or basic education data.

It is hard to overstate how big of a deal this is. For example, one reason that Argentina has struggled with its economy is not just inflation, but because President Kirchner fired members of the national statistical agency when the numbers did not align with what he wanted. Over time, official data painted a rosier picture than private estimates. Investors had less ability to assess Argentina as a credible opportunity when they could not rely on the basic economic data.

Or Greece, where authorities tried to prosecute, Andreas Georgiou, head of the national statistics agency, after he exposed that politicians had been cooking budget deficit data. He said:

Official statistics, government statistics are a mirror that society holds up to itself…If society cannot see itself clearly, then it cannot identify its problems. If it cannot identify its problems, then it cannot find the right solutions. It cannot find the right persons to solve these problems.

Or Turkey, where the authoritarian Erdogan fired the national statistics chief when he did not like inflation data.

This is where we are now, this is the company we keep: authoritarians and tin-pot kleptocrats. By shooting the messenger reporting on the negative effects of Trump’s economic policies, Trump pushed America further into banana republic territory.