Trump's dangerous war on data
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There are plenty of reasons to be disturbed about the Trump administration. Chief among them for financial policymakers is the hubris and blatant confirmation bias that is guiding White House economic policy. It would be bad enough if Trump were simply sticking to his alternative facts and trotting out flat-out lies about the economy, like when he said he “inherited a mess” from President Obama.

The truth is that Obama actually inherited the mess that was the 2008 financial crisis, when Wall Street imploded just before his first election win. The S&P 500 went up 235 percent during Obama’s tenure as president. That’s 16 percent annualized versus a historical norm of around 10 percent. Moreover, the unemployment rate peaked at above 10 percent in Obama’s first year and steadily declined to under 5 percent when he left office.

But Trump is not content to accept the facts and simply lie about the truth. He wants to change the very nature of economic data, all in a desperate effort to change the facts — both past and future — to justify his worldview.


Trump recently instructed his advisers to forecast U.S. growth rates a full percentage point higher than consensus estimates — from the current rate of 2 percent to 3 percent. Predictions are inherently flawed and difficult, of course, and economists often disagree. But as one Harvard economist who specializes in economic forecast told Wall Street Journal, “It is awfully hard to get to 3 percent. I don’t know where a number like that would come from.”


Trump’s alternate reality and self-serving agenda, that’s where. As another economic expert told the Journal, “The risk is that rosy economic scenarios allow us to borrow trillions of additional dollars” and not worry about the real consequences.

Trump also wants to change how the trade deficit is calculated in an effort to pander to the tough-on-trade crowd that elected him. In a nutshell, the White House wants to remove “re-exports” from export data — but not import data. In other words, if Mexico trucks $100 million worth of widgets into California and then immediately puts them on a ship bound for China, we would record $100 million in imports — but $0 in exports. That would artificially inflate the trade deficit in a way that a senior fellow at the Council on Foreign Relations called “duplicitous” and “deliberately dishonest.”

Even his proposed changes to the unemployment rate calculation should be viewed with skepticism. On the surface it looks like a minor tweak, including people who aren’t actively looking for work in the mainstream definition of “unemployment,” but clearly fidelity in numbers is not a core value of this administration.

After all, just before Election Day, Trump’s key economic advisor asserted that the real unemployment rate was 9.7 percent — almost double the rate at the time even using his new and preferred definition. Furthermore, early last year Trump claimed the unemployment rate could actually be 42 percent — a number that would elicit laughter from a freshman economics class.

But as Trump has repeatedly shown, he has no respect for the discipline of economics. Trump is simply trying to alter the statistics for personal gain, to align with his campaign narrative. I have to wonder what the true end-game is here in his mission to recast the current labor market as a hot mess only he can fix.

I am not naïve enough to think that fuzzy math isn’t par for the course in Washington when the truth is inconvenient. And particularly in the realm of finance, where Silicon Valley touts “hockey stick” growth on preferred user metrics while ignoring minor details like profitability and revenue, it’s an occupational hazard.

But there is a tremendous difference between debating the methodology of a study on early childhood education and simply acting like the U.S. economy is fully 50 percent stronger than it actually is.

And there is a tremendous difference between venture capitalists cherry-picking growth metrics in their Series B funding round and a president cherry picking export numbers to start unfounded trade wars.

Contrary to Trump’s assertions, both Main Street and Wall Street we have come a long way since the dark days of 2008. But that success has been hard-fought, and remains quite fragile in a global economy where sustainable growth is increasingly difficult.

Ill-advised economic policies could have a lasting impact to businesses, investors and consumers alike. But under Trump’s proposed changes to economic data, we may never truly understand the true impact of his policies until it is too late.

Jeff Reeves is a stock analyst and executive editor of His commentary has also appeared on CNBC, the Fox Business Network, USA Today and the Wall Street Journal network.

The views expressed by contributors are their own and are not the views of The Hill.