The economic world, as you understand it, is about to take a big turn for the worse.
That's if the US Department of Labor gets its way and curbs journalists' ability to report on the vital data it collects on jobs and prices, as Bloomberg News reported Tuesday. The Trump administration is considering changes to so-called media "lockups," the 30 to 60 minute window when reporters and editors get an advance look at economic data. That extra time gives them a chance to prepare headlines and stories in a secure room. While officials didn't specify a rationale, one consideration is removing computers from the room. The government has cited security risks and unfair media advantages for previous changes to this procedure.
If plans proceed, it would bring an end to decades of established practice, and anyone with an interest in transparency will recognize that we will all be worse off for it. At best, the public that pays for the collection and dissemination of this information will get an incomplete picture. At worst, understanding of the economy will be distorted and access to the best data will be limited to those with the resources to access government websites early and use fancy algorithms to trade. The disruption to markets alone could be huge. I have the first-hand experience in beating back an earlier attempt to restrict press access, and found officials' attitude alarming.
Statistics on the gross domestic product, retail sales and trade also hang in the balance, because the Department of Commerce tends to follow the lead from their colleagues across town, and even uses the same press room. If President Donald Trump is presiding over the most awesome economy ever, as he often asserts, why hide, obscure or hinder the ability to convey that to Americans?
Ever wonder how those headlines appear at 8:30 am, Washington time, with scope, seasonal adjustments, detailed tables and stories? Not by magic. It's the result of the painstaking attention deployed in the lockup by experienced journalists poring over reams of data. Experts from the department are available to answer any questions and explain quirks in a particular month's numbers, such as whether a blizzard or flood impeded the data collection. The goal is to convey to a broad range of readers, punctually and accurately, what's happening in the world's biggest economy, with historical context to boot.
The good news is that we have been here before and good sense prevailed. I was one of a group of senior journalists from leading news organizations that helped defeat the Labor Department's attempt to hamper media access in 2012. Then Bloomberg News's editor in charge of economics and international government coverage, I testified to Congress along with a senior Reuters executive. We were supported by the Associated Press and Dow Jones, transparency advocates and champions of First Amendment rights to free speech and reporting.
The big mistake in that tussle was the Obama administration's attempt to force journalists to use government-owned computers and equipment. As I told the House Committee on Oversight and Government Reform, this meant Uncle Sam would effectively own and control reporters' notebooks, an intrusion into one America's most-valued freedoms. I said we were prepared to seek a legal order to prevent it.
During this saga, the administration played the security card, as it appears to be doing now: Procedures needed to be changed because of the danger of leaks. The department cited a few incidents that it never satisfactorily explained. Yet security at lockups was, and is, already tight. Penalties for transgressions are so high – like being booted from the lockup – that no serious news organization would want to take the risk of gaming the system and damaging its reputation. In reality, the department itself has inadvertently released data before the certified time.
Merely dumping data on a government website at 8:30 am wouldn't create a level playing field, anyway. In fact, it's likely to achieve just the opposite. The way things play out on snow days – or other times when government offices are closed unexpectedly – is instructive. I'm hard-pressed to recall a single instance when the data was available on time, despite assurances. Sometimes it would appear several minutes late and then the site would crash, no doubt due to heavy volume.
That's just an appetizer for what might happen if lockups are dispensed with. There's a word for it: chaos. Here's another one: danger. In an era when cybersecurity is all the rage, why increase the risk of hostile actors getting the jump on the public and the investors who manage trillions of assets for them?
In 2012, the Labor Department ultimately retreated and made a compromise with news organizations that enabled lockups to continue. I suspect that the White House decided there was little upside in having an increasingly bitter argument with the press and Congress about labor statistics during an election year. Given Trump's distaste for his predecessor, I'm surprised he's repeating an Obama administration shtick.
For the past year, I have worked in Asia, where I write columns on the growing power of the region's economies. Decision-makers here have traditionally looked on the US, for all its flaws, as being the gold standard for statistical quality and reliability. Now, another strand of American leadership is in jeopardy. It's all so unnecessary, so self-inflicted.
Disclaimer: This article first appeared on Bloomberg.com, and is published by special syndication arrangement.