Choosing Sources for Data and Analysis
At “A Dash” we emphasize the need for objectivity in finding and analyzing data. It is good for public understanding and it is good for your investments.
We disagree sharply with those who allow their own biases to guide their work. One way to spot such pundits is to see how they treat sources. Many have embraced the work of a conspiracy theory website that purports to show the “real” economic data, getting rid of the alleged biases and manipulation of government.
We have avoided linking to this site in the past, but our work on misleading data and the cost to the individual investor will lead us there at some point.
Meanwhile, mainstream economists simply ignore this source. Mainstream media writers, with one prominent exception, have also ignored him. There is a good reason. Professional economists choose to deal with those who behave in a collegial fashion– those who share data and who are open to discussion. Professional journalists demand a good source for their material, and often some independent support.
Despite this general lack of official recognition, the “research findings” from this source are starting to appear in the comments of many others, often without attribution.
A Frontal Assault
In an excellent article, Menzie Chinn at Econbrowser, one of our featured sources, takes a look at some of the data criticisms of the conspiracy theorists. Covering difficult topics like inflation and GDP measurement, he shows that apparent data inaccuracies result from many things, most frequently the lack of up-to-date inputs. His conclusions on inflation measurement are similar to our own, (and he also gets a similar reader reaction).
There is no way to do justice to his article in a brief summary, so we encourage everyone to read it. You will get a link to the Twilight Zone if you want to go there, and some very specific refutation of key points. The analysis of GDP inputs is especially enlightening and relevant.
On the one hand, we have official government data. This is detailed information on every aspect of methodology, on the components of various data series, and including the ability to examine alternate measures. Thousands of economists and pundits pore over the data, sharing and exchanging opinions.
On the other hand we have a single source. Menzie could not do a complete comparison because he did not have access to the data. In the absence of checking and peer review, mistakes are frequently made.
Here is the irony. Many of the prominent pundits who are the loudest complainers about the official government data, often using quite colorful language, drink deeply from the waters of the conspiracy theorist.
It is something to think about.