Imagine that America starts falsifying its economic data. This threatens not only financial markets but also people’s trust in the institutions that shape economic policy and set the rules of the global economy.
After President Donald Trump fired the head of the Bureau of Labor Statistics (BLS), Erika Makentarfer, over weak employment data, experts warn: data manipulation could undermine trust in official statistics and undermine fundamental decisions in the economy.
President Trump has just taken one very negative step on a slippery slope.
– Alan Blinder
The next alarm will be about data manipulation.
– Alan Blinder
In this context, it refers to potential consequences for global markets: if the government changes the indicators, this could influence the decisions of investors, policymakers, and citizens who rely on sound data.
Historical context provides grounds for caution: examples of Greece and Argentina vividly show the risks of untenable gaps between data and reality that can trigger uncertainty and financial turmoil.
Greece and Argentina
In 2004, Greece admitted that it falsified deficit and debt figures in order to join the euro area as early as 2001.
In 2010, Andreas Georgiou, appointed head of the Greek national statistical agency, made a bold decision: to publish deficit figures that reflected reality. After years of unreliable data that had become the subject of sharp criticism, his steps led to prolonged court battles, and the EU condemned Greece for the use of falsified data.
Falsification amplified the impact of the global financial crisis of 2008–2009 on Greece: creditors demanded higher interest rates on government debt due to increased uncertainty, and austerity measures provoked public outrage.
Images of riots and unrest on the streets of Greece underscore the risks of unreliable data.
In Argentina there was ongoing debate about trust in inflation and economic data. In 2007 Néstor Kirchner dismissed the official responsible for preparing inflation data after he correctly recorded price increases. For years, official inflation was met with skepticism by investors and the public.
This had consequences for credit ratings and access to financing: distrust in the data created conditions for higher borrowing costs and worse loan terms.
It is worth remembering: the United States has advantages, but the Greece and Argentina examples have shown how quickly trust can erode when data do not reflect reality.
When the data of Greece and Argentina were found to be false, their economies were already in a difficult state, and the impact on markets was less significant than expected due to the overall loss of confidence.
– Robert Shapiro
Despite the history, the United States remains a leader in size and influence in the global economy. The scale and breadth of public institutions allow maintaining stability even amid debates over data.
We are the largest economy in the world. We are, without a doubt, the most outstanding financial center in the world.
– Robert Shapiro
Global Data Standard
After the August report, which showed slower employment growth, President Trump fired Erika Makentarfer from the position of BLS commissioner, accusing political motives behind data manipulations.
Economists, including Michael Haidt, assessed the situation as evidence that the United States remains a leading source of accurate data, but requires ongoing improvement of methods and expansion of data sources to sustain a high standard of quality.
There is no substitute for reliable government data.
– Michael Haidt
Alongside this, discussions are underway about modernizing methodologies, data collection, and institutional budgets. It is also noted that national statistics must remain independent and unbiased, using a variety of data sources, including censuses and economic analysis.
There is no way to doctor the data for Makentarfer or other leaders – that is impossible.
– William Beach
Regardless of differing views, contemporary rhetoric around data emphasizes the importance of transparency, professionalism, and independence of statistical agencies. In a data-driven world, these factors remain critical for citizen trust and economic stability.