“p”olitical Science: Fool Me Once Shame on You; Fool Me Twice Shame on Me

The lowercase “p” is designed to signal the use of the word “political” as an adjective rather than as part of the academic discipline — political science. Politicized science or even spun science might have served just as well.

Whatever name you choose, it describes a problem that is more serious than might first be imagined. If we are to rely on others, especially our government, to compile and provide important information, how are we to react if they distort it for political purposes?

Earlier this week, the Bureau of Economic Analysis reported that the Gross Domestic Product (GDP) of the United States had declined by 0.1% in real (inflation-adjusted) terms in the fourth quarter of 2012. For a day or two, the stock market paused to consider this news before continuing its remarkable January ascent to close the week above 14,000 for the Dow Jones Industrial Average and 1500 for the Standard & Poor’s 500.

The GDP number did not “feel” right to investment professionals until they recalled that GDP is easily manipulated. Though initially attributed to the effect of defense cuts, these should have at least partially been offset by bonuses (that would normally have been received in 2013) being advanced to 2012 to avoid the new higher income tax rates.

At first, it might not be clear why any administration would want the economy to look worse on its watch rather than better. If manipulations were to occur, surely the number would be manipulated upward to make the administration’s policies look better.

But not always.

The other factor at play is the postponed fiscal cliff in which all the terrible things that were supposed to happen on December 31 have been pushed out to early spring. From the politicians’ perspective, the worst of these “terrible things” is reduced spending, particularly on their pet projects and secondarily on any other projects that they will have to trade for their favorites.

If the public can be made to believe that reduced defense spending led to negative GDP for the fourth quarter of 2012, perhaps the public can be made to believe that additional budget cuts will lead to negative GDP in the first quarter of 2013. Since two consecutive quarters of GDP contraction constitute the “R” word — a recession — perhaps the pressure for spending cuts will be alleviated thus permitting another swift kick of the fiscal can.

And don’t forget the blame game. White House Spokesman Jay Carney blamed the Republicans for the decline, while Republican National Committee Chairman, Reince Priebus, tweet blasted the Democrats.

Another sacred figure is the unemployment rate that gets announced monthly. Broadly it reflects those who can’t find jobs as a percentage of those who are deemed to be looking. The figure can “get better” if either of two things happen; only one of which is good. The unemployment rate declines if those who could not find jobs suddenly can. Good news that. But it also “gets better” if lots of people give up their searches, which is not so good. Think back to September and October when unemployment was a key factor in the election.

Statistics like these are often revised, sometimes more than once, so there is an easy opportunity to bring the permanent figures back to right after nobody cares about them anymore.

Whichever party occupies the White House quickly deploys its political legions throughout the federal government in part to assure that lipstick is properly applied to any stray pigs. If one of the legionnaires has successfully made the poor turnout at an Iowa rally look like a blow out, how hard can the GDP number be?

Each time the spinners are caught, public trust is diminished; and it becomes harder to do whatever the right thing might be on really difficult questions like gun control, immigration and global warming.

Problems are hard enough to solve without distorting the science.

If a corporate CEO was caught doing this type of thing, the Sarbanes Oxley law would send him to prison. Just a thought.

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