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Poor statistics plague economic planners

April 19, 1992|By Bill Hendrick | Bill Hendrick,Cox News Service

"After all, we're not talking about money that would be a budget-buster," said Thomas D. Boston of the Joint Economic Committee of Congress, headed by Sen. Paul S. Sarbanes, D-Md. "If we hope to be competitive in a global economy, we must have better statistics."

Because statistics are so questionable, many economists rely on anecdotal evidence. Mr. Boskin said he chats monthly with executives of businesses of all sizes. The administration even looks at things such as light bulb sales to get a feel of the economy's pulse.

"Even though it's anecdotal, it's more current than government statistics," Mr. Boskin said.

Without a better window on the economy, improving the nation's record of economic growth will be hard, because policy-makers will have to keep going on instinct rather than making decisions based on reliable facts.

"Under Reagan, there was this view that economic statistics weren't important," said Martin Fleming of Cahners Economics, who heads the National Association of Business Economists' statistics committee. "But we are seeing the cost of that neglect, because businesses make decisions based on the information that's available."

The association has criticized U.S. statistics, which Mr. Fleming said measure "the manufacturing economy of the 1940s. The economy is very different from that today -- 80 percent of activity is in the service sector."

The government doesn't do a good job of tracking how much consumers spend on services such as health, restaurants, dry cleaning, and video rentals and dozens of other businesses born in the past 30 years, Mr. Fleming said.

Also, reports on things such as economic growth are based to a large degree on stale information, he said, "so more frequent data collection is required."

In addition to setting up the necessary mechanisms, Mr. Boskin said, experts also need to take into account the fact that "the population and labor force is growing at a much slower rate than in the '70s and '80s."

The Bush initiative also calls for better ways to track exports and the use of new computer techniques to make statistical surveys more meaningful and useful.

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