'Government statistician Graciela Bevacqua arrived at the office on a Monday to bad news from her boss: There was no easy way to say this, but the president wanted her head.
It was January 2007, and Bevacqua oversaw the consumer-price index at Argentina’s national statistics agency, Indec. Rising inflation threatened the electoral hopes of leftist President Néstor Kirchner’s wife, Cristina Fernández de Kirchner, who was running to succeed him. Bevacqua was unwilling to fudge the numbers, so Kirchner replaced her with a loyalist who did it.
Echoes of the Argentine saga have reverberated in the U.S. since President Trump fired Erika McEntarfer, commissioner of the Bureau of Labor Statistics, on Aug. 1 after big downward revisions to jobs data. He accused the bureau of rigging the data to make Republicans look bad but provided no evidence, and independent economists dismissed the allegation.
“This is the sort of thing only the worst populists do in the worst emerging economies,” economist Phil Suttle said of McEntarfer’s dismissal in a note to clients.
Although Argentina is an emerging economy, its statistics agency was regarded as professional and independent, and governed by a solid legal framework. That makes its experience a useful lesson in what awaits the U.S. if new leadership politicizes economic data.
Following Bevacqua’s removal, Argentina’s officially reported inflation rate fell to 8.5% in 2007 from 9.8% in 2006. Fernández de Kirchner easily won the election, and the government initially saved billions of dollars in interest on inflation-linked bonds which could be spent on social programs and subsidies.
In reality, inflation had accelerated to around 25%, private economists estimated. The government faced lawsuits from unions and pensioners whose social-security checks were indexed to inflation. Some of the government’s savings on inflation-linked bonds were offset by higher payments on debt tied to gross domestic product, which came in artificially high.
“It started to become a huge mess,” said Alberto Cavallo, an Argentine economist teaching at Harvard University who created a website that tracked inflation based on publicly available prices to fill the void left by Indec. Users bombarded him with all sorts of questions over email, like how much to adjust settlement payments to an ex after a divorce. “The examples add up, and you end up realizing how important some of these statistics are,” he said.'
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more_corn•6mo ago
WSJ articles are a waste of everyone’s time. Posting them is either an advertisement for a subscription or the beginning of a conversation without content. I, for one, recommend not posting them.
Bostonian•6mo ago
It was January 2007, and Bevacqua oversaw the consumer-price index at Argentina’s national statistics agency, Indec. Rising inflation threatened the electoral hopes of leftist President Néstor Kirchner’s wife, Cristina Fernández de Kirchner, who was running to succeed him. Bevacqua was unwilling to fudge the numbers, so Kirchner replaced her with a loyalist who did it.
Echoes of the Argentine saga have reverberated in the U.S. since President Trump fired Erika McEntarfer, commissioner of the Bureau of Labor Statistics, on Aug. 1 after big downward revisions to jobs data. He accused the bureau of rigging the data to make Republicans look bad but provided no evidence, and independent economists dismissed the allegation.
“This is the sort of thing only the worst populists do in the worst emerging economies,” economist Phil Suttle said of McEntarfer’s dismissal in a note to clients.
Although Argentina is an emerging economy, its statistics agency was regarded as professional and independent, and governed by a solid legal framework. That makes its experience a useful lesson in what awaits the U.S. if new leadership politicizes economic data.
Following Bevacqua’s removal, Argentina’s officially reported inflation rate fell to 8.5% in 2007 from 9.8% in 2006. Fernández de Kirchner easily won the election, and the government initially saved billions of dollars in interest on inflation-linked bonds which could be spent on social programs and subsidies.
In reality, inflation had accelerated to around 25%, private economists estimated. The government faced lawsuits from unions and pensioners whose social-security checks were indexed to inflation. Some of the government’s savings on inflation-linked bonds were offset by higher payments on debt tied to gross domestic product, which came in artificially high.
“It started to become a huge mess,” said Alberto Cavallo, an Argentine economist teaching at Harvard University who created a website that tracked inflation based on publicly available prices to fill the void left by Indec. Users bombarded him with all sorts of questions over email, like how much to adjust settlement payments to an ex after a divorce. “The examples add up, and you end up realizing how important some of these statistics are,” he said.'
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