A modest proposal for improving the release of employment data
This morning I was listening to the most recent episode of Planet Money, which looked at the extensive security measures taken by the Bureau of Labor Statistics to guard against the early release of its monthly jobs numbers. (Did you know, for example, that TV reporters who are let in on the secret minutes before they go on air are only allowed to say Bureau-specified nonsense phrases to do their mic checks for fear that they might otherwise send out coded messages?) One thing the episode didn’t address was why the Bureau goes to such great lengths. They simply said that if someone got the numbers ahead of time they would stand to make a lot of money.
But what’s wrong with making lots of money, I thought. Nothing from the perspective of the windfall recipient, I’m sure, and nothing from the perspective of the markets, which happily assimilate the new information. There wouldn’t be anything inefficient about early release, I thought.
So I asked my Mercatus Center colleague Keith Hall who until earlier this year headed the BLS. He said it was not about efficiency, but about fairness. Even if you’re skeptical of laws against insider trading (because, after all, such trading only gets information to markets quickly about the reality of a corporation), the jobs numbers are different. They are not just information about a company, but an market-moving estimate developed with taxpayer dollars. To give anyone and advantage would be unfair.
Fair enough, I say, but here’s how I would improve the system: Why not hold a monthly lottery among all taxpayers and the winner gets the data a day in advance? The winner can’t tell anyone, but he’s allowed to trade on the information. We can even have part of the prize be that the winner gets to announce the numbers live on TV with a very big smile. Again, there would be no inefficiency, and as long as we are all eligible for the drawing, and we all have an equal chance of winning, then it’s still completely fair.
Why aren’t we doing this? This would be one government program I could get behind.