Conversation 635-009

TapeTape 635StartFriday, December 10, 1971 at 11:13 AMEndFriday, December 10, 1971 at 12:00 PMTape start time02:20:55Tape end time03:08:07ParticipantsNixon, Richard M. (President);  Wallis, W. Allen;  Mostellar, Frederick;  Shultz, George P.Recording deviceOval Office

On December 10, 1971, President Richard M. Nixon, W. Allen Wallis, Frederick Mostellar, and George P. Shultz met in the Oval Office of the White House from 11:13 am to 12:00 pm. The Oval Office taping system captured this recording, which is known as Conversation 635-009 of the White House Tapes.

Conversation No. 635-9

Date: December 10, 1971
Time: 11:13 am - 12:00 pm
Location: Oval Office

The President met with W. Allen Wallis, Frederick Mosteller and George P. Shultz.

     Introductions

     Doodles

     Report

     W. Braddock Hickman’s death

     The President
                                          25

                     NIXON PRESIDENTIAL MATERIALS STAFF

                                 Tape Subject Log
                                   (rev. 10/06)
                                                           Conv. No. 635-9 (cont.)


     -Federal government
          -Schedule
                -People's Republic of China [PRC]
                -India
                -Pollution
                -Congress

Committee
   -Richard M. Scammon

Commission on Federal Statistics
   -Commissioner
   -Federal statistical system
         -World admiration
         -Compared to other statistical systems
   -Infant mortality rate
   -Consumer Price Index [CPI]
   -Gross National Product [GNP]
   -Statistical agencies
         -Bureau of Labor Statistics [BLS]
         -Census Bureau
   -Non-statistical agency
         -Credibility
         -Examples
                -Interstate Commerce Commission [ICC]

Statistical organizations outside the federal government
      -Census Bureau
      -Survey Research Center
             -University of Michigan
      -National Opinion Research Center
             -University of Chicago
      -Pollsters
             -Albert E. Sindlinger
             -Louis P. Harris
             -George H. Gallup
                  -Study after 1948 election
                                         26

                     NIXON PRESIDENTIAL MATERIALS STAFF

                                 Tape Subject Log
                                   (rev. 10/06)
                                                                   Conv. No. 635-9 (cont.)


Commission on Federal Statistics
   -Census Bureau
   -Function
   -Reorganization of federal agencies
   -Federal statistical system
         -Statistical Policy Division
               -Julius Shiskin
         -Improvement
               -Enlargement of the Statistical Policy Division Staff
                      -Surveys
                            -Controlled field studies
                            -Welfare programs
                      -Daniel Patrick Moynihan
                            -Opinion
                                  -Poverty programs
                                        -Headstart
                      -Office of Management and Budget [OMB]
                            -Shiskin
         -Pollsters
         -Statistical organizations outside the federal government
               -Universities
         -Census Bureau
         -Department of Commerce
         -BLS
         -Individual agencies
               -Central point
         -New agencies
               -Strengthening the system
                      -OMB
               -Statistical Policy Division Staff
                      -Factors involved
                            -Staffing
                      -Production and use of statistics
                            -OMB
                            -Remedial education
                                  -Moynihan
                                        -Instant credibility
                                  -Statistics
                                        -Prove statements made
                                        -Minority groups
                                        -Must know the facts
                                  27

               NIXON PRESIDENTIAL MATERIALS STAFF

                          Tape Subject Log
                            (rev. 10/06)
                                                           Conv. No. 635-9 (cont.)


                               -Examples
                                   -British-Irish
                                   -Blacks
                                   -Asians
                                         -Value of statistics
-National Academy of Sciences
-Outside review
     -Operating agencies
           -Shiskin
     -Statistical Policy Division
-Census Bureau
-Confidentiality and privacy
     -Statistical Advisory Board
           -Compared to President’s Foreign Intelligence Advisory Board [PFIAB]
           -Civil Rights Commission
                  -Workability
           -PFIAB
                  -Richard M. Helms
                  -Henry A. Kissinger
                  -State Department
                  -Department of Defense [DOD]
     -Public statements
     -American public
           -Attitude toward statistics gathering
                  -Census Bureau
                  -Internal Revenue Service [IRS]
                  -Federal Bureau of Investigation [FBI]
                  -Credit agencies
                  -Army surveillance
-Recommendation of guidelines
     -Shiskin
     -Advisory board
           -Confidentiality
           -Duties and responsibilities
                  -Regulation
           -Freedom of Information [FOI] Act
                  -Protections offered
           -Census
           -Confidentiality
                  -FOI
                  -Proposal to improve the laws
                                    28

                  NIXON PRESIDENTIAL MATERIALS STAFF

                            Tape Subject Log
                              (rev. 10/06)
                                                              Conv. No. 635-9 (cont.)


                       -Confidentiality
           -IRS
                -Improvements
          -Census Bureau
                -Quinquennial [five-year] census
                      -Cost benefit study
                             -Recommendations
                                   -Cost of census
                             -Stabilization of US population
                                   -Comparison of Brazil population
                                   -Movement of blacks to cities
                                   -Congressional district changes
                                   -Movement of blacks to suburbs
                                         -Freedom of choice
                                               -Schools and housing
                                               -Strom Thurmond
                                               -Comparisons and differences
-Economic statistics
     -Accuracy and timeliness
     -Research
     -Federal Reserve Board
     -OMB
     -Bank deposits
          -Indication of change
     -Research
     -GNP statistics
          -Figures
                -Accuracy
                      -Preliminary
                      -Adjusted
                      -Final
                -Corrections
                      -Congress
                      -Shultz
                      -Business
                             -Wall Street Journal
                             -Pollsters
                -Commerce Department
                      -Raw data
                -Statistical Policy Division
                      -1959
                                                29

                             NIXON PRESIDENTIAL MATERIALS STAFF

                                        Tape Subject Log
                                          (rev. 10/06)
                                                                           Conv. No. 635-9 (cont.)


                                        -Study of price statistics of the federal government
                                               -CPI Wholesale Price Index
                                               -George Ziegler [?]
                                        -Study of employment statistics
                             -Commerce Department
                                   -Elimination of preliminary estimate
                                   -Retail sales
                                        -Estimates
                  -Public outlook
                       -Business
                             -Inflation
                       -Comparison to politics
                             -Cab drivers
                             -Barbers
                       -Business
                             -Decision making

      Outside commission
           -Shultz

      [General conversation]

Wallis, et al. left at 12:00 pm.

This transcript was generated automatically by AI and has not been reviewed for accuracy. Do not cite this transcript as authoritative. Consult the Finding Aid above for verified information.

All right, I'll tell her if I tell you.
Sit down.
I mean, I've got a PR player, too.
I don't hear rules on all that stuff.
I wish they were.
I mean, can I show you my interest in payers?
They're not going to visit the convention before other payers, other people did for us.
I didn't want to hear any commands from you, so... No.
I don't know.
I think it'll be a mission.
We hold certain purpose.
We hold so.
First let me say that we have a distinguishing thing.
We did, and one of the people got hit.
Yeah.
Right in the middle of the early morning.
What was it?
He had a heart attack.
He was only in his early 50s.
Right.
That's when they got hit.
Oh, yes.
Right then and then.
Yeah, yeah, yeah.
Well, I think the commission, oh, they worked very hard.
We filmed on weekends.
We filmed on Saturdays and Sundays.
And if they enjoyed it and appreciated it, they felt that they could understand.
Also, that they all were particularly appreciative of your taking the time for the nuts and bolts of the government this way when you've got to deal with China and India and right to control pollution and monitors and those things.
I'm not for right to control all those things.
I know.
I don't care about that.
I don't care about that.
It's always stubborn.
You know, I've got views on half of that.
That's another subject.
But try it.
The thing that I wanted to say was this, that I hope that you, I noticed you had a broad vision on the committee.
Did he participate in the very event that we have here in April fall?
Is there a bipartisan context to it in a real sense?
There were several times when he strongly defended the power of the presidency when the people on the commission were suggesting hedging things around so the president would have control of these things.
who worked at the Census made a strong and effective case that, you know, he said, I didn't vote for him, but he's in there wanting to do it his way so I can make arguments next time.
are what we focused on naturally, but I should say first that the federal statistical systems really admire all of the world and other statistical systems as far away the best.
And I think that's right, but on the other hand, it has vast opportunities for improvement.
We realized early on
that it would not be productive for us to single out one important series after another, the infant mortality rate or the consumer price index or the gross national product, and focus on those.
We could have divided up into subcommittees, but even then we couldn't handle over half a dozen of those.
And the job of the room for improvement is much faster than that.
So what almost immediately we decided what we're going to try to do is figure out ways to build into the system
things that will keep them from getting out of joint this way, from lagging or the quality deteriorating or not being raised as much as it should.
So our basic effort was not so much on the things that I think would be a really immediate interest to you, like how to get the changes in GMB measured more accurately, more promptly, or how to get the consumer price index improved.
As a matter of fact, both of those things are going to be studied repeatedly and nothing much is done about it.
We distinguish the statistics of the federal government in the two categories, those put out by the statistical agencies, like BLS, Census, and those put out by the non-statistical agencies.
We concluded that the ones from the statistical agencies are generally fairly credible.
What do we do with non-statistical agencies?
If you go into the business of the possibility of having government agencies rather than doing it in-house and going outside to get market vendors to sit in groups outside, is that a possibility?
There are.
There are.
The census is as good a statistical agency as there is in the world.
There are some excellent ones outside, which are used by the government, the Survey Research Center, the University of Michigan.
We have, of course, Katona and Alron's.
National Tangent Research Center at the University of Chicago.
There are a number of good ones.
There are holsters, I suppose you'd call them, centered in Chicago.
Yeah, I mean, there are a number of good centers in Paris and Dallas.
There are a lot of good people here.
Fred wants to make a big study of those people after the 48th election.
Well, the commission thinks the census is excellent, and it thinks that the... That's in Congress.
Just can I ask one question?
If you made a recommendation regarding taking all these things out of departments,
We discussed a bit.
Our answer to that, essentially, is that we've looked more at the function and that we thought that the administration's ideas of rearranging the agencies seem to want support.
On the other hand, that is not the area where we ourselves support Congress.
It's that realization.
Now, second,
I believe the statistical policy of the Chisholm office seems to also be of very high quality and newly energetic since Chisholm's appointment.
And I believe that the principle of 14-2 for strengthening the federal statistical system in the long run is to enlarge the statistical policy of the nation's staff and responsibilities.
in several directions.
First, though it would not be fair to say they only look at surveys now through the Federal Reports Act.
Still, that is a very major part of that job.
We think that, considering the current situation in the world of statistics, that they should look at the whole of federal statistics, including things like controlled field studies, improving evaluation of welfare programs,
So it's a strange thing, Professor, to be surprised by a statistical investigation.
We do have to say one thing.
I want one hand to read this.
You know, I mean, he has some very strong... That was not much of a statistic, you know.
For example, in the whole poverty program, we all came in, we all looked into it.
Everybody thought it was so good.
It's just that it didn't work out at all.
The program is to evaluate the whole system.
The whole system.
Oh, I just like that one hand.
Because he was raising hell of a lot.
He said, our generation is just not good.
That's what we know.
He said the operating agencies turn out most of the statistical data, not the statistical.
And they are weak.
And they're very weak.
You know, that's what I'm saying.
So we think that the statistical policy division ought to have targets that are moderate and positive.
That's what I mean.
Good.
And the reports from the pollsters and the reports, of course, you've got
I think the point that you made is there are some excellent outside private organizations and probably some good universities.
There are certain some very good.
They say that the Department of Congress will be good.
BLS, I don't know.
I'm not sure if it's good.
It could be good.
That's how they use it.
That's a subject I'll cover later.
But what I think is needed is somebody sitting on top of the whole thing who will wear it.
operating agencies that are trying to get information.
Instead of going off on a half-assed program on their own, they come out and say, well, we'd like to know this.
Usually, you'll find it's already been studied.
Maybe it's a bad study, but something like that.
Or that the operating agency, the business agency, should say, well, this is a
This is something that could better be done in Michigan, or could better be done at the University of Michigan Center.
We would recommend this poll.
I'm sure it's a good one to operate on.
Or please get that right on the Bureau of Census.
Do it in-house, or this information should be available here, or we should just set up something for you.
I think what is possible is anytime the government, particularly the new agencies that have been set up with the best of intentions, go out in all directions.
And we make decisions in government based on bad
This means over a period of time to correct this by strengthening the whole system and by having a really confident agency that's well-structured.
I think this is important enough to really strengthen.
I don't like to see the White House or any other White House increase in size, you know.
But in order to do that, you've got to have, you've got to get the position of prestige, you've got to get the power.
We've got to get enough horses to do the job.
Do we have enough?
We don't have enough horses to do the job.
Do we have enough?
I think we stand fairly well on that.
No.
Do the people out in the agencies know that that's worth it?
Our is, they know that, and we, of course, have our price list constantly on the line.
But you control their money.
You control their money.
We examine the PR activities very expertly, but we find they waste more people on the part of the business than the other thing for their own purposes.
but it seemed to me that on the statistical side, you really need the police at any stage to see that, I mean, if they need a hundred more in an agency in order to get it right and higher, but in many instances, the agencies just do a lousy job.
That's right.
Well, if we have a statistic that we've used for the last couple of years, and we can take on the statistical program, and it's an odd thing that the people who use the statistics
on the whole are a different group than those who produce them.
And they have different needs and they have different standards and a different point of view on budgets.
So we're trying to organize the users, so to speak, and give them an input on the budget.
And oftentimes the producing department will downplay that in the budget.
They're not as interested.
And we find ourselves in OMB, probably pushing up statistical budgets rather than holding them down.
So we come up with a different portion of it.
Because it's...
I have a question.
The move in the new agency is an assumption that proved to be totally wrong.
Because it's supposed to be the...
of remedial education and all that sort of thing.
Now, as a matter of fact, as you know, there's some controversial writing that's at the university and it's not explored.
And as a matter of fact, we may be in a situation where we find that you can't do a hell of a lot about
that the idea that if you could just move all the kids and together and so forth and so on, these differences will evaporate.
It's just not true.
One of my fellow like-minded men comes in and says this, of course, it gives some credibility because he's a man who deeply believes in what he's talking about.
Now, this, I've heard, is a common information.
position of leadership could ever agree that he knew it's a virtue, and yet he didn't know it.
You see, in fact, you need to know, you need to know, even though for purposes of minority groups who may be not, and who are, and you've got to say, well, if the American ideals, you put everybody together and so forth, everybody's going to have an equal chance to get an opportunity to go to college.
Not true.
But everybody's got to believe it's true.
See?
But the person who sets that certainty must know whether it's true or not.
Or otherwise, he does not, he may raise expectations far more than he should.
And it's a, you know, that kind of, it's that kind of hard-headed information to see that many of these operating agencies, you know, they go out here and really, I don't mind the operating agency going out and saying things that need to be said in order to
to maintain an idealistic approach to problems.
But particularly the man at the top in an operating age needs to know what the facts are.
He must lie to himself.
If he is pretending to talk to the people because he has to, he's got to know what the facts are.
What I'm suggesting here is something that is due to his leaders in the education community could not possibly accept.
There are times when
information that you have cannot be, cannot be admitted.
But you must know, the leader must know, he must know the truth, he must not always, it doesn't mean he lies about it, but you don't go out and say, well, it just happens, it just happens, that, as my aunt points out, that if you rate various abilities and so forth, after a time, you find that pretty, that the image, I should say,
are about a half a step ahead of the Irish.
In terms of, that's true.
That doesn't mean that Irish are always going to be, that all Irish inevitably are going to be behind all British, but I mean, sorry.
And it happens that if you look at these whole gradations of abilities, of native abilities of people, the Asians, of course, first.
We, our group, second.
And the blacks, of course, rank lower.
Uh, it has nothing to do with, uh, the facts, somehow.
The environment has a hell of a lot to do with other things.
This is tight end information.
You can't, you can't...
You can't do it, but I need you to know what it is that we've got.
That's it.
You must know.
You must know.
Because you must know.
Because otherwise, if you take yourself, then you can't help the man.
That's what I mean.
So I want total honesty.
Which is what we're trying to get at.
Go ahead.
The...
We feel there needs to be a backup for Kishkin's group.
He's going to be reviewing it on it.
We think that through some other places, such as the National Academy of Sciences, the National Research Council, it would be possible to appoint an outside review committee which would support that part of the action in two ways.
One way would be to give consideration, long run,
kinds of problems that a really active operating agency like Chisholm and Schiller probably doesn't have time to handle.
Second, we think that somebody from the psychological community, the SPD itself, just to make sure that it hasn't grown old or forgotten what its job is or not faced the future.
We're going to try to make sure
to improve the physical system from within.
And partly, you know, the defensive period is very interesting in its originality and the active development it gives the country.
I'll have to get on to that.
But, at any rate...
And turn now, for a moment, away from that recommendation, really the two main recommendations there.
We worried a lot, as you asked us to, about how to deal with crime and all of the rapid problems that go with that.
Perhaps you've heard of a recording, at least half of the time that the commission has spent, of
wriggling around in this very difficult problem.
We had a very hard time coming up with a final recommendation.
We finally decided to recommend, for the confidentiality side, a statistical advisory board, which would be independent.
It would have certain activities.
It would
It would be a full-time part-time.
Like this large part-time.
Outside of government.
I love that the president's so nice to tell us.
Oh, yeah.
Sure.
That he did it his way out.
Which works very well.
I'm glad George gave that example because one we thought of but it hasn't worked well is the Civil Rights Commission.
Well, the liberal rights commission, you see, is put in an antagonistic position with the administration.
That will not work.
They come down here every month.
They sit down with Helm.
They sit down with Kissinger.
They sit down with Staten.
They sit down with...
and so forth and so on.
I meet with them, of course, on occasion, too.
They say what they mean, but they realize that their job is to help.
You never hear what they say.
But they have a very
All right.
All right.
And they have mixed this up with the dealings of some private credit agencies and charges that have been made against the Army intelligence surveillance of the police.
This group would sort of assure the public that that's not happening.
And it would also assure itself that it really isn't happening.
Also, there are some problems in the government where, to be effective, they really have to violate terribly narrowly defined requirements of confidentiality.
The Bureau of Internal Affairs has some data, and the Census will have some data.
All you need to do is link those two bodies of data, match them up by individuals, and then you can throw the individuals' names away, but you need to match them for statistical purposes.
Well, technically, that's a violation of the laws of confidentiality.
And they do that now by the Bureau of Internal Revenue sending somebody over the census and they swear him in as a dollar a year man.
And then he classifies as a census employee.
And so they're really circumventing the law.
Eventually that's going to undermine confidence in the system when that gets done.
So we would have this board authorized.
It would have the power to authorize signatures like that.
They're going to recommend to the administration guidelines.
Presumably the administration would like the guidelines, and then through the department, amalgamate these guidelines, adapting them flexibly to the appropriate department.
Presumably, Chisholm's group would be, or some of Oro would be, would make sure that those guys were followed.
So in the first instance, there's a part that's looking at them.
This organization would continue to monitor to make sure that, considering the changing times and new technology will come along or move on, that the pristine confidentiality of the individual is not stratified.
I'm not even sure if we can use it to make recommendations appropriately.
It wouldn't publish its findings, and the hope would be that the findings would be that the guidelines were being followed, and that the public would hear that there was an active positive setting in their favor.
It would not, however, have any regular sort of power.
That would be the responsibility of the administration to handle, because they've got to come up with a way to make sure it works.
So that's associated with it.
There is currently a legal problem.
The Freedom of Information Act makes it possible for someone, for David, who's tweeted out an agency, even though he's gotten the information voluntarily from the individual after he's been promised to come to jail,
And these loopholes in the law and the actions of judicial decision make it very difficult for some agencies to protect the confidence of the individual supplying information.
Now the agencies have got to do this.
Their laws have turned out to be good enough to protect the sentence, apparently.
And the Census has a very good record of being careful about confidentiality, and the general public all knows that.
So we recommend that there be some tinkering with the law of the Freedom of Information Act to make it possible for more agencies that are collecting statistical kinds of information
And I should emphasize again that when we speak of statistical information, we're speaking of information that may be gathered from individuals.
It doesn't really require us to know their names.
We don't know how many of you there are, how old you are, and how much money you make, perhaps.
But for statistical purposes, we don't really need to know their names.
So we think that there should be
improvements in the laws to protect the individuals.
How would you tackle a problem of IRS?
I mean, it's basically, let's face it, it's been used in the past, politically, theoretically, everything.
We may not have any so far up here, but would you tackle that problem?
No, it's not from up there.
Of course you're not.
It's not.
Just wait.
See, they're collecting the data.
They're collecting the data.
I think that's it.
Yeah, right.
Here's what it says on the IRS.
You can ask for information.
We're going to come back first.
We can't find it.
There was one time somebody found a way legally for it to...
Let's bring you something.
They got the court to rule that while the census form was confidential, the carbon copy that the company sent kept at the census' request could be subpoenaed.
And that was an egregious paper case.
Well, Congress changed the law immediately after that.
Now, an urgent question, urgent only because the time is coming up when the decision would have to be made, has to do with the possibility of the quinquennial census.
That's been a very frightening question.
By and large, the Commission did not look into the question of a series in particular.
But this is such a big question.
that we felt it would be important for us to say something about it.
It would be silly for the statistical commission to come to you and say, well, we've got to look into this and claim a sense of possibility.
When we looked into it, we concluded, even though we had read the recent material by the Census Committee, which reviewed the census material, and it made a definite recommendation for such a census.
We concluded that the basic economical cost-benefit analysis, economic cost-benefit analysis, had not been made yet.
And on the other hand, we're not at all clear that it wouldn't be totally a problem eventually, because lots of organizations do use things in many different ways.
We, therefore, urge that the Census Bureau be asked to do an immediate substantial cost-benefit study.
Immediate because if it can, if it should be a cost-benefit, then it ought to be mounted in 1970.
We're the only people who are supportive of you.
They are.
They are working on this now.
We have...
have them working but perhaps not quite the way you would like but there is not only the question of of taking a full census but all sorts of in-between possibilities that may be much less costly and will give you essentially the kind of information
And also, particularly now, as the society gets more,
south, let's face it, the changes are not going to be as great.
And we can talk all we want about, you know, rebuilding the heartland, you know, and new cities and all the rest, but the United States is becoming more and more crystallized, and we're in certain patterns.
If you were, for example, we're talking about Brazil,
which is now $100 billion and then $200 billion and then 25 years, and where the whole pattern of all the countries about where the United States was in 1980, you know, opening the heartland and a 30-200 mile road up to the Andes and so forth and so on, and you damn well have something that will tell you much more frequently what is happening to your people.
But here, I think that, I think the point as well, and I think through spot checks around, you could kind of, but our, this country has not changed as dramatically as it did.
We've all assumed that we make strong assumptions on that, that the population is going to move up more than it has, that it's going to be on that.
The palates are going to change.
Well, the movements of the blacks to the central cities, that's now occurred.
There's going to be a whole lot of movement out.
Well, there may be movements in
out of central cities into suburbs and that sort of thing, but you can check that on an individual basis.
But I do think that the point that you make, I don't think that will change the courage of the Secretary of the President.
That is the thing we should look into.
Maybe there's one more.
There's a big political issue here in the...
How often are you going to change congressional districts around?
We allocate the House, and so forth.
Every time you take a census, you have to do that.
They'll make another argument to try to counter one.
I'm not sure I'm right.
Well, that's one thing to be found out after, but they say about 40% of the population moves every year.
And that may be true, but not change the basic statistical distribution.
That is, the number of poor people in a given geographic area may be about the same after 20% of them have moved out, another 20% have moved in, and so on.
So again, you just have to have information before you get to the conclusion that the allocation of funds would be appreciably different from an up-to-date census, from what it is from a five-year-old census, adjusted maybe by a few other indexes.
Mike, can you tell me that the biggest change in population movement at this moment, though it's not critical, is black women suffering?
Black women suffering.
That's true.
That's good.
That's good.
If we can get the idea of an olden, if you think of it in the right sense, freedom of choice,
for schools, for housing, everything is the right thing.
I mean, I agree in the sense that it's a very good sense.
But I do mean in the sense that we think about this freedom of choice as an individual has freedom of choice for a job, freedom of choice for school, freedom of choice for a house, any place.
And if you make that idea come true, that first is the right thing, and second, it also is the right thing.
Well, you've got to have certain orders of people, housing projects, et cetera, et cetera.
It's ridiculous.
This is no work.
Either way, it is a current of people.
It's not a force that wants to move in.
They're more happy when that people are attacked.
But it's not where they were.
Just like you would ask about a white man.
There's a lot of people.
There is.
And still is.
And he doesn't discriminate.
And we know terrible discrimination.
Rich whites and poor whites.
Middle-class whites against poor whites.
Rich whites against middle-class whites.
And we learn.
Well, everything is so short.
In the beginning of the universe, men thought a lot of the better Christians were not.
In the past, all the laws of the past predicted that they were not.
that it's a matter of accuracy and timeliness in statistics.
So looking at that, we have a few explanations about it, but the truth is that we believe that most of the ideas that have been brought forward for strengthening the accuracy or for improving timeliness, the kinds of economic statistics that we use, will require very considerable research.
kinds of research, extensive research, to make sure that the improvements that might be brought forward won't be booby traps for the unaware.
We have two or three ideas, and they're spelled out in the report.
One is that the Federal Reserve Board should consider whether use of bank profits might be a good device for finding out about change
Well, that's a one-time problem.
More generally, there's an original, kind of an original idea in the book that we can't stand behind because it'll take a lot of research.
And that is one of finding where there's many amazing changes without necessarily measuring the value of the quantities.
And there are a few new ideas in that direction.
It's a little awkward and difficult.
It would be very hard to explain to the man on the street.
But it might be possible to measure the actual change, if that's what you really want to know, more accurately than by computing how much you have at one time and computing how much you have at another time and then taking the differences.
If someone were thinking that that was his problem, then he may be able to think of some very ingenious ways of doing that.
To do it right and prove that it worked is a serious effort, and we recommend that research be taken up on this.
But we can't say that anything like that is really going to work or that it will be ready very soon.
The statistics have to maintain some credibility.
The credibility of GNP statistics, I think, have been seriously impaired.
And this should be corrected, and actually the reason why we should correct it.
It affects any administration, it affects any time.
Over the past three years, I've watched these numbers come out with regard to the GNP.
And they come out in three different times.
First, the problematic figures.
And second, the adjusted figures.
And third, the actual figures.
Inevitably, the preliminary figures are too low.
The adjusted figures are higher than the preliminary, but too low.
And the final figures are higher.
That has been the case.
That's been the case, for example, I won't go back three years.
I haven't watched it that closely.
That's been the case ever since November of last year.
I mean, look.
in the third quarter this year.
Wrong, wrong, right, wrong, wrong, right, down.
That doesn't mean that these people are devious, wrong, inaccurate so much as it does that they're wrong in one sense.
If the pattern shows that the preliminary figures due to inability to get enough information are always low, those figures should not be released for this reason.
Those preliminary figures are the only ones that anybody pays any attention to.
The correction in each instance, even though it's up, for example, the correction in the third quarter was very dramatic.
The corrections in the second quarter were very dramatic.
But decisions down in the Congress, decisions by administrations are made on the inactive first quarter.
They're the ones with the wrong toleration.
And the corrections are lost back in the course of X.
Now that is a fact.
Now George and the other people around here don't realize that because they look at the first, second, third things and say, gee, isn't this great?
It just created all those mean a goddamn thing unless somebody knows about it.
Nobody pays attention to Nicola.
People have been reading Calvin's Businessmen and the rest of them.
They're just as dumb as we are.
Because we watch these.
What they do, they sit on their television sets and hear or read the Wall Street Journal.
The first time it's a big story.
The correction stories are always much better.
That's for all pollsters, of course.
The pollster will come out first.
He's inaccurate.
And as he gets closer to an election, he's going to get very, very accurate for he was out of business.
They used to.
They don't so much now.
You can be wrong.
But I can say that the GNP figure, and this is Congress and they do a good job, the GNP figure, they would be very well advised to evaluate whether they should put out that raw information.
their first swipe at it, because it basically is inactive, and decisions should not be made on it.
And eventually, if I were a critic of the outfit, and there'd be somebody bright enough one day to be a critic, he'll say, look, we're making decisions based on bad information.
I blame the agency for it.
Now, this brings up a couple of points about the report.
One is that we have urged that the Office of the Statistical Policy Division follow through better when criticism is made of these studies.
Because there was a study, there have been studies made of the relation between the final estimates and the preliminary estimates of GMB and national income.
I don't remember these things in detail.
They were a bit 10 years ago.
But there was study and systematic relations were found.
And once you find the kind of systematic relation you're pointing out,
That gives you the basis right there for making a better estimate in the first place.
Well, there have been these studies made back at the time I was working for you in 59.
What was then the Statistical Policy Division had a different name, but they got a detailed study made of the price statistics of the federal government, the CPI, and wholesale price index.
It was an excellent study, but very little has ever been done.
They're not much better now than they were then.
Very little has been done to follow through.
That study was chaired by George Seeger.
Oh, yeah.
And they had a study made of the employment statistics, and a little bit of improvement was made, but not much.
So one of the things that we have...
recommended is that the OSP ought to have a better basis for following through.
Another thing we've emphasized is that when these data are put out, there ought to be an indication of the margin of error at which they're subject.
If they know perfectly well when they validate this or that, and they don't particularly stick to the outcome, they don't.
It seems to me that
Since the first thing is always wrong, or has been, and they should put out the first thing.
They should wait.
We, we, uh... Because, because, you know, I mean, people get very bearish about it.
They say, what's the second quarter term?
What's the quarter term?
Well, at least in the case of ours, there are times that are so great.
Well, that's true.
We are, we are in the process of having Congress eliminate the preliminary estimate.
Move the second.
But it's now their second estimate, up a little bit in time, to be the first one.
But to publish that in terms of a band, that on the basis of the information we have now, our first estimate is because we're between here and here, it's likely to be a sign.
One of the major problems is if your estimate's never adequate, take into account retail sales, which, of course, is all of the particular economies moving up.
Right.
Well, at least...
No information on some of the results of board meetings.
Oh, I'll let you get into that on the account.
This was a majority situation.
I guess we have two board meetings on the account.
They both have businessmen from a variety of businesses.
They're all saying that every
Everybody was trying to get in the hole.
But it didn't matter.
Three months ago, when it was clearly wrong, they were all standing there and they were falling apart, trying to place this in control.
Like I was meeting for the Italian Collegiate and we were on the ramp, and then later this evening they tell about the headaches, and it's just because the front line was falling out of the crisis.
They did it all to put two and two together, but this is psychology.
You know, it's very interesting.
Thank you.
We've got everybody.
We've got everybody all over the world.
We've got Paul.
The way to find out about Paul is talking to the camera.
He's not a very good person to talk to.
He's going to tell you what figures you want to hear.
Some people say, talk to the buyer.
He may give a little better.
And this is the impression of talking to the buyer.
Well, they're talking to each other.
It certainly does.
But when they talk to each other, it does make a difference in their decisions.
If you have an optimistic attitude to the board and they have to make a decision as to whether or not they have a planning expansion program for next year, they may look at it more favorably as a specimen.
Well, maybe we'd better not go at chief executive officers.
They're all going to be frightened to death.
Well, thank you very much for your time and for the opportunity.
Well, thank you.
We appreciate your work.
I don't know much about it, but I hope you resolve it and prove it next time.
We set up this outside to make sure you're both on it.
Right, sir.
Here's your, uh...
Here's your, uh... That's all you can take.
Good, son.
Wonderful, son.