Congressional Threat to Every Investor, Business Owner and Citizen

rcwhalen's picture

Latest comment from David Kotok at Cumberland Advisors deserves your attention.  -- Chris

May 19, 2012

This is an open letter in response to legislation recently passed in the US House of Representatives.  The behavior of Representative Harold Rogers, Chairman of the House Appropriations Committee, has made the front page of The New York Times, describing the $17,000 drip pan for Black Hawk helicopters that is earmarked for his district in Kentucky. 

The US House of Representatives, that includes his leadership, has passed Bill H.R. 5326.  This legislation decimates the statistical agencies that support the entire fabric of business investment, policy-making, and decision-making in the United States.

This action speaks volumes concerning the failure in Congressional accountability to review this legislation thoroughly and the abysmal behavior of Congressional leadership to permit it to pass.  This threatens the economic recovery and long-term growth trend of the United States. 

Below is a copy of a letter sent to the membership of the National Association for Business Economics (NABE).  It recounts the important elements of the legislation that must be opposed.  It also gives the appropriate number and reference in the US Senate version.  It contains sample text which citizens can use to send letters, emails or telephone calls when it comes to lobbying on their behalf. 

We are asking all who read our list serve to use this information, publicize it to others, and to stress to those in Congress that while we support some of their efforts in fiscal discipline, we do not support the emasculation of the agencies mentioned and the destruction of the statistical base that is essential to the ongoing business and investment climate in the United States.

I discussed this legislation with Bob Parker, Former Chief Statistician of the Bureau of Economic Analysis and the Government Accountability Office.  Bob is a good friend and colleague in several economist organizations where we are both active.  He is the most skilled professional I know.

Bob said that this legislation would "eliminate the economic census.  That means no more bench-marking of key indicators such as retail sales, service receipts, manufacturers shipments and orders, trade inventories, industrial production index, etc."

So dear reader, this legislation can really cost and hurt you. Please act now while damage can be mitigated.

Thank you.

Dear NABE Members and Friends:


Last week, we alerted you that the U.S. House of Representatives was considering an appropriations bill for Commerce, Justice, Science, and Related Agencies (H.R. 5326) that would drastically reduce funding for the Census Bureau and make participation in the American Community Survey voluntary. Thanks to the many NABE members and other data users who contacted their representatives to try to prevent this action. Regrettably, the legislation ultimately passed the House along party lines and was much more damaging than originally proposed. In its current form, H.R. 5326 will "devastate" the nation's economic statistics.


Specifically, the legislation will:


Terminate the American Community Survey;


Cancel the 2012 Economic Census; and


Halt development of cost-saving measures for the decennial census.




The Senate is expected to take up its own FY2013 Commerce, Justice, Science, and related agencies appropriations bill shortly. The Senate and House versions of the bill will then presumably be addressed by a conference committee comprised of members of both bodies.


Call or email your senators and representative today to tell them why you value the Economic Census and the American Community Survey. You can use this sample letter below:

Dear :

I am writing to express my concern over passage of H.R. 5326 by the U.S. House of Representatives, which would drastically cut funding for the U.S. Census Bureau and eliminate the Economic Census and the American Community Survey (ACS) - two of the most important tools we have for understanding the U.S. economy.

These programs are critically important to businesses, policymakers, and government agencies which use the data to make informed decisions and plan for the future. The increased uncertainty accompanying the loss of these data will most certainly result in more missed opportunities and waste for businesses and misallocation of resources by policymakers and government agencies. I urge you to ensure that the Census Bureau receives adequate funding to continue these vital programs.

How are Economic Census data used?

By the federal government as an input to calculate elements of key economic indicators, such as economic growth (GDP), prices, and productivity;


By retailers in evaluating whether to expand into new market geographies;


By economic development commissions in attracting new businesses to their areas; and


By companies to benchmark performance against industry averages


 How are ACS data used?


 By corporations to examine workforce characteristics of neighborhoods to determine optimal locations for new factories or sales centers;


By homebuilders looking to tailor new subdivisions to surrounding neighborhoods based on income, family size and existing home values; and


By municipal governments in planning to meet the educational, safety and housing needs of their citizens.


 The information we glean from the Economic Census and the ACS increases our understanding of current economic conditions and reduces uncertainty, allowing businesses and policymakers to make well-informed, efficient decisions. If we eliminate these programs, we are choosing to "fly blind," an alarming proposition in these challenging economic times. Again, I urge you that you vote to ensure adequate funding for both the ACS and the Economic Census.







David R. Kotok, Chairman and Chief Investment Officer

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dearth vader's picture

Better no statistics than tweaked statistics.

CH1's picture

When competitive providers exist, so will good statistics.

DeadFred's picture

The government is here to serve the government. I don't trust their data so why should I pay for it. If they're going to keep serving up rosy all-is-well data let them hire a new creative writing graduate instead of teams of data crunchers. Real, accurate data from a good government is worth a lot, this stuff not so much.

proLiberty's picture

"The US House of Representatives, that includes his leadership, has passed Bill H.R. 5326.  This legislation decimates the statistical agencies that support the entire fabric of business investment, policy-making, and decision-making in the United States."


Charles Biderman of Trim Tabs repeatedly complains about the horrible quality of US data.   He points out as an example that retail sales statistics are based on a sample of 10,000 retailers nationwide that is mailed in as are many of the other surveys.   He asks why a survey based on Visa and MasterCard data would not be more accurate and timely?







Sudden Debt's picture

17k drippan....
I have these fancy bedpans! Bids start at 16k!!!

CH1's picture

As soon as you see National Association for... you know it will be statist.

overmedicatedundersexed's picture

the American economy was planned to move from smoke stack to low impact business:

education, law, finance,green energy,media,  and  the expansion of government, with WAR, HSA, TSA, and the expanding need for prisons as new business ventures in the gov sector.

it might work, until those smoke stack countries stop sending us stuff or we are all UE or in jail. the expansion of what is illegal or is regulated seems to have some unintended results, PS, for the record TSA and HSA and DIA and CIA and most of all NSA are all good fellas really good fellas..government is our best friend and I will buy Facebook stock very soon no really I will. Peace and love to the good folks protecting us from terrorist everywhere. Oh I forgot the BLS and all gov data is the best most accurate unbiased data the world has ever known and we the people need much more of it, please.







The Alarmist's picture

TPTB aren't interested in a real census anyway, since it would only prove that they have been lying about the recent "drop" in illegal immigration, which is not borne out in the 8% y-o-y increase in remittances to Mexico last year. How can we fudge things if the stats are accurate?

falak pema's picture

the only way out of this Oligarchy crisis as it appears in Uber statist circles like G8  : freeze markets, have governments take over defacto the banks and markets and do a debt jubilee, by dissolving private sector-public sector legal divide line, all the while using the fiat pump to generate fiat inflation that causes debt deleveraging over time.

This is the inevitable lesson of G8 and current play. Will it stick...Are the Oligarchs ALL on the same page?

1914 Sarajevo taught us the contrary. Pax Britannica died. Too many balls up in the air to tell right now, if Pax Americana, as we see it perform currently, will survive. Doesn't look good!

But that is where FED/ECB is taking us today. They will have to reign in the HF mavericks as these feudal barons don't want to be sucked into the debt debasement vortex. Huge conundrum, controlling this vortex. Play on...Oligarchy/Statist silent war, now with the Euro-US sheeple as collateral victims of tipping times, along with the usual third world cannon fodder sacrificial lambs. The Oligarchy financial front of WS/City is cracking, as we will probably see in the Facebook IPO debacle, aka JPM pee-wee wet dreams of last months. Fiat pump running out of air to feed the asset bubble. Bubble, bubble, toil...Oh, when we were kings... and building the unending frontier of things to come...Now this! Hubris bites! 

nah's picture

we went to the 3rd world, looked into a mirror


and realized we were them

ExploitTheMarket's picture

"...Thus, in all the host of measures that have been proposed over the years to check and limit government or to repeal its interventions, the simple and unspectacular abolition of government statistics would probably be the most thorough and most effective. Statistics, so vital to statism, its namesake, is also the State's Achilles' heel...."

Statistics: Achilles' Heel of Government  by Murray N. Rothbard:

The BEA is just one of many anti-liberty agencies that should be abolished...along with that intrusive monstrosity called the census.  Save it? HAHAHAHA yeah right. GET RID OF IT!


bunnyswanson's picture

You boys apparently have not heard of Agenda 21.  It's a new world.


Global Vision: Sustainable City (formerly Zero Population Growth) Sustainable City is an international collaborative research endeavour to develop the world's first GIS (Geographical Information Systems) computer simulation programme for any town or city to see itself - and its surrounding environment - as a whole system. The project is now in development by Global Vision Corporation, a Non Governmental Organisation accredited to the United Nations Commission on Sustainable Development (CSD). It is part of the international follow-up to Habitat II - the Second United Nations Conference on Human Settlements (June 1996), where it was nominated as a Corporate Best Practice at the World Business Forum on Enterprise, the City, and Sustainable Development.

Sustainable City is designed as a practical tool for sustainable development planning. It is intended to facilitate the local implementation of Agenda 21, the blueprint for the sustainable development of our planet which was agreed at the United Nations Earth Summit in Rio de Janeiro in 1992. It is meant to be used in conjunction with the exellent Local Agenda 21 Planning Guide published by the International Council for Local Environmental Initiatives (ICLEI), the United Nations Environment Programme (UNEP), and the International Development Research Centre (IDRC). Its 48 applications will empower urban stakeholders to understand and balance their community, economic, and ecosystem development needs, and will enable them to:"[endquote]

100,000 demonstrate in Berlin against Schröder's Agenda 2010 at the World Socialist Website, 4 November 2003.

spooz's picture

looks like another neolib fasccist agenda to cut the sheeple's allotment

One World Mafia's picture

WAH WAH WAH <--those are tears


Is this article a joke? Of course it is. The whole purpose of the ACS was a test to see how many people would answer intrusive questions demanded of them by the govt.

America failed the test.

Withdrawn Sanction's picture


Even beyond the whining and gnashing of teeth, Kotok and Whalen are pleading that their particular ox not be gored.  They'd rather have the taxpayer fund data collection that feeds their forecasting models rather than have to pay for the data on their own.  Tough luck, fellas.  The gravy train just pulled into the station, and you need to get off.

A Lunatic's picture

Maybe they don't need the economic data because they simply make up their own version of economic reality? I am sorry that I will not be able to tell them to fuck off and die when they call though, I was really looking forward to it.

ultraticum's picture

Am I still on ZH? Fuk the PC census.

narnia's picture

Firing everyone in the Departments of Labor & Commerce and buying a subscription to shadowstats seems like a more productive move to me.

BidnessMan's picture

They will just terminate the contractors who actually do the surveys and continue to make up data as politically directed.  Shadowstats provides no wiggle room to fudge the numbers - like the claim that unemployment is only 8% - so subscribing to Shadowstats is never going to happen.  God forbid they use independently verifiable data.

In any case, I imagine the local governments and forecasters who put their own spin in the federal numbers will manage just fine without Census and other data that no one believes anyway.

Revert_Back_to_1792_Act's picture

Do a search here;

search for HR 5326

Notice that a bunch of them come up but look at the 4th search result.

H.R. 5326 (IH) - Common Sense Drug Policy Act of 2000 [PDF 203 KB]

  Read that thing!   Especially start reading at Page 4. Section 103.   Who could ever understand this or have an understanding of what effects it will have if it is passed?  I don't see how a Congress person could ever vote for something like this because there is no way to know what effects it would have by reading it.  You would have to have copies of all the laws it is changing, all of the prior modifications made, etc. With stuff like this, it is literally like trying to figure out a code (at least that is what it is like for me but maybe I am just dense).  Who in the world would even come up with something like this or even propose something like this in the first place?!

The laws of the land should be written in terms that a common person can understand.  How could they ever even claim that stuff like this falls under the enumerated powers in the Constitution?  How could they claim that this has anything to do with the budget or appropriations of funds??! .

The prohibitions in the Constitution against bill of attainder, and ex-post facto laws also come to mind. 

Any comments or explanation are appreciated.




Absinthe Minded's picture

I did a quick skim and the way I comprehended it was they have found that African Americans were incarcerated at a rate 11% higher than whites in 1986. Since then the funding for drug enforcement has increased about 15 fold and the incarceration rate for drug related offenses by African Americans is now 49% higher than for whites. Since we have just overcrowded our jails by this zeal for drug enforcement, they now want to relax the penalties for drug related crimes, thereby reducing costs for housing , feeding and providing medical care for said criminals. The next two portions of the bill, protecting women in jails and providing better drug treatment of incarcerated drug users, are the governments way of saying,
"We cut all this money by reducing sentences, but we're ot actually going to cut funding we're just going to earmark it differently." Which is why we will never get our debt under control.

GlassSteagall's picture

Wrong H.R. 5326. The Feds must have started over somewhere between your H.R. 5326 (dated 2000) and this H.R. 5326 (dated 2012):

reading Fed laws makes one ill and there is no cure.

Revert_Back_to_1792_Act's picture

If you do that search, there are a whole bunch of H.R. 5326's.  They are covering many different subjects.  It is bizarre to say the least.  I don't get it.  What is the point of confusing the laws of the nation where you live?


GlassSteagall's picture

If no one knows the laws, and ingorance is not an excuse, then the Government can do what it wants to its citizens ... and does.

The Federal Tax Code is 72,536 pages (per Cato Inst.) or about 48 feet tall. Loopholes anyone?


LeBalance's picture

"The Law is what THEY say it is...TODAY." - Jordan Maxwell

q99x2's picture

Don't need any silly stats. We have the Bernank. Statistics don't mean anything as long as we have him.

GlassSteagall's picture



By the federal government as an input to calculate elements of key economic indicators, such as economic growth (GDP), prices, and productivity;

… They lie, so why try

By retailers in evaluating whether to expand into new market geographies;

 … Not the tax payers responsibility

By economic development commissions in attracting new businesses to their areas; and

  … Not the tax payers responsibility

By companies to benchmark performance against industry averages

 … Let the companies (risk takers) figure this out  … Not the tax payers responsibility

 How are ACS data used?

 By corporations to examine workforce characteristics of neighborhoods to determine optimal locations for new factories or sales centers;

 … Not the tax payers responsibility

By homebuilders looking to tailor new subdivisions to surrounding neighborhoods based on income, family size and existing home values; and

 … Let the companies (risk takers) figure this out  … Not the tax payers responsibility

By municipal governments in planning to meet the educational, safety and ho

… Let them figure it out locally

... the only ones who really rely on Government information is Government as their justification to extract more tax dollars

… Read the Constitution. Where is any of this the responsibility of the Federal Government?

... Don't tread on me



GernB's picture

But, its impossibke for anyone but the government to gather this data. Nobody in the private sector is smart enough. And, the information is far far to valuable to have to pay someone to gather it. Without government to do this we would all be lost.

BeetleBailey's picture

Congress has been corrupt for decades. Post WWII was the jumping of the shark.

Since that time period, the Congress has been a lap dog for the Military Industrial Complex, and multi-national corporations, who by then, were geared for war, made for war, and hooked on profits over any sort of decency.

I love to confront politicians running for office. I nail them right between the eyes, and ask them the tough questions, and if they waffle.......... even for a moment, I dismiss them as quacks - loudly.

The only reason Eisenhower was allowed to live post his MIC exit speech is he was a war hero, and retiring.

Hell, Ike knew he was telling on them. Watch his speech closely; his eyes shift as if he feels he's being painted by mutliple scope rifle targets.

The TRUE "powers that be" knew much of the nation would not know what he was talking about/not care/consider it Ike's "grandfatherly advice", and go back to Westinghouse Theater, or Howdy Doody - if they heard it at all.

Sadly, the only way out of this mess is war - within ourselves - and hopefully - a better model to go forward with.

Problem is, the masses of people never seem to get that history repeats itself - and it will again,

Past is Prologue...


Catullus's picture

Oh no! Now the central planners will be flying blind. 


medicalstudent's picture

when in doubt about whether you know you and others know you are fucked and your sneatorial job will be lost and the 40+ year ponzi obliterating... obfuscate


even when the husband suspects his wife is cheating on him, its alot easier for her to hide it for a short while while she adulterizes in the same room with the lights off


you get the point



One World Mafia's picture

"...and make participation in the American Community Survey voluntary."



Catullus's picture

Exactly/ Now they threaten to fine you if you don't hand over this private information that they use to extrapolate incorrectly.

Tuffmug's picture

Government Statistics = Lies and BS used by politicians and lobbyists to justify expanding government, increase spending, and bamboozle the public.

Bollixed's picture

This article is its' own worst enemy.

If you want to appeal to the public you should at least do a good job of explaining the BENEFITS that society sees by virtue of the current status quo regarding this legislation. This article falls woefully short of doing that.

"The information we glean from the Economic Census and the ACS increases our understanding of current economic conditions and reduces uncertainty, allowing businesses and policymakers to make well-informed, efficient decisions."

Give me a fucking break...

Joe The Plumber's picture

I am just suspicious that "cost saving " methods for the census was a ruse for sampling instead of direct enumeration

I am against sampling because that just creates the equivalent of rotten boroughs where democrats in urban areas can have more represetatives in congress due to phantom residents that exist only by statistical magic

CPL's picture

Holy shit...this is unfortunately real.

This would also allow them to open pandora's box of Weights and Measures.  What is a kilo?  What is a gram?  How is kilopascale defined?  What is a lot size?  Skid metrics?  Sheets to a roll.


That's like the US government saying they invented the wheel.  Why?  Just because they say so.  This would cripple everything so fast.

Earl of Chiswick's picture

I believe they are already doing all you describe.  Kotok is a knob but it seems he may be in the early stages of waking up.

TooBearish's picture

OMG Chris - I really appreciate your work but this efforts shows a bit of naivete...set up your super PAC or at least get a kick back fund going and hirer a lobbyist if you are looking to preserve the precious government collected and massaged data you treasure...letter writing campaigns are so 1960s....

eatthebanksters's picture

I'm a big Chris Whalen fan but my comments are as follows:  1. If there statistics and info are accurate, then why did we have the housing debacle and why are we in econmic crisis?  2. When the government keeps statistics they manipulate statistics (for political purposes)...examples - government unemployment numbers vs. real unemployment numbers, inflation numbers, and so much more.  I wouldnormally be worried that without government statistics the small businessman would be at a disadvantage because the hge corporations have bigger budgets for info gathering, but the big corporations are doing it anyway - they dn't trust the government numbers.  Is the small guy on main street better off with no government info or with manipulated government numbers?  Got a quarter? 

Short_phlogiston's picture

So without the ACS large national homebuilders might have a more difficult time throwing up craptacular McMansion?

How many ZH readers believe the bulk of the stats released by our government?

XitSam's picture

So basically, this article is saying don't cut the free stuff that the business community gets from taxpayer money. If the business community needs this data they should pay for someone to get it for them. There is no reason for them to be stealing from other people's pockets for their benefit. It is just another example of the broken windows falacy. If that money would be left with the taxpayers then they could decide the best place to spend it. But the business community has lobbied the government for free stuff, and government gives it to them.  I see nowhere in Article 1 section 8 that Congress is authorized to provide money for business statistics. "General welfare", you say? How can it be the general welfare when it benefits only a portion of the citizens?  Mr. Kotok and Whalen say austerity for thee but none for me. Well this attitude is part of the reason we're in the mess we're in.

SilverDosed's picture

I thought all our statisticians were well paid to massage the numbers in the approriate direction, hit up your real bosses at the FED for cash, I hear they're just giving it away. A nod's as good as a wink to a blind man.

Terrorist's picture

Interesting, it sounds like you care about this data more than I do. Maybe you and your like minded fellows should band together and pay for it. Personally I might need to decide between putting $10 worth of gas in my old truck or feeding my kids meat tonight.

illyia's picture

We all ought to care about the elimination of history. The fabrication of the "truth" will continue - aided and abetted by the destruction of the evidence of historical success or failure. Allocations will be increasingly made (yes they will increase) purely on the bases of cronyism. The mafia system will solidify and your old truck will become an impossible situation due to aftermarket manufacturers giving in to the revenue stream/renter/slave society.

If you are smart enough to have found ZH you are smart enough to know that this allows further lies - only it also eliminates all means to reconstruct the past.

And, you might try hunting... we all might unless we join the Patriotic Party.

Joe The Plumber's picture

There are other ways to get the data if business needs it

They can pay for it themselves. There are plenty of private economic surveys and indices

Shut it down