One of the reasons that I am worried about the economy is that I am seeing such a high ratio of sweeping proposals to hard facts.

[UPDATE: At this discussion of the role of the Community Reinvestment Act in the crisis, the people with the facts were the ones arguing that CRA was not a big factor. I think that Russ Roberts made a persuasive case against the non-transparency of using Freddie, Fannie, and regulated banks to allow the government to outsource social spending. But I think that the CRA supporters were effective in pointing out that the default rates were higher for loans originated by institutions not subject to CRA.

From the point of view of CRA advocates, we kind of went full circle. In the early 1970’s, poor people took on too much debt from unscrupulous lenders. Then we got CRA in 1977, which forced regulated institutions to participate in poor neighborhoods. Then, starting around 2000, the unscrupulous lenders piled back in. I’m neither endorsing that story nor discounting it. It’s worth considering, and it’s worth getting some more facts.]When I wrote my book on health care policy, my first goal was to assemble and organize facts. What are the largest components of health care spending? How much of the rise in health care spending is due to price increases, and how much is due to increased use of medical services? How does medical spending differ by age group and income class?

Even more than the division between left and right, what is visible to me in health care policy is the division between fact-based and fact-free analysis. People will assert that much of the excess costs in medicine come from malpractice suits, regardless of the facts. Or they will assert that drug company advertising and profits are a big issue, regardless of facts.

Every week, there are several proposals for dealing with troubled home mortgages. They are always presented in fact-free form. Instead of reading about someone’s clever loan modification proposal, I would love to read a column that tells me what percentage of troubled mortgages are cash-out refis, what percent are owner-occupied purchase loans, and what percent are investor loans.

Instead of reading about new ideas for using the $700 billion slush fund (formerly the program to be buy troubled mortgage securities), I would like to know approximately what percentage of banks is troubled. Both unweighted and weighted by assets. I would like to know what percent of troubled banks would be fine if their portfolios were marked to their prices as of, say, October of 2007. (I am not saying I have a policy in mind based on those historical values, but I just want some facts.)

I would like to know how much of the market values lost on credit default swaps and other securities represents actual losses (i.e., real defaults) and how much of it represents an increase in the probability of losses. If I sold a credit default swap on a company when the estimated default probability was 1 in 10,000 and that probability is now 1 in 100, the market value of my liability is now (perhaps more than) one hundred times greater than it was. On the other hand, there is still a 99 out of a 100 chance that I will come out whole. Does that hypothetical example typify what is going on? Or not?

I find the fact-free policy recommendations pouring onto the op-ed pages to be pure noise. I find the news reports equally empty. Occasionally, the press provides a bit of signal amidst the noise, as in the WSJ piece that led me to write this post on AIG. But even that left me hungering for hard data.

Maybe I am the only one who feels this way, but I would love it if an official from the Fed or the Treasury, instead of announcing the next zig-zag in policy, would give a fact briefing. Tell us what they know. Tell us what they don’t know. The current situation has characteristics {X} and we are going to try to move it to {Y}.

It could be that, deep down, they know all this information and have decided that it is either too boring or too sensitive to talk about. But I’ve probed a few places in Washington (connections are not my strong suit), and nobody has hinted to me that they know the answers to the sorts of questions that I’m asking. I would feel better if it were otherwise.