As most economists who follow the unemployment statistics released by the Bureau of Labor Statistics probably know, President Trump broke with a strong tradition by tweeting, over an hour before the official release date, a hint about what the statistics would be. He tweeted:

Looking forward to seeing the employment numbers at 8:30 this morning.

Many economists were fit to be tied. How dare he do that!

My initial reaction was highly negative also. When there’s a tradition of not beating the BLS to the punch, a gut conservatism takes hold: why break with tradition when there’s no good reason to do so? Trump introduced a wild card into the system. Now, if some month he doesn’t tweet about looking forward to the unemployment report, will that mean that it’s bad news? It may. But it may not.

Baseball star Pete Rose famously said that although he sometimes bet on his own team, he never bet against them, so what’s the big deal? The big deal is that when he doesn’t bet at all, it might mean he knows something about the next game that will make his team more likely to lose and then that messes up the playing field for other bettors who don’t happen to know that he didn’t bet: they face a disadvantage against bettors who do know that he didn’t bet.

There’s a huge difference, of course. Donald Trump is unlikely to be betting: it would be too easy for him to be caught.

It’s not just a gut conservatism that takes hold. I am, after all, an economist. What is the economics of what Trump did? That’s less clear.

Betsey Stevenson, a former member of the Council of Economic Advisers under former President Obama, thinks it’s quite clear. She tweeted:

There is a big question about who he privately leaks data to and that should be investigated.
Privately leaking this information makes money for those who get it. Where does the money they “make” come from? People who don’t have the information.

But notice that her tweet is not about Donald Trump’s tweeting to over 50 million people at once. Her upset, rather, is about the possibility that Trump privately leaked this information before tweeting.

That’s a reasonable upset. If he did that, that is bad. It’s not bad because someone is helped; it’s bad because it’s a breach of trust. Period.

And one can understand why Professor Stevenson fears that Trump did this. He doesn’t exactly hold things close to the vest.

There are two issues: (1) the tweet and (2) the possibility that Trump leaked to insiders. Both are interesting.

The tweet

By tweeting 69 minutes before the BLS official announcement, Trump gave information to over 50 million people at once. People trading on the BLS information, of whom there are likely thousands, probably know by now that Donald Trump has a big mouth and that they should follow not just official government announcements but also Trump tweets. So if revealing the information at 8:30 a.m. is right, how is it wrong to reveal it at 7:21 a.m.? It’s hard to see.

You could argue that this gives an advantage to people who follow his tweets. But as I said above, there are probably thousands of people who both follow his tweets and trade on that information. So they are bidding against each other and the sellers make their money 69 minutes earlier than otherwise.

So again, while the little bit of conservatism I have in me says that Trump was wrong to do this, it seems to be a slight sin, not a major sin. It does not, for example, rise to the level of having a “kill list” of people whom the U.S. government has decided to kill, on slim evidence, around the world.

Leaking Information to Insiders

If Trump leaked information to insiders, as Professor Stevenson fears, that is simply wrong. It’s wrong to make information that one gets by virtue of one’s position in government into a profit-making opportunity for one’s buddies.

We have no evidence that Trump did this, but, of course, evidence would be hard to get. As former Defense Secretary Donald Rumsfeld famously said (although he was not the first to say it), “Absence of evidence is not evidence of absence.”

This is one of those rare analyses where I don’t have a strong view. I started writing this with the thought that Betsey Stevenson was wrong. I ended up noticing the huge difference between tweeting to 50 million followers and leaking private information to friends and associates.

I would add one thing: Unless Donald Trump is really stupid about really basic things–and I know that many people think he is (I don’t)–he would be unlikely to tweet early in a case where he even earlier gave information to friends. If we should be suspicious of Trump’s leaking that information to friends this time, we should have been even more suspicious of that in the 16 prior cases where he didn’t tweet in advance.

For an excellent analysis of the economics of a related issue, insider trading, see Charles L. Hooper, “Who Is Harmed by Insider Trading?“, Econlib Feature Article, March 2, 2015 and the excellent discussion when I posted about it.