OLD Media Moves

Cooking the books?

October 8, 2012

Posted by Liz Hester

Last week’s drop in the unemployment rate to 7.8 percent from 8.1 percent seemed like good news no matter which side of the political spectrum you’re on. Or was it? Several influential business leaders – think Jack Welch – and financial blogs accused the government of changing the numbers to benefit President Obama.

Many in the business media were quick to jump into the fray, while others worked to dispute the claims. But more importantly, what does this say about the media?

Welch’s tweet – “Unbelievable jobs numbers…these Chicago guys will do anything…can’t debate so change numbers” – generated pretty strong reaction from some leading journalists, according to the Huffington Post. The Wall Street Journal even devoted a video segment to it.

In his most recent op-ed for the New York Times, revered business journalist Joe Nocera broke it down into three points that it was impossible to change the numbers. The first was that it didn’t make any sense for a non-partisan bureau to manipulate the numbers since their jobs remained secure no matter who was in office. The second was this:

Hence, Point No. 2: there is, indeed, something a little strange about the way the country derives its employment statistics. It turns out that the statistics the bureau releases each month are generated by two different reports. One, called the establishment report, is a survey of businesses. That’s where the 114,000 additional jobs comes from.

The second is a survey of 55,000 households, where people are asked about their employment status. Extrapolating from the survey, the bureau concluded that an additional 873,000 people had found work in September. It is that number that brought the unemployment rate from 8.1 percent to 7.8 percent.

When I asked a bureau spokeswoman why there was such divergence between the two numbers, she said she had no idea. “The reports are totally separate,” she said.

His third point was that the presidential race shouldn’t hinge on one set of numbers, especially those that were volatile and constantly readjusted.

But that didn’t keep the media from piling into the debate or Rep. Allan West from agreeing publicly with Welch. Politico reported that West wrote this:

“I agree with former GE CEO Jack Welch, Chicago style politics is at work here,” West wrote on his Facebook page Friday. “Somehow by manipulation of data we are all of a sudden below 8 percent unemployment, a month from the Presidential election. This is Orwellian to say the least and representative of Saul Alinsky tactics from the book ‘Rules for Radicals’ – a must read for all who want to know how the left strategize.”

In the same story, they also pointed out:

Labor Secretary Hilda Solis, whose agency releases the jobs figures every month, responded that charges of a conspiracy theory are “ludicrous.”

“I’m insulted when I hear that because we have a very professional civil service,” she said on CNBC. “I have the highest regard for our professionals that do the calculations at the [Bureau of Labor Statistics]. They are trained economists.”

But why is this even news? This story from ABC News quotes a fund manager who nails why this even warranted the debate:

Guy La Bas, a managing director, fixed income strategy, at Janney Montgomery Scott, a Philadelphia brokerage firm, agreed. “I don’t want to simply blast Welch since he’s a very respected manager,” he told ABC News in an email. “In this instance, he issued an off-the-cuff remark which I highly doubt is true, but that doesn’t negate the value of his business opinions.”

But, he added, “The Bureau of Labor Statistics, which conducts the monthly jobs survey is a non-partisan group of hard-working people that have the public trust.  Considering this trust and the controls imposed on their processes, the chances that the BLS actively “manipulated” data are extremely low, even if some of the numbers underlying today’s jobs report appear surprising.  In my discussions with statistical organizations, political officials receive information about economic releases only after the numbers have been calculated, so there’s no opportunity for the White House–or anyone else–to alter the results.”

There are a couple of points for the media to actually be commended on in covering this story. Ignoring a controversial tweet/statement from someone of Welch’s mystique would have been doing a disservice to the general public. Stories, like this one from McClatchy’s Kevin G. Hall, that discredit the remarks are important.

But it does seem that the election and the country in general are moving in a dangerous direction when business leaders and elected officials are questioning the truth in statements from non-partisan government bureaus. And that is the worst commentary of all – that politics and personal beliefs are enough to spark a nation-wide debate over something that’s considered fact.

It’s important the media continues to try and discredit these statements, but also sad commentary that this even got the coverage it did.




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