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Jack Welch: I Was Right About The Jobs Report

From the opinion page of the Wall Street Journal:

Jack Welch: I Was Right About That Strange Jobs Report

The economy would need to be growing at breakneck speed for unemployment to drop to 7.8% from 8.3% in the course of two months.

By JACK WELCH | October 9, 2012

Imagine a country where challenging the ruling authorities—questioning, say, a piece of data released by central headquarters—would result in mobs of administration sympathizers claiming you should feel "embarrassed" and labeling you a fool, or worse.

Soviet Russia perhaps? Communist China? Nope, that would be the United States right now, when a person (like me, for instance) suggests that a certain government datum (like the September unemployment rate of 7.8%) doesn’t make sense.

Unfortunately for those who would like me to pipe down, the 7.8% unemployment figure released by the Bureau of Labor Statistics (BLS) last week is downright implausible. And that’s why I made a stink about it…

As did others, including the chief economist for Gallup.

The Obama campaign and its supporters, including bigwigs like David Axelrod and Robert Gibbs, along with several cable TV anchors, would like you to believe that BLS data are handled like the gold in Fort Knox, with gun-carrying guards watching their every move, and highly trained, white-gloved super-agents counting and recounting hourly.

Let’s get real. The unemployment data reported each month are gathered over a one-week period by census workers, by phone in 70% of the cases, and the rest through home visits. In sum, they try to contact 60,000 households, asking a list of questions and recording the responses.

Some questions allow for unambiguous answers, but others less so. For instance, the range for part-time work falls between one hour and 34 hours a week. So, if an out-of-work accountant tells a census worker, "I got one baby-sitting job this week just to cover my kid’s bus fare, but I haven’t been able to find anything else," that could be recorded as being employed part-time.

Which raises the question, would Obama describe himself as a full time or part time employee?

The possibility of subjectivity creeping into the process is so pervasive that the BLS’s own "Handbook of Methods" has a full page explaining the limitations of its data, including how non-sampling errors get made, from "misinterpretation of the questions" to "errors made in the estimations of missing data."

Bottom line: To suggest that the input to the BLS data-collection system is precise and bias-free is—well, let’s just say, overstated.

Even if the BLS had a perfect process, the context surrounding the 7.8% figure still bears serious skepticism. Consider the following:

In August, the labor-force participation rate in the U.S. dropped to 63.5%, the lowest since September 1981. By definition, fewer people in the workforce leads to better unemployment numbers. That’s why the unemployment rate dropped to 8.1% in August from 8.3% in July.

Meanwhile, we’re told in the BLS report that in the months of August and September, federal, state and local governments added 602,000 workers to their payrolls, the largest two-month increase in more than 20 years. And the BLS tells us that, overall, 873,000 workers were added in September, the largest one-month increase since 1983, during the booming Reagan recovery.

In fact, in 1983 the GDP was growing at a rate of 9.3%. In September, our GDP was growing somewhere around 1.3%.

These three statistics—the labor-force participation rate, the growth in government workers, and overall job growth, all multidecade records achieved over the past two months—have to raise some eyebrows. There were no economists, liberal or conservative, predicting that unemployment in September would drop below 8%.

I know I’m not the only person hearing these numbers and saying, "Really? If all that’s true, why are so many people I know still having such a hard time finding work? Why do I keep hearing about local, state and federal cutbacks?"

I sat through business reviews of a dozen companies last week as part of my work in the private sector, and not one reported better results in the third quarter compared with the second quarter. Several stayed about the same, the rest were down slightly…

The reality is the economy is experiencing a weak recovery. Everything points to that, particularly the overall employment level, which is 143 million people today, compared with 146 million people in 2007.

Now, I realize my tweets about this matter have been somewhat incendiary…

As I said that same evening in an interview on CNN, if I could write that tweet again, I would have added a few question marks at the end, as with my earlier tweet, to make it clear I was raising a question.

But I’m not sorry for the heated debate that ensued. I’m not the first person to question government numbers, and hopefully I won’t be the last. Take, for example, one of my chief critics in this go-round, Austan Goolsbee, former chairman of the Obama administration’s Council of Economic Advisers. Back in 2003, Mr. Goolsbee himself, commenting on a Bush-era unemployment figure, wrote in a New York Times op-ed: "the government has cooked the books."

The good news is that the current debate has resulted in people giving the whole issue of unemployment data more thought. Moreover, it led to some of the campaign’s biggest supporters admitting that the number merited a closer look—and even expressing skepticism. The New York Times in a Sunday editorial, for instance, acknowledged the 7.8% figure is "partly due to a statistical fluke."

The coming election is too important to be decided on a number. Especially when that number seems so wrong.

Meanwhile, we have this, from the editors of the (nearly bankrupt) New York Times:

Conspiracy World

October 9, 2012

When Republicans began questioning President Obama’s birth certificate four years ago, it seemed at first like a petulant reaction to a lost election, a flush of nativist and racist anger that would diminish over time. But the preposterous charges never went away. As this election cycle shows, many in the Republican Party continue to see the president as the center of a broad and malevolent liberal conspiracy to upend the truth.

To live and seethe in that world of conspiracy theories means rejecting any form of objective reality. When unemployment numbers make the administration look good, they are obviously “cooked.” When poll numbers put Mr. Obama ahead, they are skewed. Birth certificates are forgeries. Safety-net programs are giveaways to supporters. Health insurance reform is socialism. And campaign donation disclosure is antibusiness.

It’s an upside-down version of life, and it is not innocuous. When desperation leads political critics of the president to discredit important nonpolitical institutions — including the Census Bureau, the Bureau of Labor Statistics, the Federal Reserve and the Congressional Budget Office — the damage can be long-lasting. If voters come to mistrust the most basic functions of government, the resulting cynicism can destroy the basic compact of citizenship.

Mind you, this is coming from the same newspaper that saw a George Bush conspiracy in everything he did. Even in his efforts to fight the war on terror.

But here the ‘paper of record’ is basically saying that you are crazy if you ever question government produced figures, if there is a Democrat in the White House. — Just think about what says about the state of journalism at the New York Times.

Last week, the Labor Department reported that the unemployment rate had fallen to 7.8 percent, depriving Mitt Romney of his standard talking point that the rate had never been below 8 percent during Mr. Obama’s term. No one expected Republicans to celebrate a positive trend for the country —

Who are the conspiracy theorists here?

[B]ut almost immediately the anchors on Fox News and the editors of right-wing Web sites saw something more sinister: a conspiracy, led by the Obama campaign, to manipulate the numbers to make the president look good a month before the election.

Notice that the New York had no problem publishing the op-ed from Austen Goolsbee in 2003 that claimed Bush "had cooked the books" regarding the unemployment rate that Jack Welch mentioned. In fact, Goolsbee accused Reagan of cooking the books, as well. (See below.)

The charge was absurd. The Bureau of Labor Statistics, which along with the Census Bureau conducts the underlying household survey, is run by career civil servants and is impervious to political pressure and manipulation, as all but the hypnotized in Washington understand.

And never mind that several of the BLS economists are Obama donors. Or that the entire operation is run by the highly partisan hack, Hilda Solis.

But, this time, the conspiracy theorists went beyond the usual suspects. Jack Welch, the former chief executive of General Electric, said Mr. Obama’s Chicago staff obviously changed the numbers, though he had no evidence of chicanery beyond the outrageous charge that the numbers came from an “ideologue division of the federal government.”

Mr. Welch has plenty of evidence, some of which he listed above. And again, we also have the contribution from Gallup’s chief economist.

To Mr. Welch and his fellow cynics, the facts were inconvenient, so they had to be wrong. And not just wrong, but deliberately so. That’s the same mentality that led ideologues last month to accuse independent pollsters of deliberately skewing polls to show Mr. Obama ahead, though no such charges are emerging now that Mr. Romney is improving in the polls.

More unintentional hilarity. The mainstream news media and the rest of the left are claiming that the polls are oversampling Republicans. Which is exactly what the rightwing conspirators were claiming when they showed Obama ahead.

And this trend is reinforced when people who know better, like Newt Gingrich and Senator John McCain, trash the civil servants at the State Department and the Congressional Budget Office. (Mr. Romney, to his credit, did not question the latest jobless figures.)

Apparently, the New York Times believes that government produced numbers are never to be questioned. Which is an odd perspective, given that they still pretend to be a newspaper.

Besides, we don’t remember them having any trouble questioning the State Department or the CBO during Republican administrations.

Democrats aren’t happy about the latest polls, but they aren’t suggesting Mr. Romney is manipulating them, just as they didn’t undermine the Bureau of Labor Statistics when the jobless numbers were high.

Two lies packed into one sentence. — Which is about the going rate for The Times these days.

Many are far more worried about a conspiracy that is verifiable and serious: the concerted effort by Republicans over the last four years to deprive minorities, poor people and other likely Democratic supporters of their voting rights.

Speaking of lies and bizarre conspiracies.

That, of course, doesn’t seem to bother those who see “Chicago’s” evil hand everywhere. When there is real-world evidence of political collusion, the conspiracy theorists are nowhere to be found.

The editors of the New York Times should stick to their field of expertise: propagandizing for the homosexual agenda and open borders. They are in over their heads when it comes to adult conversations about polling and economics in general.

For the record, here is an excerpt from the aforementioned Goolsbee op-ed that appeared November 30, 2003 in the New York Times:

The Index of Missing Economic Indicators; The Unemployment Myth

By Austan Goolsbee | November 20, 2003

…The reality is that we didn’t have a mild recession. Jobs-wise, we had a deep one.

The government reported that annual unemployment during this recession peaked at only around 6 percent, compared with more than 7 percent in 1992 and more than 9 percent in 1982. But the unemployment rate has been low only because government programs, especially Social Security disability, have effectively been buying people off the unemployment rolls and reclassifying them as ”not in the labor force.”

In other words, the government has cooked the books. It has been a more subtle manipulation than the one during the Reagan administration, when people serving in the military were reclassified from ”not in the labor force” to ”employed” in order to reduce the unemployment rate. Nonetheless, the impact has been the same….

But that was then, and this is now.

This article was posted by Steve on Wednesday, October 10th, 2012. Comments are currently closed.

2 Responses to “Jack Welch: I Was Right About The Jobs Report”

  1. GetBackJack says:

    Let’s not forget what a turncoat Jack Welch was to America during his years at GE and during the GW years

  2. lydiaontario says:

    Good for Jack Welch! SOMEONE needed to speak the TRUTH!

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