Jack Welch Doesn’t Know What He’s Tweeting About
Are Republicans really this desperate?
After months of attacking President Barack Obama for not bringing down the unemployment rate fast enough, Jack Welch, the former chief executive officer of General Electric Co., took the rhetoric to a new level this morning with the suggestion that Obama's campaign had somehow monkeyed with the unemployment data for political gain.
“Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers,” Welch tweeted right after the U.S. Labor Department reported the unemployment rate had dropped to 7.8 percent as the economy added 114,000 jobs in September.
His comments were seized upon by conservative pundits and personalities, including CNBC's Tea Party captain -- Rick Santelli -- who said, "I told you they'd get it under 8 percent -- they did!"
One can find flaws in the jobless data: It's based on a survey of individual households -- which means it's not concrete -- and is often revised up or down in subsequent months. It can also, as this study points out, substantially underestimate labor force participation of those near retirement age and overestimate for other demographics.
But a political tool it is not.
As my Bloomberg News colleague Hans Nichols has meticulously detailed, the statistics used to determine the unemployment rate are cobbled together by a host of government bureaucrats, including census workers who knock on doors to find out if a person worked the previous week and economists at the Bureau of Labor Statistics. Together they compile such sexy statistics as "Employed persons by class of worker and part-time status."
The BLS -- which has political appointees at the top but is largely an organization of rank-and-file government workers -- transmits the data to the president's Council of Economic Advisers, which shares the data with Treasury and Federal Reserve economists and then the president.
As Betsey Stevenson, former chief economist at the Labor Department and a Bloomberg View columnist, tweeted: "Anyone who thinks that political folks can manipulate the unempt data are completely ignorant about how BLS works & how data are compiled."
Imagine, for a moment, that this could be done: Would Obama have waited until now -- five weeks before the election -- to monkey with the numbers? And would he have taken the jobless number down so incrementally?
Today's unemployment report was chock-full of good numbers, but it was not a Hail Mary pass. The economy added 114,000 jobs last month -- a strong showing indeed but still barely enough to keep up with the number of people who want to work. It also included some dark clouds, including the long-term unemployment rate, which was little changed at 4.8 million. That means 40.1 percent of the unemployed -- or two out of every five job-seekers -- have been out of work for six months or longer.
In fact, the report was so lackluster in the eyes of Republican presidential nominee Mitt Romney that he sent an e-mail blast saying, "This is not what a real recovery looks like."
And, as House Speaker John Boehner pointed out, "Administration officials said unemployment would be as low as 5.6 percent by now if Congress passed their ‘stimulus’ spending bill -- instead, after four years of spending, taxing, and red tape, millions of Americans remain jobless, underemployed, or have simply given up looking for work."
Next time the BLS tries to monkey with the unemployment rate, they may want to aim a little lower.
Read more breaking commentary from Bloomberg View at the Ticker.