Friday, October 5, 2012

Jack Welch Says "Chicago Guys" Created 7.8% Jobless Rate for Obama


(Scroll Down for complete transcript of Chris Matthews Interview with Jack Welch w/video at bottom of post)

Anybody, any serious person who has any familiarity with how these numbers are tabulated understands that these are career employees at the Bureau of Labor Statistics that are responsible for compiling and analyzing these numbers and they do that on their own.
~ White House Spokesman Josh Earnest

I think it would be impossible to really manipulate the numbers. Certainly, it would be impossible to manipulate the numbers and not be found out.
. . . At turning points, sometimes the household survey turns a little quicker than the payroll survey does. It doesn’t mean it doesn’t give out false signals
~ Keith Hall, former Head of Bureau of Labor Statistics, on LA Times
. . . There’s nothing wrong with the numbers. The only issue is the interpretation of the numbers. The numbers are what they are.
~ Keith Hall on Wall Street Journal

Listen, I would never send a tweet like Jack Welch, and I respect Jack - he's a great guy. That's why last month I said it would be below 8% before the election. That's why I said it. I don't say things I can't prove - that was my prediction. I will leave it at that.
. . . Of course a lot of people are staying home working on their computers, selling things on Ebay, and they're probably part of that 800,000 number. It's not the kind of jobs I want, but I can't prove that it was fudged. I do find that that's the kind of question I'm finding on the Trading Floor. It is what it is. I'm on record last month saying it would be below 8 and if you look at interest rates, they all popped. I told you they'd get it under 8 percent -- they did! You can let America decide how they got there!
~ Rick Santelli on CNBC

These numbers don't add up, they don't make sense.
~ Joe Scarborough on Morning Joe

If you go just based on Twitter right now, and the people I follow who are conservative - they're about to make a huge mistake. They're gonna say BLS numbers are horrible, some people are already saying the numbers are made up to help the president politically. They have to find a way to talk about the economy and why Governor Romney would be better, not to try to - it's exactly what they did with the polls the last two months, to attack the methodology. These numbers are good. They're not only good symbolically, they represent the economy moving in a better direction.
~ Mark Halperin of Time on MSNBC's Morning Joe, via MMFA

I agree with former GE CEO Jack Welch, Chicago style politics is at work here. 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. Trust the Obama administration? Sure, and the spontaneous reaction to a video caused the death of our Ambassador......and pigs fly.
~ Congressman Allen West on Facebook

We’ve hit that moment in the election when people begin to lose their minds. Case in point, within minutes of the jobs report, Twitter filled with Republicans claiming the books were somehow cooked, the numbers aren’t real, etc.
Let’s take a deep breath. Jobs reports are about the economy, not about the election. Confusing the two leads to very bad analysis.
. . . The fact is that there’s not much that needs to be explained here. We’ve seen drops like this — and even drops bigger than this — before. Between July and August the unemployment rate dropped from 8.3 percent to 8.1 percent — two-tenths of one percent. November-December of 2011 also saw a .2 percent drop. November-December of 2010 saw a .4 percent drop. This isn’t some incredible aberration. The fact that the unemployment rate broke under the psychologically important 8 percent line is making this number feel bigger to people than it really is.
~ Ezra Klein on Washington Post

Martin Bashir: Republicans appear to have more conspiracy theories than L. Ron Hubbard produced in his lifetime.
Goldie Taylor: I don't know if there's anything that this particular Republican Electorate believes in, whether it's global warming or the unemployment numbers . . .
Martin Bashir: Conspiracy. Conspiracy. Conspiracy. Out to Chicago. Conspiracy.
Goldie Taylor: As Toure said earlier (on the Cycle), "White Folks be Trippin'".
~ Martin Bashir Show in MSNBC

Trustworthy economic data is a very valuable public good that serves as a useful production input for tons of private businesses. It also helps smaller-scale government agencies and nonprofits make smarter decisions. And last but by no means least, precisely because the BLS is credible presidents know that they'd take an enormous political hit if they were seen as manipulating it.
~ Matt Yglesias on Slate:

The way things are going, if the GOP doesn't win this election, I'd say there's a 20% chance of a congressional investigation into vote fraud and a 5% chance of an Avignon Presidency set up by those who refuse to believe the election was lost.
~ David Weigel on Slate

Today’s full-scale freakout over a decent jobs report is a sight to behold. Spare me the false equivalence: yes, you occasionally find people on the left claiming that the numbers have been faked or the truth hidden, but not leading figures in the media and major-league plutocrats. (Next time people try to portray Jack Welch as an icon of success, a man we should listen to, remember this moment)
. . . The thing is, although such antics are funny in a way, they’re also menacing. By attacking anyone who presents awkward facts, the right exerts an intimidating effect. It won’t get the BLS to retract today’s jobs report, but it might bully news organizations into avoiding objective economic analysis, and maybe even into blurring their reporting right now.
So this is crazy and stupid; but it’s also scary.
~ Paul Krugman on The New York Times

Jack Welch Interview on Anderson Cooper October 5, 2012
COOPER: Well, you said these Chicago guys will do anything.
WELCH: A question mark might have been better. Last night I had a question mark.
COOPER: So you wish you would have --
WELCH: A question mark would have been better.
COOPER: So, you don't really stand by the notion --
WELCH: I stand by it. I stand by that these numbers have to be examined.
WELCH: Somebody ought to be investigating. Somebody should have looked at this and said wait a minute, we just dropped the GDP this much. How can we have the greatest economy since June of '83?
COOPER: But, there are legitimate questions about how the house - I mean, it seems like your problem is how the household survey is done and that's very legitimate. There are always questions and they're always revising the numbers.
WELCH: I want to have a long discussion about it.
COOPER: Right. And certainly, your tweet certainly has provoked discussion but again --
WELCH: It's to important. This election is too important for one number based on 60,000 phone calls and 100 million plus people to determine the outcome.
COOPER: But again -- to say these Chicago guys will do anything --
WELCH: That's what I tweeted.
COOPER: Right. But, you don't stand by that tonight?
WELCH: What do you mean, I don't stand by it? I've got a tweet out there. I stand by it.
. . .
ALI VELSHI: There are two great facts you make, Jack. You know, as the best CEO America has ever had, there are two very powerful things you can say here. One is let's take a look at how the BLS, bureau of labor statistics and department of labor measures unemployment, number one, and b, maybe you think Barack Obama's not doing a good job and Mitt Romney should be replacing him.
But to honestly suggest that there's corruption, that the Obama campaign may have had something to do with cooking these books, why do you need to do that at a time when U.S. trust for government and institutions is at an all-time low. That is not good for society. What does Jack Welch gain by introducing this? There are so many CEOs who talk nonsense. What do you gain from this, Jack? Why don't you take this opportunity to take it back?

WELCH: Ali, I love you. I'm not talking nonsense, OK?

VELSHI: I love you more, Jack, but fix this.
WELCH: Wait a minute. Wait a minute before we have this love- fest. I told you that these numbers are implausible. We don't have a five percent GDP growth in this quarter. We don't have it, Ali. We revised the second quarter down, I'm involved in 14 businesses, I've been looking at them over the last week. The third quarter is not strong. It's not strong, from restaurants --
VELSHI: OK. Let me ask you this. Let me ask you this, Jack.
I agree with you. This is a lousy economy. 1.3 percent GDP growth is lousy and yet on Wednesday night, Mitt Romney said again and by the way, Barack Obama backs up this claim that either one of them will create 12 million jobs in four years. That is three million jobs a year or 250,000 jobs a month. We got 114.
At 1.3 percent economic growth there's not an economist in this country who thinks it will be higher than three percent in 2013 and probably similar in 2014 and 2015. That's a lie, too, right? Why don't you call Mitt Romney out on that?
WELCH: Well, because Mitt Romney is thinking about a plan which would lower regulations, which would change the tax, which would drive an energy policy that's very aggressive. I don't know if he's going to get 12. I'm not a Romney surrogate. I'm not in the campaign. I have never talked to the campaign. I have nothing to do with Romney. I just believe this number should not determine the outcome of the presidential election. Did you see today --
VELSHI: I agree with you. Jack, you're a hero to business people in this country. You're a hero to all sorts of people. Just do it now. Let's do it. I can go back to loving you and you can go back to loving me. Just do it now and say it's not right what you said. Nobody cooked the books. You don't truly believe that, do you?
WELCH: I said I should have put a question mark at the back of it.


Chris Matthews Interview with Jack Welch on MSNBC's Hardball

Welch: Chris these numbers are a series of assumptions. Tons of assumptions. And it just seems somewhat coincidental that the month before the election the numbers go one-tenth of a number below where it was when the President started. Although I don't see anything in the economy that says these surges are true. The 873,000 jobs in the household survey is the strongest economy since 1983. I don't think you can find an economist - there were 25 of them this morning that predicted 8.1 to 8.2 but they did predict 114,000 jobs. We got 114,000 jobs. And somehow the assumptions ended up at 7.8%.

Matthews: Let me just go back to your tweet this morning. It must be embarrassing for you to do a tweet now with the power you used to have. I mean "tweeting" doesn't seem like something I'd see from Jack Welch and I mean it. But here - you put out the word here - "Unbelievable jobs numbers" - fair enough - "these Chicago guys will do anything..can't debate so change numbers." What evidence do you have that they got to the BLS, that Chicago guys got to the Bureau of Labor Statistics and jimmyed these numbers by .3% as you put it?

Welch: I have no evidence to prove that. I just raised the question.

Matthews: No, you didn't just raise the question. (reads tweet again) So you're just asserting here in your tweet that you put out at 8:35 a.m. this morning, five minutes after the report came out. Did you talk to any economists or anyone in the National Income Accounting world that understood how these numbers were put together before you accused the "Chicago Guys" of changing the numbers?

Welch: Chris, I know that these numbers are gathered by a series of wild assumptions. Maybe they weren't right at 8.5 - maybe they weren't right at 8.4 - but it seems coincidental that one month before the election they would end up at 7.8%.

The President today is on the stump. The President - all he's talked about is 7.8. He didn't mention 600,000 jobs added in the government sector . . .

Chris: See, you're . . . It’s not your attitude about Obama people care about, it's your analysis. And you came out this morning and asserted, not a question mark, or concern about a coincidence, but you say "These Chicago guys will do anything so they change the numbers." Do you want to take that back?

Welch: No. I don't want to take anything back.

Matthews: This is an assertion that there was jimmying with the numbers, that there was corruption here, that there was infiltration getting to--

Welch: Laughs

Matthews: It’s not funny, Jack. You’re talking about the President of the United States playing with the Bureau of Labor Statistics’ numbers. This is Nixon stuff. This is what Nixon did back in the old days, accused of this.

Welch: Chris, don’t lose it now.

Matthews: I'm not losing it. (smiles) Look at my face, I'm not losing it.

Welch: I can't see your face.

Matthews: Do you want to take back the charge that there was corruption here?

Welch: No, I don't want to take back one word in that tweet.

Matthews: So you assert right now as of 5 o'clock this afternoon that (reads tweet again).

Welch: I didn't say what they did, I said they'll do anything.

Matthews: And what did they do here?

Welch: They've been calling Mitt Romney a liar, a falsehood, for the last 48 hours after the debate.

Matthews: But you don't have any independent evidence. You didn't - from the time the numbers came out this morning at 8:30 and 8:35 when you tweeted. You didn't use that 5 minutes to gather any actual information or evidence?

Welch: No but Chris, I tweeted last night that I predicted they'd be at 7.9%.

Matthews: Okay. And? Why did you make that prediction?

Welch: 'Cause I guessed that's what would happen a month before the election.

Matthews: So you guessed that the "Chicago Guys" would do this.

Welch: Well . . . I don't want to put words in the mouth of what I said last night. But that's what I did.

Matthews: Let's go back to the tweet. What started this whole band today, with people with a lot less IQ than you, and certainly a lot less business sense, like Alan West, and some of the real screwballs out there are following the band you're leading, and the band you put together today was that there's corruption here from the Chicago people, meaning the guys around President Obama, got to the BLS and manipulated the numbers.

Welch: Chris, stop it, now! I reviewed 15 businesses this week, from restaurants to rental cars to widgets. I have seen everybody with a third quarter equal-to or weaker-than a first quarter. In order to get 873,000 new jobs you would have to have a GDP going at 4-5%. The second quarter was downgraded from 1.7 to 1.3. The third quarter is not going to be very strong. It just defies the imagination to have a surge larger than any surge since 1983 a month before the election. I leave it to you to do all the analysis.

Matthews: (Reads Quote from Keith Hall, previous Head of Bureau of Labor Statistics that "numbers are good") So why do you know more than him? Do you really think - it gets back to the question of integrity. Do you believe the BLS, the Bureau of Labor Statistics, lacks integrity? That a President of the United States . . . Nixon said he could never get to them. He used to say there was an ethnic factor, that they were all Jewish people over there and he didn't trust them. He thought they were all out to get him. Now you say the President controls the BLS? Previous Presidents said they couldn't get their hands in that place because it was so independent.

Welch: You don't think it's coincidental that we've got the biggest surge since 1983 in the job surge? Come on, Chris.

Matthews: It's .3 of one percent shift this month. It went from 8.1 down to 7.8.

Welch: It was .2 - 8.3 last month, 8.1 to 7.8 this month. It's a 6% improvement in employment in two months. Chris! 6% improvement? It would require a GDP - the numbers -

Matthews: Jack, all I want to know is when we write this down three weeks from now or four weeks when the election's over, I want to know what you meant. Do you mean it's a coincidence, or do you mean you have evidence that there was corruption here in these numbers.

Welch: No evidence of corruption. None whatsoever.

Matthews: Okay. So these "Chicago guys" had nothing to do with the numbers that came out today.

Welch: Oh, I don't know that.

Matthews: Then why'd you say it? (reads tweet again). You just said it in your tweet! I'm always careful when I tweet, Jack. I usually have someone like my producer and say 'read my tweet.'

Welch: I'm careful too.

Matthews: Do you stand behind your tweet?

Welch: I wanna raise the question of these numbers.

Matthews: You just raised the question.

Welch: Chris, these numbers defy logic. They defy logic. We do not have a 4-5% booming economy with 873,000 people added. I mean - stop it, Chris! On the face of it, we don't have this GDP. I love you, but you can't get there.

Matthews: I think you're a great brilliant businessman who's in some ways - I wish you were in charge of my stock options these days because you made a lot of money for us here. But let me ask you this one more time so that all the people out there of lesser intellect will stop marching in your band - Jack Welch thinks this is a coincidence. Jack Welch does not think the Bureau of Labor Statistics and the boys in Chicago changed the numbers.

Welch: No, no - Jack Welch is raising the question for some good analyst to go look at.

Matthews: Okay, good - you're raising the question. You certainly did that. Jack Welch, thank you very much for joining us at the very top of Hardball tonight.

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