Jack Welch owes us an apology
Former GE Chairman and CEO Jack Welch was mightily upset last Friday when the latest job numbers from the Bureau of Labor Statistics (BLS) showed unemployment falling from 8.1 percent to 7.8 percent. This was the first time it had fallen below 8 percent since 2009. Coming just in the wake of Wednesday’s election campaign ...
Former GE Chairman and CEO Jack Welch was mightily upset last Friday when the latest job numbers from the Bureau of Labor Statistics (BLS) showed unemployment falling from 8.1 percent to 7.8 percent.
This was the first time it had fallen below 8 percent since 2009. Coming just in the wake of Wednesday’s election campaign debate with Republican candidate Mitt Romney, this report would be helpful to President Obama’s reelection bid by mitigating some of the political damage done by his poor debate performance. Apparently a Romney supporter, Welch dismayed by Obama’s good luck. In fact, he wanted the public to believe that luck had had nothing to do with the numbers. So he turned to Twitter to arouse public suspicion.
I know it’s hard to imagine a macho guy like Welch tweeting, but that was the fastest way for him to jump into the fray with the following message: "Unbelievable job numbers. These Chicago guys will do anything. Can’t debate so change numbers."
I defy you to interpret that in any way except as a charge that the White House had intervened with the BLS and directed it to cook the numbers in such a way as to be favorable to the President’s reelection bid. In other words, Jack was suggesting that Obama, the White House staff, and the BLS are all corrupt and conniving. If such a suggestion could be substantiated, it would be grounds for impeachment of the president and abolition of the BLS and perhaps of the whole Department of Labor.
But, of course, it couldn’t be substantiated. I watched Jack dance around that problem in an interview with Chris Matthews on Friday night. Chris asked him if he had any evidence beyond his own suspicions and speculation of White House interference with the normal practice and procedures of the BLS or of any change in the normal methods and practices for calculating the unemployment statistics. "No" and "no" was the response. Chris further asked him if he was accusing anyone of improper interference and if so who. Jack squirmed and shifted his position. "No", he wasn’t pointing the finger at any particular individual he said. Rather, he was just raising questions. Didn’t it seem awfully coincidental that these favorable numbers would come out at just the right moment to help the president, he asked.
He added that the BLS methodology is based on myriad assumptions and that it actually uses two different methods for calculation that sometimes appear to produce contradictory results. So, how, he asked, can anyone really know what the true numbers are.
That the calculations are based on a variety of assumptions and that they are complex and that different survey techniques often produce different numbers is all true. But that’s not really the issue. Everyone knows about these vicissitudes. The real question is whether or not the usual assumptions and techniques were changed in some way so as to influence the latest report in a pro Obama direction. When Chris again asked Jack if he had any evidence of such a change in technique, Jack danced and squirmed again. "No," , but I’m just raising questions" he said.
Maybe Jack’s suspicions arise from his own experience with reporting good and bad numbers. His main claim to fame, after all, is that he produced a string of 80 quarters of uninterrupted increases in earnings for GE. This no doubt reflected his genius as a corporate manager, but it also reflected use of off balance sheet vehicles such as those used by Enron before its bankruptcy and other creative accounting techniques linked to GE Capital, the company’s finance arm. So, maybe from this experience Jack thinks that happy coincidences just don’t occur.
But this is where the difference between running a company and running the United States is so great. The employees at GE and GE Capital were all subject to Jack’s whim. Not so the bureaucrats at BLS who as members of the Civil Service have job protection and cannot be fired by the President. They are in a position to defy any illegal directive from the White House and they don’t take their thinking on methodology and practices from Presidential whims.
When Jack uses cynical innuendo to suggest conspiracy and corruption at the heart of our political system, he not only undermines a president whom he obviously doesn’t like. He undermines public trust in the system itself.
If he has real evidence of such corruption, he should demonstrate it immediately. If he doesn’t have such evidence, the not only owes the president an apology. He owes the American people one as well.
Clyde Prestowitz is the founder and president of the Economic Strategy Institute, a former counselor to the secretary of commerce in the Reagan administration, and the author of The World Turned Upside Down: America, China, and the Struggle for Global Leadership. Twitter: @clydeprestowitz
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