Jack Welch triggered a firestorm today by suggesting that a group of employees at the labour Department decided to risk their careers, reputations, and potentially their liberty by fraudulently manipulating the unemployment numbers in today’s BLS report to make the anemic economic recovery look less bad than it actually is.
I certainly can understand the scepticism.
As I saw firsthand with Treasury’s accounting of projected AIG losses, when it comes to political spin shortly before an election, the government has proven itself willing and able to play a few accounting tricks in order to make something look better than it actually is. But there is a significant difference between transient politically appointed employees (like the Treasury officials who were announcing the AIG projections) and the career bureaucrats responsible for the nuts and bolts of the labour report.
While the former may very well have strong political and personal incentives to shade the truth for political gain (in part because by definition their jobs expire with the inevitable change in administrations), for the latter the risks of getting caught in engaging in such an egregious fraud far outweigh any potential benefits.
Furthermore, even if you were to assume that some evil-intentioned political would seek to manipulate the BLS numbers, he or she would have to persuade dozens of career employees to go along with the ruse, a certain percentage of which are almost certainly Romney-supporting Republicans or just plain old ethical Democrats who would be strongly inclined to blow the whistle.
Given that the downside of detection (which could conceivably bring down the entire Obama Administration in a Watergate-type scandal) far outweighs the benefits of success (is a false claim of 7.8% unemployment really going to steal the election?), this controversy should just go down as just another reason why it’s called the silly season.