Jack Welch Probably Shouldn't Bring Up Doctored Numbers
Jack Welch, former CEO of General Electric, Romney supporter, and one of our city’s wealthiest men, caused quite a stir this morning when he tweeted that the Bureau of Labor Statistics unemployment rate, which came in at a surprisingly low 7.8 percent, was doctored on behalf of the Obama re-election campaign:
Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers
— Jack Welch (@jack_welch) October 5, 2012
His accusation quickly went viral. It’s got over 2,000 retweets, and it even caused Secretary of Labor Hilda Solis to address the accusation directly. She called it “ludicrous” on CNBC. The Bureau of Labor Statistics puts together its jobs report each month under conditions of crazy secrecy, but even most Republican experts, including those who argue the numbers are an anomaly, didn’t second Welch’s theory that the BLS twisted the process in order to help the president. George W. Bush administration spokesman Tony Fratto tweeted:
BLS is not manipulating data.Evidence of such would be a scandal of enormous proportions & loss of credibility.
— Tony Fratto (@TonyFratto) October 5, 2012
Probably the most awkward thing about the accusation is that Welch’s company GE has had its own little number-cooking scandal, as pointed out by former George W. Bush speechwriter David Frum.
BTW Isn’t Jack Welch about the last person on earth who shd talk about organizations manipulating numbers to impress markets? — davidfrum (@davidfrum) October 5, 2012
Indeed, GE agreed to a $50 million fine in 2009 after the Securities and Exchange Commission charged that it had been toying with its accounting numbers for years to make it look as if the company’s performance had met or exceeded analysts’ expectations. Forbes‘s Dan Fisher wrote in 2009:
Like a professional baseball player revealed to have been dabbling in steroids, GE prolonged a nearly decade-long record of meeting or exceeding analyst expectations by resorting to tricks including “selling” locomotives to financial institutions in transactions that looked a lot like loans, and fiddling with the accounting for interest-rate hedges.
So maybe that’s why Welch suspects book-cooking where everyone else refuses to see it. He knows it wouldn’t be the first time a major institution has gotten a little tricky with their numbers.