The 0.3 percent hysteria

October 5, 2012

When was the last time the inhabitants of wonkville got so hot over a federal statistic dropping three-tenths of a percent?

This morning – after the Bureau of Labor Statistics released its monthly jobs report stating that the unemployment rate had fallen from 8.1 percent in August to 7.8 percent in September – everybody started shouting about the numbers. President Barack Obama used them as evidence of economic progress, challenger Mitt Romney swatted them aside and scoffed that this “is not what a real recovery looks like,” and Jack Welch, former CEO of General Electric (and current Reuters Opinion contributor) tweeted that Obama’s “Chicago guys” had fudged the encouraging numbers to make up for the poor performance of their boss in the Oct. 3 debate. This prompted the proprietors at @PuckBuddys to tweet, “Truthers, Birthers and now Welchers.”

Ezra Klein, the mayor of wonkville, rushed to defend the integrity of the numbers in his Washington Post blog, pointing to a Mar. 9, 2012, Post story about the secret-agent measures taken by the BLS statisticians to prevent tampering with the data or the results. Computers: encrypted and locked. Office windows: papered over. Confidentiality agreements: signed each morning. Emails and phone calls from unknowns: unanswered during the eight days of lockdown preceding the job report release. Visitors: none permitted without security clearance. Trash cans: not emptied by custodians during the period.

Helping Klein repel the doubters were Secretary of Labor Hilda Solis – “I’m insulted when I hear that, because we have a very professional civil service,” she said on CNBC – and Keith Hall, former Bureau of Labor Statistics chief under President George W. Bush, whose position was summarized in a Wall Street Journal blog item titled “Impossible to Manipulate Labor Survey Data – Former BLS Head.” Welch’s most prominent allies were Tea Party inspiration Rick Santelli, who implied on CNBC that the numbers were rigged, and Monica Crowley, who sarcastically tweeted: “the rate miraculously drops to 7.8%. Ahem.”

But as Megan McArdle pointed out today at the Daily Beast, even if you believed that the Bureau of Labor Statistics was capable of such a number-inventing conspiracy, the subtle swing in the employment numbers would be too vague to build a conspiracy from. They neither vindicate Obama’s economic policies nor refute them. It would be like breaking into a bank and stealing just the pennies. On the other hand, just because Obama hasn’t played games with BLS numbers doesn’t mean it’s impossible for him or another president or politician to manipulate data to political advantage. Back in 2004, the New Yorker‘s James Surowiecki, no member of the tin-foil-hat crowd, accused President George W. Bush of futzing with hallowed government numbers. He wrote:

Statistical expediency and fiscal obfuscation have become hallmarks of this White House. In the past three years, the Bush Administration has had the Bureau of Labor Statistics stop reporting mass layoffs. It shortened the traditional span of budget projections from ten years to five, which allowed it to hide the long-term costs of its tax cuts. It commissioned a report on the aging of the baby boomers, then quashed it because it projected deficits as far as the eye could see. The Administration declined to offer cost estimates or to budget money for the wars in Afghanistan and Iraq. A recent report from the White House’s Council of Economic Advisers included an unaccountably optimistic job-growth forecast, evidently guided by the Administration’s desire to claim that it will have created jobs. And a few weeks ago the Treasury Department put civil servants to work—at Tom DeLay’s request—evaluating a tax proposal identical to John Kerry’s, then issued a press release saying that the proposal would raise taxes on “hardworking individuals.”

Such statistical shenanigans may fall just shy of the cooked-books charges being flung today, and Surowiecki doesn’t even claim that they are common, maintaining that White Houses have traditionally kept their thumbs off the scale, and “good economics has trumped politics.” (Disclosure: Surowiecki is a friend whom I edited a couple of times at Slate.) But Bush exceptionalism – if his behavior was genuinely exceptional – should make skeptics of every consumer of government data.

It’s worth noting that the Bureau of Labor Statistics owes its origin to “two decades of advocacy by labor organizations that wanted government help in publicizing and improving the growing industrial labor force.” That’s not Jack Welch howling. It’s from the opening page of The First Hundred Years of the Bureau of Labor Statistics by historians Joseph P. Goldberg and William T. Moye and published in 1985 by the BLS. (Here’s the PDF. It’s big.)

The first state to establish a bureau of labor statistics was Massachusetts in 1869. Organized labor agitated in the states and at the federal level for similar agencies. The labor movement’s leaders believed that the collection of federal statistics would provide them with a path to political power, and said so. Testifying before Congress in 1883, labor leader Samuel Gompers spelled out that sentiment. The bureau, he said, would educate members of Congress about “the condition of our industries, our production, and our consumption, and what could be done by law to improve both [sic].”

Thanks to labor’s prolonged politicking, the bureau was established in 1884 after overcoming opposition from Southern legislators. The statutory mission of the BLS was to “collect information upon the subject of labor, its relation to capital, the hours of labor and the earning of laboring men and women, and the means of promoting their material, social, intellectual and moral prosperity.” If you can’t smell the politics in that passage, you need sinus surgery.

What the bureau’s early proponents made overt, its current supporters make covert. Governments can pretend that they are like research institutions or universities, neutrally scouring the universe for valuable data that will lead to knowledge and enlightenment. But the data sweeps and number crunchings commissioned by government are almost always political in nature, intended to justify some government action or inaction. That goes for the numbers produced by the Bureau of Labor Statistics, the Pentagon, the Centers for Disease Control and Prevention, the Department of Transportation, and all the other federal, state and local appendages.

Rare is the government data set that results in a diminution of government power or does not start a political fight, as today’s job numbers did. If you didn’t get your fill of contention today, check back for the rematch on Friday, Nov. 2, four days before the election, when the Bureau of Labor Statistics’s next monthly job numbers come out.


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PHOTO: A yardstick measures the depth of rising water in Butte LaRose, Louisiana, May 19, 2011.  REUTERS/Lee Celano

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