This story was interesting. Jack Welch accused the BLS (Bureau of Labor Statistics) of manipulating unemployment statistics. The mainstream media focused its hatred on Jack Welch. How dare he criticize a statistic published by the government!
I know that the CPI is biased and manipulated. I know that the “official” GDP statistic is wrong, due to improperly adjusting for inflation. If the CPI and GDP statistics are biased, it’s also reasonable to question the official unemployment statistics.
I saw some clips of Jack Welch on The Daily Show. Jack Welch made a weak criticism of the unemployment statistics. By promoting someone who makes a weak criticism, that makes all “conspiracy theorists” seem crazy,
Here is a better criticism of the unemployment number. The most important discrepancy is the labor participation rate. The unemployment rate went down *AND* the labor participation rate went down. That suggests manipulation. If your unemployment benefit runs out, you might no longer count as “unemployed”.
For example, at my previous job, I quit. I wasn’t eligible to collect unemployment. Therefore, I may not have counted as “unemployed” in the official statistics.
If some unemployed people count as “discouraged workers” or “not part of the labor force”, then the unemployment rate is manipulated down.
Also, the total number of employed people is less, compared to 4 years ago, even though the unemployment rate is similar. (2008=145M, Sep 2012=143M) That also suggests manipulation. Due to population growth, the number of jobs must increase to keep the unemployment rate the same.
The unemployment statistics are determined by a survey. That opens the possibility for bias, if the survey sampling method is defective. I always refuse to answer surveys and polls, which leads to bias. Can’t they get the exact employment numbers by looking at tax records?
There’s another big flaw in the unemployment statistics. It does not count people who are underemployed. It does not count people who have jobs with zero economic value. If someone is working in the parasite sector of the economy, they count as “employed” even though they produce no useful goods or services.
I’m really overqualified for my current job. I count as “employed”, even though my skills are mostly wasted. If someone is unemployed for a long time and then accepts a lesser job, they count as “employed” even though they are underemployed.
My job has no real economic value. I’m working for a bank, cleaning their contract data for Dodd-Frank compliance. My job only exists because of the Dodd-Frank law. I count as “employed”, even though I’m producing nothing useful.
The media criticism of Jack Welch was interesting. Jack Welch is not sent to a labor camp for questioning the State. Instead, the State media sharply criticizes him for questioning official propaganda. The net effect is almost the same, except it happens via the “free” market.
Jack Welch has an important point. “It should always be acceptable to question a government statistic.” Even if he is wrong, there’s nothing wrong with questioning anything published by the government.
This Huffington Post article criticized Jack Welch. The criticism was mostly ad hominem. “Jack Welch used accounting tricks while at GE. Therefore, his criticism of the BLS unemployment rate is wrong.” That is invalid reasoning. Those are two unrelated subjects. I’ve seen a similar argument when people criticize me “FSK has switched programmer jobs a lot. Therefore his criticisms of node.js, Rails, TDD, and Design Pattens are wrong.” If you can’t criticize someone’s argument directly, you instead point out other things. That’s a common propaganda trick.
Due to the ad hominem attack and strong backlash, that convinces me that Jack Welch made an important point. If Jack Welch’s criticism was so obviously wrong, State liars would not have spent so much time spreading propaganda against him.
If you really believe that State bureaucrats would *NEVER* manipulate statistics, you aren’t paying attention. The people at the BLS put a lot of effort into pretending to be impartial. There always is bias, especially for a career State bureaucrat. They know where their bread is buttered, and what conclusions their “research” is supposed to have.
In the present, most of the leaders are criminally insane. Most CEOs, politicians, and leaders have the same personality type as Bernard Madoff. 20-30 years ago, it was still possible for an honest and intelligent person to move up the ranks and become a CEO. Jack Welch seems more honest than the current group of criminally insane leaders. However, Jack Welch certainly had a bit of Clint Eastwood senility. It would be better to see someone else more clearly explain the flaws in the unemployment statistics.
It is misleading to talk about unemployment the same time as discussing government policy. It isn’t the government’s role to create jobs. When someone says “Government should create jobs!”, that makes as much sense as “An NFL referee should score touchdowns!” Most of the “jobs” created by government are wasteful ones, like my current job performing Dodd-Frank compliance.
Jack Welch said that the “official” unemployment statistic is manipulated, and there was a lot of mainstream media backlash against him. That is evidence that he is right and it is an important subject. There are a lot of flaws with the “official” unemployment rate. The labor participation rate is decreasing. The total number of “employed” is decreasing. The unemployment rate does not count “discouraged workers”. The unemployment rate does not count workers who are underemployed (like me). The unemployment rate does not count workers who have jobs with zero economic value (also like me).