There was a small story during last year's campaign after the October 2012 jobs report gave unexpectedly good news (a decline in unemployment from 8.1% to 7.8%) that has since been largely forgotten. Jack Welch, former head of GE, called the number bogus, but Paul Krugman assured us that Welch and other critics were crackpots. "It was nonsense, of course. Job numbers are prepared by professional civil servants, at an agency that currently has no political appointees."
The decline — from 8.1 percent in August to 7.8 percent in September — might not have been all it seemed. The numbers, according to a reliable source, were manipulated.
And the Census Bureau, which does the unemployment survey, knew it.
Just two years before the presidential election, the Census Bureau had caught an employee fabricating data that went into the unemployment report, which is one of the most closely watched measures of the economy.
And a knowledgeable source says the deception went beyond that one employee — that it escalated at the time President Obama was seeking reelection in 2012 and continues today.
“He’s not the only one,” said the source, who asked to remain anonymous for now but is willing to talk with the Labor Department and Congress if asked.
Crudele names Julius Blackmon as the source of the faked data, in response to pressure to meet goals for getting responses for the survey. He simply filled in surveys for people he hadn't actually contacted, Crudele claims.
“It was a phone conversation — I forget the exact words — but it was, ‘Go ahead and fabricate it’ to make it what it was,” Buckmon told me.
It wouldn't take many fakes to change the numbers significantly: a 60,000 person survey to cover 240 million adult workers means each survey respondent represents 4,000 workers. The Census Bureau says it should have told the Bureau of Labor Statistics and BLS says, in essence, yeah, you should have.
There are three takeaways from the story (and if you don't believe Mr. Crudele, you may as well stop reading, because these work under the assumption that he has the goods on both Mr. Blackmon and the Census' lack of follow-through):
First, the Krugman assertion turns out to be false. Long before the Obama Administration, the Bureau of Labor Statistics had engaged the Census Bureau via an annual contract to do the Current Population Survey (CPS) for them. I doubt Krugman knew this; I know I didn't, and I teach this stuff for a living. I thought BLS did it. And we've known for some time that there has been politicization of the Census Bureau. In February 2009, John Boehner gave a press conference bemoaning the move of the Census from the Commerce Department to the White House. Yet, at that time, BLS did not choose to take its survey from Census. They should have had reason to know that the Census was in different hands. And, importantly, the Census director is a political appointment, unlike the director of BLS.
Second, Darrell Issa, chair of the House Oversight Committee, had paid attention to the Census Bureau in 2009 over concerns about the decennial Census and the concomitant Congressional redistricting to follow. He claimed that this organization was to be nonpartisan. Yet there were complaints in 2010 about flipping enumerators at the Census to puff up what were then very bad jobs figures. I hate to add anything to the Chairman's already-full plate, and to suggest he missed one here seems a bit unfair. But he needs to track this story down with whatever information Mr. Crudele would provide.
Last, I confess that in 2012 I said on my radio program the Welch claims were likely untrue. In part, I failed to understand the contract between Census and BLS. But, more to the point, I find it disturbing that government officials game the numbers we use. I want to believe that the civil servants who take down the data are doing their jobs as best they can. (Full disclosure: a few are former students. I am protective of my young.) Part of me wants this story to be wrong, and part of me wants to believe Mr. Blackmon and his supervisor are just two bad Census employees. But it seems I've heard that story before.
The moral is to remind you and me once more to heed Stamp's Law:
The Government are very keen on amassing statistics—they collect them, add them, raise them to the nth power, take the cube root and prepare wonderful diagrams. But what you must never forget is that every one of those figures comes in the first instance from the chowty dar [chowkidar] (village watchman), who just puts down what he damn pleases.