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Census-gate: Whistleblowers Claim Pre-Election Labor Reports Manipulated

Posted by Larry Doyle on November 19, 2013 8:42 AM |

. . .  the only way to deal with a whistleblower’s accusations – again, every single time and often against your own instincts – is with a hyper-bias toward believing that the informant is onto something big. Such a bias must impel you to investigate every claim ferociously.

Jack and Susy Welch, Reuters, May 1, 2012

Do you recall how former GE chairman Jack Welch was vilified by many in the mainstream media and our government for vociferously challenging the integrity of the pre-election October 2012 Employment Report? He was. As a reminder, back then Welch released this tweet:

I further wrote at the time Jack Welch: Washington’s Emperor Has No Clothes to highlight Welch challenging the powers that be in Washington on the integrity of that specific report.

Well, let’s restoke that fire and get some more wood as a gust of fresh air has rekindled those hot embers from October 2012. We learn this morning that more than one whistleblower from within the Census Bureau bring meaningful credence to Welch’s clarion call to address and expose just how the Census Bureau collects the data that the Department of Labor then utilizes to formulate the monthly employment report.

Here we go again.

What do those blowing the whistle have to say? A lot. In an exclusive report released by financial reporter John Crudele at The New York Post:

In the home stretch of the 2012 presidential campaign, from August to September, the unemployment rate fell sharply — raising eyebrows from Wall Street to Washington.

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.

Indeed, “What a tangled web we weave, when first we practice to deceive.” Many have long wondered about the integrity of the labor reports. If these details are not a hint of a smoking gun, then I do not know what is. Let’s continue navigating.

“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.

The Census employee caught faking the results is Julius Buckmon, according to confidential Census documents obtained by The Post. Buckmon told me in an interview this past weekend that he was told to make up information by higher-ups at Census.

Can somebody say independent investigation, please? In a scenario that looks and smells all too similar to unsavory mortgage brokers filling in documents with fraudulent info, Buckmon asserts:

. . .  he filled out surveys for people he couldn’t reach by phone or who didn’t answer their doors.

But, Buckmon says, he was never told how to answer the questions about whether these nonexistent people were employed or not, looking for work, or have given up.

But people who know how the survey works say that simply by creating people and filling out surveys in their name would boost the number of folks reported as employed.

But there was no intentional manipulation, right? Do you think there is a chance that this manipulation actually occurred? More than just a little. Reminds me of the line, “How do you know when a politician or one of his operatives is lying?”

When their lips move.

Begs the question as to what reports emanating from Washington we can trust and believe?

Did somebody say banana republic?

Navigate accordingly.

Larry Doyle

Please pre-order a copy of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy, that will be published by Palgrave Macmillan on January 7, 2014.

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I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.

  • Mike

    Larry,

    Jack Welch is the expert on manipulating numbers. His financial engineering at General Electric was legendary during the years he ran the company.

    For twenty years he sent American jobs overseas, destroyed many former industrial cities like Schenectady, cut back on research and development while channeling all of the efforts into financial services.

    The leverage that gave him the consistent earnings gains during his tenure almost caused the company to fail during the financial crisis.

    Were it not for the good graces of Paulson and Buffet a once great company would have gone the way on Enron.

    Madoff was an amateur compared to Jack.

    Navigate Accordingly,

    • LD

      Mike,

      Thanks for taking the time to write.

      I do not write here in defense of Welch at all. In fact, I have denigrated his management style in other posts BUT he is not the only who might think that employment data was manipulated.






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