Manipulating Democracy

America seems to have become inured to scandal, judging by the apparent lack of attention being paid to an allegation that the unemployment statistics released just before the past presidential election were manipulated to benefit the incumbent.
The claim was made in Monday’s New York Post, but except for the perfunctory scoffing by the White House spokesman, a promised probe by the implicated Commerce Department, and yet another investigation by the Republicans in the House of Representatives, it seems to have drawn little attention outside the constantly indignant conservative talk radio shows. Such insouciance is hard to account for, given the potentially history-changing implications of the charge.
The New York Post is a conservative publication by the lax standards of the New York press, and therefore lacks requisite cachet to fuel a media frenzy, but its record of accuracy compares well to its more fashionable competitors. Although the story cites an unnamed source, which is usually sufficient to ignore any scandal involving Democrats, it also documents that name a specific employee involved in the deception who is quoted as saying he acted under orders from higher-ranking bureaucrats. Given that many knowledgeable observers were skeptical of the suddenly and serendipitously rosy unemployment numbers at the time, including the former chief executive officer of General Electric, the story also has a sobering plausibility.
If true, the story warrants far more attention that it has received. Manipulating such crucial data as the unemployment rate calls into question the accuracy of all government reports, with dire consequences for the markets that rely on the information to make that the decisions that drive the economy. Doing so for partisan political reasons also calls into question the results of the election, with dire consequences for democracy and a free society. As the latest in a series of scandals involving a politicized bureaucracy acting on behalf of the one party committed to its continual growth, it could even call into question whether we still have a democracy.
The story seems all the more plausible following revelations of the Internal Revenue Service harassing conservative groups seeking tax-exempt status, the Department of Justice’s apparent lack of interest in the matter or anything else that might prove embarrassing to the administration, the National Security Agency’s inordinate interest in the phone records of average Americans, the National Park Service’s heavy-handed efforts to exacerbate the inconvenience of a partial government shutdown, and numerous other cases of government gone wild. The notion that only one or two low-level employees are responsible for a deceptive jobs report is not plausible, and even if it were the notion that they expected to get away it is still scandalous.

— Bud Norman

Downbeat Reading

Few things in life provide the emotional stimulation of depressing literature, so our bookshelves are well-stocked with such grim fare as Nathaniel West’s “Miss Lonelyhearts” and Sylvia Plath’s “The Bell Jar,” but for unrelentingly gloomy reading nothing can top the latest offerings from the Commerce Department and the Congressional Budget Office.

A stiff drink is recommended before delving into the Commerce Department’s look back at the past three months of the American economy, which reports that the nation’s gross domestic product increased by a mere 2.8 percent annual rate during the final quarter of a year, meaning that the economy grew by only 0.7 percent during the holiday shopping months. The figure is ugly enough at first glance, but upon closer examination it becomes even more gruesome.

Slog through the Commerce Department’s bureaucratic prose and you’ll discover that 75 percent of the growth was due to businesses restocking inventories with as-yet unsold goods, which they will not continue to do indefinitely. Careful readers will also note that the Commerce Department arrived at its GDP number by assuming an inflation rate of just 0.4 percent, an assumption that will seem suspicious to anyone who has shopped for groceries in recent months.

Another stiff drink, perhaps hemlock, is recommended to anyone reading the Congressional Budget Office’s look ahead to the next decade of the American economy, which paints a picture of our economic future as disturbing as anything Hieronymus Bosch ever put on canvas. The CBO predicts the unemployment rate rate will rise to 8.9 percent by the end of the year and to 9.2 percent in 2013, that GDP growth will be only 2 percent in the coming year, and that the budget deficit will be $1.08 trillion in 2012 and very high years to come.

Again, the ugly numbers get uglier with a closer look. The report modestly admits that “Many developments could produce economic outcomes that differ from the CBO’s forecast,” citing a “significant worsening of the of the banking and fiscal problems in Europe” as one example, and when that one inevitably develops the current gloomy predictions will seem wildly optimistic.

All of this is bad news if you’re looking for a job, but even more so if you’re hoping to hang on to your current job as president of the United States, which might be the only ray of hope to shine through such dark clouds.

— Bud Norman

The Re-Organization Man

Work for an organization of any size for any length of time and you will eventually be re-organized.

Over many years in the newspaper business we went through it often enough to notice two kinds of re-organizations. The first kind, and by far the most fearsome, was forced by economic necessity. With revenues shrinking due to those darned internet sites and other changes in the news industry, these re-organizations involved significant numbers of lay-offs and forced the remaining staff to either do more with less or, as on most occasions, simply do less. The other kind, relatively benign and more easily survived, is motivated by some manager’s desire to fool the higher-ups into thinking that he’s actually doing something. These re-organizations mostly involve a change of nomenclature, such as calling the various departments “teams” rather than “departments,” and usually wind up with the same people doing the same things but with new business cards.

The plan announced Friday by President Barack Obama to re-organize a small portion of the federal government — or “streamline” it, as CNN’s headline approvingly phrased it — strikes us as one of the latter kind of re-organizations. With $15 trillion in debt and a bigger payroll than ever, the government so obviously requires downsizing that even such a devotee of big government as Obama can see it. Obama’s proposal is considerably smaller than what is necessary, however, and there is reason to believe that he might not be serious about making even such minor changes.

The plan would eliminate the Commerce Department, something conservatives have long fantasized about, but replace it with a new and as yet unnamed agency that would retain almost all of the old bureaucracy and also include the U.S. Trade Representative, the Export-Import Bank, the Overseas Private Investment Corp., the Trade and Development Agency, and the Small Business Administration. By the White House’s own reckoning the plan would cut only 1,000 to 2,000 jobs — all through attrition, meaning that people with jobs that don’t need to be done can stay at work until they decide to take their generous pensions — and save only $3 billion over 10 years, which is about one-third of a day’s spending by the government. All of which spoils the conservative fantasy while upsetting liberals with a special interest in one of the affected agencies, meaning that the plan is unlikely to win approval from congress.

This suggests that Obama is merely trying to make his bosses, meaning the voters mulling whether to renew his contract or not, think that he’s doing something. The plan allows Obama to claim he’s not really the big government devotee that the past three years and $4 trillion have made him seem, and instead pose as a ruthlessly efficient manager paring down a bloated bureaucracy. If the plan doesn’t pass because of bi-partisan opposition, he can still claim to be doing with a battle with a “do-nothing” congress while counting on the support of the placated Democrats who voted against him.

The generally administration-friendly National Journal goes so far as to say that the president is trying to “Out-Romney Romney,” which exposes the flaw in his re-election strategy. Obama will dearly want to attack likely Republican nominee Mitt Romney as a ruthless downsizer who laid off workers in the name of mere economic efficiency during his days with the Bain Capital firm, an argument that will come from his community organizer’s heart, but it would be starkly inconsistent for him to do so while boasting of his own ruthless downsizing.

Our guess is that he’ll go ahead and do both, inconsistency be damned, and hope that nobody notices.

— Bud Norman