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Sun Oct 6, 2019, 03:32 PM

Nixon Was The First President Known To Pressure BLS to Manipulate Econ Data. What About Trump?

As Trump celebrates BLS labor data suggesting that unemployment is down even as the economy slows and record numbers of people are homeless, this reminds me of relatively small Trump scandal early in the Trump presidency when he appointedFred Malek. Who is Fred Malek?

Well, Fred Malek was infamous because he counted the Jews in the Bureau of Labor Statistics so President Nixon could demote them because Nixon believed that they were cooking the BLS's economic stats to make him look bad. So, Nixon asked Fred Malek, a future Trump appointee, to identify and demote Jews and Democrats in the Bureau of Labor Statistics in an effort to pressure the BLS to publish more favorable economic data?

Could it happen again? Or, do we think that Trump has more scruples and is less racist than Nixon?


Our story begins on the afternoon of July 2, 1971. President Richard Nixon is angered to read in the Washington Star that the Bureau of Labor Statistics has downplayed a drop in the unemployment rate from 6.2 percent to 5.6 percent, attributing it to a statistical quirk. (For details about the BLS interpretation, which was routine and unexceptional, see Hughes’ “Nixon vs. the Imaginary Jewish Cabal,” posted Sept. 24 on the Web site History News Network.) We join Nixon as he is talking to White House aide Charles Colson. (This is from a newly released Miller Center transcription.)

Colson: We’ve got the headline of the Star tonight, looking—Nixon: Yeah, well, they’d have to, wouldn’t they? Colson: They did. They threw in their line that maybe it’s a statistical fluke, which some damn fool at the Labor Department said, but … if I can find out who it is, he’ll be the first one of the casualties of the Lord High Executioner. (He chuckles.)Nixon:Well, did—somebody at the Labor Department said it was a statistical fluke? Colson: Yes, sir. We’ll— [Four-second “privacy” excision]Nixon: Yeah. Colson: It’s typical of what these bastards in the bureaucracy— Nixon: I want—I want—I want—really now, we told everybody that’s supposed to be here. Now, I’d find out, and then he’s got to be fired. Colson: That’s right. You— Nixon: If he said it. I gave the orders. It was clear. Didn’t I? Colson: Oh, absolutely.

“He” turned out to be Harold Goldstein, assistant commissioner of labor statistics. According to Hughes, Nixon had been wanting to fire Goldstein since the previous January, when Goldstein had publicly (and correctly) termed an unemployment drop of two-tenths of 1 percent “marginally significant.” On July 3, Colson advised Nixon (according to a tape available to Hughes but not yet transcribed) that he demand a reorganization of the BLS. “In the process of reorganizing it,” Colson said, “I think we’ll get this guy’s resignation.” Nixon agreed and called in White House budget director George Shultz and Labor Secretary James Hodgson. “Well,” said Shultz, “I think the only kind of organization that would be sensible under these circumstances is a reorganization that separates Goldstein from the employment, uh, employment figures, and gets him into something else entirely.

* * *

Six weeks pass, and it is Sept. 8, 1971. Malek reports in a memo (previously unpublished; thanks, again, to Kenneth J. Hughes) that he has had “several meetings” with Labor Secretary Hodgson “to convince him of the need for fairly drastic moves.” Six out of nine offices will be combined into an Office of Data Analysis. This will be headed by a “politically sensitive, loyal Republican economist,” presumably one who does not have a mezuzah nailed to his front door. The move will strip the BLS’ deputy commissioner, the unfortunately surnamed Ben Burdetsky, from authority “over the most critical areas.”

In addition, “Harold Goldstein will be moved to a routine, non-sensitive post in another part of BLS. He has been told of this and will move quietly when the reorganization is announced.” Goldstein, too, will be replaced by a “sensitive and loyal Republican,” one who we may assume eats shellfish with a clear conscience. (Goldstein lost some key duties, had a new supervisor placed above him, and decided less than a year later to retire at 57.)

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Reply Nixon Was The First President Known To Pressure BLS to Manipulate Econ Data. What About Trump? (Original post)
TomCADem Oct 2019 OP
octoberlib Oct 2019 #1
mopinko Oct 2019 #2
TomCADem Oct 2019 #3
DrToast Oct 2019 #4
TomCADem Oct 2019 #5
roamer65 Oct 2019 #6
DrToast Oct 2019 #7
uponit7771 Oct 2019 #8
moondust Oct 2019 #9

Response to TomCADem (Original post)

Sun Oct 6, 2019, 03:35 PM

1. Interesting.

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Response to TomCADem (Original post)

Sun Oct 6, 2019, 04:05 PM

2. i posted this when the job numbers came out.

didnt get much traction.
the economy is his only hope. hell yes he would find a way to cook the numbers. we should believe absolutely nothing these people are trying to sell.


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Response to mopinko (Reply #2)

Sun Oct 6, 2019, 07:18 PM

3. George Washington U - Nixon vs. the Imaginary "Jewish Cabal" - Sound similar?

When you read about Nixon's efforts to pressure the BLS to publish more positive economic data, doesn't the paranoia and conspiracy theories sound similar to you know who?


The Federal Reserve is catnip to conspiracy theorists (just Google “Federal Reserve conspiracy” and see) but Richard Nixon may be the only political paranoid ever to form a conspiracy theory about a Fed Chairman whom he personally appointed.

In July 1971, dogged by rising unemployment and inflation, Nixon imagined the existence of a “Jewish cabal” involving Federal Reserve Chairman Arthur F. Burns and the Bureau of Labor Statistics. The President had expected favorable press coverage on July 2, 1971, when the Bureau of Labor Statistics announced a big drop in the unemployment rate from 6.2 to 5.6 percent. When Nixon learned that the front-page of Washington’s Evening Star said, “The Labor Department warned that the dip might have been caused by a statistical quirk,” he ordered an investigation to find out who was responsible, saying, “He’s got to be fired.”

* * *
In reality, Burns was a Nixon man, the chief conservative economist on the White House staff in 1969 before Nixon nominated him to the Fed. Congress set up the Fed to be independent of politics, but that didn’t stop Burns from secretly assuring Nixon that he would use its power over the economy to reduce unemployment for his re-election year. The only official Burns was conspiring with was Richard Nixon.

But the Fed chairman had incurred his patron’s displeasure. Nixon had wanted a conservative economist at the Fed, but grew angry when he got one. As unemployment rose to politically harmful levels, Nixon wanted the Fed to follow an “easy money” policy that would reduce interest rates, lowering the cost to business of borrowing money, expanding operations and hiring more employees. Burns, however, warned that this would fuel inflation. On the morning of Nixon’s “Jewish cabal” comment, the Times had run this front-page headline: “Burns Says Inflation Curb Is Making Scant Progress.”

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Response to TomCADem (Original post)

Sun Oct 6, 2019, 07:25 PM

4. I think if the economy starts tanking it's something to keep an eye on

The problem for him is that there are private entities that measure how the economy is doing as well. And he has no control over them.

Also, BLS employees take their jobs very seriously. I think if Trump tries to pressure them, we will hear about it.

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Response to DrToast (Reply #4)

Sun Oct 6, 2019, 11:14 PM

5. At the same time, look at what Nixon did and what Trump is doing...

Trump has been even more brazen than Nixon in publicly attacking a Fed Chairman that he himself appointed. What makes us think that Trump is being less brazen about pressuring the BLS to tweak Labor stats than Nixon?


President Trump rips Fed as 'boneheads,' calls for zero or negative interest rates

President Donald Trump on Wednesday blasted the Federal Reserve, saying in a name-calling tweet that the central bank should lower interest rates to zero or possibly even below zero.

The president posted consecutive tweets bashing the Fed and Fed Chairman Jerome Powell, saying the "bonehead" officials are missing "a once-in-a-lifetime opportunity" to boost the economy with rate cuts.

"The USA should always be paying the lowest rate," Trump said on Twitter. "No Inflation! It is only the naïveté of Jay Powell and the Federal Reserve that doesn’t allow us to do what other countries are already doing."

American presidents have typically shied away from criticizing the Fed or commenting publicly on monetary policy decisions for fear of rattling investors or being seen as exerting undue influence. But Trump has bucked convention, choosing to air his grievances regularly.

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Response to TomCADem (Original post)

Sun Oct 6, 2019, 11:21 PM

6. The U6 unemployment rate is the most accurate.

It is a measurement of those without a job and those who are part time that want a full time job.

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Response to roamer65 (Reply #6)

Sun Oct 6, 2019, 11:45 PM

7. It's a different measurement. It's no more or less accurate

It’s like the difference between a thermometer and a ruler.

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Response to TomCADem (Original post)

Mon Oct 7, 2019, 10:21 PM

8. K&R, red Don is less credible than Nixon

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