Oops, Another ‘Conspiracy Theory’ Just Came True

Trump Fired Erika McEntarfer. The Data Proves He Had A Point.

I imagine right about now Louisiana Senator John Kennedy must be getting downright perplexed by the Washington Establishment. Corporate media has been doing its best to honor his request to create some new “conspiracy theories”, but time and again the new “conspiracy theories” quickly become “conspiracy facts”.

The media-created furor over the firing of the Commissioner of the Bureau of Labor Statistics is but the latest such effort by the media, and the latest “conspiracy theory” to become “conspiracy fact.”

I am referring, of course, to CNN’s depiction of Erika McEntarfer’s firing as “Orwellian”.

Trump has always been rather blatant about his efforts to rewrite history with self-serving falsehoods and rather shameless in applying pressure on the people who would serve as impartial referees of the current narrative. But this week has taken things to another level.

On Friday, Trump fired the commissioner of the Bureau of Labor Statistics. This came just hours after that agency delivered Trump some very bad news: the worst non-Covid three-month jobs numbers since 2010.

This would then feed into CNN’s subsequent somber and obviously moderate headline.

(Warning: Please do not slip on the dripping sarcasm!)

CNN, unfortunately, has a small problem with their reporting: It has been proven multiple times that the BLS has been putting out garbage jobs statistics for at least the past couple of years.

I can say this because I have been criticizing the BLS jobs data as “Lou Costello Labor Math” since they published the vaudevillian absurdity known as the January 2022 Employment Situation Summary.

The Employment Situation Report: Lou Costello Math

The reader is invited to re-read my comments from then, as well as my numerous commentaries on the BLS jobs data since. Check the data. Interrogate my logic. Challenge my conclusions.

Checking the data is the one thing former Treasury Secretary Larry Summers did not do before sounding off about the firing Sunday when interviewed by ABC’s George Stephanopoulos.

Former Treasury Secretary Larry Summers called President Donald Trump's accusation without providing evidence that the top Bureau of Labor Statistics official manipulated jobs report numbers "a preposterous charge" on Sunday.

Speaking with "This Week" anchor George Stephanopoulos, Summers said that one official would not be able to change the numbers.

"These numbers are put together by teams of literally hundreds of people following detailed procedures that are in manuals. There's no conceivable way that the head of the BLS could have manipulated this number," Summers said.

The first flaw in Summers’ argument is the magic word “compliance”. While I have no doubt that there are “detailed procedures that are in manuals”, anyone who has ever dealt with a financial audit knows that compliance with procedures is a major portion of every examination. Compliance checks are necessary because the mere existence of procedures is no assurance they are being followed.

Moreover, as DOGE revealed earlier this year, non-compliance is a major problem across the whole of government.

DOGE Is Not Telling Us Anything New. That’s The Problem

Further, despite the “detailed procedures”, the reality of the jobs data is that it has been outrageously wrong for most of the past few years. The variances between the trends from the various BLS surveys of US labor markets do not allow for any other rational conclusion.

The other defense offered for Erika McEntarfer’s serial incompetence—that she is just a figurehead—is no more persuasive.

The BLS head - known as the commissioner - plays no role in collecting the data or putting the numbers together, only stepping in to review the final press release before its published, according to former commissioners.

"My reaction was, 'That couldn't happen,'" says Katharine Abraham, who served as BLS commissioner from 1993 to 2001, about Trump's claims that the numbers had been rigged.

"The commissioner doesn't have control over what the numbers are," she adds.

Assume for the moment that McEntarfer simply proof-read the press release. If that is true then the one thing she could not have been doing is actually looking at the numbers and asking if they made sense (or, more aptly in the case of the most recent numbers, “Whiskey Tango Foxtrot?”). If that is true then she was not doing her job as it is defined by the Department of Labor.

The Statistical Official ensures that the Department’s statistical function adheres to the rigorous standards in the Confidential Information Protection And Statistical Efficiency Act (Title 3 of the Evidence Act), including that the Bureau of Labor Statistics will protect the confidential of respondents and the information they provide, and will coordinate with the Census Bureau and the Bureau of Economic Analysis to improve the sharing of economic data.

Per the Department of Labor, the job of the Commissioner of the Bureau of Labor Statistics includes ensuring data and reporting quality. Both have suffered under McEntarfer’s BLS stewardship—hence my labeling the BLS job reports “Lou Costello Labor Math”.

Despite the well documented decline in BLS data quality, corporate media only became concerned about its “integrity” after McEntarfer was let go.

Trump’s dismissal of Bureau of Labor Statistics Commissioner Erika McEntarfer after the release of disappointing employment figures on Friday has raised fears over the integrity of Washington’s economic data, which are relied on by countless businesses and investors in the US and across the world.

The National Association for Business Economics warned that McEntarfer’s “baseless” ouster risked doing “lasting harm to the institutions that support American economic stability”.

Side note: anyone who doesn’t laugh out loud at the National Association for Business Economics depiction of the BLS as an “institution that support[s] American economic stability” probably hasn’t been paying attention to the BLS data (your remedial assignment is to read up on Lou Costello Labor Math).

While I freely concede the utility of a central information bureau gathering and disseminating US economic data, the Bureau of Labor Statistics has made such a pig’s breakfast of the jobs data over the years that, if anything, it has contributed to economic instability. That is particularly true to the extent that the Federal Reserve relies on the BLS top-level jobs data to justify its unjustifiable decision to keep the federal funds rate arbitrarily high.

June Is Too Late, July Even Later

It’s not hard to understand why corporate media thinks McEntarfer’s firing is somehow all about Trump. If Donald Trump accepted the jobs numbers at face value the way corporate media does, his sales pitch of a big booming US economy would collapse. Corporate media, of course, loves the idea of Donald Trump face-planting over the economy, so they’re only too happy to rush to McEntarfer’s defense, accepting the jobs numbers along the way.

However, corporate media has not thought this narrative all the way through. They want to argue that the US economy is not doing well and might actually be on the verge of a recession.

Traditionally a lagging indicator when it comes to recessions, the weakness in job growth points to an economy that may be slowing even more than some of the traditional metrics are showing.

“We are in a broad economic slowdown. Whether it translates to a recession or not is the question that I’m asking now,” said Luke Tilley, chief economist at Wilmington Trust. “The labor market is key, and it’s hard to gauge what’s going to happen.”

The problem they now have is two-fold:

First, a number of “experts” have been happy to tout the “strength” of US labor markets—strength which vanished in a puff of illogic last Friday.

Trump administration officials have been calling on the Fed to cut its benchmark funds level that feeds into multiple other consumer interest rates. The Fed last week held the rate steady, and several officials made public comments since the report saying they still think the labor market is strong.

However, further signs of economic weakness could change that.

The second problem corporate media has is that the most public official who has been touting the strength of US labor markets is Jay Powell, who has used that repeatedly as a reason not to cut the federal funds rate.

Without strong labor markets Powell’s TDS-inflected reasoning for not trimming the federal funds rate also vanishes in a puff of illogic.

Wall Street and official Washington thus have a choice: accept Friday’s jobs numbers at face value and then accept that Donald Trump is right about Jay Powell being “too late” to trim interest rates, or accept Donald Trump’s assertion that the jobs situation is in reality much better than the BLS data suggests and then accept that Donald Trump is right about the American economy entering a “golden age”.

Which Trump narrative do they want to say is right? That Powell needs to cut rates or that the US economy is booming? Corporate media and official Washington must choose one or the other. There’s no squaring of the circle which will allow them to accept or reject both.

For all of corporate media’s valiant efforts to portray the firing of Erika McEntarfer as controversial, and claims the BLS is putting out garbage data are simply “conspiracy theories”, corporate media is upstaged by the data itself.

It is the BLS data which shows that the BLS is putting out garbage numbers.

It is the BLS data which, despite its degraded condition, shows US labor markets are still toxic rather than tight.

It is the BLS data which, despite its degraded condition, shows the US is nowhere near the full-employment level that is part of the Federal Reserve’s official mandate

It is the BLS data which shows that Erika McEntarfer was inept and incompetent in her job as BLS Commissioner.

Corporate media has done its best to provide Senator Kennedy with a fresh conspiracy theory. Truly, it has.

Unfortunately, what it ended up providing is a fresh conspiracy fact.