Ex-GE CEO Welch sets Twitter on fire with jab at Obama on jobs

Reuters Middle East

* Welch suggests data an attempt to recover from debate

* White House slams Welch tweet as "ludicrous"

* Investors point to his "black box" past with GE Capital

BOSTON/WASHINGTON, Oct 5 (Reuters) - Jack Welch, the

lionized former chairman of General Electric Co, provoked

cries of outrage in Washington on Friday when he appeared to

accuse the White House of manipulating September job figures for

political gains.

White House officials dismissed as "ludicrous" a tweet Welch

sent to his more than 1.3 million followers that suggested U.S.

President Barack Obama's administration rigged the data as a way

of recovering from a poor Wednesday night showing in a debate

against Mitt Romney, his Republican challenger for the White

House.

"Unbelievable jobs numbers..these Chicago guys will do

anything..can't debate so change numbers," Welch said in a

posting on Twitter, apparently referring to Obama, who formerly

served as a senator from Illinois.

The tweet was repeated more than 2,000 times, with many

mocking posts comparing Welch to New York real estate tycoon

Donald Trump - who during his failed bid for the presidency

loudly argued that Obama was not born in the United States - and

Clint Eastwood, who gave a widely panned speech to an empty

chair at the Republican National Convention in August.

Officials in Washington quickly dismissed the idea that the

Labor Department report - which showed U.S. unemployment falling

to a four-year low of 7.8 percent - could be rigged.

"That's a ludicrous comment. No serious person believes that

the bureau of labor statistics manipulates its statistics," said

Alan Krueger, chairman of the White House Council of Economic

Advisers. "The jobs report and all of their other statistics are

prepared by career employees. They use the same process every

month. They use the same process for Republican and Democratic

administrations."

The tweet was by no means Welch's first criticism of Obama

on his Twitter feed, where he has regularly spoken out in favor

of Romney, as well as weighing in on sports. During the

presidential debate in Denver, Colorado, on Wednesday night,

Welch tweeted: "HOW can anyone vote for Obama after this

performance..he has demonstrated his incompetence."

MEMORIES OF THE "BLACK BOX"

Welch's comments drew particular fire from the financial

community since during his 20-year tenure as GE CEO, which ended

in 2001, he was accused of using the GE Capital finance unit as

a "black box" where he could quickly sell assets such as real

estate to ensure that the largest U.S. conglomerate regularly

beat Wall Street profit estimates by a penny.

"This guy is the guy that's telling me the books are cooked?

That's hilarious," said Barry Ritholtz, CEO and director of

equity research at Fusion IQ in New York, which manages about

$300 million in assets. Ritholtz was one of the first to respond

to Welch's tweet.

Other tweets agreed with Welch's assertion. Welch is a

frequent participant on the site and has more than 1.3 million

followers.

"In regards to today's Jobs report---I agree with former GE

CEO Jack Welch, Chicago style politics is at work here," said

Florida Representative Allen West, a Republican, on Twitter.

GE Capital grew to generate about half of the Fairfield,

Connecticut-based company's earnings under Welch. But the

operation's vulnerabilities became all too clear during the

financial crisis, when losses at GE Capital hammered the

company's earnings and sent its stock below $6.

Welch's successor Jeff Immelt, who has been working to scale

back GE Capital and make it less volatile, serves as top adviser

to the Obama administration on jobs and the economy. GE

officials declined to comment on Welch's words.

Welch, who with his wife Suzy Welch, writes a column for

Reuters, could not be reached to comment further on his view.

BLS DEFENDS METHODS

Officials with the Bureau of Labor Statistics defended their

methods and findings.

"We have done a monthly survey since 1940 and the methods

have broadly not changed," said Karen Kosanovich, an economist

with the bureau. "Fiddling with the numbers, I don't know how

that would be possible."

U.S. Labor Secretary Hilda Solis told CNBC television that

she was "insulted" by the remark.

Other economists said they regarded the idea that the

monthly data - which is widely watched by Wall Street,

particularly in the face of the United States' slow recovery -

could be rigged as strange.

"Because we lost two-tenths (of a percentage point) last

time and three-tenths this time, the conspiracy theorists would

contend the BLS is cooking the numbers," said Ray Stone, an

economist with Stone & McCarthy Research Associates in

Princeton, New Jersey. "This just isn't true. They don't do

that."

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