* 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
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
"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
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
"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