Tuesday, February 24, 2015

When government controls business, it can buy silence

Gallup chairman and CEO Jim Clifton made news recently by writing on his company’s blog that the nation’s official 5.6 percent unemployment rate is a “Big Lie.”
The capital letters make that a reference to the propaganda technique of Adolf Hitler and Joseph Goebbels, who recommended telling a lie so big that people would believe it only because no one would have the gall to make up such a thing.
A few days later Clifton appeared on CNBC and tried to clarify that he wasn’t calling the Bureau of Labor Statistics a bunch of liars. “I need to make that very, very clear so that I don’t suddenly disappear,” he said. “I need to make it home tonight.”
That “disappear” comment is a reference to Stalin’s purges of intellectuals in the Soviet Union.
Was he joking?
They’re never joking.
What is in Jim Clifton’s head that’s causing these totalitarian references to fall out of his mouth? He sounds like he’s afraid of the government.
Maybe he is.
Gallup is a U.S. government contractor, and it’s risky to tick off a client. Gallup has done consulting work for the U.S. Army on civilian personnel recruitment, for the Social Security Administration on marketing research, for the Department of Agriculture, the Office of Personnel Management, the Peace Corps, the Farm Service Agency, the Department of Education, the Federal Trade Commission, the Air Force, the Department of Veterans Affairs and the Bureau of Ocean Energy Management, according to the Federal Procurement Data System.
There have been a few bumps.
In 2013, Gallup paid $10.5 million to the U.S. Department of Justice to settle charges that the company overstated its costs on no-bid contracts with the State Department and the U.S. Mint. The settlement also ended litigation over charges that Gallup offered a job to a FEMA employee in exchange for help getting work for the company. As the U.S. attorney explained it, “This case exposed a cozy arrangement between a contractor and a government employee where nobody was looking out for the American taxpayer.”
But all was forgiven. Last October, Gallup won a $2.5 million contract to do a customer satisfaction study for the Department of Labor.
And then the CEO compared their unemployment numbers to the propaganda of Joseph Goebbels.
In a totalitarian state, the government exercises total control over business, and an executive who steps out of line could very well disappear, but what we have here is a totalitarian state of mind.
Before he was afraid of disappearing, Jim Clifton wrote a scathing commentary exposing the tricks of government statisticians. He revealed that “a job” is defined as at least one hour of work for at least $20, “unemployed” doesn’t include people who desperately want a job but have given up trying to find one, and the number of full-time jobs in America is a “staggeringly low” 44 percent of the adult population, leaving 30 million “out of work or severely underemployed.”
He must have felt a cold stab of fear when he realized he was criticizing a client worth millions of dollars to his company. That kind of thing can cause a CEO to lose his job.
In this economy, that’s the same as disappearing.
Where the government has too much control over business, executives have a strong incentive to shade their public comments in a way that’s pleasing to government officials. This is especially dangerous when the business is news and information, or polling data, because the public may be fed a distorted picture of reality.
If it’s not quite totalitarian propaganda, it’s a little too close for comfort.

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