How To Make Government Pay

Gossip, speculation, and scuttlebutt about politics.
May 3 2001 4:56 PM

How To Make Government Pay

As a down-on-your-luck day trader, you perked up last Friday morning when the government released new statistics showing that the economy had bounced back to a 2-percent growth rate. But what if you'd gotten hold of that info the day before its official release? With that data in hand, you could have made more money in a few hours than you lost when the Nasdaq crashed!

"It would be like in Trading Places," gushes a cable network financial journalist, referring to the 1983 movie in which Dan Aykroyd and Eddie Murphy use an advance peek at a government citrus crop report to make millions in the commodity's markets. Of the many monthly government data dumps, the Labor Department's unemployment statistics are the most exploitable, surmises the financial journalist. The markets react vigorously to the job numbers because they're a leading indicator of future trends: Anybody who got a sneak preview of them could make a bundle, say, with a forward position in a foreign currency for or against the dollar, he says.

But how easy would it be to pull such a scam off?

Not very. The government keeps the data secured in specially locked offices, storing them on ultrasecure computers, and entrusts the operation to a few career employees. Even big-time pols and appointees aren't trusted with the info. Former Clinton adviser George Stephanopoulos insists, "I never knew a single number early, and no one wanted to take the risk of even asking for the information."

The handling of the employment statistics is governed by Office of Management and Budget Circular No. 3, which was issued in the early 1970s. Here's how it works: On the first Friday of every month at 8:30 a.m. the Labor Department releases the new employment data. A few administration bigwigs get a half-hour heads-up, but that's it. A couple of dozen approved journalists get to see the numbers at 8 a.m. too. But they are sequestered in a room at Labor with no communication with the outside world until 8:30 a.m. TV journalists get to leave the room a bit early to set up outside with their crews, but a Labor Department handler prevents them from making any revealing smirks or gestures until 8:30 a.m.

Even if the press leaked the numbers to you, 30 minutes wouldn't be enough time to make a killing. So where to get the information? Don't bother Secretary of Labor Elaine Chao. All she gets is the 30 minutes heads-up. (What about the president? We'll get to him in a moment.)

The best shot would be the half-dozen or so green-eyeshades who compile the numbers in Labor's Bureau of Labor Statistics. Their names: Katherine Abraham, the commissioner of the Bureau of Labor Statistics; John Galvin, associate commissioner for employment statistics, the office that crunches the numbers; and four or five members of his staff whom he designates. It's safe to assume that none of them make as much money as your average Wall Street high-flyer. You might want to consider bribing them (which, of course, would be against the law, but hey, in for a dime, in for a dollar).

Surprisingly enough, government and Wall Street sources say that this valuable information has just never leaked. Or if it has, no one was any the wiser. The only exception was a brief period in the middle 1990s when data was inadvertently posted on the Internet on several occasions while the Bureau of Labor Statistics folks were trying to figure out how to run their Web site.

But don't lose hope. There is one more angle you could work. One political appointee gets tipped in plenty of time to cash in: the head of the president's Council of Economic Advisers. According to Kathy Hoyle, an economist and press officer at the BLS, late on Thursday afternoon (i.e., the day before) the bureau sends the numbers to the head of the council, basically as a proxy for informing the president. Whether he actually tells the president, Hoyle didn't know.

That guy is now the soon-to-be-confirmed Columbia University economics professor Robert Glenn Hubbard. So if you want to give this idea a try, Hubbard's your man. He's probably taking a big pay cut. He just may be willing to listen if you cut him in.

TODAY IN SLATE

Foreigners

More Than Scottish Pride

Scotland’s referendum isn’t about nationalism. It’s about a system that failed, and a new generation looking to take a chance on itself. 

What Charles Barkley Gets Wrong About Corporal Punishment and Black Culture

Why Greenland’s “Dark Snow” Should Worry You

If You’re Outraged by the NFL, Follow This Satirical Blowhard on Twitter

The Best Way to Organize Your Fridge

Politics

The GOP’s Focus on Fake Problems

Why candidates like Scott Walker are building campaigns on drug tests for the poor and voter ID laws.

Sports Nut

Giving Up on Goodell

How the NFL lost the trust of its most loyal reporters.

Is It Worth Paying Full Price for the iPhone 6 to Keep Your Unlimited Data Plan? We Crunch the Numbers.

Farewell! Emily Bazelon on What She Will Miss About Slate.

  News & Politics
Weigel
Sept. 16 2014 7:03 PM Kansas Secretary of State Loses Battle to Protect Senator From Tough Race
  Business
Moneybox
Sept. 16 2014 4:16 PM The iPhone 6 Marks a Fresh Chance for Wireless Carriers to Kill Your Unlimited Data
  Life
The Eye
Sept. 16 2014 12:20 PM These Outdoor Cat Shelters Have More Style Than the Average Home
  Double X
The XX Factor
Sept. 15 2014 3:31 PM My Year As an Abortion Doula
  Slate Plus
Slate Plus Video
Sept. 16 2014 2:06 PM A Farewell From Emily Bazelon The former senior editor talks about her very first Slate pitch and says goodbye to the magazine.
  Arts
Brow Beat
Sept. 16 2014 8:43 PM This 17-Minute Tribute to David Fincher Is the Perfect Preparation for Gone Girl
  Technology
Future Tense
Sept. 16 2014 6:40 PM This iPhone 6 Feature Will Change Weather Forecasting
  Health & Science
Science
Sept. 16 2014 4:09 PM It’s All Connected What links creativity, conspiracy theories, and delusions? A phenomenon called apophenia.
  Sports
Sports Nut
Sept. 15 2014 9:05 PM Giving Up on Goodell How the NFL lost the trust of its most loyal reporters.