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December 18, 2005
Statistics are for liars, Sun., Dec. 18, 2005, 1:30 PM
Israeli mutual fund manager Doron Tsur expresses a viewpoint in today's Haaretz media that is strikingly similar to my own. For those who get caught up in the statistical data that is produced by the U.S. Administration and spun by Wall Street and Big Media, you might be interested to know that the truth lies somewhere between point and counter-point.
The problem of course, is that when those people go on the offensive, there is hardly a counter-point to be heard. So, it's up to us to speak up more.
Here is the link to the Tsur article. It's a neat piece of op-ed journalism, which is a successful feature of traditional media.
Bloggers like myself should try to express more of our opinions in traditional media, and journalists using nicknames ought to come more to the comment section of legitimate bloggers.
The late Marshall McLuhan, a man I admired and who's family I personally know, had it partly right when he coined the expression, "the medium is the message". After all, I have been saying for years that broadcast and web media are going to give a different message.
However, the truth is that, regardless how the message is delivered; it's the message that carries the weight.
The message we get today from the U.S. Administration, and their friends, and one that I say is as phoney as a U.S. $2.1 bill, is that inflation is just at ~2 percent today. The government has the statistics to prove it, they say.
Herein lies the relevance of Mr. Tsur's op-ed piece:
"....This lecturer had a few rules. "You won't remember the formulas and models a day after the test," he'd say, justifiably. "What you have to remember is the underlying logic, so you can protect yourself against charlatans in the future when they whip out the stats."
The key word is skepticism, he'd say: "In statistics, there is no such thing as truth. Beyond the figures you see, always ask yourself the following questions.
Who compiled them? What is his interest? What figures or analyses did he withhold?
"Only once you know the answers to these questions," he would orate, can you decide whether to trust the numbers you're seeing."
Does this not sound familiar? If you recall, I have been saying that U.S. Treasury Secretary John Snow and his colleagues at the Departments of Labor, Defense, Commerce, and so forth, have a job to do, which is to tell a story that best sells the President's platform, policies, and strategies.
The "Snow" man has a particularly challenging job to do " some might even call it a "snow job" -- when he tells us there is no inflation to worry about because the number is only + 2 percent.
That doesn't mean to say the story is correct " factually, morally, businesswise, or whatever. Everything he says is subject to interpretation. Your job and mine is to analyze what the "Snow" man is telling us, and to decide whether the data will help us make decisions with respect to our personal wealth, today and into the future.
I can, from personal experience, say that Mr. Snow has it wrong. The fact he can manipulate statistics to derive a number like 2 pct tells me just one thing: that he does it. Moreover I believe he has a strong motive for doing so.
You see, in simple logic, which is something I relate well to " and promote throughout these pages " I can see that at the end of the month, when paying bills, apples to apples, I have to pay increases of significantly more than 2 pct year over year.
Given that property taxes, hydro, home and car insurance, auto operating costs, medical and dental charges, public and limo transportation, and a host of other expenses and costs like McDonald's hamburgers and drinks, are growing at a much greater rate than +2 pct a year, I know that Mr. Snow has lost touch with reality if he actually thinks I am going to believe him.
And you show me that the total compensation packages for the officers and directors of Big Government, Big Media and Big Business are growing at just +2 pct a year, and I'll show you a Big Liar.
Yes economic statistics are for big liars.
This afternoon, I have swans and ducks, but no geese. And no stats.

Posted by Posted by Bill Cara on December 18, 2005 01:30:01 PM | Category: Economics

I had a statistics professor who would always get a laugh when he said to the class, "show me the data and tell me what you want to prove". Over the years I have come to doubt and be skeptical of anyone who uses statistical data in the public forum. So to listen to Snow, Rubin, politicans of any color or Snow White for that matter is just a waste of time. They all have an agenda and none of them can have your interest at heart regardless of what they say. In addition most people I know don't know the difference between a "normal curve" and a can of shoe polish. Doron Tsur is correct.....the message to get to people is to question all data presented and verify, verify, verify. If you can't verify the data or the basis for it, then ignore it.
Personally the value I see in Bill Cara's blog is the nice work done by G034 for example, on PFE based on Bills commentary. G034 presented a straight forward, logical analyses. Will everyone go out and buy PFE tomorow.....I think and hope not, but that doesn't take away from what he did.
Posted by: davpac
at
December 18, 2005 3:25 PM [link]