Lies, Damn Lies and Anecdotes

“Lies, damn lies and statistics” is a phrase used to disparage the persuasiveness of statistics.  Anybody who has worked with statistics even a small amount know how numbers can be massaged to fit the biases of the ones doing the massaging.  I’ve seen it firsthand in the use of business statistics and we’re all getting a taste of it in the field of science with the e-mails uncovered a few weeks back in Climategate.

I have learned to be very skeptical of statistics, even statistics that support my own intuitions and beliefs.  Usually, with just a little poking, I can find problems in the data that damages the validity of any conclusions drawn on the analysis.

But, while statistics can often be used to persuade the logical mind who has not yet come to appreciate problems in data, anecdotes are even more dangerous because they are used to persuade the general public, especially in journalism.  Statistics are just numbers on a page.  Go find one of those numbers and show what it means and the persuasive factor has increased by several multiples.  A picture is worth a thousand words.

Just about every news story uses real life people to bring points the reporter wants to make alive.  That’s entertaining and interesting, but often this is abused because the reporter neglects to balance the stories with anecdotes form others and gives a distorted picture of reality.

How Government Grows

Government is stuck in a positive reinforcing loop, which means that just about anything is used to justify more government.

Consider the attempted terrorist attack on the Detroit flight.  We will likely be told that we need to fix it so that won’t happen again and that will mean more government.

Or, think about the mortgage crisis, which occurred due to large part to government intervention (though most people don’t recognize this).  The crisis is incorrectly considered a market failure that must be mitigated with more government.

How about health care?  As with mortgage crisis, the market for health care has been heavily damaged from government intervention.  Again, this damage is incorrectly attributed to a market failure.  Naturally, we need more government to fix it.

In all three cases above, the pattern is the same.  Something bad happens, be it viewed as a government or market failure and more government is proposed to fix it.

Global warming was sold as a problem, even though it doesn’t appear that the certainty of mankind’s influence on it is as clear cut as the believers have stated.  Either way, more government is sold as the answer.   Even if it’s not clear, “we don’t want to take any chances.”

It doesn’t just happen with bad things.  Even in good times government grows.  There’s always some perceived inequity that someone thinks needs fixing through government. Plus, if everybody’s doing well, who notices if the government has gotten a little bigger?

Consider US government spending from 1994 – 2000, arguably a pretty good time.  Federal government spending increased by 26% while inflation increased by 16%.  During this time, we also reduced military spending and entitlement spending.  Without these reductions, government would have even grown faster.

Or how about 2001 – 2006,  another time frame with good times.  Federal government spending increased by 44% while inflation increased by 14%.

Intuitively, I don’t buy that government is a good way to solve our problems.  The problem is that government activities are judged based on their intentions, not their results.

This Econtalk podcast, Wrinston on Market Failure Government Failure, supports my intuition.  Clifford Wrinston, of the Brookings Institution, took a look at a wide body of research on government in his book, Market Failure versus Government Failure (available for free online).  I highly recommend the podcast.  I will be reading the book over the coming weeks.

Make no mistake.  I know there are failures in the market too.  Neither the government or market is perfect.   However, failures in the market are like cancers that have their blood supply choked off – they die off.  Failures in government work the opposite.  Those cancer cells attract more blood supply and keep growing.

Dennis Prager is on to Something

Dennis Prager’s column, Thank You to These Businesses and Products, is a good reminder that we should be thankful for how good we have it.  As a society, we are excellent at whining about our problems but, not so good at recognizing the things that make our lives better.

Here are some of the things I can about that have helped the quality of my life in the last few days:

  • The Realtime 4-wheel drive on my Honda C-RV made it easier and safer for us to get to and from work and visit family over a snowy Christmas weekend.
  • The local tire store was able to fit us in on short notice and put new tires on my other car right before the snow.
  • Plastic disc sleds and a snow shovel produces hours of entertainment for my family in building a sled run in our backyard.
  • The mapping software on my iPod Touch, connected via wireless to the Internet through my AT&T Uverse service, and a Sprint cell phone allowed me to help my wife find a safe route home during blizzard conditions.
  • Grocery stores open for our convenience, stocked full of food and household items.
  • The Wii game console which has turned my living room into a bowling alley.
  • Band-Aids, a bottle of hydrogen peroxide and anti-biotic ointment that allowed me to administer first aid on a minor break in my skin that was starting to become infected.  Now, a day later, it’s healed.
  • The people who made all of the stuff in my house that makes a much cozier environment that one that exists just a few feet away during a blizzard.   The roof keeps us dry.  The walls keep out the wind.  The insulation keeps out the cold and noise.  The furnace and natural gas extracted from deep within the earth keeps it warm inside.

Those are just a few things that come to mind.  Every minute of my day I come into contact with something that makes my life better.  I like Prager’s resolution to keep that in mind and discuss those things.

Dave Barry on 2009

I enjoyed this 2009 recap from Dave Barry.  I found the recap of the first half of the year better.  Perhaps insanity becomes more clear a few months removed.

From January:

The No. 1 item on the agenda is fixing the economy, so the new administration immediately sets about the daunting task of trying to nominate somebody — anybody — to a high-level government post who actually remembered to pay his or her taxes. Among those who forgot this pesky chore is Obama’s nominee for Treasury secretary, Timothy Geithner, who sheepishly admits that he failed to pay $35,000 in federal self-employment taxes. He says that the error was a result of his using TurboTax, which he also blames for his involvement in an eight-state spree of bank robberies. He is confirmed after the Obama administration explains that it inherited the U.S. Tax Code from the Bush administration.

I really this passage about January and February:

In entertainment news, an unemployed California mother of six uses in-vitro fertilization to give birth to eight more children, an achievement that immediately catapults her to a celebrity status equivalent to that of a minor Kardashian sister. But even this joyous event is not enough to cheer up a nation worried about the worsening economy, which becomes so bad in . . .

FEBRUARY

. . . that Congress passes, without reading it, and without actually finishing writing it, a stimulus package totaling $787 billion. The money is immediately turned over to American taxpayers so they can use it to stimulate the economy.

No! What a crazy idea THAT would be! The money is to be doled out over the next decade or so by members of Congress on projects deemed vital by members of Congress, such as constructing buildings that will be named after members of Congress. This will stimulate the economy by creating millions of jobs, according to estimates provided by the Congressional Estimating Office’s Magical Estimating 8-Ball.

Another from February:

The stock market hits its lowest level since 1997; this is hailed as a great investment opportunity by all the financial wizards who failed to let us know last year that the market was going to tank.

From March:

. . . an angry nation learns that the giant insurance company AIG, which received $170 billion in taxpayer bailouts and posted a $61 billion loss, is paying executive bonuses totaling hundreds of millions of dollars. This news shocks and outrages President Obama and members of Congress, who happen to be the very people who passed the legislation that authorized both the bailouts and the bonuses, but of course they did that during a crisis and thus had no time to find out what the hell they were voting for.

Fun stuff.

Barry drills home the Geithner absurdity and “inherited from the Bush administration” excuse throughout.

As I read it, it occurred to me that while Barry is a good humorist, the funniest stuff in his recap didn’t need much help looking remarkably stupid.  And we accept that.

Sarah Palin Sensationalism

She must be a person people love to hate.  When I post about her, the traffic on my site goes up.  My last post about her generated about 10 times more views than any of the other posts in one day.

That makes me curious.  What is it about her that people love to hate?  Further, why do people beat on her so much? 

Consider, for instance, the fact that she wore expensive clothes provided by McCain’s campaign during the campaign.  That’s presented as if there’s a tinge of scandal.  It seems to grate people the wrong way.  Yet, I don’t recall any mention of who provides the other candidates’ campaign clothes or how much those clothes cost.

I do remember a story after Obama took office about the tailor who makes his suits and the designers that make Michelle’s clothes.  The tailor sounded very exclusive and I’m sure his suits aren’t cheap as did the designers for Michelle’s clothes. 

Yet, reporters don’t ask how much Obama’s or Michelle’s clothes costs or who pays.  Rather than a scandalous angle, the clothes story was presented as a human interest story.   

Personally, I could care less about anyone’s clothes, but the fact that there was such dramitcally different treatments in the media about the same story says a lot to me.  It should to you as well.

Don’t celebrities where free clothes?  Why isn’t that a scandal?  Do they need free clothes?  Can’t they afford their own?  Nope, it’s just a scandal when there isn’t much else to scandalize about someone we dislike.   When we can’t find something, we sensationalize.

I’ve heard more about Sarah Palin’s campaign clothes than Obama’s ties to ACORN.

I’ve heard more about the fact the Palin didn’t tell us which magazines and newspapers she regularly reads (do we know which Obama, Biden or McCain read?) than Obama bailing out Wall Street billionaires.

I’ve heard more about Tina Fey’s – as Sarah Palin and often attributed to Palin – comment that she can see Russia from her front porch than Obama following the path set by Bush in his last term rather than bringing the “change” people voted for.

Infinity Padlock

What was that game we’d play as kids when you wanted to lock something in so the other person couldn’t change it?   You might tell your friend that you’re good at something.  They reply, “I’m better.”  Then, you say, “I’m the best! Infinity padlock!”  I think.

Anyway, looks like Senator Harry Reid is playing that game with the health care bill.

Good Writing on Health Care

If you are having trouble figuring out what health care reform is all about, Scott Gottleib sums it up well in his piece entitled Obamacare: No Exit at the American Enterprise Institute for Public Policy Research.

In effect, the plan creates a single national health-insurance policy. Consumers’ only real option is to trade higher co-pays for lower premiums. But we’ll all get the same package of benefits established by a series of new agencies and an “insurance czar” seated in Washington.