This week a rant about numbers and number crunchers.
What got me fired up was an interview on the box of a Senior Fellow at the Howe Institute (a conservative think tank) on the apparently shocking lack of saving by the millennial crowd and other inter-generational stereotypes for their elongated retirement years, now expected, because of longevity expectations. The senior fellow, and he was a senior in true sense of the word, in short order, completely debunked the argument by pointing out that the conclusions were based upon biased statistical assumptions that used, as a norm, income earned in the last five years of a working life (the highest in a working life) and upon a one time statistical anomaly for increased life expectancy. Once corrected for these unfortunate slips, a big problem became a very small one and certainly not worthy of all the fuss.
Setting aside the efficacy of the arguments on both sides of the issue this goes to show how figures can be used to drive an issue in the public domain. Mark Twain was right when he supposedly said “figures don’t lie but liars do figure” (for their own ends)
The Retirement Industry in all of its facets, is enormous and the government policy implications are even bigger. Just think about it. We have government promising to lend us back our own money until we die, so we can live in increased circumstances, and we have armies of extremely well paid sales people telling what to do with the supposed largess to make sure we have enough to live like royalty.
Very much the same kind of thing occurs with the furor over the so-called income inequality. Once statistical anomalies are removed, namely housing that drives wealth number, we find the great middle has hardly changed at all and a so-called problem becomes a relatively small matter. For the top and the bottom of the wealth scale, it has ever been thus and it may well be argued that something should be done. Unfortunately experience tells us otherwise, that taxation for social does not work.
Finally my ongoing prattle about fear and numbers used to drive paranoia. Here the problem is that common sense tells us that the numbers (Terrorist threats of all kinds) and being greatly exaggerated in order to centralize power in the hands of the elite. Why Not? A population that lives in fear is a lot more compliant than one that has the audacity to question edicts from on high. Here the problem is the secrecy that surrounds the great wheels of power and makes it all possible. This is why the Edward Snowdon revelations are so significant, because they draw back the curtain and allow us to glimpse inside the center of power that is dependent upon churning out numbers that by any count cannot be justified as being realistic.
Common to all of this is the reluctance of the media to question the efficacy of the numbers that are assumed to drive ratings. Maybe now we have social media this will change, but so far the temptation to manipulate seems to be well in front of rationality.