How to Lie With Statistics

"There is terror in numbers," writes Darrell Huff in How to Lie with Statistics. [get it from Amazon through this link]

The book was (still is?) required reading for the Statistics course in the CGA program in Canada. (A CGA would be similar to a CPA here in the USA.)

You know, every time we hear the latest reports out of Washington, you have to wonder just what the economic numbers really represent. Are they telling us everything? Is the picture really as rosy (or gloomy) as the numbers indicate?

Take, for instance, the latest economic numbers coming out of Washington.

At last count, 9.4% of the workforce is jobless. Compared with a year ago, the goods and services we produce are worth 5.7% less while the ones we buy are 0.7% cheaper. [link]

John Williams, a semi-retired grandfather of five living in Oakland, Calif., consults for corporations, recalculating government economic data to arrive at what he says were more reliable measures, and with them, truer forecasts.

Here is the picture his numbers paint:

If Williams is right, unemployment is over 20%, gross domestic product is shrinking by 8% and consumer prices are jumping by nearly 7%. [link]

Now, looking at the two pictures above, having just completed a wee bit of shopping at my local area stores, I'm thinking John's numbers with respect to inflation are far more accurate.

Having read a great deal in recent months regarding bankruptcies, business and bank closings and major corporation cutbacks... I also have a strong feeling John's picture regarding GDP and unemployment are far closer to reality.

So ...if one were to compare the two styles for collecting and disseminating data... in a way similar to art, one might say that John Williams style uses "realism" and Washington's style uses "impressionism" in their approach to paint the final picture.

Either way, in art at least, both approaches can result in a great masterpiece.

The quickest definition of a great work of art was probably given by Leonardo DaVinci. It was DaVinci who said that an artist must be able to paint the thing represented, i.e. if an artist clearly wants to paint a squirrel and the resulting representation is an embarrassment ... then the artist is a failure. Of course this will not grade the fundamental attribute of complexity of subject matter.

To contrast between realism and impressionism in art you could say everything is equally important (realism) or equally unimportant (impressionism).

In art, it's all about "controlling the viewer."

In marketing, the same could be said to be true.

In copywriting, it most definitely is true.

Whether you choose to believe the numbers according to Washington, or the numbers according to John Williams... the picture is far from good.

In fact, according to the Administration's reasoning behind the Stimulack, you can now officially say it failed. Unemployment was to be kept below 8% according to that grand plan, wasn't it?

I leave you today with one final quote by Darrel Huff:

"The fact is that, despite its mathematical base, statistics is as much an art as it is a science."

Have a super day.

I'm back tomorrow with a real whopper that will have your head spinning!

PS: Did you hear about the latest on-air media confrontation: Contessa Brewer vs John Ziegler? Just for fun, you can learn more here. Draw your own conclusions there. LOL!