The Midterm Elections mean we have lots of numbers and statistics on full display in the media. As we try to think through all of the points and figures, keep this Tim Harford quote in mind, “Curiosity can save us when lies come dressed as numbers.” Before the stats suck us in (or our clients), we should consider the chance at salvation he’s reminding us to take.
Whenever we hear a striking statistic that catches our attention, we need to pause and reflect. Hartford’s plea for curiosity means we have to just say “hmm… why?” Does the economy do better or worse under Republican Presidents with Democratic Senates and slight majority Republican Congresses?
Why would it? How would we know? How big is the sample size? How many periods of time do we actually have to study this? What else was going on at the time? Do we believe politics was the only causal factor? If it’s one of many, how should we weight it?
We don’t need to have advanced degrees or statistical training either – we just have to remember what we learned in grade school. As Harford writes, “…perhaps my own teachers weren’t so wide of the mark with their advice. They always used to tell me: stop and think, check your answer, and explain your reasoning. It was wise counsel. Some lessons stand the test of time.”
No doubt there are some interesting stats about how the economy and markets perform under different administrative scenarios, but the reality is we simply don’t have enough data to provide us with much useful information. A fair comment to the next person who pushes a statistic under your nose should be, “That’s interesting, but it does raise some other questions.”
Learn to treat statistics as curiosity triggers. Ultimately, when we start to ask questions, we’ll naturally revert towards our actual values and become less swept up in the noise of the moment. For ourselves, our clients, and our peers, staying wary of potential lies dressed as numbers helps to maintain our actual vision and path – and that’s far more important than getting pushed and pulled by the latest sound bite.