19 August 2011

Lies, Damned Lies and....Averages

Mark Twain famously said that there are three kinds of lies: Lies, Damned Lies and Statistics.* I'd amend that: Lies, Damned Lies and Averages. Averages hide a multitude of sins, lies and distortions, especially in politics. Consider a statement like this:

"My fellow Americans, consider the past ten years: on average household income has increased 28%. The average American now has 49% more money invested in stocks."**

People nod and agree how wonderful things must be on paper, even if personally they do not feel richer or better off....and with good reason. Consider the analogous situation:

I have 100 pies. You have 2 pies. On average we have 51 pies, even though I have 50 times more pies than you do. Tomorrow I get ten more pies and you lose one pie. On AVERAGE, pie ownership has increased almost nine percent. On AVERAGE, we each have more pies than yesterday and on AVERAGE (and at aggregate level), the total number of pies is going up. But are you better off that you were yesterday? Certainly not. Oh, well....at least 'on average' things are going swimmingly.

When wealth in this country is finding its way into fewer and fewer hands and as the gap between the richest and poorest continues to grow, dishonest people distract from this by touting averages in exactly these ways, proving once again that in the hands of talented political consultants, even the truth can be used to lie. Until people start learning to dig deeper, we will continue to be bamboozled by people who assure us that on average, things are going well, even when it's just a tiny sliver of the population that is benefiting.


*Actually, he attributed the quote to someone else, but there's no evidence that person ever said it, so we may as well call it Twain.

**These are not the actual figures; this is just an example.

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