Misleading with Numbers: It’s Worse When the Government Does It

Major international comparisons have long concluded that Americans’ ability to effectively utilize mathematics is inadequate. Such conclusions divide students, parents, teachers and administrators into camps that share little more than blaming others for the problems. However, it is unclear whether all the finger-pointing indicates a real desire to overcome our innumeracy. In fact, we systematically misuse numbers to distort reality because we want to fool ourselves, making our ineptitude no surprise.

The Unseen Cost of Shoveling Snow

“Sophistry?” my indignant neighbor replied, shovel raised.

“Yes,” I responded, raising my shovel in response, “pure sophistry.”

How did we, two friendly neighbors, end up in such a confrontation? What was the reason for raising shovels instead of slinging snow? To answer that, we must go back in time.

The weather forecasters had predicted rain, followed by ice, and then by snow. Panic was everywhere, which usually means nothing would be the result — and I had hoped as much. Sure, we might get a little rain and a little ice and snow, but only as minor inconveniences.

Central Banks Put a Safety Net Under Financial Markets

Most early business cycle indicators suggest that the global economy is pretty much roaring ahead. Production and employment are rising. Firms keep investing and show decent profits. International trade is expanding. Credit is easy to obtain. Stock prices keep moving up to ever higher levels. All seems to be well. Or does it? Unfortunately, the economic upswing shows the devil’s footprints: central banks have set it in motion with their extremely low, and in some countries even negative, interest rate policy and rampant monetary expansion.