In The Media

For my annual April Fool’s Day post, we revisit some of the past year’s most useless and inane numbers presentations. This year we celebrate an infographic about marijuana use in the U.S. in the recent past. This graph is this year’s winner because it is not only shockingly incompetent, but appeared on the website of a news outlet – CBS News – that really should know better.

For New Year’s reading I commend “What Kind of ‘Jobs President’ Has Obama Been – In 8 Charts,” from the NPR website. The eight graphs referred to are straightforward and easy to understand. They show critical data in a journalistically ethical way – a characteristic in very short supply these days. With one exception that’s all too common in data visualization today…

This second post in a short series on TV news innumeracy looks at an even more ludicrous example – the notion of “bellwether” counties. The pundits seem to have an obsession with counties – or towns, or even precincts – that have voted for the winning side in several consecutive elections, as if that information actually meant anything. Well, it doesn’t, and the reason it doesn’t has implications for financial analysis.

In last night’s TV coverage of the Iowa caucuses, two words kept coming up – “winner” and “bellwether” – showing that when it comes to the real meanings of numbers as well as words, even the "experts" don’t get it.

An interesting headline on the front page of a recent USA Today: “Drastic drop in Medicare deaths, costs.” The story cites a JAMA article reporting significant drops from 1999 to 2103 in death rates, hospitalization rates, and cost-per-patient among Medicare patients. That great news! Now, from that headline, you might infer that Medicare had something to do with the improvements, but should you really?

In celebration of April Fool’s Day, let’s take a look at some of the most messed-up, incomprehensible recent examples of quantation. Not surprisingly, all are graphs. But some come from sources that definitely should know better.

Six years ago David Friehling, Bernie Madoff’s auditor, pleaded guilty to aiding and abetting the fraud, but he still hasn’t been sentenced. It’s a drama eerily reminiscent of the old “Weekend Update” bit on “Saturday Night Live,” where newsman Chevy Chase announces that “Generalissimo Francisco Franco is still dead.”

A recent (2/9/15) Reuters article suggests that the accelerating trend of large U.S. companies reincorporating abroad, sometimes called “tax inversions,” is NOT motivated by the statutory U.S. federal tax rate, at 35% one of the highest corporate rates in the world. An interesting perspective, but the numbers they cite don’t support it. Yet again, this is an instance that illustrates how important it is that we be careful about the words that we wrap around the numbers.

Since my last post was so negative, and so critical of the stuff given to us to read, it’s a pleasure to encounter a good example of quantation, even on an unpleasant subject. I’m referring to a Washington Post-ABC News poll of public opinion related to the recent Senate report on torture and the CIA. Here’s what I liked about the survey design:

At last week’s terrific Association for Financial Professionals (AFP) national conference, there was much discussion of “data visualization,” a major information-presentation buzzword these days. Last week’s U.S. elections seem to provoke the same urges to barrage us with graphics. But do all these beautiful pictures really get us anywhere?

Finance professionals produce information. It’s what we do, so let’s think carefully about why and how we produce that information. In that respect, CNN’s coverage of Flight 370 is instructive.

This piece appeared originally on Proformative.com, an excellent website for senior finance professionals. It’s a little technical, and pretty long as my posts go, but very spicy – I take a novel perspective on what really went wrong in the Madoff fiasco. If it’s not your cup of tea, feel free to scroll down to the next post. Thanks for your interest.

I’m in the habit of tuning in to CNN fairly regularly for a few minutes just to see what’s going on in the world, especially since CNN is on the satellite radio that’s in my car. But within a few days after Malaysia Airlines flight 370 disappeared, I got tired of CNN newscasters breathlessly announcing, “And this just in: Flight 370 is still missing!!!!”

It’s important to present numbers that your audience actually cares about. We sometimes lose sight of that in an effort to turn out a beautiful table or graph. I have Ira Apfel of the Association for Financial Professionals and the editor of AFP’s Exchange, to thank for a great example of this point. Here’s a snip from the “Medal Tracker” page of the ESPN website.

“Chartjunk” is a term coined by Edward Tufte to describe elements in graphs or approaches to graphing that detract from the meaning of the graph or even skew the depiction of the graph to the point where it will get misinterpreted. For the interested observer, the media efforts to present information on Obamacare and its rollout have created a veritable goldmine of chartjunk.

In clear, effective quantation, the words we put around the numbers are often as important for audience comprehension as the numbers themselves. In this morning’s Washington Post is an excellent op-ed piece, “What to call this economy?” by Robert Samuelson, where he observes that we lack the economic vocabulary to describe the current state of the U.S. economy.

I recently downloaded a Wall Street Journal article about the congressional food fight over spending and the debt ceiling. I learned that “on Oct. 17 [the Treasury] would be left with only about $30 billion.” I went on to learn that this amount was approximately equal to the Harvard University endowment in 2011, and the cost of Hurricane Ike in 2008.

In today’s broadcast of Marketplace on NPR, David Brancaccio led a great discussion about using statistical indicators to predict presidential elections. Which works best? GDP? Disposable income? American war casualties? Unemployment? Gas prices? Durable goods spending?

This morning’s “Daily ‘Dog,” a website devoted to information and discussions about the public relations profession, introduced a “Best Practices Guide for Use of Statistics in Public Relations,” prepared jointly by the Public Relations Society of America (PRSA) and the American Statistical Association (ASA). This short document is excellent guidance not just for PR professionals, but for anyone presenting survey results and other statistical information.

I just saw a 7/1/11 CNN interview with Scott Hodge, the President of the Tax Foundation, on the subject of “Who Pays Income Taxes in America.” I won’t elaborate on Hodge’s position here – you can see the video for yourself – but in the course of the interview CNN put the following slide up on the screen, using data provided by the Tax Foundation...

The word for today is context. Yesterday’s New York Times ran a story about a bill in the New Jersey state legislature about to become law, which will reduce the state’s cost of benefits for government employees and retirees. The fiscal condition of the states is a burning issue nationwide, and deserves a clear and concise airing for interested citizens.

Housing starts in April dropped more than 10% from housing starts in March. That was one of NPR’s lead stories this morning , as it was for many other news services. In the spoken version of the story, the NPR reporter attributed the drop in new construction to the glut of existing homes that are on the market because of mortgage foreclosures. The reporter went on to say that one of the problems these foreclosed homes posed was that they “were selling below their value.”

In an ExxonMobil TV ad supporting the National Math and Science Initiative (NMSI), the voice-over says that “high schools. . . enrolled in the NMSI have raised AP test scores by 138%.” ExxonMobil reasserts this claim on their corporate website.

A headline in today’s Los Angeles Times reads, “Boehner demands trillions in cuts in exchange for debt vote.” Wow! But wait! It gets even more specific! Since the cuts the Times cites Boehner as demanding cuts greater than the increase in the debt ceiling being negotiated, that somehow means he’s demanding cuts of “$2 trillion or more.” Double wow!! (Have I used too many exclamation points?)