Selective Data and Alternative Facts

"Figures don't lie, but liars do figure." -- Mark Twain

"The public be damned. I'm working for my stockholders." -- William H. Vanderbilt (1821-1885), president of the New York Central Railroad

   Carefully selecting data and stressing alternative facts is what enables demagogues to succeed. They begin by shading the truth, then selectively focus on a few minor statistical data, claiming that this one small size fits all.
   They continue this tactic, regularly expanding their pitch as they attack those who disagree as being unpatriotic purveyors of fake news even as they themselves are spreading loose interpretations of limited information bordering on and often surpassing the definition of falsehoods.
   Here's an example: The current administration in Washington insists that massive and sweeping tax cuts will fuel the economy so it will take off "like a rocket," and that the average family will gain $7,000 from the proposed tax reform.
   They cited a study by Harvard economists to support their contention. But the authors of the study pointed out that their conclusion led to a benefit of just $800 to the average family.
   Separately, it turns out that a study by another government agency that did not support the White House contention was deleted from the agency's web site.
   Nevertheless, the White House persists in touting the benefits of its plan, including the part that would eliminate the estate tax. As if this would benefit millions of people. Fact: The estate tax is levied only on the excess of an individual's $5 million in estate value. The first $5 million of an estate is not taxed.
   How many people do you know have an estate valued at more than $5 million?
   In any case, the chant continues that the administration's policies will lead to a rocketing recovery of the nation's economy. This especially is based on the claim that corporate tax cuts will be passed on to workers in the form of higher wages.
   Fact: Such benefits are passed on to shareholders and senior management in the form of dividends, stock buybacks and bonuses, not to workers.
   Fact: The nation's economy has been steadily recovering for the past seven years. The latest Beige Book survey from the Federal Reserve Board said all twelve of the nation's Federal Reserve Districts reported increases in economic activity in September through early October, despite "major disruptions" in some areas from Hurricanes Harvey and Irma.
   Fact: Median weekly earnings of full-time wage and salary workers amounted to $859 in the third quarter of this year, according to the Bureau of Labor Statistics.
   Fact: Real hourly earnings, seasonally adjusted, faded by 0.1 percent in September, while the Consumer Price Index rose by 0.5 percent, the BLS said.
   Fact: Economic conditions in Europe are healthy, according to the International Monetary Fund.
   Fact: Stock averages on Wall Street have soared to an all-time high.
   Fact: Very few Americans have substantial holdings in the stock market.
   Fact: The stock market is a poor reflection of economic conditions. Rather, it reflects the sometimes "irrational exuberance," as a former chairman of the Federal Reserve Board put it, of investors.
   
   For many years, the study of economics was based on the premise that people make rational decisions about the consumption expenditures.
   More recently, however, the field of Behavioral Economics has documented the fact that people are not necessarily rational in what they do, a concept that led to the award of the Nobel Prize in Economics to its leading proponent.
   All things considered, look for a major change in stock market averages as investors look to take in profits from the soaring prices.
   And on yet another front, look for the president to replace Janet Yellen, chair of the Federal Reserve Board of Governors, with someone more attuned to his preference for less government regulation and control of business and economic activity.