Monday, June 02, 2008

When the best thing to do is do nothing - why say anything?

Mental exercise time:

How many times in the past year have we heard the networks rabbit on about economic indicator X indicating that things are improving - only to have that number revised downward in the following months?

I would be very interested to see a study of economic indicators that appear in network broadcasts - cross referenced with their frequency of use and their accuracy over time.

Surely when things are bad and counterintuitive data is released the media is obligated to someone should at least look into the historical validity of that data. (How has it performed over time? Has it been an accurate forecaster of events?)

'Cos (But) it's for damn sure you're never going to get that analysis from the stenographers who call themselves reporters the major outlets are just relaying whatever they are told at this point:

(Via CJR's the Audit)
We learned from countless outlets that sales of new, single-family homes were up 3.3 percent in April, in comparison to the previous month.
Reuters told us. MarketWatch told us. Agence France Presse told us. Bloomberg told us. The AP told us. And so, with less fanfare, did The Wall Street Journal, The New York Times, and The Financial Times.
Such a prestigious journalistic consensus must be true, right?
Um, no.

[snip]
It’s all here in black-and-white: a joint report by the U.S. Census Bureau and the Department of Housing and Urban Development.
The report does list a 3.3 percent increase, but a couple of pixels away from it we get a more significant number: the margin of error—11.7 percent.
That’s right.
A margin of error larger than the statistic itself...
They go on to illustrate that the press does address the fact that the number was an increase likely because the March numbers had been revised downward. But I'd share CJR's incredulity on this point:
...we don’t criticize reporters for an omission here. But it does point to a broader issue: The practice of comparing revised to unrevised figures. This doesn’t make sense.
Exactly Why do these comparisons keep getting made? If the numbers are preliminary, why given them any media play at all?

So the news outlets are given that number and run with it:
ABC News
New Home Sales Increased in April
The Commerce Department Reports Sales of New Homes Rose 3.3 Percent Last Month
CBS News
Home Sales Post Unexpected April Increase
Home Sales Post Unexpected Increase In April But Remain Near Lowest Level In 17 Years
NBC News
New home sales rise unexpectedly in April
Despite upbeat report, activity near the lowest level in 17 years
Now, again - each of these stories contain disclaimers (fittingly, ABC News is the only one to have both a rosy headline and dec) about why there is room for doubt - but NONE of them is saying what they ought to be saying, given the evidence:


We don't know what the numbers are, but here's a guess that is likely wrong.
Why were these stories even written? Because the Commerce Department asked them to?


Late edit: Cleaned up some poor wording.

2 comments:

Anonymous said...

Month to month analysis is generally questionable. Better to look at this year vs same time last year. That shows a ~42% decrease.

The way they do it you could compare store sales November to December and say "wow, did we have a good December!"

Your point is of course taken. We no longer get news, we get newsiness. This is at least partly due to budget cuts. The papers take whatever NAR(National Association of Realtors) or The Gov gives them, no analysis. That would take time and resources. The famous Joe Klien comment "I have neither the time nor the inclination to understand what I've written about" seems to apply here.

Unknown said...

Klien's comment is perfect. I'm just too busy to do my job. Taking what I'm given saves so much time - why do anything else?

On the context:

I'd even go broader than month to month. They should plot these indicators on a timeline going back as far as that metric has been tracked.

If they had to narrow the focus they could at least show the entire lifespan of the indicator and then zoom in on the last decade. The more perspective they give these snapshots the more people might realize that there is more going on than the latest press release.

You know there are people in government (well-intended and otherwise) who are paid to scour the stats and find something - ANYTHING - that is in line what their bosses wish was true. You'd think some media skepticism would be automatic by now - but no...