Posts filed under “Mathematics”
Unbelievable jobs numbers..these Chicago guys will do anything..can’t debate so change numbers
— Jack Welch (@jack_welch) October 5, 2012
Today’s column is about stupidity. Perhaps that’s overstating it; to be more precise, it is about the conspiracy-theorist combination of bias, innumeracy and laziness, with a pinch of arrogance thrown in for good measure.
I am talking about the manifold ways various economic reports get misinterpreted, sometimes in a willful and ignorant manner.
That’s right, I am calling some of you ignorant (not you, but the guy next to you). There are things we all should understand about how specific data series work in the real world. However, I want to make a distinction between legitimate criticisms of the details of any economic report and wild-eyed accusations of falsification.
Let’s start with the employment report. Long-time readers know I am not a fan of the monthly data releases, preferring instead to focus on the trend. This report is an attempt to assess the changes in a labor pool of about 150 million workers in real time, and is highly subject to revision. Like all data series based on a model, it is often wrong but useful.
Over the years, I have criticized many aspects of the models that underlie economic news releases: Business birth and death adjustments can yield a serious misreading of the labor market’s health. The tendency to ignore the broader unemployment landscape in the U6 numbers in favor of the U3, or the official unemployment rate, also misses significant trend changes. I have also written about reconciling the household and establishment series. The new home sales data series is also very noisy and unreliable. And don’t get me started on the many issues with the various inflation-modeling issues, such as hedonics and substitution. However, the MIT billion prices project shows that while the Bureau of Labor Statistics inflation data are quite imprecise, they are consistent, and therefor helpful.
Back to the foolishness that pervades the world of the conspiracy theorists.
Let’s begin with perhaps the most infamous charge, made by former General Electric Chief Executive Officer Jack Welch, the month before the 2012 election . . .
Stories based on Black Friday consumer spending numbers are a holiday tradition. Bob talks with investor and Bloomberg View contributor Barry Ritholtz about the problems with stories based on those numbers. NPR/WNYC: Source: On the Media
We live in an era of technological advancement. Whether it’s genomics, nanotechnology or software algorithms, the world is driven by mathematical solutions to complex problems. Yet at the same time, we are surrounded by what I like to call Bad Math. It seems as if the average person has little familiarity with the fundamental workings…Read More
“We are in the business of making mistakes. The only difference between the winners and the losers is that the winners make small mistakes, while the losers make big mistakes.” -Ned Davis I began my career in finance on a trading desk. You learn some things very early on in that sort of…Read More
I am a fan of Morgan Housel, columnist at the Motley Fool. His writings evince a strong understanding of behavioral issues, and he has a gift of sifting through the nonsense to get to what really matters. Only on rare occasions do I get to disagree with him. Today is one of those times. Housel has…Read More
Last week, we discussed the problems with having poor reading comprehension and the impact that has on consuming news. This week, I want to look at the lack of math skills. America seems to becoming a dangerously innumerate society. Innumeracy is incompetence with numbers rather than words. This is a worrisome issue for the future…Read More
click for ginormous chart Source: FRED This morning’s column on Inflation truthers led to some emailers insisting inflation numbers are much higher post crisis than pre. Sorry, but the data says that is simply not true. Play with the attached FRED XL spread sheets all you want, the data is hard to argue…Read More
“All models are wrong; some are useful.” – George E. P. Box The quote above comes from George Box. He was a brilliant statistician and professor, who thought long and hard about the use and misuse of statistics. I was reminded of Box this weekend while watching the thrilling World Cup final between…Read More
Chances are that when you think about math—which, for most of us, happens pretty infrequently—you don’t think of it in anything like the way that Jordan Ellenberg does. Ellenberg is a rare scholar who is both a math professor (at the University of Wisconsin-Madison) and a novelist. And in his fascinating new book, How Not to Be Wrong: The Power of Mathematical Thinking, he deploys analyses of poetry, politics, and even religion in a bold recasting of what math is in the first place.
For Ellenberg, the stuff you hated about math in high school isn’t the core of the thing. He’s emphatic that mathematics isn’t simply about the calculations involving, you know, numbers; rather, it’s a highly nuanced approach to solving problems that we all, unavoidably, encounter. Ellenberg’s chapters range from showing how mathematical thinking undermines many popular proofs for the existence of God (Paley’s design argument, Pascal’s wager), to explaining how math helps us understand why smoking causes lung cancer (contrary to claims by one early statistician who actually argued that the causation might be reversed—that lung cancer might cause smoking!).
On the show this week we talked to Ellenberg about his book, and math: why you’re probably thinking about it all wrong, and why it’s so powerful.
This episode also features a short interview with Tasneem Raja, author of the must-read new article “We Can Code It: Why computer literacy is key to winning the 21st century” in Mother Jones, and a discussion of new findings about autism and possibly how to stop it—by making brain cells better able to communicate with one another.