Critical Thinking Requires a Little Understanding of Statistics

I made a comment a couple of weeks ago about people spending more to buy organic or all-natural products at the grocery store (and other places) without being able to justify the added cost with some tangible benefits.  Of course one of the benefits is the good feeling that they are taking better care of their families, but if the evidence shows that there is no difference, it’s money wasted, money that could be used in other ways to make the family’s life better.

What is evidence?  Is it a news item on TV or the Internet citing a study that showed health benefits?   Listen closely and we find that many things that were bad for you a couple of years ago are now good for you (e.g. coffee, wine and chocolate) and some of the things that were good for you are now either bad for you or have no effect whatsoever – several supplements fall into this category and within the past month a doctor warned that it could be dangerous to be drinking a lot of water when you are not thirsty.  (This came with a shocking headline, “Can Water Be Bad For You?”)  So the statements and studies come and go.  Some evidence is trustworthy and some is not.  Just because someone wrinkles his nose and sneers at the limitations of “Western Medicine,” it doesn’t mean that everything the Chinese did for thousands of years is better, or even effective.  We can’t necessarily take for truth what we hear or read without at least some preliminary investigation.  And we shouldn’t follow the example of the boxer in Paul Simon’s song – “A man hears what he wants to hear and disregards the rest.”

There is a lot to consider when we hear reports.  Sometimes the author of a study wants to beat others in order to get credit for a discovery by issuing a press release with “preliminary result.”  If these results later don’t hold up we never hear about it.  Studies often contradict each other, because they are designed differently or some are poorly designed or those tested differ in some way, or the effect is borderline and the results can go either way.  Some studies are sponsored (paid for) by organizations that favor a particular outcome.  Is the sample large enough or chosen properly?  In health-related studies, it’s a long way from lab rats to people and most conclusions cannot be applied directly.  

Do interest groups or news agencies give us enough of this information to make an informed decision?  Usually not, and if they do it's at a point where most people have stopped reading.  Sometimes the headlines are slanted in a way to get our attention or sway our beliefs.

So it’s left up to us to try to understand the science and statistics – a tall order.  Here is an article I found recently to help work through some of the issues.  Still, remember when faced with claims of the miracle cure or the cleaner, safer, healthier product, it’s better to be a little skeptical.

Healthcare and Critical Thinking

So far I have given a few examples of behavior in each dimension to make the point that Americans in general often make poor decisions or act inappropriately, that these decisions and actions can be categorized using the five dimensions defined in my blog of May 30, and since behavior has consequences, problematic behavior reaps unwelcome results.  What I am doing, in a sense, is building a reference library of examples.  Yes, we are weak in these areas, and these weaknesses lead to personal and societal problems.  The inability to stick to a diet, and look for easy answers instead, leads to obesity.  The general weakness in discipline in America as a whole leads to what has been dubbed an obesity epidemic.  The government proceeds to attack the result of the problem, which is a symptom, without recognizing that the underlying societal lack of discipline.  This is the real problem, which is also the cause of the so-called Social Security or retirement crisis.  That too, gets handled separately by once again attacking the symptom.

A very complex area like healthcare would take several weeks to discuss in behavioral terms, but the current approch of providing insurance for all is symptom- rather than problem-oriented.

Critical Thinking reminds us that you don’t reduce the cost of something by helping people pay for it.  As the cost of higher education continued to rise, the government stepped in with a number of grants and loan programs to help people pay for it.  Did the cost somehow magically turn around?  No, it continued to increase at a rate greater than overall inflation, and you hear stories today about people graduating from college with increasingly higher debt loads.  In the same way when the government got involved in the housing market, making “the American dream” more accessible, housing prices began to skyrocket until the inevitable crash.  So the idea of providing more affordable or more accessible health insurance is totally separate from the issue of rising healthcare costs.  If you have a rash of houses being lost to lightening strikes, you don’t solve the problem by making homeowner’s insurance more affordable.  You put up lightening rods.

Likewise, understanding the economic process reminds us that there is no magic money tree.  When insurance companies pay our doctor bills, they must get the money from somewhere.  They get it from us. Either we pay higher premiums or we pay more taxes or we pay higher prices for goods and services of the companies who provide insurance for their employees.  The principle holds that governments and corporations don’t really have money; they just process money.  It always flows out of the pockets of the consumers or the citizens.  Any scheme that gives more people insurance does so by taking money from someone else in the system, and if the core problem of increasing costs is not addressed, nothing has been fixed.  It’s just a matter of a reallocating more and more money and is reduced to a moral and political question of how much to take from one class of people to support another.  The core problem still exists.

Flashback

Ok, I admit I am writing this in advance of posting.  It's the end of July in my world and the government default was just avoided.  Now the television news is featuring FAA employees and construction workers who are laid off due to more bickering in Congress.  By the time this gets posted, the media will have moved on to other crises, nonetheless, I just thought of a couple of great examples.

During the above two crises, the news featured A) people on Social Security who were worried that the checks would not go out on August 3, and B) people working for the FAA telling the cameras that they have rent payments and other bills coming due.  The view presented, of course, is:  how are these people going to survive and who is going to bail them out?

My concern is behavioral:  why don’t these people have any savings at all?  For all of Suze Orman’s books and appearances on Oprah and years of personal financial advice about paying yourself first and building an emergency fund of at least 6 month’s requirements, these people didn’t know what would happen if they missed one paycheck.  This is the problem!  It’s not how to bail them out this time, so that we can bail them out next time.  That’s a very healthy and selfish approach for the advocates and politicians; it gets them funding and re-elected.  But it doesn’t serve the people.  It gives them no incentive to change behavior, and behavior is the root cause of the problem.

What if, while they are tinkering with Social Security, someone asked the question: What can we do to help people save money so that there is not a panic immediately when a check is late or a job is lost?  What do we do to make people understand that the original intent of Social Security was as a supplement to their savings, not a full pension?  It’s too late for today's retirees.  Their behavior has already determined what outcome they are enjoying, but what about the next couple of generations?  Their current behavior will lead to consequences that are, for the most part, not a pretty picture.  As long as we go on rewarding unhealthy behavior, that’s exactly what we will continue to get.

Responsibility Takes a Direct Hit

Earlier I discussed responsibility, explaining how we lose our freedom by giving up responsibility, by playing the victim (7/4/2011), and how not taking responsibility is an invitation for outside interference (7/25/2011).  Failure of parents to take responsibility in their roles leads to skewed expectations by their children, difficulty in school and more activists wanting to limit our choices at restaurants.  Trial lawyers spend millions advertising to persuade us that when accidents happen, it’s not our fault, and someone else should be made to pay.  To defend themselves, companies spend millions labeling their products with warnings while passing on the cost to us.  The acceptance of victimhood keeps fine, capable people from finding solutions to their problems, wallowing in self-pity while they wait for help from an advocate or agency.

Now we have a strong challenge to the whole concept of responsibility from the American Society of Addiction Medicine (ASAM).  After a four-year study they conclude that addiction is a problem in the brain, a chronic, primary disease that “must be treated, managed and monitored over a person's lifetime.”  So in many cases we are not really making bad choices or acting irresponsibly; we are sick and need help.

Where are we going to find lifetime help?  Don’t tell me the ASAM doesn’t have a dog in this fight.  (It sounds like a strong case for job security, reminiscent of NASA’s warning years ago about the danger of a growing hole in the ozone layer and how it had to be monitored.  What ever happened to that hole in the ozone?)

How many behaviors can now be excused, written off as the result of a mental disease rather than a choice?  How many people are not really responsible for their behavior and must be treated, not punished?  If I can’t pay my mortgage and my kids don’t have clothes for school, it’s not my fault.  I spent the money on a shopping spree or gambling, or liquor, because of a disease I have.  Is it fair for hospitals to forbid employees to smoke even off-premises during working hours for fear of “third-hand smoke” since they can’t help their addiction?  It’s not being rude at the dinner table; it’s a Blackberry addicted.  Anyway, the kids won’t notice because they’re addicted to their videogames and cellphones.  It’s also not fair to punish all those politicians who are addicted to power and sex or professional athletes who gamble or take drugs, or all those priests…  Where does it end?  We can stop holding everyone accountable for everything they do and send them for treatment, but if they don’t show up for their appointments, who gets the blame?  One thing is certain.  Behavior has consequences and whether we take responsibility for our actions or not, those (personal and societal) consequences will follow.

Oh, and if you don’t agree, don’t blame me – I’m addicted to this sort of skepticism, and I’m getting help for my disease.

Perspective and Expectations

Americans have high expectations.  We expect a lot for ourselves and for our children.  These expectations evolve and change making it difficult to maintain perspective.

Perspective is about separating needs from wants, knowing what are the necessities of life and what are merely nice to have.  Over time though, we begin to take things for granted.  This explains why so many people spend more money than they earn.  The recent recession, which drove debt to the extreme, has been a wakeup call for many as they live out the consequences of earlier behavior.

As I write this I am sitting in an air-conditioned house.  It’s 85 degrees outside and humid and expected to get warmer.  I am comfortable and grateful, but remember a time when home air-conditioning was a luxury only the rich could afford.  On a hot day people would find excuses to go to a store or to a movie just to get into an air-conditioned building.  The alternative was to set up the garden hose in the backyard or just sweat it out wearing a few clothes as was decent.  Today the standard of living for everyone is higher and home air-conditioning is fairly common – 88% of new construction vs. less than half 40 years ago.

There are many other things we take for granted.  We expect them and complain when our expectations are not met.  It has been ingrained in our psyches that these are rights, not recent developments that were unimaginable just a few years ago.  Let’s look at a short list.

Televisions:  More than half the households in the US have 3 or more TVs and only 11% do not have cable or the equivalent.  Can we live with fewer than three televisions, without cable or HD?  Certainly, but no one expects to.  In fact, there are more TVs in the US than people and a 2009 study stated that 71% of children between 8 and 18 have a TV in their bedroom.

Vacations:  One reason people are loyal to a company is the ability to accumulate vacation.  How long ago was it that workers never took a vacation, or if they did, they never dreamed of being able to fly to a particular destination?

Retirement, healthcare, unemployment Insurance:  These have a comparatively short history.  Up until about 75 years ago, people expected to work until they died, didn’t expect their employer to pay their doctor bills and depended on family to take care of them when they were no longer able to work.  It’s great that we have progressed this far, but perspective helps us feel grateful for the advances we have made rather than resentful that we don’t have everything we dream about.  Bottom line, it’s a happier and healthier way to live.

No One Really Creates Jobs

There has been a lot of talk about jobs in the past two or three years, but I think it requires strong economic understanding and critical thinking to draw accurate conclusions.

Jobs are not created; they are purchased.  You don’t work for the boss; you work for the customer.  Conversely, jobs don’t go away, customers go away.  My experience is that many bosses don’t understand this important concept and fail to pass it along to the workers.  When a company is growing or downsizing, it is usually based on matching the number of jobs to the requests from the customers.  (Sometimes, though, they are just passing along their work to their customers, think self-service check-outs and those irritating phone menus).

When we work at jobs, making goods or deliver services, there must be a market for those goods and services.  People should say to themselves, ”Wow, this is better and cheaper than I could have done it for myself.  I’m glad I made that particular purchase.”  Everyone in the organization, whether it be a single proprietor or a global corporation, is working together to make the sale successful.  Then customers continue to buy and more customers arrive.  By buying more product or service, they essentially buy more jobs.  This is motivation for a company to improve customer satisfaction.

When a governor decides to “create green jobs” by mandating that a portion of electricity be generated by renewable sources (wind, solar), who purchases these jobs?  Since they are created, they must be additional to jobs that already exist and the additional wages for these additional jobs must come from somewhere.  Because there is no magic money tree, utility customers pay more.  These jobs are created not because there are voluntary customers; instead the customers are forced to buy these new jobs with money they would have spent on other things (i.e., other jobs).  Then we are paying more to support a wind farm that no one asked for, with a much bigger ecological footprint than conventional generation, that requires a back-up system anyway because it is only 35% efficient because the wind blows only part of the time and more at night, when less electricity is consumed.  It doesn’t improve customer satisfaction or attract new customers.  It merely creates jobs by displacing other jobs.

When we hear of jobs being created, we must be very wary.  GM, GE, General Mills, and Geico don’t create jobs.  When they have something we want, we, as customers, purchase those jobs voluntarily, not because of new laws or regulations, but because we believe the output of those jobs makes our lives better.

And Speaking of Health...

Last week I wrote about Alzheimer’s Disease and how, like many other ailments, the evidence points more and more to common-sense preventive behaviors:  diet, exercise, etc.  Now I see an article about people in Indonesia, ignoring red warning signs to lie across railroad tracks to absorb the electricity in an effort to cure diseases.  Later in the article it goes on to say, “Pseudo-medical treatments are wildly popular in many parts of Asia — where rumors about those miraculously cured after touching a magic stone or eating dung from sacred cows can attract hundreds, sometimes thousands.”

It’s easy for Americans see such information and feel sorry for these people while at the same time feeling smugly superior – eating dung from sacred cows, indeed!  Yet, how many of us have the same kind of primitive, throw-the-virgin-in-the-volcano approach to our own health.  Dietary supplement sales in the US are more than $5 billion per year, despite the fact that they are not held to the same testing standards as pharmaceuticals in terms of both efficacy and side effects.  Other companies advertise magical sounding ingredients in their foods.  Let’s stock up on some of those probiotics, make sure Grandma drinks her Ensure, substitute energy drinks for sleep, take a chondroitin pill for that aching knee, bring in a consultant to arrange our furniture according to the principles of Feng Shui, and don’t forget the Ginko (pun intended)!  Until it was banned by the government for making false claims, one well-known company sold shoe inserts with magnets to solve your foot pains.  Many Americans support these products, not based on any scientific information or real application of reason, but because they heard about it from a friend or it did wonders for Mom.  (A co-worker wanted me to try a particular food because it had antioxidants, but couldn’t tell me what an antioxidant does or why it’s good for you.)  Many supplements and homeopathic medicines have been subsequently proven to be ineffective, some should be taken only for special circumstances and some can be dangerous.

For those who swear by these products, much of the benefit can be explained by the Placebo effect.  So if we feel contemptuous when we read about people from Third World countries eating dung from sacred cows (which, by the way is organic, and all-natural), let’s look in the mirror, examine our own behaviors, prejudices and superstitions, unsupported by research or even by proper critical thinking.  Many of us take too much on faith or on the basis of anecdotal evidence.

Alzheimer's Disease

I’m sure many of you share my tendency to talk back to the radio and television, especially when they are insulting your intelligence or your favorite team is losing.  So when I see the health update coming on the TV news, I usually call out, “Eat your veggies,” because the advice is usually at that level of common sense (but presented as news).  Most of the good health advice, packaged and repackaged can be summarized as:

·      Eat a proper diet with vegetables and grains,

·      Avoid soda and junk food,

·      Exercise/stay active,

·      Get enough sleep,

·      Don’t smoke or drink alcohol to excess,

·      Drink enough water, especially in hot weather or when exercising,

·      Have a positive, supportive social life.

Of course they think we need to hear it over and over, because we don’t do it.  These are discipline issues and we can come up with a thousand excuses instead of taking responsibility.  But now there is more.

From a conference just ended in Paris, comes another motivator.  A presentation of a very large study noted that the biggest modifiable risk factors for Alzheimer’s disease in the US are physical inactivity, depression, smoking, mid-life hypertension, mid-life obesity, low education and diabetes, which are associated with up to 54% of cases.  Association does not necessarily mean cause and effect, but this association with lifestyle habits is an encouraging sign, given that Alzheimer’s is the second most feared disease in the US (behind cancer) with no known cure.  These are substantially the same factors we hear about every day to address a myriad of other medical issues, so Alzheimer’s prevention for some may not involve anything new.

Alzheimer’s represents both a personal wellness issue and a societal financial scare about the future of Medicare – how to address the increase in costs as the Baby Boomers age.  The answer to both sides of the problem could be behavioral.

Whose Responsibility Is It?

I’ve heard it several times when discussing my blog with friends, and I’m very concerned that smart people continue to think this way.  One of my favorite examples of how societal problems can be traced back to a behavioral trigger is the childhood obesity “epidemic.”  I explain that the problem stems from discipline issues that parents have passed on to their children and responsibility issues of parents, their failure to monitor their child’s diet, draw the line on visits to the fast food restaurants, offer healthy snacks, buy and keep on hand good food, and not capitulate when the children start to whine.

The response sometimes is, “But the fast food companies have some responsibility, too.”  NO, NO, NO!  We have the responsibility to tell them what we want and we do that by spending or withholding our money.  The fast food companies have a responsibility to their owners/shareholders to make money.  They do this by offering us products that we want to buy, and by providing sanitary conditions for preparation, serving and dining.  If they are smart and want return business, they give good service, are polite and make it a generally pleasant experience.  We, then, get to choose.

We should not require or expect them to help us with our behavioral issues.  In fact, I think it is dangerous to do so.  No one is holding a gun to our heads insisting that we eat at a particular restaurant.  In fact, no one (yet – although there seem to be no end of do-gooders who want to police our decisions in any number of fields) is threatening us in any way regarding our dietary choices or those of our children.  As soon as we involve other parties in these choices we open a Pandora’s box.  We are admitting that we are not capable of making these relatively simple decisions and are asking for help.  We play the victim.  That is how people get the idea, mentioned in the news only a few weeks ago, of removing children from their parent’s custody if they are morbidly obese, or taxing soda and other junk food.  Where does it end?  When do we get to a point where we say, “Enough!” and by then is it too late?  Is it already too late?

If we don’t help ourselves we will have help “inflicted” upon us.  If McDonalds wants to put fruit in their Happy Meals and thinks that it will attract more customers, that is a good business decision.  If they are doing it to please a pressure group, not as a direct response to their customers, we, their customers, have lost some of our power.  They, like every other business, are supposed to be responding to us, giving us what we want at prices we agree to pay, not offering us what some outside party tells them they should.  It is our responsibility to feed our family properly and also our responsibility to tell the market by how we spend our money, what it is we want and what it is we don’t want.  Every time we let any of these opportunities slip away we are giving up power, and loss of power eventually leads to frustration and worse!