Monday, August 4, 2014
Beyond the Headlines
It should be pretty clear that headlines are meant to get your attention. To do that they often must take the most engaging, exciting or extreme portions of a story and move them to the front. It’s important to read beyond the headlines to understand both the real story and often the real danger. It’s also important to think about the story itself to discover missing information or future implications. This is when critical thinking and economic understanding come in handy.
The first example is from the New York Times. The first sentence reads: “Men with vasectomies may be at an increased risk for the most lethal form of prostate cancer, researchers have found.” Left alone this statement might lead some men to worry about a problem they can’t do anything about. Even though the second sentence seems reassuring – “But aggressive cancer nonetheless remains rare in these patients.” – doubt or anxiety has already been planted.
It’s not until further in the story that we begin to learn the facts, but even then it’s presented in a scarier than necessary way: …“men who had had a vasectomy were about 20 percent more likely to develop lethal prostate cancer, compared with those who had not. The incidence was 19 in 1,000 cases, compared with 16 in 1,000, over the 24-year period.” OK, going from 16 to 19 is almost a 20% increase, but 16 or 19 out of 1000 is a tiny probability. Looking at it the other way a man has either a 984 or a 981 out of 1000 chance of not developing the disease. That’s a 0.3% difference – not 20%! Is there really anything to worry about or, for that matter, anything to deserve headlines in the New York Times?
The second example is about future implications. Good news comes in the form of an announcement that scientists think they have discovered a way to triple the life of rechargeable lithium batteries that are used in cars, cell phones and many other devices. The new process requires greater amounts of lithium, but the new technology could allow utilities to use batteries to hold a charge for times when wind and solar are not available making for smoother delivery of clean electricity. That sounds great, but don’t stop thinking about it there.
A little research shows that 80% of the current lithium supply in the US comes from South America. How will relations with those countries affect supply? Would they be motivated to form a cartel similar to OPEC for oil where they try to balance price and availability? Will we be faced with concerns about reducing our dependence on “foreign lithium” as prices rise? Last year lithium was discovered in Wyoming, but what environmental hurdles will investors face in trying to extract it? Does it resemble a repeat of the decades-old fight over drilling for oil in the Arctic National Wildlife Refuge in Alaska? These are realistic implications that most people don’t take the next steps to anticipate.
The lesson: never take headlines at face value.