The Power of Numbers to Deceive

Large numbers are impressive, so people often fail to put them into perspective. That’s why advertisers and advocates love to use them to get more sales or to garner support for a cause. Examples pop up daily, especially in this age of COVID-19.

 

Every day the local and national news media blast out the latest coronavirus totals. Millions of cases and over one quarter million deaths get our attention. In fact, relative to other causes they are very big numbers. It is a serious problem, but no one reminds us that 15 million is less than five percent of the population. Furthermore, I have never heard a news organization report on the number of people who have recovered. It’s sure to also be in the millions. It seems that people come out on two extremes: they either don’t take it seriously enough or they are unnecessarily terrified of catching it and dying. Perhaps if the news gave a more honest, measured account, more people would have an appropriately moderate reaction.

 

I found another example in a health report. “The Federal Trade Commission is sending 70,142 checks and PayPal payments totaling $3,864,824 to consumers nationwide who bought Quell, a wearable device that supposedly would treat chronic pain throughout the body when placed below the knee.” The company was fined almost $4 million for misrepresenting their product! Consumers who were gullible enough to buy the product will be reimbursed. That’s about $55.10 each for a device that is advertised on sale for $99 – not exactly a money-back guarantee – but the $4 million fine seems impressive.

 

Class action lawsuits are also typical. Chipotle, accused of falsely advertising its food as GMO-free, settled for $6.5 million. After the lawyers took 30%, that left their customers with a claim of $2 per meal with a cap of $30 per household, but it “could be less than this depending on how many claims are made.” Again a big number reduced to peanuts per person.

 

Similarly Johnson & Johnson, a favorite target for lawsuits, was ordered to Pay $6.3 million in the Infant’s Tylenol Settlement. That came out to $2.15 a bottle.

 

The number of home burglaries in 2018 was 685,766, about half of total burglaries (1,230,149), and about half of those happened when people didn’t lock their doors. But when buying a home security system you will hear, “A burglary happens once every 26 seconds.”

When big numbers are spread across many people, it doesn’t add up to very much.

 

In some cases, the news media implies big numbers just in their tone. A couple of years ago they wanted us to believe that school shootings were common, but what happened to school shooting news when the presidential campaigns got into full swing? The problem didn’t go away, but the news did. 

 

According to Education Week, twenty-five incidents occurred on school grounds or during school-sponsored events resulting in five student deaths, only one under the age of 14. Any such deaths are tragic, but that’s five out of 56.4 million students. Should anyone panic over such minuscule probability?

Headlines about these extremely rare events like shark attacks are easy to ignore, but when kids are involved, it’s different. Parents are terrified at the prospect of their child being abducted. Nosey neighbors report them for letting kids walk alone and authorities respond. An elementary school in South Carolina won’t let the kids whose mother wants them to walk home, leave school without an adult. “Today, only 10% of American kids walk to school, down from about 50% in 1969.” 

Reuters tries to assure parents: “Kidnapped children make headlines, but abduction is rare….On average, fewer than 350 people under the age of 21 have been abducted by strangers in the United States per year since 2010.” Then Parents.com tells them, “Every 40 seconds in the United States, a child becomes missing or is abducted.” But they don't tell them that 0.1% are abducted by strangers, over 95% simply ran away and 99.8% are later found alive. 

 

It’s an endless battle against the media, politicians and charities selling products or ideas and raising  funds using big numbers. The best defense is perspective.

Why Do They Bother?

I often wonder about news agencies. They publish flashy headlines, but the details later in the stories turn out to be much less interesting or conclusive. Here is a recent example from CNN health: “People with blood type O may have lower risk of Covid-19 infection and severe illness, two new studies suggest.” (At least citing two studies is better than their frequent practice of citing one unnamed source in their political news, but let's get into it.) 

 

The studies concluded, “People with blood type O may be less vulnerable to Covid-19 and have a reduced likelihood of getting severely ill.” To compound the weakness of this conclusion that they “may be less vulnerable” they add a disclaimer that “Experts say more research is needed.”

 

What we know so far, provided we read the headline carefully, is that something “may be” going on, and even if true, the connection is not clear.

 

A study from Denmark found that of a sample of 7,422 people who tested positive, 38.4% were blood type O, whereas 41.7% of a separate non-tested group of the 2.2 million Danish people has that blood type. The article doesn’t explain where that 2.2 million came from. The population of Denmark is about 5.8 million. Were those 2.2 million representative of the entire population?

 

It is likely the results were statistically significant or they would not have been published. Still, statistical significance is overrated, and the difference between 41.7% and 38.4% does not seem to be of any practical significance to a CNN audience. 

 

The difference for Danes with type A blood goes in the opposite direction, 44.4% ill compared to 42.4% of the population. But the Type O and Type A does not account for everyone, only 84.1%. The remaining type B and AB people must comprise 15.9% of the population and account for 17.2% of the cases, which is actually proportionally higher than the type A cases. Why they reported what they did, the way they did, is puzzling.

 

The second, a Canadian study, looked at a much smaller sample, only 95 critically ill patients. Of them, 84% of those with blood type A or AB required ventilators compared to 61% of type O or B. They didn’t make the same comparisons under the same conditions as the Danish study. The only common finding was the better performance of blood type O.

 

The final conclusion of the CNN article is that no one should worry and no one should become complacent. Blood type does not supersede other risk factors. The information is useful only to researchers in this narrow field of trying to discover a link between blood type and COVID susceptibility or seriousness. They “don't yet know what mechanism could explain the link” or if a link exists.

 

The fact that they were published in a journal called Blood Advances reinforces how narrow the focus for the studies was. It wasn’t really intended for the general public. Which brings me back to my original question. Why do they bother? 

 

Not to pick on CNN. The same useless information appeared in Forbes, NBC, UPI Health News, Science Focus and others. The pressure to fill airtime and Internet space must be overwhelming. We get such news with its exciting headlines whether it adds any value to our daily lives or not.

Flashback – Baby Powder

Almost exactly four years ago I wrote about the difference between how the legal system looks at the danger of baby powder vs. how science sees it. Of course, that makes no difference, as just this week I saw another class action lawsuit ad on TV. When it comes to taking money from big rich companies and giving it to poor victims (and their lawyers) juries don’t care about science. They just want to use someone else’s money to dry the tears.

But they still expect the same company to continue to make the Tylenol for their headaches while testing and producing a COVID-19 vaccine. It’s all part of some weird love/hate relationship.

From September 2016: "How Baby Powder Can Harm You?"

[Under the heading of Health, the Fox News headline read: “Research finds talc doesn't cause cancer; juries disagree.” The story tells that two juries awarded a total of $127 million dollars to two women claiming that the Johnson & Johnson baby powder gave them ovarian cancer. A second judge threw out two cases, saying there was no reliable evidence; but another 2000 women have already lined up to sue.

That’s the legal side. What does science say? “Most research finds no link or a weak one between ovarian cancer and using baby powder for feminine hygiene, a practice generations of American mothers have passed on to their daughters. Most major health groups have declared talc harmless.” The rest of the article gives more information about the research and the trials. Here is another conflict between science and the legal process, but that should come as no surprise in light of jury awards given years ago for silicon breast implants when the implants were later found to be safe.

It is very easy to understand how a jury could ignore science and award millions of dollars to a woman with ovarian cancer. They do it out of sympathy, and they do it because they can. To do otherwise seems cold and heartless.  It’s not their money and the company has plenty of money. What’s a few million dollars in the grand scheme of things when it can bring comfort?

What person would stand by and see a toddler fall and skin her knee and not immediately run over to pick her up, dust her off and give her some comfort? It is the human thing to do.

There are several similarities between the one who helps the fallen toddler and the juries who award large sums. It costs them nothing. It gives comfort to the afflicted, although it does nothing to cure the cancer or heal the skinned knee. And it makes the rescuers feel good about themselves.

There are, however a few key differences. When you comfort the toddler it truly costs you nothing, and other toddlers don’t look at the one who fell and line up to also fall down to get sympathy. (Some may independently discover that falling down is an easy way to get attention, and some of them probably grow up to be trial lawyers.)

Also, when a toddler gets sympathy, the costs of that sympathy are not spread to the rest of society.  When a jury finds for the plaintiff in this case, not only does the company (or insurance company) pay, but every other company in that industry is put on notice. They are at risk of losing a large judgment for one of their products that has been on the market for years with no ill effects. They don’t spend the money now, but must keep some in reserve to protect against such a contingency.

Likewise, all insurance companies, seeing that evidence means nothing to some juries, must save for similar outcomes. The companies making personal products slowly raise their prices to adjust for this, and the insurance companies raise their rates to cover the increased risk. This sympathetic redistribution, which is really what it is, ends up costing everyone in society. 

What’s worse is that this activity adds no value. It does not add to the GDP. It does nothing to increase the standard of living for anyone except the few women who win in court (and their lawyers – Remember personal injury lawyers are not paid for justice; they are only paid for winning.)

In the end what can Johnson & Johnson do (besides spend a lot more time and money appealing each decision)? What lesson could they learn? Should they get everyone who buys baby powder to sign a hold-harmless agreement? Why are they more at fault than the “generations of American mothers” referred to in the article? They made a product considered safe for years and suddenly they are on the hook for $127 million; and if the ratios hold true and half the next 2000 win similar amounts, it could be $127 billion! It’s “jackpot justice,” and the cost of all the winning “lottery tickets” is spread among the rest of us, including the people who served on those juries!

So how can baby powder harm you? It harms you in the same way other wasteful legal actions harm you. It takes money out of deep pockets to compensate “victims,” but the costs ultimately come back to each of us, with nothing to show for it but richer lawyers, and juries who, in some misguided way, temporarily feel satisfied that they did something to help.]

Acting and Reacting

Is the world getting safer or more dangerous? Data about crime, wars and accidental deaths indicate that life this century is much safer than it was in the past. These events are very noticeable and easily measured. On the other hand, we often ignore or excuse less immediate dangers that arise as our interactions with the world become more complex.

As I have been describing behavioral examples of errors in the five key dimensions over the last 10 years, it becomes clearer that much of the human race is still attacking twenty-first century problems with cave-man level of skills. Just as the hunter-gatherers required immediate reactions to survive, when they heard a rustling in the bushes that may or may not be a snake or predator, humans retained those instincts, following a course of acting first and analyzing later. 

Likewise the practice of not trusting or even attacking people from a different tribe or with a different belief system carries over today in many forms. “My god is better than your god” is not necessarily ancient grounds for confrontation. It happens in a modified form daily on social media.

These instant reactions and mini-superstitions come to us immediately, before we have a chance to engage our critical thinking. Thus critical thinking is often omitted from our decision process, used only to justify or rationalize actions after the fact.

Several recent books describe this psychological phenomenon in detail: Thinking, Fast and Slow by Daniel Kahneman; Nudge, by Thaler and Sunstein; and The Power of Habit by Charles Duhigg are among them. They tell how, as humans evolved, we developed mechanisms to be able to make quick decisions in times of panic or emergency. We react instantly, responding to emotional triggers often before we are aware of them. We are more comfortable following our established patterns of behavior. These programmed, intuitive reactions saved our ancestors, but they serve us poorly today.

That explains in part the need for COVID-19 bail out packages. According to Market Watch: “A shocking number of Americans are living paycheck to paycheck.” One survey says it’s at least half, another estimates 74%, as “one in four families making $150,000 a year or more are living paycheck-to-paycheck” and three in ten families having no emergency savings. No wonder it’s a crisis! The article says people are struggling.

This problem keeps coming up year after year, yet there is no change. 

Apparently what people need is something called financial literacy. An article in Ideas.TED from late last year asks: How financially literate are you?” and tells “3 things you should know about your money.” These three things are not close to rocket science: knowing how much money is coming in vs. how much you are spending; knowing your credit score and knowing how much credit card debt you have. Do we really need seminars and newsletters to teach people how to spend less than they earn to have a little left over at the end of the pay period or to read a credit card bill? These are third-grade skills.

Don’t blame it on credit cards or the eagerness of banks to lend customers more money than they can afford to borrow. These excuses are a cop-out. But this problem arose only in the last half-century or so. The world gets increasingly complex while we still try to cope using our cave-man instincts, act now and analyze later.

Critical thinking does not come naturally. It’s hard work and can sometimes be unpleasant. But it’s increasingly needed to keep up with the new products and services that technology throws at us at an ever-accelerating pace.

No Magic Money Tree

For years I have been patiently explaining how unbelievable it is that people go through life putting their faith in some magic money tree to take care of their problems. They spend instead of save, then stress about the cost of education and retirement. They expect a lifeline to bail them out – money off some magic tree. Buy now, pay later, and don’t worry about the consequences, just continue to borrow and play the lottery.

As the government increases spending, it makes no impression on them except to feel good that some people are getting more goods and services for free. If a big business is fined or sued, people assume there is some invisible bank account to cover the expenses. (Maybe the CEO will take a pay cut.) Americans fail to see the unbreakable link, either direct or indirect, between these expenditures and their own wallets.

Here are the facts. There is NO magic money tree! The money always comes from somewhere, and that always has ramifications for every single citizen: higher prices, higher taxes, a sluggish economy or a bigger share of the National Debt. The poor are usually disproportionately hurt.

When the business gets an unexpected expense, they raise prices and pass it along to their customers. This is easy when it’s due to a new government regulation that affects the entire industry. No one has an advantage, and everyone’s prices go up to cover the added cost. If it affects only one company and raising prices makes them non-competitive, they risk going out of business or downsizing, and people lose jobs.

When the government increases spending, it comes from taxes and debt. For many years lawmakers seem to have more interest in using some combination of lower taxes and increased spending to buy votes than in acting responsibly. (In fact, they characterize a lower than expected increase as a “cut.”) This has pushed the National Debt to unimaginable levels, currently over $26 trillion. Now Congress is fighting with the President over whether to spend $3 trillion or only $1 trillion on another emergency COVID package! Where do they think that money is coming from? 

The debt, in the form of government bonds is interest-only. Payments do not lower what is owed. Growing debt leads to more interest, which holds back economic growth. Fiscal irresponsibility can lead to inflation, which also affects everyone.

Many economists tell us not to worry, despite what happened to Greece in the recent past when their debt got out of hand. In 2017, years after the initial crisis, its economy grew by only 1.4% with unemployment around 22% and one-third of the population living below the poverty line. The EU bailed them out to some degree, but there is no entity big enough to bail out the US.

It’s a simple matter of critical thinking to understand that this issue is going to become a crisis some day, but as the problem grows, no one seems concerned. Behavior has not changed. Politicians still win elections by promising more spending and programs. Even numbers in the trillions get a ho-hum response. 

Everyone must assume there is some magic money tree somewhere; but there isn’t.