FALSE CORRELATIONS

FALSE CORRELATIONS

26 Jan 2018

POVERTY AND INEQUALITY Listening to Radio 4’s Today (aka NHS Daily) I heard a professional lobbyist from Oxfam explaining that poverty and inequality are inextricably linked. Most of us are against poverty and inequality and, if we suffer from neither, probably feel slightly guilty about both. The counter argument, which is fairly obvious, is that economic growth is the only practical way to relieve poverty; that economic growth is best served by liberal democracy or free market capitalism, (if you think that term is more honest); and that inequality is always promoted by such growth. Reading its latest polemic about the “inequality crisis” I learn that Oxfam broadly agrees with the argument that economic growth is the answer to poverty. Between 1990 and 2010, the number of people living in extreme poverty (i.e. on less than $1.90 a day) halved, and has continued to decline since then. This tremendous achievement is something of which the world should be proud.   Reward work not wealth: Oxfam January 2018 It goes on to say that we would have done even better if we had eradicated inequality. This is the big contentious and unknowable point and is therefore the object of lobbying rather than reasoned argument. Oxfam’s lobbying might be more convincing coming from an organisation that rewards its executives less lavishly. The president of its US operation was paid a package of $504,000 last year; its CFO $258,000. Oxfam UK’s eight directors averaged £113,000 having received an inflation beating 3.7% rise. What first struck me about the Today item was that I heard the Oxfam lobbyist say that “we (Oxfam) know more than anybody else the power of enterprise to help overcome poverty” – this is bragging worthy of Donald Trump and is perhaps evidence of how his influence is becoming pervasive, even among those who presumably despise him. On reflection I was more taken with the casual way that poverty and inequality were conflated. Dodgy correlation is everywhere. Take two facts or convincing assertions and smoothly merge them into one conclusion that appears plausible because the two original statements can be presented as truthful. PRIVATE EDUCATION AND UNIVERSITY PLACES 7% of UK pupils are privately...

Prepare to turn left

Prepare to turn left

14 Nov 2017

I have been on the town recently. Two weeks ago I went to see Reasons to be Cheerful, a brilliant play based around the music of Ian Dury. It is performed by the Graeae theatre company that featured in the 2012 Paralympics opening ceremony. I saw it when it was produced the first time in 2010 and eagerly returned for more. Ian Dury was to say the least an anti-establishment figure and by today’s standards not politically correct. I’m not sure whether he would have appreciated the fact that a new song was tacked on to the end of the show. “If it can’t be right then it must be wrong” has rather puerile lyrics that I don’t think Ian himself would have written (“Keep the funding flowing from a loving cup”). As the song was played and sung, pictures of various politicians with devil horns sprouting from their heads were flashed onto a screen: Mrs Thatch, natch, David Cameron and, oh look, Tony Blair. But I will let someone else summarise: “This new anti austerity song from Graeae and the Blockheads captures the current mood of the country. Its lyrics bring people together in a moment of shared experience to challenge the status quo.” Jeremy Corbyn, Leader of the Labour Party. There I was watching a play set in 1979 and suddenly the “mood of the country” in 2017 was sprung on me. How did that happen, I wondered. Last week I revisited 1979 for the second time by paying a 2079 price to see Squeeze at the Royal Albert Hall. And it happened again. In between Cool for Cats, Up the Junction and Labelled with Love, the band naturally played songs from their new album. These included Rough Ride which laments the lack of affordable housing in London and A&E which really challenges the status quo by calling for more funding for the NHS. Perhaps I should get out more but I was struck by the way in which the anti austerity message was offered on both occasions with such confidence, as if it were not a politically contentious message but almost a fact. Perhaps I live in a London bubble but...

Four kinds of bias

Four kinds of bias

30 May 2016

1)      SELECTIVE USE OF FACTS It is not news to say that people will select facts and opinions that appear to favour their side of an argument. There was a good example last week from the pro-Remain CBI which wants to demonstrate that the possibility of Brexit is already hurting investment. “Overall, surveys of investment intentions have shown a deterioration in investment plans, particularly in the services sector. Some of this is likely to be related to uncertainty ahead of the EU referendum. Although our April investment intentions data for the manufacturing industry actually strengthened, anecdote from the sector suggests some specific factors at play – in particular, replacement spending in the food & drink sector (following flood-related damage earlier in the year) and buildings investment by chemicals manufacturers looking to expand production on the back of solid export demand.” CBI Economic Forecast 16th May 2016 Did you get that? The latest data suggest that their view is wrong so they have concluded that the data are wrong. The CBI is supposedly a highly respectable organisation (so respectable that the EC contributes money to fund some of its publications) and can get away with substituting anecdote for data, or so it seems.    The Leave side is mostly less respectable and, partly by virtue of the necessity that it is promoting something of a leap in the dark, rarely seems to attempt to employ hard facts. But you can be sure that it is highly selective in what it says. You would imagine that the UK is full of people who are deeply worried about immigration. According to a survey that goes back to 1962, the peak year for UK citizens thinking that there are too many immigrants was 1970 when the level reached 89%. In 2014 it was 54%. Enoch Powell’s infamous “rivers of blood” speech was made in 1968 and probably contributed to the high level of antipathy to immigration that the chart shows. During the speech, Powell quoted a white constituent (in Wolverhampton) as saying: “In this country in 15 or 20 years’ time the black man will have the whip hand over the white man.” As it happened, the period...

Housing demand and demographics

Housing demand and demographics

5 Nov 2015

If you arrived today from Mars and the first human you met tried to explain the housing market, you might hear that average prices are >10x average earnings for the first time and that interest rates are at a 3000 year low. If he then told you to invest all your savings in a property you would probably zap him into a little pile of ashes. Because Martians can do that. Yet you would soon find that this apparent rogue adviser would have felt (were he still capable of it) unlucky to have been zapped because he was part of a crowd and people in crowds typically feel (unjustifiably) secure. He could have pointed you at newspaper stories following the latest population estimates from the Office of National Statistics (ONS).    Britain’s population set to rocket by 10 million over next 25 years   Migration will cause UK population to explode by almost 10 MILLION over the next 25 years I suppose that headlines of “UK population to grow by compound rate of 0.54% per annum” would have seemed less exciting though that is exactly what the estimates amount to. While I think that 25 year projections are so likely to be wrong as to be next to useless it is worth remembering that average GDP growth in the last 60 years has been 2.5%. It is also worth mentioning that population growth from 1981 to 2015 was compound 0.44% per annum. On a per head basis we have all become much better off. This may be why old people of today have trouble reconciling what counts as poverty today with what they remember from their childhoods. But an increase in the annual rate of population growth from 0.44% to 0.54% is an increase and is clearly a very important matter to some people. What particularly seems to strike fear and loathing into the population is that the ONS estimates that half of the extra 10 million will be from net migration. (The government’s annual net migration target of c.100,000 is ignored by the ONS which assumes a persistent long term rate of 185,000).      But 10 million extra people will need somewhere to...