Lies, Damn Lies and Percentages

When my son asks what good all the math he’s learning will do him later in life, I say it’s a very important skill to master if you want to be a speechwriter. He doesn’t appear to find this argument very compelling. Nevertheless, it’s true, especially when it comes to statistics.

Most speechwriters worth their salt have learned to manipulate statistics for maximum impact. Not that any of use with intentionally mislead, of course. Heaven forefend! But if you’re going to make a case, you might as well make it convincingly.

One of my favorite examples has to do with percentage decreases and increases. The Wall Street Journal, for instance, reported this week that for the S & P index to get back to its October 2007 high it would have to rise by almost 100%. They reported this like it was news. But it’s exactly the same as saying that the S & P index has declined by about 50%, which we all know.

If you have 100 of something and you loose 50, that’s a 50% decline. If you gain 50 back, that’s a 100% increase. A 50% increase would only bring you back to 75. It’s pretty obvious when you’re dealing with round numbers like this. It’s less obvious at other times. But a decline is always going to be less as a percentage than an increase that is exactly the same in absolute terms.

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