Number Crunching…

More and more, business, government, and education rely on numbers, but from what I’m seeing, fewer and fewer decision-makers understand what lies behind the numbers or how the numbers are being used in ways that border lies, and all too often those in business or government who do understand the numbers are those with essentially few ethical restraints. This isn’t new. Mark Twain noted that, “There are lies, damned lies, and statistics.”

Right now, there are two disparate trends in number crunching. The first is to use numbers to make everything more “efficient” and profitable, but this emphasis has two distinct problems. First, for the most part, efficiency and profitability are calculated on an ever-shorter time scale, and if something’s not profitable in terms of this year’s or next year’s budget, it tends to get slighted or eliminated, even if total profits/efficiency over time would be greater. Coupled with this tendency is the attitude on the part of decision-makers that can be expressed as: “How can you prove we’ll be better off in the future; today’s hard numbers show we’ll be better off now. Anything farther out is just speculation and guessing.”

In addition, there’s an ever-increasing tendency to use numbers to quantify the unquantifiable or to use data that’s seemingly relevant, but isn’t. More than a few studies have shown that frequent so-called performance reviews that require numerical quantification, to put it bluntly, don’t work. In higher education, the use of student evaluations has a negative correlation to evaluating the best professors, because the best professors require more of students, and, most student down-rate demanding professors. In addition, the wide-spread use of student evaluations has also led to grade inflation. Grade inflation has led to students who are unsuited to higher education staying in the system longer and usually incurring more student loan debt without being able to pay it off. And those are just a few of the problems with numerical quantification of human performance.

Paradoxically, the second discouraging trend in number crunching is the growing disregard for any numerical analysis that requires more spending now to preclude greater future outlays. The most obvious case is that of Social Security and Medicare. Congress and the last few presidents, including the present incumbent, all talk about the coming shortfall, but no one wants to do anything, yet the earlier steps are taken, the less the cost in any one year on any taxpayer. There’s a similar problem with federal deficit spending.

And, of course, there’s the global warming problem, which for all the rhetoric, isn’t going away, and won’t. And each year that meaningful remedial measures aren’t taken means greater future costs. No… in the next few hundred years, we won’t destroy the planet’s environment, but at the current rate of ice-cap melting, which is increasing faster every year than most scientists calculated, in some thirty years, the U.S. alone will have to replace, repair, and relocate millions of structures, highways, port facilities, and utility infrastructures, as well as build seawalls, and redesign and rebuilt harbors and ports — all just to keep places like New York City functional. Just one storm in New York already flooded the subways and cost hundreds of millions to repair. And that doesn’t include all the naval facilities in Norfolk, a good chunk of Florida, Sacramento and the interior bay area, and a great deal of other valuable real estate, not to mention millions of houses and businesses. What no one seems to want to recognize is that we’re facing a monumental construction, relocation, and remediation problem that will cost trillions of dollars just in the U.S.

Yet, at the moment, the U.S. is running a huge current account deficit; the interest on the national debt will soon exceed the defense budget; billions of dollars in student loans will be defaulted; our existing infrastructure is crumbling; and those are just for starters for U.S.-based problems.

Then add to that military problems and massive social unrest caused by tens of millions of refugees fleeing drought-and-flood-caused famines around the globe because of climate change – a fact that the notoriously conservative U.S. military has already raised as a growing problem.

Yet all the politicians are worried about keeping taxes low this year and for the foreseeable future, claiming that economic growth will take care of the deficit and all the other economic problems. Even the most optimistic economists don’t see any reductions in the deficits, and that’s with budgets that don’t address any of the major increasing costs. That means that we’re pushing off addressing all sorts of future problems, in large part because no one really wants to look at the numbers impartially… and especially not if it means taking on fiscal responsibility.

But don’t worry; the worst won’t occur, if we’re fortunate, until most of us are dead.

3 thoughts on “Number Crunching…”

  1. Ralph Wilson says:

    No politician ever got elected by pointing out inconvenient truths, the electorate much prefer Juvenal’s ‘bread and circuses’. The current social trends for instant gratification mean this is unlikely to change. As a species, we do seem to lack a long term view and an inability to conceive and execute multi-generational projects.

  2. R. Hamilton says:

    When comparing the performance of activities that we don’t at least in principle know how to automate, numeric ratings will necessarily fail to capture the absolute or relative (among others performing somewhat similar activities) merits of the performance.

    And while short-term shareholder profit has many shortcomings as a driver of decisions, theories and models that, although not without some validity, have overpromised and underdelivered on their predictions are perhaps not all that much better.

    For the simpler (maybe) case of employee ratings, what’s the alternative, depending on the descriptive writing skills of the rater? Or perhaps self-rating, which while at least leaving someone’s fate more in their own hands, certainly encourages self-promotion potentially disconnected from results – in both directions: some will overstate their abilities, while others are reluctant to make claims on their own behalf. And not all jobs equally require creative writing skills for the basic job duties, so why should they require it for rating oneself? 🙂

    In addition to the difficulty of assigning non-numeric ratings, there’s the difficulty of comparing them, and especially the difficulty of providing the appearance of objectivity for ratings comparisons resulting in promotions or bonuses or other benefits. In a time where anyone rated may appeal the rating as discriminatory (_all_ decisions are discriminatory, the only question is whether they are so on appropriate grounds or not!), a flawed system seems to risk less blame on raters and managers than a more honest one would.

    Given the Peter Principle, it’s a wonder there are any decent managers or leaders at all, and a Peter Principle proof process would perhaps be a bit much to ask.

  3. Darcherd says:

    I recall a telling comment by a European politician during the Grexit crisis a few years back: “Every one of us [politicians] know what has to be done. What none of us know is how to get re-elected after we’ve done it.”

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