Here’s a nice piece from Barry Ritholtz on “stupidity.” He’s criticizing baseless accusations against economic reports, like GDP and unemployment, from people who obviously haven’t researched the way these reports are generated.
The key here, as he points out, is recognizing that some reports are derived from “noisy data sets” that don’t yield exact figures. The Census Bureau’s monthly new home sales report, for example, has a ±15-19 percent margin of error. Some scoff at this and chalk the whole thing up to a piece of government propaganda used to manipulate public opinion regarding the health of the economy. But such a large margin of error is actually a stroke of intellectual honesty—researchers at the Census Bureau are admitting the limits of their figures. So it’s not the bureaus who lead public opinion astray, but the commentators who ignore margins of error and readjustments when criticizing these figures.
This isn’t to say there aren’t problems with the way government calculates things like GDP, unemployment and new home sales. Those are plenty. But worse than using imperfect figures responsibly is publicly criticizing imperfect figures irresponsibly, especially if it’s for no other reason than a disappointment with the economic story those figures tell.