Economic tea-leaves

economics ▪ policy ▪

Paul Krugman on interpreters of US economic statistics:

The truth is that I often feel that people interpreting economic data are taking a kind of Rorschach ink blot test — what they’re seeing is more of a random pattern than anything else, and their interpretation of that pattern is telling you more about their personal demons than it is about what’s really happening in the economy

And right now that’s utterly true. Since there are now data telling you more or less whatever you want to hear, you’re free to believe whatever you want.

The same can be said of interpreters of national poverty statistics, especially when they ignore simple statistical features such as standard deviations (see here and here).