Proofiness - Charles Seife [35]
All companies that are too big to fail—Citigroup, General Motors, Fannie Mae, Merrill Lynch—are swimming in moral hazard. Once they know that they won’t be allowed to collapse, it’s almost guaranteed that they will fill their own pockets while passing the consequences of their risky behavior on to the taxpayers.31
Every few years, tremendous cases of risk mismanagement extract money from average citizens and put it into the hands of the wealthy. Whether it’s the savings and loan scandal or Enron or the subprime mortgage crisis, the end is always the same. The people who are willing to lie about risks make themselves very rich, and the taxpayer suffers the consequences. Even if one or two of the malefactors wind up in jail, there are always many more who made themselves much better off at others’ expense and never suffered any serious consequences.
Risk management is the form of proofiness that hits the pocketbook most directly. However, other forms of proofiness can have consequences that are even more grave. They can undermine the press, deny us our vote, put us in jail, and sap the strength of our democracy. Mere thievery pales by comparison.
4
Poll Cats
Public opinion contains all kinds of falsity and truth, but it takes a great man to find the truth in it.
—G. W. F. Hegel
“Dewey Defeats Truman.”
It’s an iconic picture. Harry Truman, grinning with uncharacteristic glee, holds the Chicago Daily Tribune up for all to see. “That is one for the books,” he gloated.
The headline was a colossal screw-up, even by newspaper standards. Truman had trounced Dewey, but the first edition of the Chicago paper declared otherwise—scrawled across its front page in the biggest, boldest type it had available.
It’s not unusual for first editions to have errors, as they’re usually rushed to press. The Tribune’s first edition was even more rushed than usual because of a printers’ strike—it had to be put to bed in the early evening. This was unfortunate, especially on an election night; the deadline was before even the East Coast returns were in. Without these results in hand, the editors had to make a judgment call about what to put in the election story on the front page. They chose to make a guess about the victor—a choice that was spectacularly risky and spectacularly wrong.
It didn’t seem so risky at the time. All of the major polling agencies, including the big ones run by George Gallup and Elmo Roper, had long since concluded that Dewey would walk away with an easy victory. The results of their polls were so definitive that the pollsters closed up shop weeks before the election. Since the outcome was obvious, they reasoned, there was no need to continue collecting data. The Tribune editors, confidence buoyed by the incorrect polls, figured that Dewey was a shoo-in. But the polling experts had come to exactly the wrong conclusion.
What went wrong? According to Bud Roper, son of Elmo, nothing at all. “I think the 1948 polls were more accurate than the 1948 election.” The polls weren’t wrong—the voters were. This is idiocy of the highest order. Even in the face of overwhelming proof that they’ve screwed up, pollsters somehow still have undiminished faith in the phony numbers they generate.
Polls are perhaps the leading source of proofiness in modern society. They are an indispensable tool for journalists; it’s hard to pick up a paper, listen to a newscast, or browse the Web for news without stubbing your toe on a poll—usually a ridiculous one—in a matter of minutes.32 To politicians, polls are a tool that can help shape opinions, and a weapon that can help them attack their enemies. In the right hands, a carefully designed and executed poll can give us an accurate snapshot of the collective thoughts of a society. Most of the time, though, a poll is a factory of authoritative-sounding