The most important number for Americans, according to writer Andrew Dilnot, is $15.6 billion.
Dilnot with Michael Blastland is the co-author of “The Numbers Game” subtitled “the common sense guide to understanding numbers in the news, in politics and in life.”
The book may be especially significant as we deal with large -- no, make that huge -- numbers with talk of a stimulus program with a price tag of $800 billion, following a TARP (Troubled Asset Relief Program) of $750 billion with $35 billion tossed to rescue auto companies.
Eyes glaze at the big numbers, perhaps in part because the difference between million and billion appears to be only one letter or three zeroes. Would the numbers appear more meaningful if we wrote them as $800,000,000,000 or $700,000,000,000? Would the size of the nation’s economy be any more daunting if we expressed it at $14,000,000,000,000 instead of $14 trillion?
One important device, according to Dilnot, is to express numbers in terms we can understand and most people, he suggests, “don’t understand a number bigger than the value of their home.”
For starters, let’s look at the difference between a million and a billion. Think of it this way: a million seconds is about 11 and a half days; a billion seconds is a little less than 32 years.
Media consultant Tripp Frohlichstein has taken this arithmetic a bit further, noting that one trillion seconds would be 31,688 years! More to the point, Frohlichstein calculated that one billion seconds ago, Jimmy Carter was president.
We are overwhelmed -- and in some cases awed -- by large numbers. That 40 gigabyte iPod pushed by Apple (AAPL), for example, according to Frohlichstein if filled with music would allow you to drive round-trip from New York to San Francisco 14 times -- and never hear the same song twice!
We are, according to Dilnot, “bad at dealing with numbers with a lot of zeroes” and public officials will often take advantage of that using large numbers to emphasize a particular point.
“When we hear someone say a sentence with a number in it, we tend to believe it,” Dilnot said.
Perhaps not if House Speaker Nancy Pelosi offers a number.
When she spoke last week trying to sell the stimulus package wending its way through Congress when she warned “500 million Americans” could lose their jobs. Never mind that our population is about 300 million. Pelosi issued the warning twice!
We don’t only have difficulty understanding large numbers, but large measures. Ask most urbanites if they’ve seen an acre or can describe one, and you’ll probably be met with a blank stare. They have though: a football field. Without the end zones, a football field is 48,000 square feet; an acre is 43,560 square feet.
Dilnot’s suggestion is to convert numbers to more understandable terms.
“Counting” he offered, “seems so simple and pure until we start counting things.”
Dilnot also warned against easily and quickly accepting medical studies, one of which he recalled warned against eating bacon because it would increase the chance of death by 14%. The probability of death though, he observed, is already 1 (or, expressed in percentage terms, 100%).
Consumers of data, he suggested should be more demanding and, for example, break down a government spending program by the number of people who will be served and, as appropriate, the time frame. In “The Numbers Game” Dilnot and Blastland wrote of a program to spend an additional $600 million over five years to create a million new child care spaces. Dividing the total by the population to be served, one million children, means $600. Over five years that would be means $120 per year. And, over 52 weeks that would be a little over $2 per child per week, probably way too little to provide any respectable child care program.
So, far starters, Dilnot suggests dividing any broad-based program by 300 million to understand the individual impact. Dividing again by 52 would be the impact of any widespread program per person per week for a year.
And $15.6 billion? It represents $1 per week for each American for a year.
Mark Lieberman is the senior economist for the Fox Business Network. Prior to joining FOX, he served as first vice president and manager of economic analysis and research at Washington Mutual in New York. Before that, he served as senior vice president at Dime Savings Bank of New York (which was later acquired by Washington Mutual), where he specialized in credit and risk management. He is a member of the Executive Committee of the New York Association for Business Economics. He has a degree in Economics from the Wharton School of the University of Pennsylvania.
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