When I teach Excel, I always highlight what I consider the two most important features that make Excel useful: formulas and charts. Formulas are important because they allow us to analyze, manipulate, twist and turn numbers so that we can learn new things about them. And charts allow us to visualize numbers so that we can understand them in an instant. (If a picture is worth a thousand words, then a chart is worth a thousand numbers.)
But, when we start creating our own charts, and formatting them, I always point out how charts can be used to manipulate the data. The easiest way to point this out is to change the vertical axis so that it doesn’t start at zero. This amplifies any changes in the vertical axis, making the chart more dramatic. Here is an excellent article by Eric Portelance that further discusses this manipulation, as well as several other manipulations — either on purpose in order to mislead an audience, or by mistake by someone who doesn’t know how to present data accurately.
The chart Portelance discusses is from a (late 2013) article by Mark Gimein, “Companies and Markets editor at Bloomberg.com, and lead writer for the Market Now blog and newsletter.” Bloomberg is, of course, the huge financial services conglomerate. These guys DO data. They should know better. In fact, I find it extremely hard to believe that they would create a chart that mistakenly mis-represented the data. The only other conclusion, then? That Bloomberg purposefully mis-represented the data.
The question then becomes, why? What do they hope to gain by publishing an article with the title, “For U.S. Men, 40 Years of Falling Income,” and then backing it up with purposefully mis-represented data?
Gimein’s concluding paragraph states, “To TMN it seems that the focus of the economic debate belongs less on rising incomes at the top than on falling incomes in the middle. The concern of Americans on the middle of the economic ladder is not really that their neighbors behind some high hedge are doing too well. It’s that they themselves are not earning anything like the incomes they expected. Judging by the data, that concern is well-founded.”
The real question with this chart is, “what happened in 1972 that caused the steady progression of income growth to immediately level off?” Portelance, admitting he is not an economist, takes a shot in the dark anyway: “Bretton Woods and the end of the Gold Standard?” Maybe so. I’m not an economist either, and a cursory glance at Wikipedia’s “Nixon Shock” article only provided me more anxiety.
However, I do have my own guesses as to Bloomberg’s motives for publishing this purposefully-inaccurate article: Is Bloomberg trying to deflect attention away from income inequality (aka “Class Warfare”)? Are the richest 1% trying to “divide and conquer” the 99%?
The income of the bottom four-fifths — the middle and lower classes — has remained steady since the mid 1960s. However, the top 20% and especially the top 5% have grown steadily since the mid 60s. This means that all the growth in income is going to the people who are already rich.
Is Bloomberg afraid that the proletariat will realized the rich have rigged the system? That the rich run things? That the rich make the rules, which of course favor the rich?