This Summarizes Why Excel is Getting a Spike of Bad Press
(Also: Guys, your barrels are a bit… droopy. I suggest NOT pulling those triggers.)
Why the negativity? It comes down to “Austerity.”
The “London Whale” story that I talked about last week is small potatoes. The big reason that Excel is catching heat these days is because it is caught up in a political fight, over something called “austerity.” It hit the New York Times this week too – more on that later.
Austerity is defined as reductions in government budget deficits – either by cutting expenditures or raising taxes (or both).
Right wing politics tell us that austerity is a Good Thing. Left wing politics tell us that austerity is a Bad Thing. Got that? Those are the teams – if you vote Republican, you are supposed to think “austerity good,” and if you vote Democrat, you are supposed to think “austerity bad.” Please do not diverge from the playbook.
Here’s a visual primer on the latest tug of war:
Dueling Political Agendas: Doing What Political Agendas Do.
I Came Here Today Not to Defend Excel…
Well maybe I did. But I also want to skewer dishonest and biased economists and politicians. The original title of this post was “Steven Levitt for President.”
Check this out…
Blue Line is the 2010 Paper’s Conclusions. Red Line is the 2013 Paper’s Conclusions.
Both Basically Conclude the Same Thing. Dishonesty Ensues Because Excel Mistakes are Something Voters Can React To.
(Source: Cyniconomics.com – click image for the original article)
Let that sink in: Despite the fact that the papers both basically report the same trend, and NEITHER one of them establishes (or disproves) causality between govt debt and economic decline, they are being used by opposite ends of the political spectrum.
Good gravy, aren’t we Excel Pros lucky to find ourselves in the middle of THIS stupidity.
Let’s Get Real on “Austerity”
I’ve been reading about this stuff for years now, and as far as I can tell, none of the debate is remotely honest. With my best Steven Levitt cap on, here’s what I think is important:
Debt is Just a Number. Interest Payments Are a Killer.
Politicians and High Profile Economists Don’t Like to Mention This.
***UPDATE: I’ve downgraded my use of the word “overwhelming” to “primarily.” See this followup post.
No one ever talks about this dirty little secret. Why? Maybe because the recipients of the interest payments are the #1 funding source for political campaigns?
“Who Cares if the Government is Being Sapped by Interest Payments?”
We spend more on interest payments than on food stamps and Education:
Source: USNews. Click Chart for the Article.
(Worth Noting that USNews has a Right-Wing Bias But I’ll Still Use Their Chart)
“Well, 14% isn’t so bad…”
Thing is though, it could explode. Our total interest payments have actually FALLEN recently, which is of course a good thing.
But that decrease is entirely due to the fact that our lenders have demanded a falling interest rate when they loan us money.
And hell, this is a PowerPivot blog! Time for a PivotChart made by yours truly:
As Our Overall Debt Balloons, Interest Payments Have Actually Temporarily Decreased!
But That’s Just Because Interest Rates Are So Low Right Now.
What happens if we “level set” interest rates to their 5.5% average? What does the interest graph look like THEN?
Low Interest Rates Have Saved Us. At Historical Average Rates,
Our Interest Owed Would Be More than Double!
So we’re lucky right now. But we keep piling up debt and hoping rates don’t reset.
We’ve lit the fuse on an old-fashioned grenade. So what are our leaders doing? Let’s look.
Two Flavors of “Screw the People”
Here’s what our “leaders” are arguing over. You can tell they both have our interests at heart, right? Right?
Ugh. Both Factions are Morally and/or Intellectually Bankrupt.
We can quibble, I suppose, on which one is worse. But that holds little value in my opinion because neither is truly standing up for our interests.
Yes, that includes people who very much claim to be on our side:
The “Excel Depression???” Really?? I Disliked This Guy BEFORE This.
More Like “The We Borrowed Too Much and Have No Honest Way Out Depression.”
(Hell Hath No Fury on Par With My Distaste for Economist Paul Krugman)
I’m gonna have to stop for today. But I will leave you with something I wrote earlier and didn’t post. Something funny about economists. From an economist.
What’s the Single Most Important Quality for an Economist?
Steven Levitt’s keynote at the PASS Business Analytics Conference (aka PASS BACON) was highly entertaining – as I said last week, the best keynote I’ve ever attended. How many keynotes dive into the data behind drug dealers, prostitutes, and walking drunk versus driving drunk?
But my favorite snippet of his talk was when he told us about a survey he took as an Econ grad student:
This Survey Question Was Given to First-Year Economics PhD Students Nationwide
(He only told us about answers A and B – C and D weren’t relevant to the story I guess)
A nationwide survey of Econ grad students was conducted during Levitt’s first PhD year. The question above stood out to him. Actually, it was the results that stood out.
I find this ridiculous. Only 2% chose “reality” as their answer???
But years ago, I would have agreed with the 70%.
(Full Disclosure: I was captain of my high school calculus team.)
In his keynote, Levitt was anything but boring.