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It's All about Context, Not Just Perspective...Really!!!

Science shows that the human brain has three levels of function:

  1. Lower brain stem, which is responsible for survival and reproductive responses.
  2. Limbic system, which is responsible for emotional responses and classifies everything as good or bad.
  3. Neocortex, which is responsible for reason and logic and has given us philosophy, mathematics and science, and the great man-made wonders of the world.

Frequently, our survival instincts and emotions sabotage our decision-making. In fact, our instincts and emotions taunt us constantly and are responsible for all forms of irrational behavior. They make us focus on the here and now—the short-term fight or flight response.

Politicians and pundits know this, and use it to gain advantage all the time. Sad, but true. Pick an issue and a politician will spin and spin. (Research has shown that elections are hardly won on the issues, but on the emotions and gut instincts of the voters.)

Your only true defense: Base your decisions on cold, hard numbers. Why? Numbers cannot lie—when given the actual numbers without the spin.

When your rational mind has cold, hard statistics (put in its proper context of course), you are much more likely to overcome the survival and emotion-based responses and instincts. It’s not always easy, but is necessary for optimal decision making that leads to positive long-term results.

To be deliberate, reflective and objective, we have to examine the REAL, honest evidence, not just those that support a particular viewpoint or position. It’s disingenuous when politicians and pundits engineer and parse numbers to only support their specific claim.

Now, let’s relate the above to the recent media coverage of the jobs report and economic news.

To think clearly about the economy and jobs, and to speak intelligently about them, we have to look at the actual numbers. When viewed in their proper context, numbers can help people make decisions based on statistical analyses instead of just raw emotions.

With only a 10-15 second sound-bite of news, you are very unlikely to get the full picture of the story or you will reach reasonable conclusions. Most news stories are more complex than the 10-15 sound-bite would lead you to believe. Not surprisingly, a 2006 study of economic news coverage found that national broadcasters reported overwhelming on negative aspects of the economy (62%) compared to good news (31%).

To understand important details of complex news stories, we have to dig into the actual statistics.

Most Americans don’t understand the statistical data or methodologies, so they take many things a face value. For example, ThinkByNumbers.org provides a list of things the average American needs to know, but doesn’t. The list includes many things, such as the powers and responsibilities of the federal government, federal spending and budgets, taxation, and many economic items. Research shows that the average American does not know how to interpret the monthly jobs reports or how the stock market works. Yet everyday, individual Americans form opinions and make decisions based on “news” about these things.

If you really don’t understand something, how can you make a rational choice? You can’t!

Respected economist Fritz Meyer recently stated, “It’s easy to accept what one side or the other says, but it always helps to look at the data and then come to a more informed judgment.”

In our market-based economy, we are the decision makers. Unfortunately, the majority of our decisions focus on short-term benefits and immediate gratification, and thereby, waste resources, reject good ideas, and accept bad ones.

The key question: What do the REAL numbers say? When you examine them, you may reach a different conclusion than what’s generally reported and accepted as fact.

In the coming weeks, I’m going to provide context to some of the jobs and economic “news” and “facts” thrown around in the media. My intent is to help you become an informed decision maker.

Regardless of what you do with the information, it’s time to see through the games “noisemakers” play.

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