Sunday, April 23, 2006

A negative sign solves everything 

Those of you who read right-wing newspapers (or read opposition blogs) might be familiar with the Heritage Foundations Index of Economic Freedom. The Heritage Foundation is a very right-wing U.S. think tank and its Index of Economic Freedom supposedly rates countries on how free and pro-market their economies are.

Having a little too much time on my hands I decided to check out their 2006 version. Right off the bat I was a little mystified. Venezuela ranks number 152 which is near the bottom of the list. But in a very interesting twist it is ranked 2 places below Cuba which is in the 150th spot. So we are to believe Venezuela which has lots of foriegn companies operating in it, has a large private banking sector and stock exchange, has large private companies dominating its media, transportation, and commercial sectors is somehow less free than Cuba which has a command economy? Right there that pretty much blows away any credibility this list may have aspired to.

But then it gets worse. They write detailed reports on each country and I read the Venezuelan report which is chockfull of the usual propoganda and half-truths. Listening to them describe how badly the Venezuelan economy is managed and all the dire problems it faces one could be forgiven for thinking that famine was about to break out.

Not thinking much of their analysis I decided to check out there little box of statistics on the left hand side. There they have compiled all sorts of interesting data such the countries size, population, trading partners, etc. Of course, I thought it would be interesting for them to have to report that Venezuela's economy was booming inspite of their considering it "repressed". Much to my amazement, they reported GDP growth as being a NEGATIVE 9.4%.

Whoa, where did that come from? At the bottom of the statistics table they say data is from 2003 (in a 2006 report?!?!). But that can't seem to be as although the Venezuelan economy suffered a strike induced decline in 2003 it wasn't 9.4%. Rather curiously the 9.4% is pretty much the right number for the most recent year - 2005. Of course, it just needs to be a POSITIVE 9.4% not a NEGATIVE 9.4%.

So when statistics create problems for your world view what is one to do? Well, according to the Heratige Foundation one acceptable solution is just to insert a negative sign. That solves everthing. Thinking up innovative solutions like that is probably what these people get paid big bucks for.


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