The new FiveThirtyEight is up, and Tyler Cowen is not impressed. I’m sorry to say that I had the same reaction. Here’s hoping that Nate Silver and company up their game, soon.
What worries me, based on what we’ve seen so far — which isn’t much, but shouldn’t the site have debuted with a bang? — is that it looks as if the Silverites have misunderstood their mission.
Nate’s manifesto proclaims his intention to be a fox, who knows many things, rather than a hedgehog, who knows just one big thing; i.e., a pundit who repeats the same assertions in every column. I’m fine with that.
But you can’t be an effective fox just by letting the data speak for itself — because it never does. You use data to inform your analysis, you let it tell you that your pet hypothesis is wrong, but data are never a substitute for hard thinking. If you think the data are speaking for themselves, what you’re really doing is implicit theorizing, which is a really bad idea (because you can’t test your assumptions if you don’t even know what you’re assuming.)
I feel bad about picking on a young staffer, but I think this piece on corporate cash hoards — which is the site’s inaugural economic analysis — is a good example. The post tells us that the much-cited $2 trillion corporate cash hoard has been revised down by half a trillion dollars. That’s kind of interesting, I guess, although it’s striking that the post offers neither a link to the data nor a summary table of pre- and post-revision numbers; I’m supposed to know my way around these numbers, and I can’t figure out exactly which series they’re referring to. (Use FRED!)
More to the point, however, what does this downward revision tell us? We’re told that the “whole narrative” is gone; which narrative? Is the notion that profits are high, but investment remains low, no longer borne out by the data? (I’m pretty sure it’s still true.) What is the model that has been refuted?
“Neener neener, people have been citing a number that was wrong” is just not helpful. Tell me something meaningful! Tell me why the data matter!