There was a time, back in the shadows of pre-recorded history, when entire societies rose and fell based on the power of their oracles.
If you could toss a bag of rocks inscribed with runes or read the entrails of a sacrificed animal you were treated like a modern-day financial services analyst. And just like analysts from our own time, these godlike figures observed the same environment their patrons did — crunching the same data that was available to anyone else living at the time.
And that "foresight" made oracles some of the most powerful people of the ancient world. Today, on the other hand, we pretty much just rely on computers to do the predicting for us.
Oh, there are still business analysts, commentators and pundits out there screaming their heads off in an attempt to convince someone with money that they are smart, even though it’s a lot harder to make money that way in a post-crash world.
Millions of American investors are even now following the lead of the big U.S. banks and throwing their money into the stock market, blissfully unaware that if the banks ever start lending out that money again, instead of investing it, demand will dry up and the market will collapse. They aren’t worried about this because they have been empowered with analytics; powerful data crunching computer models so easy to use, even for TV commercial babies.
It seems crass to ask where these models came from (perhaps from the same folks trying to get people to make stock trades?) and what data they are actually crunching (probably just historical data, drawing trend lines by extrapolating). I mean, I can’t imagine a leader of the ancient world asking, upon hearing the news that his army will be defeated, for a list of the data sources used in the analysis or for a peak at the model. Wall Street didn’t invent the Black Box, after all.
On the one hand, I’m not sure I want to open that box, ask those questions. Why call into question analytical tools that make people who buy things more confident about buying things, especially when you’re living in a society that operates only when people buy things? Doesn’t make a lot of sense. As a guy who does a bit of PR, I suppose I should tip my hat when I see people act like oracles and use their data and analytics to tell the stories they want told, see things others might not see in the same data. I’m just having a problem with that lately.
For instance, I saw the story today where the Pew Research Center decided that despite the downturn, the “real estate bust hasn’t dimmed Americans’ faith in real estate.”
Last month, Pew staffers called up folks and determined that 80% of adults still believed that a home was the best long-term investment a person could make.
Maybe people think that their home is a better long term investment because they just watched all the money drain out of their 401(k)s and get scooped up by savvy Wall Street firms.
To their credit, Pew did point out: “the ‘intensity’ of the public’s faith has fallen off” since the crash. That’s an interesting data point. Of course, we all know what happened to the oracles of the ancient world when their patron’s faith became, shall we say, less intense.