The SoapBoxers

I once had a credit card through MBNA. I loved this card. It was an alumni card that proudly displayed my alma mater.

Then, Bank of America bought MBNA. Suddenly, things got bad. The web site functions no longer worked like they should. In particular, paying the card online became much more difficult. Many times, it didn’t work at all. Other times, it process the wrong amount (generally the minimum payment instead of the amount of the bill). I was double checking what I was doing, and clearly this was the fault of Bank of America. News stories at the time pointed to problems they were having with integration – apparently I was a victim.

One month, we didn’t get a bill. We didn’t notice until the next month, when we got a bill with the $29 late fee.

Typically, a credit card issuer will give you ONE freebie late fee. You simply call, and they will waive the fee.

This was not the case with Bank of Ameria. Not only did they refuse to waive the fee, but they refused to escalate our calls to a manager, and even hung up on me once (for no real apparent reason – I wasn’t using abusive language or anything, I was simply demanding to speak to a manager).

Finally, after repeated calls, we managed to get the fee waived. Honestly, I can remember exactly how this miracle occurred.

However, I was sick of Bank of America by this point. I cancelled by card. OK, we ran a fair amount of purchases through the card, so they lost a few bucks in transaction fees. No big loss, right?

We have our mortgage through CountryWide. As you know, CountryWide has been purchased by Bank of America. We are refinancing our mortgage on Monday (shaving 3/4 point off our rate). We are switching lenders. We didn’t even consider CountryWide/BofA as an option. We simply don’t trust Bank of America at this point. With all the problems we encountered with the credit cards, we have fears that they won’t handle the escrow properly or will make other errors.

Does anyone want to guess how much this will cost Bank of America over the course of the loan? It’s a rather large amount … certainly much larger than the $29 fee they fought to keep. If we had encountered positive customer service during the credit card debacle, we would probably be keeping our loan with CountryWide/BofA.

The whole situation with the Illinois governor makes me wonder … when a member of congress leaves his/her seat for a better job (President, Vice President, cabinet, etc) why don’t we simply let them pick their successor?

After all, if I voted for Senator X, I want a person who very closely fits Senator X’s profile to fill that role. Who better to make such a decision that Senator X. If the governor is from the opposing party and selects someone from that party, I might get the exact opposite of Senator X – definitely not what I wanted when I voted.

Of course, there would need to be an exception for situations where a person resigns in disgrace – and a way to split hairs of what is or is not disgrace.

This will likely become a mini-series … statistics are great, but can be abused.

Today’s focus is on the “transitive” property of statistics. My example will be an issue that many people are well aware of. The issue is important and is a problematic societal issue. I am definitely not suggesting that the problem doesn’t exist – but I am suggesting that the arguments have at times been twisted to say things that the number don’t necessarily support.

Fact 1: Members of group A are paid less than members Group B for the same work
Fact 2: Members of group A, on average, have salaries that are 50% of those of members of group B

thus, the creation of
“fact” 3
Members of group A on average make, on average, 50% of members of group B, for the same work.

The only problem with this is that this is overly simplistic. You cannot blend the first two facts. Too many other variables exist.

Let’s illustrate:

Group A, 100 people
6 brain surgeons @ 135,000 = 810,000
94 engineers @ 45,000 = 4,230,000
Total = 5,040,000

Group B, 100 people
50 brain surgeons @ 150,000 = 7,500,000
50 engineers @ 50,000 = 2,500,000
Total = 10M

Let’s test facts 1 and 2

Fact 1: Are members of group A paid less than members of group B for the same work? Yes. They make 10% less.
Fact 2: Are members of group A, on average, paid ~50% of the salary of members of group B? Yes. 50.4%

But when we come to “fact” 3:
Members of group A on average make, on average, 50% of members of group B, for the same work.

This is not true. Members of group A make 90% of what members of group B make for the same work.

Keep an eye open and you’ll see occasional use of the “transitive” property by otherwise reputable sources. Why? Either because the person doesn’t know any better, or because it’s easier than delving deeper to find the “split” statistics – and 90% of people aren’t going to see the problem. The key point here – when you read the news, you should not only scrutinize the facts for accuracy, but also the logic used to piece the story together. The best statistics in the world cannot undo the harm of illogical thinking.

End note: With this particular example, there is the issue of why members of group A tend to have less than members of group B. Is this due to personal preference, lifestyle choices, or a lack of opportunity. This is a good topic for discussion, but it is beyond the point of this article – that people need to analyze the statistics more closely.