It’s an honest management team, so you lay the numbers out there for all to read, net profit of $78 million versus $100 million in the corresponding quarter a year ago.But there’s a column on the right for percentage change, and in that space you enter the number, 22. Technically that is correct, the company recorded a 22 percent change in net earnings, it just happens to be negative. In school I learned that a number without a qualifier can be assumed as positive, but that a negative number should always be denoted with a minus sign, just to make sure.
Maybe the company wanted to avoid negative thinking. They are making the most of a bad situation, assuming that any investor will understand the numbers, that there is no need to spell it out for the savvy folks who invest in their company. One might even say that the misty earnings statement avoids unnecessary embarrassment for the company’s shareholders.
I recently read a report by an overzealous journalist analyzing automotive sales in Turkey; he had no fear of negativity, reported that August sales were down 117 percent from the previous month. I said wait a minute, sales can only drop so far… if you sold zero units then sales would be down 100 percent. Maybe people were returning vehicles they bought the month before, a truly historic month for sales managers at all the car companies.
Turkish exports in October recorded their first year-on-year rise so far in 2009, up 4.6 percent to $9.945 billion. Unfortunately, we are dealing with the base-effect here, for last October the economy was already slowing from the economic crisis, so the growth is not such a big deal, but it is growth. Indeed, some economists say we should not get caught up analyzing statistics, for the economic momentum is key.
Avoid negative thinking, or think positive. Avoid negative is a double negative, which is a positive, but it doesn’t have the same ring as think positive, which is why the New York preacher Norman Vincent Peale titled his book “The Power of Positive Thinking,” rather than “The Power of Avoiding Negative Thinking.” Peale was a narrow-minded bigot, opposing John Kennedy for president because of his Catholic faith, but it’s hard to argue with a harmless suggestion for individuals to put the best light on things, to believe they can solve their problems and succeed in life.
Adlai Stevenson ran for US president as the Democratic candidate in 1952 and 1956, losing to Dwight Eisenhower both times, and both times opposed by Peale because of his having been divorced from his wife. Stevenson countered that he found the Apostle Paul appealing and the Apostle Peale appalling. Clearly a man more comfortable sparring with words than with numbers.
Back to numbers, October exports were up a more impressive 19 percent from September, so anyone can take inspiration from such a significant increase. News reports on the rebound in Turkish exports described overall economic activity this year as being approximately $600 billion, versus $700 billion last year.
But here we run into the unregistered economy, said to be 40 percent of the total. Has this share of the black market remained constant during the recession? Is the overall economy a trillion dollars? Are official statistics meaningless when the state is unable to tax nearly half the workforce? Can all the exploited workers who do not pay into social security ever recoup the years spent living off the books?
The government this year enacted an unusual stimulus measure, offering to pay the first five years of social security payments for new employees hired at the minimum wage. Why stop there, why not a retroactive program to bring all the noncontributing workers onto official payrolls? Let’s expand the tax amnesty program to an amnesty and incentive program for employers. Something is wrong when national statistics require rounding up by 40 percent to get an approximate value of the reality. Let’s make the most of this bad situation.
