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Exploding Tires and Lovin’ Free Trade

Jim Capo
JBS [1]
Wednesday, Aug 6, 2008

In a world of information overload and a dearth of critical thinking it’s easy to misrepresent the facts. Two recent “news” items make the point.

Exploding Tires

The dramatic ABC 20/20 News report “Aged Tires: A Driving Hazard?” aired back in May. Since many people on the Internet have stopped watching such old school news sources, there is sometimes a lag in having such a story make your radar screen. In my case, it was only a week ago that I learned from a concerned friend that I was at risk of being killed by my car’s tires.

My friend, who is no slouch at analyzing information when he has the time, had taken a pass on critiquing the ABC story before urgently forwarding it to my email box. This was because he himself had been alerted to the story by a newsletter writer he generally respects for his critical thinking ability.

All would be fine if the newsletter writer had stuck to a basic point like, “Hey, why pay full price for a ‘new’ tire that has been aging away in a warehouse for several years?” Instead however, he titled his article, Exploding “New” Tires. While in his defense it could have been his own rushed opinion on the matter, he closed his review of the story in dramatic fashion: “Still not convinced? Watch this video. Horrifying.”

If you turn off the thinking side of your brain and stick with the visuals in the ABC 20/20 piece, it is indeed a horrifying story: car wrecks, simulated exploding tires, suspicious sounding merchants and a nervous looking industry spokesman caught on film. Though ABC covered their tracks by giving their tire story a title ending with a question mark, there is no question as to how they wanted viewers to answer their hypothesis. “Hazard? Good grief! We’re lucky to be alive.”

Employing just a little bit of critical thinking, we can see how ABC has pulled one over on those tempted by sensationalism.

The story opens with a tale of death to create the gravitas the ABC editors are looking for. A young man has died in a car crash/rollover. Police in Canada say he lost control due to tire failure. It turns out that the tires his dad bought for his SUV five years ago had already been sitting on a store self for four years, making them nine years old at the time the investigators say one of them disintegrated while driving. In a lawsuit (mentioned later in the story), a jury awarded the boy’s family damages from the tire retailer. With death then as prologue, the ABC reporter goes on to frame his issue by making the statement: “The evidence of the problem can be seen every day on the nation’s highways.” [Camera pan to a stark image of the debris from a peeled off tire tread laying alongside a highway.]

What is wrong with this picture? First, the pealed off tire tread that made a cameo appearance several times in the story is most likely a truck tire retread, which is a common item of litter on our highways totally unrelated to the tire shelf-life issue. Second, and most importantly, if the age of the tires were a factor in the teenager’s accident, there were three other tires of the same age and life experience that could have been anaylzed from the crashed vehicle. This would have been the scientifically appropriate path of investigation to pursue. Since no mention was made of the results of any such testing, it is more than likely that the other tires showed no signs of imminent failure or unusual degradation.

It is also interesting that although the divorced father kept good records on his tire purchases, no mention was made of how many miles had been put on the vehicle over the five years the “aged” tires had been on it. All we really know from the way the story was told is that a tire outlet store, still in operation and so likely covered by an adequate commercial insurance policy, paid an “undisclosed sum” to settle a claim by a customer whose son had died while driving on tires sold by the retailer. In our litigious society this is news? In any case, note that the reporter was not able to state that the settlement was based on the claim that the tires sold were “aged.” Making a legal (not scientific) determination that a tire in service for 5 years may have been defective and a liability to the retailer involved cannot lead to a conclusion that “aged” tires kill.

What about the report from Britain’s Tyre Industry Council recommending that tires over 6 years old not be sold and that tires over 10 years old from date of manufacture should not be used regardless of remaining tread life? The most obvious problem here is that even following such a stringent warning would not have saved the young man whose tires were only 4 years old at time of sale and only 9 years old at the time of his accident. A second problem is that the Tyre Industry Council’s chief financial support comes from tire manufacturers. These manufactures have a clear economic incentive to lobby for age limits on tire sale and usage. The fact that the British trade group has made such a statement, while similar trade groups in the U.S. have not, could merely be related to a higher percentage of tire manufacturers in the United States also being retailers who would rather not be bothered by expiration dates on their stock.

The recommendation from Ford Motor Company that tires over 6 years old not be used is also self-serving and begs for scientific evidence. Remember this is the same Ford Motor Company that when faced with a rash of litigation on rollovers of its popular Ford Explorer SUV, tried to deflect blame to the Firestone tires supplied on the vehicles.

What should be obvious to anyone who has driven a car for many years is that there is simply no epidemic of people dying on our highways from exploding tires. That ABC news was able to find so many “aged” tires on store racks is actually an indication that people have very little to fear from this alleged threat. You probably have a far greater chance of dying in a vehicle accident caused by a bad mechanic, or your own inattention to your tire’s visible quality than from a retailer selling you an old tire as new. (For those who feel they must worry about something however, scroll down to the answer to question #5 to see what Goodyear Aviation recommends as the maximum life for an airplane’s tire.)

Lovin’ Free Trade

This is the title of a piece in Investor’s Business Daily (IBD) from July 28th. At least they had the decency to present it in their opinion section. That does not stop the editorialists from basing their case on misleading statistics.

The IBD editorial, which knowingly commits the crime of conflating true free trade with cartel creating trade pacts deceptively named as “free trade agreements (FTA’s),” pulls its information from three sources:

Again, this is an opinion piece so they have no obligation to present opposing views to their own. However, the core of their argument is based on a statement made in a NAM press release that breaks down to this: In the 1st quarter of 2008 the U.S. had a $0.5 billion dollar surplus with our FTA partners. We had a $176 billion deficit with our non-FTA trading partners. Therefore: FTA’s are good for our country.

Of course this is one of those false logic statements like: All boys wear blue. Chris wears blue. Therefore, Chris is a boy.

The really big laugher is the data report itself that all the players are working from. In line #55 of the Excel spreadsheet table you will see an item labeled, “Statistical discrepancy (sum of above items with sign reversed).” What does this mean? It means that since various statistical methods are used to arrive at the economic data presented, statistical errors can creep in which must be adjusted for such that the calculation tables used still balance. In other words a fudge factor must be used to square the books each quarter. The intention of the statisticians is that more firm numbers will eventually be available to make the historical data more accurate. For now though we fudge by totaling up all the discrepancies, then simply reverse them back out to make our numbers balance to zero. Think of it as coming out with an imbalance in your check book and then making a final entry for the month to eliminate that imbalance on the assumption that in some future month things should work out just right.

Here is the funny part. For the first quarter of 2008 that statistical discrepancy line item required adding a fictitious $52 billion dollar surplus to our reported trade numbers. (This is 30 percent of the $176 billion dollar deficit reported) This means NAM is touting a $0.5 billion dollar surplus from a set of numbers that has had a $52 billion dollar fudge factor added in. That is, the fudge factor the report could be off by is 100 times greater than the surplus NAM claims we have with our FTA partners!

Oh, and by the way, an entry for “financial derivatives” was not yet available for the 1st quarter 2008 report. That might be an important number.

Our closing critical thinking tip: Next time you hear someone talking about economic statistics generated by our government think, “Soviet Union five- year plan.”