Lies, Damned Lies, & Statistics

Lies, Damned Lies, & Statistics SolbergFarms.com
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"There are three kinds of lies: lies, damned lies, and statistics."
Beads, mirrors, wampum: Manhattan or the Brooklyn Bridge?
"There are three kinds of lies: lies, damned lies, and statistics." So goes the phrase attributed to Benjamin Disraeli & popularized by Samuel Clemens (click here). The purchase of Manhattan Island from “the Indians” by Dutchman Pieter Minuit in 1626 provides a fun opportunity to illustrate the saying. The oft-cited & deliciously ironic story goes that Minuit purchased the land from the natives for $24 worth of trinkets & thereby closed perhaps the most advantageous real estate deal of all time.
Let’s put Disraeli’s quote to the test by examining the deal from several angles.
The Dutch Take
According to the World Book Encyclopedia, Manhattan occupies 34 square miles. Manhattan real estate has a value of around $1,000 per square foot (click here). So the Dauntless Dutch walked away with a total take of (34 mile²) x (5280² ft²/ mile²) x $1000 / ft² = over $900 billion (that's billion with a "B") Cha-ching!!!

The Indian Take
Now, let’s suppose our Native American friends had the wisdom to invest in T-Bonds. Let's be conservative & say the bonds earned the lowest yield in the past few years of 4.4% (click here). With the T-Bonds compounding semi-annually, our native friends’ $24, from 1626 to 2008 (382 years), would have grown to $400 million (click here). That's million with an "M." Bummer!

Advantage Dutch!
But the Indians didn’t do so badly either,
& unlike the Dutch’s, the natives’ assets are liquid. They could have their pick amongst the Atlanta Braves ($374 million), Cleveland Indians ($292M) or Cincinnati Reds ($245M) (click here) & retire one of those offensive team names. And they’d have enough left over to buy some Lear jets at $13M a pop or one Boeing 737 at $85M (click here) & send a contingent of Injuns (sorry) to all the away games of the Atlanta “Windmills,” or the Cleveland “Dutch Treats,” or … (paybacks are hell), the Cincinnati “Dikes.”

But wait! If one is to believe Wikipedia, the $24 figure was estimated in the 19th century using some faulty assumptions. The correct value, they say, is around $1,000 (click here) which yields, again at 4.4% over 382 years, an Indian take of $16 billion (click here). Now we're talkin' some serious bling potential.

Still, Advantage Dutch!
But Fortunate Indians!
Now we’ve got the dough to get some real pay back! The natives could buy all three Indian-named MLB teams ($911M) and their counterparts in the NFL (click here), the Washington Redskins ($1.4 billion) & the Kansas City Chiefs ($894M). But that’s not all! A fleet of 50 Boeing 747’s (click here) would take an entire tribe of 25,000 -- 524 per plane (click here) – to watch the “Dikes” clobber (or should we say tomahawk) the “D-backs.”

But wait!!! Whether it’s $24 or $1,000, those numbers are not in 1626 dollars! At best, we’re talking $1,000 in today’s dollars (click here -- notice it says "$1,000 now"). Alas, how those poor, ignorant natives were fleeced. With a grand, they can't even go halvsies on a Redskins season pass (click here).

But wait! Did the Indians actually sell the Dutch the proverbial Brooklyn Bridge? If we can trust the source cited in Wikipedia (click here), then that’s precisely the case. In actual fact, the island was ‘owned’ (i.e. was the permanent residence of) the Weckquaesgeek tribe. But the Dutch made the deal with the Canarsees!

Gullible Dutch!!!!!!
Clever Canarsees.

See how you can make statistics work for you? Simply pick & choose which assumptions you'd like to base your statistics on & also how much of the story you wish to tell &, just like the pros, you can make the numbers say just about anything you want.

References
To avoid broken links over time, I've included snapshots of the relevant web pages taken 10/26/08. If this goes beyond "fair use,"then I hope the prominent link I've placed to each "donor" website makes up for the mild infringement.

Disraeli's quote from LewRockwell.com