Wednesday, December 11, 2013

Conclusory Statements

What is a Conclusory Statement and why should you be on the lookout for them?

When I was in Law School and called on to recite, in the Socratic Method, I was routinely humiliated for my weak thinking, by the law school professors.   I was not alone, of course.  Most people in their 20's are weak thinkers, and confuse slogans and other people's ideas with real thought. 

And one comment a professor made, was, "That is a conclusory statement, Mr. Bell!"

As I sat down in abject humiliation and to the laughter of my fellow students, I thought, "what the heck is a conclusory statement?"

And when I learned what it was, I realized that much of my "thinking" up until that point, was not thinking at all.   And I realized, as I have noted here before, that Law School was about teaching you how to think like a lawyer, not how to be one - just as Engineering School taught you how to think like an Engineer, not how to design a bridge.

What is a Conclusory Statement?   Simply stated, it is a statement made in an argument that states a conclusion, without any foundation, underlying logic, or reasoning.  For example, someone says, "Hitler was bad" - that is a conclusory statement.  It states a conclusion, without any underlying reasoning or supporting facts.   If they said, "Hitler was bad because he slaughtered millions, enslaved nations, and started the largest war in history" - that is not a conclusory statement, as it provides supporting facts and arguments.

With these supporting facts and arguments, one can understand the reasoning and factual basis for the ultimate conclusion.   And you can research the facts or address the arguments, if you feel the conclusion is wrong.  You can debate a non-conclusory statement.  However, a conclusory statement is not even an argument to begin with.

Now with regard to the examples above, you might say, "Well, everyone knows Hitler was bad" and you might be right about that.   But to a child growing up, who is just learning history, they don't know all of that, and it bears explanation.   And in most instances, the things you are talking about or debating do not have a back-story based on common cultural or historical experiences.

And just because a statement uses the word, "because" does not mean the statement is not conclusory.   As this example illustrates
"Here's  an example  of a conclusory statement taken from an exam answer: "Because Adam's intent manifested the malice required for murder, he will be convicted." The problem here is that although the statement may be true, the writer has not told the reader (professor) precisely which of Adam's acts show he had the malice required to prove murder, what degree or variety of intent the law considers sufficient to prove malice, nor what type or variety of malice is required to obtain a murder conviction."
Similarly, statements made in the financial sector, which provide "reasons" but don't tie them to the underlying statement, are conclusory.  For example, "Leasing is a better deal, as it frees up your cash flow!" is a statement often made by salesmen and parroted by their victims.   It provides a "reason" (freeing up cash flow) for the argument (leasing is a better deal) but really fails to explain why freeing up cash flow is helping the consumer (it isn't, really) and how it relates to the overall cost of the transaction (the "deal").  And of course, the reason this isn't delineated, is that freeing up cash flow is a nonsense argument and the overall cost of the transaction (the deal) is higher than buying the car.

Why should you be wary of Conclusory Statements?  Because when someone makes a conclusory statement to you, they are engaging in weak thinking or lying to you, or both.  And in commerce, investing, and other financial subjects, conclusory statements abound.

For example, on the financial channels and online, you hear conclusory statements all the time, usually from self-proclaimed "stock analysts" who say things along the lines of, "Gold will hit $5000 an ounce!"  (which was an actual statement made by so-called experts, at one time - and yes, the price will eventually reach those values, the question is, of course, when).

The "logic" behind these statements is that "Well, I'm an expert at this, so my opinion means something.  Obviously I know about these things, so I don't have to explain why."   And this is an example of creeping credentialism and expertism in this country - where people assume that if someone is "expert" at something, they are right - or if they have a mountain of diplomas, their opinions are sacrosanct.

But experts are just jerks like you and me - and are often wrong.  And in the financial arena, the best example of this is the Shouting Guy - who screams "BUY!" and "SELL!" into the camera, touting one stock or investment after another - without explaining why these are good buys or stocks that should be dumped.   He's the expert, you're an idiot, and you're supposed to do what he says - or at least that is the idea they are selling you.

But, as others have noted, a monkey using a dartboard has a better track record of investment than the Shouting Guy, and his "expertise" is very suspect.  Actually, all "expertise" in the financial arena is pretty suspect.   A financial analyst makes a few good guesses, and he is touted as the Golden Boy - and people throw money at him.   When he flips a coin, it always comes up heads.   But eventually, he flips a tails and people scratch their heads and wonder why he "lost his touch" - when in fact, the law of probability just caught up with him.

The problem with these conclusory statements is that they cannot be analyzed.   When the gold bug says, "Gold will hit $5000 an ounce!" you cannot analyze that statement with any form of research, reasoning, logic, or analysis.   And not surprisingly, the people who make such arguments are usually in the business of selling gold, or some related business.

On the other hand, if I say that I think gold is overpriced because it costs only about $500 an ounce to mine, that people are mining more and more of it every day, and that historically sudden spikes the price of gold (or any other commodity) are usually followed by sudden drops, those are at least arguments and facts that you can research, refute, discuss, argue, or analyze.  You have something to attack, at least.  The conclusory statement, on the other hand, is irrefutable.

And in that regard, in political debates, conclusory statements (usually in the form of political slogans) are far more popular than reasoned analysis.   When you make a statement with reasoned analysis and factual basis, your opponent will attack the reasoning and facts, which to the public makes the original statement seem "weak".   The opponent, on the other hand, who merely makes a conclusory statement, seems stronger as there is no way to argue a conclusion.

Like I said, when someone makes a conclusory statement, they are usually lying to you.

In sales, we hear conclusory statements all the time.  "You'd be hard-pressed to find one of these chairs for less than $1,000" a salesman chirps.   This is a conclusory statement, with no underlying basis in facts or reasoning.  If she said, "You'd be hard-pressed to find one of these chairs for less than $1,000 because they wholesale for $900", that might make some sense.  At least there is logic and reasoning behind it.

Making conclusory statements in commerce is not illegal, and in fact, is protected.  In commercial law, we call such statements "puffery."  They are like ad slogans - not intended to set forth facts, but to give a consumer a warm and fuzzy feeling about a product.   So when the salesman says, "This is a fine car that gets good gas mileage and has plenty of power!" those are conclusory statements and also advertising puffery.  They are not enforceable as contract terms - even in a verbal contract - as they mean nothing.

On the other hand, if the salesman said, "This is a fine car, as consumer surveys place it in the top 5% of all cars sold.   It gets over 30 miles per gallon, and has 300 horsepower!" it is a different matter.  He is providing hard data here, which can be analyzed and refuted - and moreover the subject of a lawsuit, as some manufacturers have found out in the past when cars didn't meet their stated performance criteria.

Sadly, most people cannot distinguish between conclusory statements and logical thinking.   I know I couldn't, when I was in my 20's.   I tended to believe whatever pile of horseshit sounded good to me and sounded like something that would work to my advantage.   And this is why young people tend to be more liberal and tend to believe ideas like, "If we just gave everyone more money, no one would be poor!"

But sadly, many people go through life, never learning to think logically or to question the premise of arguments.  Many oldsters are just as naive as youngsters - listening to right-wing talk radio, which provides them with lots of slogans and conclusory statements - but little data or logic to back them up.

"Illegal immigrants are taking over our country and taking away good-paying jobs!" they cry.   But they can't point to one "good-paying job" that an illegal immigrant has taken away from anyone.  It is just a slogan touted on the radio, and part of an underlying political plan orchestrated years ago

People spend their whole lives making financial decisions based on conclusory statements.  "Leasing is a better deal!" they chirp, "I get more car!"   But they fail to do the math on the proposition - and salesmen don't provide this math.   And the simple reason is, if you did, you'd likely never lease a car.   Conclusory statements sell when logic and reasoning won't.

In the last few years, we've heard a lot of conclusory statements made by financial experts, salesmen, and politicians, and maybe even your family members.  Most, if not all of them have been outright lies:
"Better buy now, or be priced out of the Real Estate Market!"

"This payment-optional loan will make your home more affordable!"

"If rates go up, you can always refinance!"

"Housing prices in our area will always go up!

"Leasing a new car every three years frees up your cash-flow and you get more car!"

"These dot-com stocks are the next big thing! This is your chance to get in on the ground floor!"

"This credit card deal is great! You get Frequent Flyer Miles and Cash Back!"

"But Grandma, I need a reliable car to get to work and school!

"I just need $500 to tide me over.  You're lucky and have so much money!  Why not help me out?"
"Vote for me and I'll create jobs!"

"If you raise taxes on rich people, they will lay off employees!"

"Illegal Immigration is costing America too much money and taking away jobs!"

And so on....

Most of these statements are outright lies.   But even if one of them has a nugget of truth to it, you cannot tell - as there no underlying logic or reasoning presented as to why the statement is true.

You can blame these sort of people for making conclusory statements and lying to us.  But we chose to believe these sweet lies.   So who really is at fault?   The liar, or the person who believes the lies?  

When listening to the media, politicians, financial channels, salesmen, and even friends and family, be on the lookout for conclusory statements.   Chances are, when someone makes one, they are lying to you and trying to get at your money.   Such statements should set off an alarm bell in your head - and act like police tape to rope off a raw deal.   If you look at conclusory statements in this manner, you will be forewarned of bad things happening.