In my last two posts, about data points that really matter, an implicit assumption is that the data in question (house sales and auto sales) actually drives decisions. Surprisingly, this hasn’t always been the case in many fields. Until fairly recently, many decisions have been largely based on expectations, plausibility, and bias.

Medicine is a great example. I don’t mean to pick on health care—after all, it’s the source of the current gold standard for effectiveness studies, the double-blind clinical trial—but think about the current debate on medical costs. One of the principal arguments for the availability of cost reductions is that no one really knows which treatments are most effective for many problems. Surgery rates for back pain, for example, vary widely among regions—which wouldn’t be the case, I hope, if there were one clearly superior solution. An entire industry, pharmaceuticals, is built around rolling out new treatments that, in many cases, offer little measurable benefit over existing treatments, at a much higher cost. Doctors hold onto their right to practice as they please, without regard for studies of industry best practices. The fact is, in many areas of medicine, we really don’t know what works best and why.

In yesterday’s post, I discussed why I think both house sales and car sales are good indicators for the economy’s performance over the next 6–12 months. I went into some detail about the housing market and why I believe it will continue to support growth; today we’ll do the same for auto sales.

To recap a bit, anyone buying a car is making a long-term commitment, as well as a long-term bet on his or her own earning power. To be willing to make the commitment is to have confidence in the future. At the same time, since most autos are bought with financing, a lender must also have confidence in the future. Rising auto sales therefore reflect both consumer and business confidence, and are based on what people are really doing at a given point in time, without much room for interpretation or adjustment.

I wrote Commonwealth’s monthly market update this morning, and one of the topics I covered was the slowdown in the housing recovery. To be sure, I think this is just a slowdown to a more sustainable level of growth, but looking at it made me think about what I really consider some of the best indicators for future economic performance.

As you know, consumer spending represents more than two-thirds of the economy as a whole, so the consumer is paramount when considering where we’re going. We have multiple surveys of consumer confidence, which remains at high levels, and many data points on how much consumers are spending, but each of these is subject to revision, massaging, assumptions, and everything else that goes into the economic-statistics sausage grinder. It can be tough to see anything through the fog. What we need are simpler, easier data points that reflect underlying consumer demand in a clearer way.

I had an interesting talk with a reporter for a major newspaper yesterday about the debt ceiling issue. She wanted to know what we were doing about it and what changes if any we were making to our allocations.

One of my earliest musical memories is listening to the song “The Sound of Silence” by Simon & Garfunkel playing on a reel-to-reel tape recorder that my father had brought home when I was very young. I am sure that I had heard music before— on the radio at a minimum—but I remember being very struck by the beauty of the song, particularly the harmony of the voices, in a way that I had never been before. I actually trace my interest in music to that particular song and that particular moment.

I was remembering this in the context of a quiet week in Maine, where I have had the chance to do quite a bit of hiking in fairly unfrequented areas. The area around my cottage has also been quite empty during the week, so I have had a chance to listen to considerably more silence than is normally the case. Silence very definitely has a sound of its own, and, as much as I love Jackson, quiet he is not.

With the S&P 500 down almost 5 percent from its peak, and a drop yesterday, I am starting to hear from investors who are asking, “What is going on? Do I need to worry?” The short answer is, it depends on your portfolio and your time frame.

I have written extensively about how the market is either somewhat or very richly valued, based on historical standards, and how most of the appreciation this year has come from investors paying more for a given stream of earnings, rather than from an increase in the earnings themselves.

In what I really hope is an apocryphal story, it is said that frogs don’t notice small temperature changes. You can, therefore, put a frog in a pan filled with cold water, and, as long as you heat it very slowly, you can actually boil the frog without it jumping out. If you keep the temperature changes slow enough, it will never realize that the heat is rising to harmful, and then fatal, levels.

I have, obviously, never tried this, but something similar has been happening in the U.S. economy. I am pleased to find, however, that people appear to be somewhat smarter than frogs. The heat I’m referring to is the pending debt ceiling crisis.

I haven’t written much about education recently, but now that school is starting back up, it’s time to take another look. My oldest nephew, Jake, is entering college this week here in Boston, which adds a certain amount of immediacy to the discussion.

When I compare the experience Jake will have with what my five-year-old son, Jackson, might have years from now, I expect there will be significant differences. First, Jake will be starting at an established university, with a physical campus, and take most or all of his classes sitting in a lecture hall—just as his parents and I did. For Jackson, I doubt very much that will be the case.

I will be taking some time off next week. I will still be blogging every morning, but I plan to spend the rest of each day doing some resting and recreating. There are a number of issues I want to think more deeply about before reengaging, and this will give me a chance to do some long-deferred reading and thinking.

I had the chance yesterday to be a guest on the Bloomberg Radio program Taking Stock, which was an awful lot of fun. The hosts, Pimm Fox and Carol Massar, are both smart and well informed, and the other guest, Kevin Divney, had some very interesting views and was a pleasure to bounce ideas off of.