Metaphors Reveal the Economic Ignorance of Politicians and Journalists
The past few weeks have been a difficult time for economic educators. Never has it been more obvious that all their efforts have been in vain. Neither the politicians nor the journalists, who have been spewing out words at a rapid rate with regard to the so-called financial crisis and the proposed financial bailout, have a clue about the economy.
It’s not simply that these nincompoops use metaphors, rather than more precise terms and ideas, in speaking about the economy. We all use metaphors to some extent; we can’t talk without them. But the journalists’ metaphors are routinely so mixed that one wonders what is going on in their minds. Many, for example, refer in one breath to financial markets that are “freezing up” and in another breath to financial markets that are “melting down.” Which is it? Are these markets cold and immobile or hot and fluid? The speakers know (or fancy that they know) only that something is terribly wrong; they can’t be bothered with understanding exactly what is wrong or why.
Many commentators think of the economy by analogy with an animal’s body. Thus, “credit is the lifeblood,” and because the animal presumably has sustained a wound, it is losing blood quickly, and therefore the government must rush to “apply a tourniquet.”
Others refer to the “battered financial industry,” as if it were a boxer pitted against a superior opponent who is mercilessly beating his head and torso. One wonders: has the financial industry dropped its mouthpiece? Has it forgotten to keep up its guard? Perhaps it has simply disregarded its footwork, neglecting to “float like a butterfly, sting like a bee.”
An extremely common term has been “toxic assets.” Perhaps because of some research I did in connection with mining in the Coeur d’Alene Valley, I cannot hear this term without imagining that the assets are covered with a fine, nearly invisible dust consisting of tiny particles of lead, zinc, cadmium, and arsenic. Have you noticed that bankers have been wearing respirators lately? But perhaps I’m all wrong about the toxicity, and it actually arises from contact between mortgage documents and the viruses of acute hemorrhagic fevers. This hypothesis may help us to understand the alleged bleeding and the consequent need for a tournequet.
One article refers to lawmakers’ fears of “a crushing economic contagion.” I’m stumped. I’m trying to picture how contagion can crush something or someone, but all I can think of is that contagion denotes a pathogen’s spread from person to person, by either direct or indirect contact or via a vector, such as an insect. Can mere exposure crush us? Doesn’t crushing require either great mass or great velocity.
Of course, the most common term of all in the recent reports has been “distressed” or “troubled” assets. Try as I may, I cannot picture how all of these worthless IOUs piled in the safe deposit boxes of banks and other lending institutions can feel distressed or troubled–the bankers themselves, maybe, but that’s not what’s being said. I keep imagining a mortgage-backed security or some other type of collateralized debt obligation lying on a psychiatrist’s couch, as the shrink asks: “what’s troubling you, Oliver?” Or perhaps the worthless security is sitting in the confessional, saying to the priest, “Father, forgive me, for I have promised to pay and offered security for my promise, but I am not paying and my security is worthless.” You can easily imagine how many Hail Marys that will get the wayward financial instrument. Distressed and troubled, indeed.
If journalists have used inappropriate and even screwy language to talk about the economy and the bailout, politicians have been no better.
Thus Rep. Barney Frank, one of the guiltiest parties in this whole criminal undertaking, declares: “We were the EMTs rushing to the rescue of an economy that suddenly found itself choking, but now we have to perform more serious reform.” He promises “serious surgery” next year. Since when, you might wonder, did the removal of an obstruction in the windpipe require “serious surgery”? Couldn’t EMT Frank simply apply the Heimlich maneuver to expell the economy’s unsufficiently chewed chunk of credit steak? One quakes to imagine Barney Frank cutting into the economy’s body cavity to . . . what? . . . cut out its gizzard? (I assume here that the markets are birds, not reptiles, because during prosperous times they are said to be “soaring.”) My great fear is that Rep. Frank and his congressional/surgical colleagues will cut into the economy’s body and, finding no gizzard, satisfy themselves by excising the kidneys or the liver. After all, they clearly know little or nothing about what goes on in there or how the various parts of the economy work together to keep the economy “alive” and “healthy.”
Rep. Nancy Pelosi, seemingly punch-drunk from the verbal pounding she has been giving and taking of late, opined that the bailout law will “begin to shape the financial stability of our country and the economic security of our people.” I suppose she meant these noises to sound reassuring to someone, but can one really “shape” financial stability or economic security? What shape does one best employ? I imagine that Pelosi might well select the shape of Devils Tower, much as Richard Dreyfus piled his mashed potatoes on the kitchen table in Close Encounters. I don’t know if such artistry is possible in this case, but our devoted public servants are persons of unquestioned imagination and creative genius, so if anyone can pull off this trick, they can.
Pelosi also excused the legislators’ treachery in facilitating the greatest broad-daylight robbery of all time by saying, “We must win it for Mr. and Mrs. Jones on Main Street.” What does this lady pirate know about Main Street? Did she ever do an honest day’s work? And if so, why did she quit that job and turn to crime? However elusive the answers to these questions may be, we can all understand why the Speaker of the House did not say, “We must win it for the Gipper.” If she is anything, she is a political partisan.
Finally, we come to Rep. Elijah Cummings of Maryland, who switched from voting against the bailout on Monday to voting for it on Friday. His explanation: “Sometimes you just have to do what is necessary at that moment.” This vacuous and dishonest excuse calls to my mind the statement that might be made by a 16 year old boy, explaining why he did what he did last night in the backseat with his overheated girlfriend. Maybe that boy will grow up and be elected to Congress.
Jonathan Dresner - 10/8/2008
To be frank, most world history textbooks stink at economics, and I say that as someone who isn't really all that economically sophisticated. Most of the time the discussion is pretty hackneyed, with economics a byproduct of technological changes.
The newer crop of textbooks that are genuinely written by world historians, instead of a committee of regionalists, are somewhat better because they engage with globalization and trade and imperialism more rigorously. The one I'm using this semester, Felipe Fernandez-Armesto's The World: A Global History is very good on global connections, ecology and the economics of world trade (he's an Atlantic Region specialist, I believe). He even seems to get Adam Smith and David Ricardo right -- much better integrated discussions than most, and subtler.
What I don't know, though, is how someone with more training in economic history would take it. He does reference recent scholarship in the field -- I've never seen a world text that actually mentioned "high-level equilibrium trap" theory before -- so it may be about as good as you could get without a very specifically economics-oriented text.
Ken Pomeranz has a text as well, and he's done work with strong economic implications. It's a supplement, rather than a full text, but it might do the trick.
James Otteson - 10/8/2008
I like your idea, Jonathan. Is there a good textbook you would recommend?
Jonathan Dresner - 10/7/2008
Perhaps, in keeping with the purpose of this site, a historical approach to economic matters might be worth considering? A World History course that actually paid attention to economic affairs -- and the quality of textbooks varies on this topic, but nobody can argue that it's irrelevant -- would introduce most of the major economic concepts and theorists in useful and complicated contexts.....
James Otteson - 10/6/2008
You might be right about that, although something similar might be said about many of the disciplines in higher education today. I'm not sure I'm ready to resign myself to such a conclusion yet, however. Perhaps something like an "Introduction to Economic Concepts" class--which focused on general ideas rather than mathematical models--would not be so bad?
Robert Higgs - 10/5/2008
When I consider what would actually be presented in a required economics course in 95 percent of the cases, I am inclined to think that, all in all, people are better off without such a course. Modern economists, with a few exceptions, have little understanding of real economics. Most of them are idiot savants who play with mathematical models in which the x, y, and z variables have been given economic-sounding names. Academic economics verges on intellectual bankruptcy; better that students not be exposed to it at all, because such exposure serves only to convince them that learning economics is a waste of their time.
James Otteson - 10/5/2008
I have long advocated adding an introductory economics class as a requirement for a liberal education. I've thought that some basic concepts--like where prices come from, for example--would help enormously.
But would it? A friend of mine argues that we are too tribal a species to understand the extended, impersonal market order. He argues that we will always be suspicious of it.
What do you think? A job for enlightened free-market-oriented philosopher-kings?