By What Name Shall Ye Know Them?

Journalists tend to lean on simplified words and phrases to explain complex topics to a general audience.  Too often, though, they don’t consider whether their language is ideologically loaded or favors certain interests over others.

Consider, for example, the ways used to describe the mortgage-backed securities at the root of the financial crisis.  The most popular term is the government-endorsed “troubled assets,” which gained its imprimatur from the Troubled Asset Relief Program (TARP), which originated, lest we forget, with Hank Paulson and the Bush administration. Journalists should have been wary of using the very language provided by the plan’s promoters to explain it to the public.

Things that are “troubled” typically share two characteristics: they are (1) subjected to distress by an external force (2) for a limited period of time. In the case of “troubled assets,” then, the phrase suggests that there’s nothing inherently wrong with the mortgage-backed securities—they are being temporarily subjected to unusual market pressures—and that their value will someday return to normal.  But if this analysis is correct, the phrase “troubled assets” smuggles in assumptions about mortgage-backed securities that supporters of the TARP program may believe, but many financial experts, such as Paul Krugman and Nouriel Roubini, reject. Geithner has recently said things to suggest he thinks mortgage-backed securities are “artificially depressed” and will someday regain their value, which, if true, might justify their purchase with taxpayer dollars.  But others think the market is accurately valuing the securities—they really are junk—and that Geithner’s view is, at best, wishful thinking or, at worst, an attempt to manipulate taxpayers into shoring up the losses of his buddies in the financial sector. However one sees the issue, journalists should resist any language that prejudices the public’s ability to decide how its money should be spent.

Critics of TARP seem to prefer the phrase “toxic assets,” which has gained wide usage in the media.  “Toxic” suggests that the assets are inherently poisonous, damaging the companies that own them and rightfully frightening off potential buyers.  Despite the stronger terminology, some journalists have discussed “toxic assets” in ways that deceptively bolster the case for government action.  Consider, for example, the following paragraph from a March 1 New York Times article on the A.I.G. bailout:

The intervention would be the fourth time that the United States has had to step in to help A.I.G., the giant insurer, avert bankruptcy.  The government already owns nearly 80 percent of the insurer’s holding company as a result of the earlier interventions, which included a $60 billion loan, a $40 billion purchase of preferred shares and $50 to soak up the company’s toxic assets.

This isn’t the first time the Times and other news organizations have compared bailouts and TARP to “soaking up toxic assets.” The image subtly compares the government bailout to a toxic-cleanup operation—something we generally expect the federal government to do.  But this metaphor hides the reality of what the effort involves: the use of taxpayer money to purchase assets that cannot be properly priced, because the market is unwilling to buy. With one simple image, a journalist attempts to convey a complex topic but ends up concealing the heart of the problem.

In The Shock Doctrine, Naomi Klein indicts “disaster capitalism,” the tendency of corporate interests to exploit natural disasters to secure public policies that wouldn’t normally gain a hearing.  The language of the Times article offers the potential flipside of disaster capitalism: corporate interests would prefer the public to think of market crises as akin to natural disasters—things for which they are not responsible and which obligate massive public funding.  Whatever one’s view of the matter, journalists should resist any language that prejudices the public’s ability to decide how its money should be spent.

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