In a Financial Crisis, Why Does Language Matter?

Suzanna De Baca -- Expert Business Source, 9/29/2008 9:33:00 AM

The proposed government purchase of $700 billion in troubled assets being hammered out by Treasury officials and legislators has been commonly referred to as a bailout, yet President Bush described it as a “rescue” last week.  In a financial crisis that has been fueled by an erosion of consumer confidence as much by the underlying credit and derivative problems that caused it, subtle differences in language are important.

Many people, President Bush included, are using language carefully in an attempt to quell further panic and to put an affirmative spin on a disastrous meltdown. A financial rescue sounds much more encouraging than a bailout.  A rescue suggests that the problem is alive, salvageable, and simply needs a hero to intervene and save the day.  A bailout, on the other hand, sounds more like an attempt to resuscitate an unconscious patient.  You bail an accused criminal out of jail.  You bail out a boat when it is already starting to sink.

In a September 29, 2008 New York Times article entitled “President Bush Calls It a ‘Rescue,’ but Others are Sticking with ‘Bailout,” author Brian Stelter writes, “In a stark example of the way language is used as a public relations tactic, government officials have characterized the $700 billion measure in positive terms.”  He notes that President Bush has also used the term “asset relief program,” and comments that neither of the presidential candidates used the word “bailout” during last Friday’s debates.

The word ‘crisis’ has been treated with similar kid gloves by some over the last year.  Last year, ‘crisis’ was being tossed around by the media, but Wall Street spokespeople and Washington DC lawmakers also avoided that word like the plague.  Using a word as powerful as “crisis” can have a serious effect on the public; even bringing the possibility of crisis into the public consciousness can evoke fear and essentially evoke that reality. 
Consumer confidence drives spending and has a vast impact on the markets, so using language accurately and carefully is critical.  Last year, I felt that the media often compounded investors’ fears through dramatic headlines and alarming stories.  Now, many of the dire predictions about the market meltdown have come to pass, and one has to wonder how much the alarming language exacerbated fears and caused investors to react impulsively – further driving the markets downward.

Responsible members of the media walk a fine line in trying to accurately characterize the market environment.  A financial problem implies something different than a downturn, which is not as bad as a crisis.  A crisis implies that we are in a state of emergency, on the verge of a catastrophe, about to fall apart.  But if we are in crisis, it is important to call it what it is so that we can acknowledge it and start working on a solution.

I’m all for optimism, especially in an era when sensational, alarming headlines bombard us on a minute-by-minute basis.  So is this a rescue or is this a bailout?  For the sake of consumers everywhere, I hope it is indeed a rescue and I am rooting for some smart, practical, realistic heroes to bring much needed economic relief.