Stick and stones may break my bones, but words can never hurt me. So goes the tune we were all taught as 7-year-olds to make ourselves feel better after getting mercilessly teased by the school bully. But flash forward to 2008 and it seems like the pen has come back with a mighty vengeance.
With Congress failing to pass the $700 billion bailout yesterday, media outlets across the country have been cautioned to carefully choose how to describe the financial crisis, so as not to create a general state of panic and fear. According to Newsweek columnist and Daniel Gross ’89 “Stunning Day for Dow: Closes up more than 450.” The second headline of the article reads: “Previous day’s carnage attracts bargain hunters that bolster markets.”
The significance of these headlines lies in the hunter terminology they use to describe the market. Generally, the markets are described as running on a bull when investor confidence is high. Markets are described as being on the bear when investor confidence is down. It is definitely a bear market right now, Elmer Fudd. But as has been repeated over the past few weeks, the markets need to be convinced that problems can be resolved in order to restore investor confidence and that it is okay to lend again. By describing today’s uptick as bargain hunters who have beaten yesterday’s carnage, this plays heavily into the psyche of investors that the stock market might be okay in the long run.
Similarly, some suggest that we need to label the bailout as something else in order to get more Congressional backing. “Bailout” is a loaded term that signifies to the main street Americans that they are bailing out the greedy investment bankers on Wall Street. Instead, another more successful way to push the bill would have been to label it as an economic stimulus package or something along those lines. There are no doubt flaws with the bill that was voted on yesterday but it seems like the House will have another go at it again this Wednesday. But for any bill to be successfully passed it will need to be retooled as a proposal that main street Americans can get behind.
One thing is sure though. When it comes down to it, talk ain’t cheap. These words are definitely going to hurt.