Wednesday, February 18, 2009

Terminology, and why it matters....

I watch The NewsHour with Jim Lehrer many nights for several reasons: the analysis is generally more thoughtful, and individual segments are longer, providing more context. There is a distinct leftist bent to the coverage, but it's not the shallow and superficial coverage available from the so-called broadcast networks or the shrill shoutfest at cable outlets such as MSNBC or CNN.

I had a few minutes, earlier this evening, to send a short note to the folks at The NewsHour with Jim Lehrer, which I'll share here:

Selection of terminology is important to clearly and concisely explain complex subjects, such as the economic situation facing our country (and the world). I'm bothered by a selection of terminology that obscures, intentionally or not, the source of the treasure that will be spent. For instance, one of tonight's stories has the following lede on your web site:

"Nine weeks after automakers made their first plea to Congress for emergency aid, General Motors and Chrysler submitted new restructuring strategies and requests for additional federal funds that could bring the government's total tab to $39 billion."

Use of the term "federal funds" obscures the fact that funding will come from two sources: taxpayers and bondholders. While bondholders are important, and have a critical stake in the problem, taxpayers will bear the full brunt of any decisions made to "stimulate" the economy. Additionally, the phrase "government's total tab" can easily be interpreted by inattentive citizens as being somehow different from "taxpayer's total tab". Using the more accurate phrase will help avoid misinterpretation, and continue to remind taxpayers that they (and not "the government") are picking up the tab here, and are accountable for the decisions made by their elected representatives.

By the way, "bailing out" General Motors and Chrysler is a bad economics and bad public policy. It was a bad idea in December, and it's a bad idea now. Taxpayer intervention in market forces that are trying to establish the fair value of these companies will postpone (and increase the cost) of the inevitable.

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