naked capitalism

Here are a few code words that you will often see in economic writing followed by their true meaning. The code word is a dog whistle. It acts like an emotional marker only for those attuned to the underlying ‘moral’ issues implied by the code. While you may agree with the logical framework behind the code word, the purpose in using the code is to influence emotion instead of logic. When I talk about ‘economics as a morality play’ this is what I am referring to.

Politics is not the only place where you will hear dog whistles.

The code is in parentheses – which others may hear, but much more faintly.

• PIGS/PIIGS = the eurozone periphery aka Portugal, Italy, Greece and Spain and sometimes including Ireland (who are shameful debtors too lazy to work hard to actually pay for the things they buy, looking to free-ride on the euro zone)
• Technocrat = unelected (and therefore illegitimate) policy maker (from elite institutions isolated from the mainstream and middle classes) who works behind the scenes to assist elected officials because of their prior policy experience (and connections to power)
• Big Government = (statist and freedom-crushing) activist government policy (used to increase the size and scope of government to redistribute wealth illegitimately by government confiscation)
• Bankster = (contemptible) high level financial services executive (who acts like a mob boss Gangster in ripping off ordinary folks as popularised in recent history by libertarian Murray Rothbard in Right Wing Populism in 1992 but now used more widely)
• Anschluss economics = (repugnant) economic power play to force another society into a specific economic model (usually done by Germany, harkening back to the Third Reich and the German attempt to dominate Europe militarily)
• Hippie = (unreasonable and dangerous) Occupy Wall Street protester (dressed like counter-culture and treasonous types from the 1960s and 1970s with no agenda due to economic ignorance)
• Deficit terrorist = someone who sees fiscal deficit as a negative aka a deficit hawk (who acts like a terrorist in forcing pro-cyclical cuts that disproportionately affect the poor, middle and working classes because of uninformed economic views)
• Trickle down economics = (bogus) supply-side economics that reduces regulation and lowers income taxes and capital gains taxes (in order to give kleptocrats a free hand in stealing legally)
• Oligarchs = (deceitful and grasping) bankers and corporations who have a dominant role in society (and who act as unelected policy makers, because they bribe and lobby government, pushing policies that favour themselves)
• Elites = those (untrustworthy) who have either attended what is considered a highly regarded educational institution or work in what is considered a well regarded corporation and who are in a policy making or policy influencing role (but who live in an ivory tower separated from reality that sets them apart ordinary people and gives them the ability to make bad policy decisions which only serve to enrich themselves and others from their caste)

All of these terms are morality plays used to influence emotion rather than speak from a voice of reason. Whenever you see them, you should ALWAYS be suspicious regardless of context or source.

I will update this list over time as I think of more words. So refer back to it here at Credit Writedowns.

Note: This post was supposed to be a quick and dirty list. But I have added the paragraphs below to the original post only at Credit Writedowns and Naked Capitalism due to some very useful suggestions from readers. Further updates will be at Credit Writedowns going forward.

Since economics has become a hot topic with the financial crisis, a lot of people who aren’t economic gurus have a great interest in the topic. I think that’s great. The reality is that there is a code in the economics world just as there is in any profession. For example, in real estate, an agent might say a house is a "must see" or has a "lovely interior" when advertising it. That’s code for "this house looks better on the inside so I have to tell you that or I can’t sell it." In education, a teacher might call a pre-school or primary school student "active" in an evaluation form because they know they must use neutral terminology. But this might be code for "disruptive" or "has an attention deficit".

The intent of this post is to make more plain what is meant by these hidden codes so that anyone can understand why the code is being used instead of the true message. My point is not to say that emotion or morality is illegitimate in economics, although it should be clear I lean toward rational argument given the unconscious use of a code word ‘morality play’, which was pointed out by a reader. After all, economics is a social science, and hence not objective; it is not a science as some of its practitioners wished it were; it’s not just about numbers but about social values, ethics and political judgments that are not the same for all people. Every economic policy has ethical and moral dimensions and is therefore not objective. Sometimes economists act like economics is a science; it is not – and their telling you it is like science is either deception or self-deception.

I believe you as a reader should always be on the lookout for loaded words that inflame emotions and code and jargon that masks deceptive intent. Sometimes the code is justified like when banks use ‘robosigners’ to process mortgage applications or when banks get a ‘bailout’ when they are clearly insolvent or when banks commit ‘errors’ in trying to evict people from their home. I say these are the kind of things that should make you angry; you should get worked up about it. Yves Smith and Michael Hudson are masters of using language to evoke emotion – and they make strong arguments. However, a lot of times, the code is used just to divert from a reasoned argument exactly because that argument is weak and must rely on emotion to have appeal. I say you should always do a double take when the code is employed to check whether it is a justifiable use or a cover for something else.

One more thing: occupying the neutral center is not always a great thing. The word ‘bipartisan’ is code for a reason. A lot of times, you have to take sides since economics is a social science and not objective. There is nothing wrong with that, especially because this is a once-in-a-lifetime crisis with key issues on the table. I take sides all the time, but I am trying to flag it when I do so you know it instead of trying to act like my analysis is always neutral. Sometimes I do so unconsciously though and you should be alert to code as a sign that I have done.

P.S. – I try to avoid these words. But they are insidious. Sometimes they creep in. (As I say above, the truth is that sometimes these words are legitimate. So sometimes I consciously use them to evoke the thinking in the code words, although less and less now. Sometimes they just come out – unconsciously. Bailout and morality play are the added words below I most use. You as a reader, though, should never give a free pass to anyone though. Always remember the code is suspicious.)

P.P.S. – the dog whistle is supposed to have one meaning that some can hear but that others can not hear at all or more faintly. It is supposed to be a ‘secret’ language that can be used in public discourse between like-minded people without offending anyone. So it makes sense to add in words that seem more neutral/non-pejorative but are really code. And so the ‘code’ is what is heard by advocates of the logic behind the dog whistle as opposed to what those opposed to that logic might hear. Many of the terms above are ‘loaded’ i.e. carry negative associations and therefore a bit obvious to be good dog whistles. The ones below are often more neutral sounding but are code nonetheless.

Also see Kantoos referring to the increased moralising in the Euro debt crisis.

Updates

• Morality play = an (inappropriate) appeal to philosophy and emotion and morality in an economic or political argument (that is illegitimate because morality is bad or at least shouldn’t be a prevailing policy concern and because logic is always superior to emotion as a way of getting a response)
• Free market = society (worthy of emulation and) guided by deregulated and desupervised economic policy (which is a good thing because freedom connotes choice and choice is good)
• Job creators = (praiseworthy) individuals that hire or organisations where people work (and should therefore be seen as most responsible for creating jobs and given leeway by regulators, the media and society in general to do as they please)
• Reform = (good) change that requires significant economic adjustments to implicit social contracts (toward the prevailing economic orthodoxy which includes lower taxes, free markets, and less regulation and should be viewed as positive because reform is viewed as such regardless of the impact on different groups)
• Moral hazard = a (bad) policy choice which gives someone, some institution or some group within society a break (which they don’t deserve and therefore encourages them to free-ride and mooch off of society)
• Class warfare = (bad) economic and political policy used to divide people (and pin the blame all on one political group and their allies to gain an unfair political advantage)
• Wage inflation = (negative) rise in wage rates (that will lead to cost-push inflation and eventually to higher consumer prices unless stopped)
• Bailout = (an illegitimate) provision of liquidity to forestall bankruptcy (because the recipient is bankrupt and not just temporarily lacking funds, making the financial aid a form of welfare)
• Bipartisan = (what everyone should see as a legitimate) policy approach which mainstream economists and policy makers of different political leaning have endorsed (making this effort better than more partisan ideas.
• Extremist/left-wing/right-wing = (dangerous and contemptible) economic ideas which can be considered outside the mainstream (and should therefore be considered illegitimate)
• Printing money = (hyperinflationary) economic policy in which the central bank buys existing private sector financial assets for reserves it creates for the that purpose (and which will eventually destroy the value of the currency)