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Lex maniac

Investigating changes in American English vocabulary over the last 40 years

Tag Archives: banking


(1980’s | academese (economics) | “cautious”)

This expression carries a couple of odd dichotomies considering how straightforward it appears. The most obvious pertains to that which it modifies; either persons or corporate bodies — whatever the Supreme Court says, they’re not the same — may be risk-averse, though presumably the risk-aversion of a corporation is ultimately traceable to individuals, whether executives or independent shareholders. More interesting is the fact that risk-averseness may proceed from two entirely different kinds of experience. A conservative corporate board avoids sudden shifts and grand initiatives because they feel prosperous; there’s no incentive to rock the boat. Yet it is a tenet of pop psychology that those who have lived through times of deprivation are suspicious of all but the safest investments, and, in extreme cases, may refuse even to keep their money in banks. (Both sides have in common assets to protect; if you have nothing to lose, there’s no point in being risk-averse.) But then there’s an absent dichotomy that one might naively expect to find in an expression beloved of bankers: the distinction between sensible risk likely to pay off and a crazy scheme. The risk-averse will stay away from both, desiring only the steadiest and safest.

The expression comes out of the discipline of economics and was most used originally in finance, starting in the sixties and becoming commonplace by the eighties. Soon it came to be used often of politicians and lawyers. Among corporations, insurance companies attract it the most; their risk-aversity comes from a visceral understanding of actuarial tables. Yet any stodgy company merits the term. Slowly but surely over time, it has spread into other kinds of prose, with movie reviewers and even the odd sportswriter resorting to it nowadays. More kinds of writers use it to describe more kinds of people — it’s not just for stockholders any more. The point of the compound seems to be neutrality; it strives to avoid any imputation of prudence or cowardice, and largely does, as far as I can tell.

In a previous post I remarked on the curse of capitalism — if one guy works harder, everyone has to work harder — and risk-aversitude bears the seeds of a different manifestation of it. In competitive markets, each company watches the innovations of others like a hawk. When they succeed, the other competitors follow; when they fail, everyone else drops plans to do something similar. Television works this way, though maybe less so now, when there are so many networks (an obsolete word, I know). Any change — introducing a new character into a popular series, or a new show about a controversial subject — carries with it a chance that your audience will flee in terror. But if it pays off, your competitors take note and resolve to do the same damn thing, backed up by shareholders who noticed that it made big profits for the other guy. Within a season or two, everyone is sick of the no-longer new gambit, and most of the imitators have made no headway. Whereupon they lose advertisers, another risk-averse group famously shy of causing offense, taking the money and running at the first sign of any immoral or objectionable acts that might result in lost market share. (Bill O’Reilly is only the latest in a very long line of such embarrassments.) Sometimes, what looks safe turns out to be dangerous. Risk avoidance, like any other strategy, is subject to misuse born of misunderstanding or bad timing, whether by the humblest investor or the loftiest board of directors.


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irrational exuberance

(1990’s | bureaucratese | “mania,” “speculation,” “fiscal irresponsibility”)

This expression took hold instantly. It sprang from the fertile mind of Federal Reserve chair Alan Greenspan on December 5, 1996 and soon became ubiquitous in financial discourse, as it remains to this day. Within a few years, it became possible to encounter it elsewhere, but such uses have never become common. I can’t think offhand of another example of a new phrase taking off so fast ex nihilo; it got 500 hits in December 1996 on LexisNexis after a grand total of zero before that; Google Books shows maybe one or two random instances before Greenspan. That is a reflection not of Greenspan’s popularity, but his majesty in financial circles, the ritual awe with which his every word or decision (one forgot for a while that the Fed was actually made up of several governors, not just one emperor) received from the rattiest day trader or the suavest mandarin. There have been other expressions that were born at a specific time and place (“trophy wife,” “tiger mother,” “factoid,” “deep doo-doo”), but has any of them shot out of the gate quite so precipitously?

The phrase recalls the old expression, “throwing good money after bad,” except that in some cases there isn’t any good money. “Irrational exuberance” involves excessive risk and excessive debt run up in pursuit of unreliable investments. When one person overdoes it, it doesn’t matter a whole lot to the larger market, but when everyone does, the consequences can create a wide swath of destruction and despair. In order to prevent such panics (as we used to call them), or collapses (as we call them now), the government must regulate banks and commodities markets. During eras when no one wants to do so, the boom and bust cycle starts again.

Greenspan’s exact words — “How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?” — illustrate his practice of avoiding direct statements and forcing auditors to guess more or less confidently at his meaning; one thinks of wall posters in Beijing under Mao or of the Oracle of Delphi. All you can really get out of his question is a theoretical possibility that the market might overvalue enough stocks, say, to cause a bubble. Now that’s taking a stand! Is it too much to ask that the chair of the Federal Reserve seek to forestall asset bubbles or remind investors in no uncertain terms that it is possible to buy too much on the margin or pay too dearly for a chance to pick up a few extra millions? That would mean open dissent from the fanatical, and entirely unsubstantiated, faith that the market — a bunch of workaholic moneygrubbers driven by desire for personal gain — is somehow infallible if left alone. Well, we all know that’s bullshit, but that doesn’t seem to keep us from admiring, and even electing, those who proclaim it as gospel truth.

Investor psychology isn’t particularly complex; as long as some assets somewhere — Chinese stocks, African diamonds, Gulf of Mexico oil, U.S. junk bonds — do well, the money has somewhere to go, investors feel secure, and the numbers keep going up. Now that many of us have our retirement funds invested in mutual funds, rises in stock market value are widely cheered, but only a few of us will ever amass fortunes worthy of Croesus. Too few to buy sufficient consumer goods to keep the economy humming — that’s why maldistribution of wealth leads to stagnation and falling fortunes for most people. Too much money in too few hands, a sure breeding ground for irrational exuberance.

Thanks to lovely Liz from Queens and almost-as-lovely Lenny from Cherry Valley for this week’s contribution. Even when you think he is not listening, Lex Maniac hears all.

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brick and mortar

(2000’s | businese? computerese? | “with a fixed address”)

I was surprised to learn that “bricks and mortar” is, or at least was, heard as often as “brick and mortar.” The former may come from England, and my ear tells me loud and clear that “brick and mortar” is much more common. But both forms come up often enough to be taken seriously. American Heritage rules it a hyphenated adjective, but it doesn’t seem to be hyphenated very often in the corpora, and it can also be used as a noun. There’s no doubt it is predominantly an attributive adjective. I can imagine someone using it as the complement of a copula (“The store is brick and mortar”), but I’d notice if I actually heard it. A related expression, which I never encountered until I got to wondering about “brick and mortar,” is “click(s) and mortar.” That describes a business that operates both on-line and in physical locations (“bricks and clicks” is another variation). Anyway, the opposite of “brick and mortar” doesn’t have to be “on-line,” however likely most of us are to think of that first. It could be through a mail-order catalogue or even the old stand-by, door-to-door sales, which were antiquated by my childhood and which require a building somewhere, anyway, even if it’s not used for direct customer service. But so do on-line businesses. You can’t leave all those high-powered servers out in the rain.

Indulge me as I drag in one other related term, “showrooming,” which they say is mushrooming. (But one writer says “reverse showrooming” is more common.) It denotes the practice of examining a product in a store, then buying it on-line. I encountered this word only a few years ago, but it has surely leaped the gap between specialized vocabulary and everyday language. It’s almost always used as a gerund. Showrooming is a form of freeloading — you’re using the retailer’s facilities without paying for them. And if all there is to shopping is convenience and saving money, most of the time you can do better on-line, although the Internet ain’t perfect, either.

“Brick and mortar” is older than I thought, and I was probably wrong about its lineage, too. I had assumed it came out of computerese, but it turns up earlier in marketing lingo and earlier still in that surprisingly fecund source of new expressions, American Banker (cf. “firewall,” “takeaway,” “best practices“). The first examples in LexisNexis date from the early eighties, and they’re in articles about changes in banking that make ATM’s and telephone banking more profitable than maintaining branches with parking lots and bullet-proof glass. I can’t rule out the possibility that the bankers got the term from primal computer geeks, but I don’t want to give the geeks too much credit. The New York Times soon provided a sterling example from the wide world of shopping (or “teleshopping” — there’s a neologism that didn’t catch on) in April 1984, and the expression slipped into consumer lingo. It was possible to buy on-line even then, but mail-order catalogues were more the rule. The computer industry was nascent, and very few people had figured out how to make it pay reliably (which, come to think of it, is still true).

Before remote shopping was dreamed of, “brick(s) and mortar” referred to housing; it could also refer to the value of a house (as in: don’t tie up all your capital in bricks and mortar). offers the following: “Originally, a firm’s investment buildings housing its offices, warehouses, and other facilities.” “The brick and mortar business” was occasionally used in the American press as a set phrase to refer to the building industry.

One impetus for this post was the announcement that Amazon, scourge of brick-and-mortar stores, is about to open one on W. 34 Street in Manhattan. Surely the second coming is at hand! Is this a case of “it takes one to know one” or “if you can’t beat ’em, join ’em”? Actually, it will be more of a take-out joint than a three-star shopping experience; the Wall Street Journal reports that it is designed to give impatient New Yorkers a way to go pick up their Amazon orders rather than waiting for the poky old Postal Service to shlep it to their door. It will be what they call a “fulfillment center” — doesn’t that sound like a health resort for new agers? One more temple to the gods of consumerism. Apparently Amazon is lowering expectations by calling it an experiment rather than a shift in policy. Wouldn’t it be funny if Amazon became a card-carrying hod carrier?

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race to the bottom

(1990’s | activese? bureaucratese? | “beggar thy neighbor,” “downward spiral,” “how low will you go?”)

According to LexisNexis, the expression originated in a very specific context: banking and financial regulation. The idea was that if banks were not regulated properly, they would engage in progressively riskier practices in pursuit of short-term profits, destroy some banks entirely, and weaken the entire system. That was the early eighties. Only a few years later along came the S&L scandals. Such swift and decisive confirmation of such a straightforward principle is unusual and worthy of note. “Race to the bottom” is commonly still used in political and bureaucratic contexts. President Clinton seems to have helped make it prominent, but it is not as closely associated with him as “shovel-ready” is with Obama, who in 2009 gave us “Race to the Top,” a federal education initiative. (You can tell a new expression has arrived is when it becomes fodder for adaptation and parody.) It was not just a phrase Clinton used regularly; it became a rallying cry for opponents of his trade agreements. Activists bewailed the tendency of nations to gut labor and environmental standards in order to attract short-term investment.

There does seem to be some truth to the proposition that we need governments to rein in our worst instincts where profit is concerned. Some bankers seem to revel in their failure to grasp the consequences of reckless speculation, or at least they convince themselves that they won’t suffer. Some other sap will get stuck with the bill (often as not, the sap is us). Even Bernie Madoff got caught eventually, and it would be nice to think that our financiers would have the brains to avoid hazardous gambles and sharp practice, if only in order to protect the gravy train. But there always seem to be a few.

Of course the use of the term spread, and by 2000 it was readily applied to other targets. Displays of sex, violence, and crassness in popular entertainment, especially television, were taken as evidence of a “race to the bottom” of standards of decency. A related target was tabloid-style journalism. And sometimes the phrase was used to talk about price wars and other familiar forms of economic competition. For the phrase always denotes competitive lowering of standards, each party intending to undercut the other(s). (It is generally understood to be deliberate — meaning that the perpetrator should be held responsible — and not merely an inevitable consequence of the widely acknowledged economic principle that greed causes people to do demonstrably stupid things.)

The race to the bottom is kind of like the slippery slope. They’re both foreboding phrases that describe what will happen, not what has already happened. Both bear relation to an older cliché, “the straw that broke the camel’s back,” because they envision a single event leading inevitably to a point of no return, followed swiftly by irrevocable and ruinous loss. Matters don’t always turn out as badly as advertised, of course. Yet over time decline is real, and its criers are bound to be right a goodly percentage of the time.

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(late 1980’s | businese (banking) | “fence,” “Maginot Line,” “quarantine”)

“Firewall” is a word of ill omen that rears its head only when there’s trouble. When it starts cropping up in the news, someone has broken the rules or violated the standards. I had thought the term grew out of computerese, but it starts to show up shortly after 1985 among bankers and financiers. The godlike Alan Greenspan used it in Congressional testimony in 1987, and it was commonplace by the end of the decade. (There were a couple of uses in political reporting from the Washington Post early in 1987, but these show up as outliers in LexisNexis.) That was a good five years before laypersons had the faintest idea what a computer firewall was and ten before general internet use made everybody need one. In both cases, the idea of an impregnable barrier persists from architecture, as between one part of a building and another, or between the engine and the passenger compartment of a car.

In financial terms, firewalls are supposed to insulate the depositing and lending arm of a bank from the part that invests in securities, so the friendly neighborhood bank isn’t sunk when the traders screw up. In journalism, the firewall separates the editorial and advertising departments so the news side isn’t pressured to whitewash a sponsor’s misdeeds. In either case, you don’t have to squint very hard to see the metaphorical wall — this side and that side simply do not touch. Recently, we’ve been treated to much talk of firewalls in the eurozone, which are needed to protect other European countries from a default in Greece, or Spain, or somewhere. Something has changed: the term still indicates a barrier against spreading calamity, but it’s much less solid. Sure, the lenders of last resort have agreed to protect investors from sour economies and political unrest, subject to certain conditions, of course, and there’s no guarantee. They’re not building permanent walls to keep financial disasters from spreading, just throwing up ad hoc barriers that may or may not be there next week.

Bankers talked about firewalls in the late eighties to show that they were unnecessary or counterproductive and should be dismantled, freeing them up to do any fool thing they wanted. Their thinking was deregulating the S&L’s had worked so well we should try it on the banks, too. It was yet another version of the right-wing argument that businesses will naturally avoid excessively risky or criminal behavior, because it will put them at a competitive disadvantage. Why do we still fall for this? This notion was flatly disproven over 100 years ago by the Pure Food and Drug Act, which obviously wasn’t needed because any fool can see that those selling food and medicine wouldn’t want to poison their customers (yeah, right!). We deregulated the S&L’s, and within a few years the industry was all but destroyed and we were paying through the nose. Then we deregulated the banking industry, and now it continues to teeter on the edge of disaster because of — surprise! — excessively risky and criminal behavior, requiring a trillion here and a trillion there to save its neck and, if we’re lucky, our retirement funds. A hundred years ago, the mountebanks and butchers knew if everybody ignores basic sanitation and uses inferior ingredients, there’s no competitive disadvantage. And if every bank is investing in securities based on bad debts and playing fast and loose with even the most basic rules, same thing. Can we please put to rest once and for all the idea that profit-making ventures will cheerfully regulate themselves in the public interest?


(2000’s | advertese?, computerese? | “word of mouth,” “like wildfire”)

Now we associate the overused word “viral” with Youtube, and I thought it was pure computerese, but it seems to have come from the fertile swamp of advertising, immortalized in a phrase you may remember from around the turn of the millennium, “viral marketing.” Championed as a successful new form of guerrilla (unconventional) marketing, it generally meant advertising designed to create or take advantage of word of mouth. One adman described it as an “attempt to establish a grass roots phenomenon” (Adweek, June 20, 1994). The point was to startle people into talking about the product and spread the word like a contagious disease, rather than making sure as many people as possible see your commercial. was a slightly later example that took advantage of the ease of automation on the internet. By adding a brief advertisement to every message sent from a Hotmail account, they increased their customer base mightily in a short period of time. Hotmail was gobbled up by Microsoft and never heard from again, but it was a raging success back in the go-go nineties, when it seemed more important to attract lots of clients than lots of money.

Advertisers soon discovered that the internet was well-adapted to the viral strategy (funny how that works), and so the two titans quickly came together, causing inexact observers like me to conclude that “viral” had always been associated with the web. Then again, the slightly older use of “virus” in computerese may have midwifed the advertese sense. A computer virus, like an advertisement, comes from the outside and establishes itself covertly. The idea of sneaking past defenses is common to both uses, and both posit an extraneous and unwanted influence controlling you (or your computer), compelling you to do something. Computer viruses became a topic of conversation around the same time as viral marketing, and computer jocks had already been talking about them for a few years. So there’s a decent chance that the advertese usage was influenced by the computer usage.

“Go viral” went viral about five years ago and seems to mean no more or less than “be seen by lots of people on-line.” It’s not clear to me that the phrase retains the original connotation of people passing word of something new along. It’s easy enough to find out what Youtube’s most popular videos are and watch them — no need for an excited friend to send you a link. Whether a video is considered to have gone viral or not is just a function of the number of views (not likely to be the same as the number of viewers). It seems to mean no more now than “sell like hotcakes.”

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