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Lex maniac

Investigating changes in American English vocabulary over the last 40 years

Tag Archives: finance

exposure

(businese | “risk”)

A word of many uses in everyday language to which one has been added in the last forty years. A quick review of the wide range of meanings this term had in the seventies, say:

a. the act of learning about or experiencing a stimulus, especially an unfamiliar one (“exposure to jazz, French culture, etc.”); goes with “to”

b. the direction your window, etc. faces (“southern exposure”); no preposition

c. for photographers, it meant how much light came in before the shutter closed, or simply a frame of film that had already been shot (you could even have a double exposure, and that’s no double entendre)

d. inadequate covering of body parts not normally displayed, voluntarily (“indecent exposure”) or involuntarily (“die of exposure”); no preposition

e. personal embarrassment caused by no-longer-secret conduct (e.g., “he was disgraced by his exposure as a tax cheat”); goes with “of”

f. attention from the popular press, what one gets when one is a celebrity; no preposition

g. potential harm caused by ingesting or absorbing hazardous substances from the environment (such as sunlight or air pollution or radiation); goes with “to”

And now there’s

h. financial risk caused by heavy investments in a weak sector, or just too much debt; goes with “to.” Probably a descendant of g., or at least that’s the one it most closely resembles. In the aftermaths of the 2008 crash, and the 2000 crash, and the 1987 crash, and the 1981 crash, we’ve gotten used to the idea of toxic financial instruments and practices, and this usage is a natural outgrowth. While “exposure” had this meaning well before 1980 in financial jargon, the increased fragility of the U.S. economy in recent decades has no doubt helped push it outward into the general vocabulary. (Even in a purely financial context, it also partakes somewhat of e. If it partakes likewise of d., you’re in bad shape; even a good lawyer won’t be able to do much.)

One way to sort definitions d. through h. is to place each one by its potential for undesirable results. With e. and g. and most likely h., you’re worse off than you would have been otherwise, but d. and f. may cut both ways. Exposure of the body may subject you to injury, or it may give you the warped satisfaction of forcing another person to participate unwillingly in your sexual gratification. Even in the latter case, you’re still vulnerable, to arrest if nothing else. As for f., today’s darling of the gossip pages is tomorrow’s disgrace, if e. kicks in and your secret vice is found out. It may not be that dramatic; a celebrity may fall from favor simply by attracting too much attention (“overexposure”). It may be fun at first, but any kind of exposure ultimately invites danger to one’s reputation, or even one’s life.

This week’s term, with its implication that one has been caught doing something wrong, points to a peculiarity of English: we don’t have a reliable word for revealing hidden good deeds rather than hidden malfeasance. “Expose,” “unmask,” “uncover,” “reveal” itself — they all imply that one has been up to no good. “Unveiling” might work, but we use that more often about statues than about people. I was thinking about this as I tried to translate a German title that included the phrase “Enttarnung eines Helden.” “Introducing a hero” or “Exhuming a hero” might get the point across, but the first is imprecise and the second ghoulish. How do you reveal that someone has acted heroically when all the available verbs suggest villainy?

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death spiral

(1980’s | financese (from athletese) | “vicious circle,” “irrevocable decline”)

“Death spiral” is a noun, but as we use it today it is influenced by the verb “to spiral,” as in “spiral out of control.” However auspicious a spiral may be for the quarterback, in most contexts it portends widening disaster, an ever-growing series of calamities, each fed by the one before. I can’t be the only one who hears an echo of Yeats’s “The Second Coming”: “Turning and turning in the widening gyre . . . Things fall apart, the center cannot hold.” But maybe I am the only one that finds a resemblance between “death spiral” and “perfect storm.”

In its classic form, the death spiral denotes a financial situation in which the seller faces declining revenues and responds by raising prices. Thereupon even fewer people buy the product or service, leading to untenable losses. The first industry in which commentators adopted the expression consistently was utilities, especially electricity. Now we’re most accustomed to hearing the phrase with reference to the health insurance marketplace; that usage was common long before the Affordable Care Act. In the eighties it appeared in in non-financial contexts, but even today buying and selling still provide the most fertile ground. By now it has spread; I’ve come across references within the past year in articles about opiate addiction, declining sperm counts, Venezuela, etc.

There’s another, more specific, financial use that denotes a particular type of corporate raiding: an equity firm buys into (or lends money to) a small publicly owned company, agrees to lend or invest more provided the stock price doesn’t go below a certain level, then drives the stock price down by selling large blocks of shares — robbing the company of its assets and forcing it into bankruptcy while walking away with a profit. (Ain’t capitalism grand? This is an example of what I call vulture capitalism, except vultures don’t kill their prey first.)

For all that “death spiral” conjures up disaster and political gamesmanship, the expression comes originally from ice skating, not aviation, as I had guessed, though it describes airborne maneuvers occasionally. (How it made the leap from skating jargon to the business world I don’t know.) It denotes a move in pairs skating, where the woman holds her partner’s hand as she circles him, one leg in the air, bent all the while at the waist so that her upper body is parallel to the ice. When well-executed, it’s breathtaking. The “death” part has to do with sheer riskiness, as far as I know, but anyone who knows anything about ice skating — or high finance — is invited to jump in here.

I am indebted to lovely Liz from Queens for providing another expression for the blog. Inspired, as always.

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risk-averse

(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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clawback

(1980’s | bureaucratese? legalese? financese? | “recoup,” “recover”)

No longer the sole property of sportswriters, this noun-verb complex has invaded the financial pages and legal journals in force. When I was young, you clawed your way back into a contest through determination and effort, not quitting until the game was on the line and you had a chance to win. It didn’t have to be a single game; it could happen over course of a season, as in a baseball team clawing its way back into the pennant race. It might be used in the context of an individual sport like tennis or golf, but I think it more often went with team sports. In the business world, you might claw your way to the top, but you don’t claw back your way to the top — though you might claw your way back to the top. There’s something ruthless about clawing when people do it; it requires unreasoning vigor, like a jungle cat, blindly fighting its way forward as long as it can move.

In the late seventies, the U.S. began imposing treble (i.e., threefold) damages on defendants who lost certain kinds of civil suits. The U.K. responded by passing a law of their own that gave a British person or corporation the right to recover the portion of the total damages that was not actually compensatory (in other words, the part that was multiplied on after actual damages were awarded). In both the British and American press, this was widely referred to as a “clawback provision.” The expression was much more common in the British, Canadian, and Australian press for at least a decade thereafter, and it is indubitably a Briticism.

My impression was that the expression refers mainly to something governments do, as in the Bernie Madoff case, but a corporation can do it, too; take Wells Fargo’s repossession of stock from disgraced executives in the wake of a banking scandal. I suppose that a business partner could claw back money that another partner had misused, but for the most part it seems to be something an institution does. Clawbacks normally occur when assets have been stolen or used illegitimately; when you hear the word, you can be pretty sure that there was some funny business that has been found out, and a governing body, private or public, is doing something about it. (That isn’t always true; for example, when the British government was privatizing public industries in the eighties, they decreed that a certain number of shares had to be available to British investors. In some cases, that meant “clawing back” shares bought by foreigners to make sure enough shares were available.) The government generally needs some kind of judicial ruling, but a corporation needs no more than the approval of the directors.

In truth, the new expression here is “clawback” (n.) since “claw back” (v.) has been a permissible construction for a long time. (As we saw above, “clawback” also serves as an adjective. I hope I am cold in my grave before “clawbackly” becomes standard English.) But its present sense seems to have arisen around the same time, and I wouldn’t want to state with certainty that one preceded the other, though I would guess the verb came first. It has never left legal and political contexts, or spread outward from them. Law and justice must have their own language.

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done deal

(1980’s | businese | “sure thing,” “fait accompli”)

“Done deal” always makes me think of the mob expression “made man.” The alliterative spondee lends both expressions the necessary sense of finality and irrevocability. I don’t know of any connection between “done deal” and organized crime; the earliest uses of the term I was able to find come out of the financial industry, soon absorbed into political discourse. As you might expect given its business origins, “deal” clearly refers to transactions, not cards, although I can imagine a casino employee responding to a poker player’s complaints with “Shut up — it’s a done deal.” Newsweek noted in 1985 that the phrase was a favorite of Treasury Secretary James Baker, and such early patronage by politicians favored its fortunes; there’s no doubt “done deal” is as useful in politics as in banking (or the Mafia, for that matter). Even today, the phrase turns up most often in financial and political news — not that they’re different. “Done deal” has now come to be used more often, if not predominantly, in the negative, to caution us that there’s no guarantee the contract will be completed as advertised (e.g., “this is not a done deal”).

“Done deal” originally referred to business maneuvers, but as politicians picked it up it came to mean any sort of dead certainty (a little like “slam dunk,” but used in different situations). A way of saying “we’re not going back” or “you can count on it.” A done deal need not actually be done, but the point is that even if the papers aren’t signed, they will be soon. It does seem to me that “done deal” is often used to refer to a transaction or agreement that is not yet formal or final; once the deal is truly executed, it is no longer necessary to call it “done.”

“Done deal” represents a form of grammatical displacement not uncommon among new expressions. The concept is an old one, so how did we express it in the old days? “Settled,” or more poetically “chiseled in stone.” In a simpler key, “all over.” These are all adjective phrases that cannot serve as subject or object. Commonplace ideas look for new parts of speech to inhabit, and nouns may slip into power where once ruled only adjectives. To some extent I am speaking fancifully in attributing will to words, which are but bits of breath and ink, but if you spend enough time observing the language, it’s easy to slip into the belief that words have life and motive independent of us, their creators but not their controllers.

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fraudster

(1990’s | businese (finance) | “con man,” “crook,” “trickster”)

A far as I can tell, we owe this one to the Brits, or maybe their ex-colonials. There are very few LexisNexis results from U.S. sources before 1995; nearly all come from Great Britain and the recent colonies. We’re certainly not above borrowing Briticisms and their cousins (“at the end of the day,” “over the moon,” “selfie“) in these parts, and the venerable “-ster” suffix (see below) rolls off the tongue easily in America, the land of gangsters and mobsters.

This word probably is not necessary in either hemisphere, but it does have the advantage of incorporating the very act its embodiments practice. The old equivalents (see above) do not. “Con[fidence] man” is itself a bit deceptive; it really refers to someone you should not have confidence in, and he has to convince you to do so. “Crook” is more general than “fraudster,” but the two words line up pretty well, so it’s rarely jarring to substitute one for the other. A fraudster sees an opening and uses it dishonestly for personal advantage. The word seems indifferent to distinctions like preying on individuals vs. cheating corporate bodies, or large-scale vs. small-scale crime. As the OED (first citation: 1975) notes, “fraudster” denotes in particular one who lies or cheats in the course of a business transaction. But it is not restricted to such use and has already spread out.

I cannot help but wonder if the rise of this expression since the seventies does not result from a simple (or rather geometric) increase in chicanery. It may be that an ever more complicated and less regulated financial system, coupled with increased criminal activity enabled by widespread use of computers, has made it ever easier to pull scams, causing a new expression to erupt, a boon to harassed writers if no one else. It’s such a relief to have a new, yet easily grasped, synonym to haul out once in a while.

The “-ster” suffix repays study. My feeling is that it has had a bit of an underbelly for centuries, but any negative connotation probably became more pronounced in the twentieth century, at least in the U.S. “Gangster” and “mobster” both date back to somewhere around 1900, according to Random House; I suspect that “gangster” relies on “teamster,” an eighteenth-century expression that did not, as far as I know, develop a dark side until the twentieth, when the Teamsters’ Union for a time became synonymous with corruption. (Tapster, tipster, and trickster, all dubious trades, are much older words. Speaking of deplorable occupations, where do “barrister” and “monster” fit into all this?) The suffix doesn’t always have a negative connotation, even today; when connected to a name, it may be affectionate. For example, Tom Bergeron used to call Whoopi Goldberg “Whoopster” on Hollywood Squares. Then again, after fifty years as a compliment, “hipster” finally became a dirty word somewhere around 2000. I’m not enough of a linguist to offer a proper history of the suffix, but “baxter” (female baker) and “brewster” (female brewer) are very old. According to Chambers Etymological Dictionary (thanks, Liz!), “-ster” comes from Anglo-Saxon, where it denoted specifically a female practitioner, but well before the Elizabethan era the gender distinction had disappeared. Chambers also notes that the suffix, originally attached to verbs (bake, brew), as befits an equivalent of the “-er” suffix, now hooks more readily to nouns. It has gone on yoking itself to new words for centuries now, and it usually seems to have something shady or untrustworthy about it. “Fraudster” thus takes its place in a long, rich tradition.

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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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monetize

(2000’s | businese (finance) | “sell,” “make money off of,” “put a price tag on”)

This was a rarefied financial term as late as the nineties, used almost entirely in discussions of gold prices and government debt. Originally, it was even more literal; you monetized gold by making it into coins, thus converting it into legal tender. By the seventies, though, “monetize” basically meant “liquidate.” There’s the kind of money that you can go out and spend, and the kind of money that is otherwise occupied, like the value of your property, a stake in a business, etc. The former is referred to as liquid; more or less what economists used to call “M1” (for all I know they still do). The government is in a unique position when it comes to controlling the money supply, so it’s not much of a stretch to talk about government “monetizing” debt by selling bonds (for example). Or the government might monetize a portion of its gold reserves by selling it off. When gold prices shot up in the late seventies, a process that has continued to this day in fits and starts, banks and nations alike found an easy way to produce ready cash. That made “monetize” something of a dirty word to conservatives, who see disastrous inflation as the inevitable consequence of any expansion of the money supply.

Monetizing has long involved selling, and it still does. Sometimes the sale was indirect, and this notion has grown utterly commonplace, as the term has also come to mean something like “commodify” (convert into a commodity that can be sold — an extra step). Sometimes the sale is more indirect still, as an on-line business selling advertising on the basis of the number of page views it attracts. Only the most hardened cynic would regard this as a literal sale of the customers, but the practice definitely trades on their existence, and “monetize the customers” has a rather sinister sound. There is another meaning I should mention, although it has always been more marginal: assign a value to. You monetize something by figuring out what it is worth; whether you go on to sell it for that price is irrelevant.

For decades this word belonged to governments, corporations, and large financial institutions. It still does, but no longer exclusively. It has taken a popular turn, and nowadays a small business or an individual can indulge just as easily. An artist might monetize her work by selling it on-line, for example. The growth of “monetize” has coincided with the growth of the internet as a marketplace, and that is not a coincidence. Before 2000, anyway, the word had a technical sound that might convince the unwary that the speaker had arcane financial knowledge. For those who wanted to appear cutting-edge, or just edgy, it was an easy to word to adopt. By the time everyone figured out all you meant was “exploit for personal gain,” you’d be sitting pretty in the Caribbean somewhere.

When a term from a certain professional jargon (finance, in this case) slides into general use, it cannot help but broaden its meaning, applying to more areas or simply taking on new definitions. (Examples: ahead of the curve, curate, template.) In one way, the meaning of “monetize” hasn’t really changed, but it is an exotic word that gravitated naturally to an exotic means of commerce: the web used as a means of selling just about anything. “Monetize” represents yet another appropriation of specialized vocabulary by the masses, and in such cases one feels the loss. Our language cries out for terms that fill narrow niches and allow us to describe very particular states, categories, or objects; every word that becomes less precise detracts from our ability to understand what’s going on. As “monetize” has become sloppier, it has become more crass, at least to my ear. I wouldn’t say the word was ever noble, exactly, but it was reserved for relatively grand situations, not the property of any third-rate businessman trying to take advantage of a new market.

I must remember to thank my father, not just for raising me but for suggesting “monetize” many months ago. Sometimes these things take a while to germinate.

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lowball

(1990’s | businese | “on the low side,” “sneaky,” “under-“)

The point about this word was that it implies deception; it goes with a word like “underhanded,” even though it is not a synonym. Space is opening up to use the word in a more neutral way, as in this recent pronouncement: “Official NOAA Climate Prediction Center estimates peg the odds of El Niño’s return at 50 percent, but many climate scientists think that is a lowball estimate.” No accusation of hanky-panky there. But the term does retain a strong association with deliberate deception on the one hand, and with financial transactions on the other. It can be a verb or even a noun (as in, “If she offers you a hundred dollars, don’t take it. That’s a lowball.”), yet it is most often encountered in an adjective mood, modifying things like offers, bids, budget projections, or sales prices. Sometimes it is designed to cheat, sometimes merely to lower expectations; either way, it partakes of deliberately misleading the audience. Even in a sentence like ” . . . the loss of physical bookstores, buckling under the weight of Amazon’s lowball prices” (International Business Times News, December 20, 2013), the feeling remains that Amazon’s prices are somehow illegitimate or unfair, even if they are not deceptive in the usual sense.

I’m not sure why “lowball” came to mean what it means. I learned it first as a baseball term, an adjective applied to pitchers and hitters alike. In that sense, it doesn’t imply deception; there are intentionally deceptive pitches, like the changeup or the spitball, but a low fastball doesn’t have to fool the batter in order to work. A “lowball glass” is a kind of liquor vessel, a short, round, wide glass used for a single spirit on the rocks or mixed with water. The drinks themselves are sometimes referred to as “lowballs.” And it’s a type of poker, a game in which the worst hand wins. That at least contains an element of misdirection that might qualify it as an ancestor, but there’s no obvious connection. I would guess that the old word “lowdown” (meaning “reprehensible”) had an influence, possibly a decisive one; sometimes “lowball” is used as a straight synonym for “lowdown,” or at least it was.

Lighter records the first use of “lowball” — as a verb — in 1957; it appeared in the New York Times on June 16: “‘low balling’: In effect this is quoting a low price initially and then reneging” or piling on extra costs after the contract is signed. The reporter attributed the then two-word verb to auto dealers. The first citation as an adjective dates from 1970, the latest part of speech to join the bandwagon. Lighter adduces a distinct definition: “operating at a low profit margin,” applied to organizations rather than activities. That sense appears to have disappeared since the seventies.

To some degree, “lowball” has lost its negative connotation, or at least it has become possible to use it without one. Of the expressions I’ve covered, not many have gone in that direction. “Factoid” is the only example I can think of, and it’s not a very good analogy. “Thanks for sharing” is no longer automatically sarcastic, but that’s another imprecise resemblance. Terms like “massage the numbers” and “game the system” have gone the other way, losing the possibility of a positive connotation over the last few decades.

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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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