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To “Bail" Or Not To “Bail"
The phenomenon of cultural reactions to language is clearly in play in the linguistic history of the financial boom & bust crises marking U.S. history.
Over the last few decades, the term “bailout" plan has been used by the general public, and often the press, to describe government intervention designed to save a variety of institution verging on financial collapse. However, because there are so many negative connotations associated with the term “bail out", proponents of such legislation have historically argued over the language used to describe the actions of the bills, actions and remedies they have proposed, i.e. “bipartisan rescue package" or “rescue" or “work out" or “asset relief" plans, as opposed to “bailout" plan.
The very language used to describe the nature and severity of the financial boom & bust crises marking U.S. History has proven to be a chronicled lesson in political semantics.
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The Panic of 1792
During the financial credit crises that occurred in 1792, because of speculation of William Duer and Alexander Macomb against their Bank of New York stock holdings, Alexander Hamilton prevented a national crises by providing hundreds of thousands of dollars in securities to troubled banks. In reviewing the abstract study The U.S. Panic of 1792: Financial Crises Management and the Lender of Last Resort, of economic historians, Richard Sylla, Robert E. Wright, and David J. Cowen, note the language Hamilton used to describe the event in a letter to a New York associate. “Its effects cannot but be in every view pernicious (destructive, evil, and wicked)." Calm in the financial markets quickly returned.
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The Panic of 1819
The Panic of 1819 marked the end of the economic expansion that followed the War of 1812. It involved widespread foreclosures, bank failures, a slump in agriculture, manufacturing, and unemployment of farmers, businessmen, factory workers, artisans, mechanics, and various other skilled craftsmen.
While the language in President Monroe’s second Inaugural Address, on March 5, 1821 asserted that, the great decline in the federal revenue was a “gratifying spectacle" and nothing more than a general depression of prices. Additionally, the New York Evening Post urged legislatures not to interfere with a “natural course of events" and Representative Johnson of Virginia spoke of the crisis as if Americans were suffering from nothing more than a bad cold. His theme was “let the people manage their own affairs." The level of his laissez-faire rhetoric rose to include statements like ". . . palliatives which may suspend the pain for a season, but do not remove the disease, are not restorative of health."
The prevailing tone of the day adhered to Monroe’s strict interpretation of the crises, in which he prevailed in limiting governmental action to ensue fiscal stability as well as refusing appropriations for internal impriovements.
In the face of the burgeoning panic, Americans could only take one of two courses, either to deny that any distress existed, or face their plight with the knowledge that only their individual acts could bring about a cure.
For a closer review of the panic that ended in 1823, see the online edition of The Panic of 1819 by Murray N. Rothbard.
In a Financial Crisis . . . Language Matters
- Financial “Rescue" or “Bailout": Language Does Matter in Financial Crises: Part 1: Early US History
- Financial "Rescue" or "Bailout": Language Does Matter in Financial Crises: Part 2: Early 20th Century
- Financial "Rescue" or "Bailout": Language Does Matter in Financial Crises: Part 3: Great Depression to 2008