Maybe it was because I was sick of walking into the Boston University School of Management and feeling like an outsider, or maybe it was because I was sick of trying to figure out what the Occupy Wall Street protesters were so angry about. But last year, I subscribed to The Wall Street Journal. The most widely circulated newspaper in the United States and in many ways the most important financial and economic media source in the world, the WSJ is the stockbrokers’ bible, the economists’ Ecclesiastes.
Yet another reason why I was drawn to the WSJ is that I wanted to inhabit, or at least better understand, the world of financial jargon, market talk, investment schemes and general “economic literacy,” as I’ll call it. I was sick of hearing from my liberal friends that the greed of Wall Street had brought on the Great Recession, that the predation of the American consumer was devised by America’s financial elite and enabled, if not encouraged, by Neoclassical economists and out-of-touch policy makers like Ben Bernanke.
I was sick of this simply because none of them knew what they were talking about. And even if they had explained their arguments using specific details and the highly complex language and concepts of finance and the investment banking world, I wouldn’t have known anything either.
I didn’t doubt that politicians could be greedy, that stockbrokers could occasionally be duplicitous and that the American public could be lied to. I had read enough history books to feel like the unholy alliance between money and power had always run deep in American society.
Yet I was sick of hearing about all this supposed greed, all this supposed trickery, all those backroom deals. I imagined men with tailored suits, slicked back hair and cigar-soaked breath pedaling off sub-prime mortgages and flimsy stock to unsuspecting families just trying to get by in the ruthless American marketplace, and not hearing any evidence from my friends or liberal teachers to back those lofty claims up.
I wanted to grasp that strange, nuanced, fast-paced financial jargon that seems to be the accepted lexicon of finance. What on earth was “derivatives trading,” and why should I be angry about it? What bone do I have to pick with hedge funds? And someone please fill me in on who Fannie Mae and Freddie Mac are, because apparently I should be very upset with them.
So I started my daily dissection of the financial section of the WSJ and tried to keep tabs on “the market.” I got nowhere. I felt like a helpless high-school student whose English teacher had made the unprecedented decision of having the class read the complete volume of “The Canterbury Tales” in Middle English without a modern translation of any kind. I was confounded by the persistent inscrutability of the vocabulary. Even when I read the national news sections, I still struggled to figure out what the “fiscal cliff” was and why everyone on Capitol Hill seemed to be fighting about it.
I tried reading books about the financial crisis such as “ECONned” by Yves Smith, as it was supposed to be an easy, engaging and enlightening read. Yet even Smith’s book — regarded as a beginner’s course on the causes and consequences of the financial crisis — was a headache to get through. Why must the language of finance and economics be so complex and confounding?
I started to convince myself that this was an intentional feature of economics and finance, possibly as a defense mechanism against my feeling of incompetence whenever I tried to understand the complexities of the topics. But one thing became clear. In the words of The New Yorker columnist in an August article, “When discussing money, incomprehension is a form of consent.” How does one defend oneself against financial risk and false promises when they don’t understand the complexities of the system into which they are buying?
I might be speaking for my own financially illiterate self, but how can I buy into something when the vendor and I speak, in essence, a different language? It’s almost like entering a spelling bee in a foreign country on the assumption that the judges are looking into my best interest and will walk me through the process.
If one thing is for sure, the language of finance and economics needs to be made more easily understandable for the average and otherwise mildly intelligent and informed American. Before we can try to understand the problems and spot the underlying, potentially greed-infested loopholes of some of the system, we have to be able to talk about them on our own terms.
In Plato’s words, “Your silence gives consent.” But ignorance, either willful or unintended, can be costly indeed.
