Many people may remember reading the novel 1984 in high school or college. The novel, written by George Orwell, is famous for its depiction of a future dystopia where all modes of expression such as the news, language and art are controlled by an authoritarian government. Admittedly, I haven’t read the novel in years but I have been hauntingly reminded of many elements in the novel as I have listened to some of the rhetoric coming from the executives of major, publicly traded corporations such as Fannie Mae and Freddie Mac. The parallel I find most striking between the language used by financial executives and the language used by the fascists in 1984 are what Orwell referred to as “Newspeak”.
Wikipedia describes Newspeak as the following: “The basic idea behind Newspeak is to remove all shades of meaning from language, leaving simple dichotomies (pleasure and pain, happiness and sadness, goodthink and crimethink) which reinforce the total dominance of the State. Similarly, Newspeak root words served as both nouns and verbs, which allowed further reduction in the total number of words; for example, “think” served as both noun and verb, so the word “thought” was not required and could be abolished. A staccato rhythm of short syllables was also a goal, further reducing the need for deep thinking about language. Successful Newspeak meant that there would be fewer and fewer words – dictionaries would get thinner and thinner.”
Orwell would have to invent a new word to describe the language from top executives at financial institutions now facing ruin essentially because they wrote, bought or held poorly underwritten loans. You will never hear anyone in authority at these institutions express their dire situations quite so succinctly. Instead you will hear what I would call, in homage to Orwell, Bankspeak. Let’s take a look at some examples of Bankspeak used in real life. Below is an email sent to employees by the former C.E.O. of Freddie Mac, Dick Syron, before his departure. These emails appeared unedited in the Wall Street Journal Online:
“To the Employees of Freddie Mac:
As you have probably heard, the Treasury Department announced today that it has placed Freddie Mac and Fannie Mae under the conservatorship of our regulator, the Federal Housing Finance Agency.”
Orwell would be proud of the Bankspeak word “conservartorship”. It subtly obscures the potential negative connotations of the more accurate “take over”.
Mr Syron continues: “We have been through a lot together. Earlier this year we completed a multi-year accounting restatement, a massive and complex project. More recently, we have had to manage significant increases in delinquencies, foreclosures and loan modifications as a result of the sharp decline in house prices.”
The Bankspeak in the above statement should be readily apparent. “A multi-year accounting restatement” is a beautifully obscure phrase of Bankspeak grandiloquence for the more exact “digging ourselves out of our cooked books problem”. Too bad for Mr. Syron, that the housing market behaved so badly and the “ multi-year restatement” efforts were hampered by significant increases in delinquencies, foreclosures and loan modifications as a result of the sharp decline in house price.” As a whole, the above statement, translated from Bankspeak, should read like this: “It really is a shame that our un-cooking of the corporate books was stopped by the whole housing mess that we helped to create.”
Thankfully for Mr. Syron, his mastery of Bankspeak has served him well and his future looks brighter then ever. In the New York Times he is quoted bidding his final farewell, “I’ve had four other jobs as C.E.O. and I came out of them all pretty well,” Mr. Syron said. “What I’m working for right now is to save my reputation.” A perfect Bankspeak adieu.