Pick your economic metaphors carefully. A few months ago, a close adviser to Britain's Prime Minister was pilloried by her fellow politicians for saying, "I am seeing a few green shoots, but it's a little bit too early to say exactly how they'd grow." Seems some people thought that was an insensitive thing to say on a day when a raft of U.K. companies announced layoffs. After all, seeing "green shoots" means you think the economy is doing pretty well, right? Or does it?
Such is the danger of the analogy-packed way we choose to discuss the economy. We talk of the housing "bubble," of stocks "skyrocketing" and "cratering," of the credit "crunch," of the possibility of "zombie" banks. These are not rigorous terms. And yet through them we view the world — often in imprecise, flawed ways that don't even necessarily carry the same imprecise, flawed meanings from person to person. From there we make some pretty hard-core decisions. If we hadn't so consistently been talking about the potential for financial "collapse" or economic "free fall" late last year, maybe money wouldn't have flowed as quickly to the nation's banks. (See 25 people to blame for the financial crisis.)
Why are we enamored with only partially accurate comparisons? Well, consider the alternative. In recent weeks, market watchers and economists have gone hog wild talking about what's going on with "second derivatives." Without venturing too far into the scary calculus stuff, the point is this: we're still headed downhill but maybe a bit more slowly. That's a more precise way to look at the world — but it's not exactly accessible. Second derivative probably isn't making its way into newspaper headlines any time soon.
So analogies do important work — they make us understand — but they also have knock-on effects. If stocks "skyrocket," you probably want to get onboard. After all, a rocket goes from the ground up into the heavens. Sounds pretty good. Never mind that a more appropriate metaphor might be a roller-coaster.
Or consider the policies that are influenced by the notion that our economy needs to be "competitive" when stacked up against other countries'. "If you talk about competitiveness you tend to fall into a football way of thinking," says Deirdre McCloskey, a professor of economics and English at the University of Illinois at Chicago who has studied the use of rhetoric in economics. The goal of competition is winning. If we want to win, then maybe we need to start helping industries that haven't done a very good job of competing on their own. Automobiles, anyone?
Politicians are natural masters at understanding how metaphors can control conversations. Just think of President Obama and Administration officials — people with a vested interest in convincing us the country is on the mend — talking about "glimmers of hope" in the economy. "Green shoots" seem like child's play when set next to "glimmers of hope. (See the top 10 worst business deals of the past year.)"
Of course, not all economic metaphors are as long-lasting as the housing "bubble." Back in the beginning of 2008, when we were all still skittish about actually using the word recession, one metaphor some people turned to was that of an economic "undertow": it takes you out to sea. But undertow didn't make it into the canon — do you ever hear people talking about how much the undertow is easing up? — which leads to an important lesson.
As editor-at-large of the Oxford English Dictionary (OED), Jesse Sheidlower has a bird's-eye view of how words do — or don't — make their way into the book that defines the English language. The past year has seen such additions as subprime and credit crunch. Those words had been around for quite some time, but it took a while for the OED to give them their own entries. "We're not going to just put in buzzwords," says Sheidlower. "We're not going to put in something that will go away three months from now." Which is perhaps a good metaphor for economic metaphors. Just because we use a phrase in conversation today doesn't mean that it will shape the way we think tomorrow.
In other words, not all green shoots grow into trees.