By Ingrid Sapona
The other day I was thinking about the things I needed to do
and I thought “I need to get a haircut”. My very next thought was, “just like
Greece”. I know, pretty strange. And yet, I’ll bet some of you reading this
probably “get” that the reference to Greece is about Greece’s economic problems
– but more on this in a minute.
As soon as I realized my mind was playing this odd game of
free association, I got irritated – not with myself, but with the fact that
what amounts to gibberish has found its way into my brain and is taking up what
limited (if not valuable) space may be left in there! And I know that the haircut
metaphor isn’t the only such junk that’s made its way in. A more recent example
is the fiscal cliff.
Let’s go back to the Greek “haircut” a minute. As I said, I
know it has to do with the Greek fiscal crisis (actually, “fiscal crisis” is
another one of those terms). But what exactly does the expression refer to?
Honestly, I don’t know. I have some
idea but that’s based on how the expression has been used and on what I’ve
inferred from how I’ve noticed economists and economic reporters use the
So here’s what my cultivated (as opposed to wild) guess
about the expression rests on. First, I know Greece has a huge debt. And, from
what I gather, Greek pensions and social benefits seem to have been paid out in
relatively generous terms over the years. Since I assume some of Greece’s huge debt
goes toward paying those things, I believe the Greek haircut has to do with
reducing Greece’s debt. And, extrapolating further, I imagine it relates to Greeks
having to accept reduced social benefits, or take a haircut – you know, trim
their lifestyle a bit (though I think for many it’s already pretty lean).
Naturally, in sitting down to write this, I decided to do a
bit of on-line research about what the expression really means. Well, surprise!
My explanation is more wrong than it is right. Yes, the haircut relates to
Greece’s debt – but it’s about writing off Greek debt, which is really of more
immediate negative consequence to holders of Greek debt (read: Germany), than
to Greeks themselves. I realize that with a write-down Greeks would suffer too,
but in my attempt to grasp the story behind the colloquial shorthand, I misconstrued
quite a lot about who the haircut impacts.
Given my new understanding of the matter, I really think the
Greek haircut expression is a completely idiotic way of describing the matter.
Indeed, if I were coming up with an expression involving a haircut, I’d say
Germans (and other Greek debt holders) are the ones who’ll be getting a haircut.
I wouldn’t describe it as a Greek haircut at all. But that’s part of my point. With pithy expressions some information is
bound to get lost.
So now, the fiscal cliff. Clearly it’s a dangerous thing –
anyone who’s seen a Road Runner cartoon knows that things always get worse as
you head toward a cliff. In terms of what I know about the fiscal cliff, I know
that if the cliff is not avoided, there’ll be automatic tax increases on
January 1, 2013 and spending cuts – but I have no idea what my tax rate would increase
to, nor do I have a clue as to one single spending cut that would happen. Oh, one
other fact I know is that this cliff was created a few years ago as kind of a “poison
pill” (oops – there’s another obtuse, if vividly named, concept floating around
in my gray matter) included in a law in hopes of encouraging Congress to get
its act together and come up with some longer-term solutions before 2013.
It so happens these examples all relate to economic things –
that’s because I tend to pay more attention to economic news items than other news.
I’m sure there are lots of other areas where clever terms are coined that soon enter
into common parlance with most folks not really knowing what they mean.
I understand the desire to use words to paint a picture of
something in an effort to grab people’s attention. And I’m all for people
paying attention to things that are important. But if anything, those clever
catchphrases actually reduce our understanding. They’re like earworms – catchy
refrains that people find themselves singing along with even if they don’t know
the rest of the song.
© 2012 Ingrid Sapona