On being ... a useful analogy

By Ingrid Sapona

I generally like analogies and I often find them to be a handy tool for analyzing things. Indeed, a good analogy can be useful when trying to help someone understand something that they don’t seem to be getting.

Late last fall, when the Wall Street bailouts first started happening (or, more accurately, when the first Wall Street bailouts started happening), I was watching NBC’s Today Show and they had on Erin Burnett, a reporter with CNBC. As you now doubt know, CNBC is dedicated to reporting on Wall Street.

I don’t recall the exact event they were talking about that morning, but I think it must have related to some bonus or severance payment that some Wall Street mogul had been paid or had approved -- or maybe it was about John Thain’s (Merrill Lynch’s (then) CEO) $1.2 million office redecoration. In any event, the amount they were talking about was controversial at the time (the recent “fuss” over AIG bonuses is just the latest episode, after all). Ms. Burnett, trying to put the figure in perspective for the lowly viewer like me, commented that to Wall Street types, the amount was akin to a “rounding error”. Ah yes… a mere seven figure rounding error -- anyone who’s ever tried to balance their chequing account can no doubt relate to that!

Not only did I not find Ms. Burnett’s analogy to a rounding error helpful, I was absolutely incensed by it! Though I don’t believe it was just a case of a poor choice of words spoken in haste -- even if it was -- I think it betrays just how out of touch people who work on Wall Street, and those making big bucks at CNBC reporting on Wall Street, are with the economic reality of the vast majority of Americans (not to mention the rest of the world).

Had CNBC been around to report in pre-revolutionary France, I can’t help wonder if, to help the simple-minded peasants understand comments like “Let them eat cake”, Ms. Burnett would have done a remote broadcast from outside a bakery. Imagine all the trouble that could have been avoided if those darned peasants had just grasped the reality of the situation better…

More recently I’ve been angered and insulted by commentators who have said that the public outcry over the AIG bonuses is misplaced anxiety and that the bonuses are just something concrete that the public can grasp. It’s true, there’s more than enough anxiety to go around these days and the clamor about the bonuses is likely a symptom of that. But how dare commentators demean the public and try to gloss over payouts in the hundreds of millions when that’s more than what many people in America will make over the course of their lifetime. (And NO, it’s not that we object to bonuses being paid despite the fact that the companies have lost billions of dollars -- it’s the inequity of such amounts, period.)

Given the depth of the trouble we’re in, I imagine that for some time to come folks will be offering up many more analogies and maybe some good old fashioned sayings to help us come to grips with the economic mess. I’m not sure how many more platitudes I can take, but to prepare, I’ve thought of a few myself that might be helpful.

For example, maybe one way to explain how companies justify paying astronomical salaries to Wall Street managers and execs is simply to see them as having gotten caught up in a corporate version of “monkey see, monkey do”. Of course, boards wouldn’t dare use such a juvenile analogy -- but, as they bought into the compensation consultants’ arguments that such amounts are “the norm in the industry” and that they had to pony up if they hoped to attract the best and brightest -- the resemblance to monkey see, monkey do is striking. (Especially since -- like monkeys -- it’s clear no one questioned the moral scruples of the supposed best and brightest. Hell, no one ever even stopped to objectively assess whether those folks really were the best and the brightest! But why should they -- that’s not how the game is played, after all.)

Actually, it occurs to me that maybe folks like Ms. Burnett should consider switching their focus from trying to make the average person understand things, to trying to make Wall Street types understand how their behaviour got us into this mess. So, in the spirit of being helpful, to those who might find the public outcry over obscene bonuses -- or the idea of a 90% tax on such amounts -- hard to comprehend, perhaps a bit of reflection on one of my favourite sayings might help them understand: pigs get fat, hogs get slaughtered.

© 2009 Ingrid Sapona


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