PLEASE STEP AWAY FROM THAT METAPHOR! Someone needs to tell Allan Sloan: Please put that metaphor down: // link // print // previous // next //

No Friday services: We’ll be on a mission of national import. Absolutely no HOWLER tomorrow.

Corporate clueless chic: Last week, Dana Milbank and Chris Cillizza staged the latest groaning version of their now-defunct Washington Post on-line “humor” series, Mouthpiece Theater. (To watch the performance which doomed the series, just click here/courtesy Foser.) Long story short: The foppish fellows said that Hillary Clinton should be served a “Mad Bitch” at a future beer summit. And not only that! Former congressman Chip Pickering’s wife is divorcing him (he had an affair). She should drink a “Bitter Woman from Hell,” the puckish alleged journalists said.

No, boys. You shouldn’t call a famous public woman a “bitch,” even if you’re engaged in something you insist is humor. Of course, you also shouldn’t call a famous public woman “slutty.” But that one pretty much slid by when David Letterman so regaled us about Sarah Palin. By the time the Letterman brouhaha was done, pundits were recording the way he’d apologized for “an” offensive joke (the joke about Palin’s daughter getting “knocked up”). Apparently, Letterman’s “slutty” knee-slapper ended up passing the press corps’ taste test.

We’ve long been aware of Milbank’s oddness. But you haven’t seen “corporate media clueless chic” until you read the apology the bosses beat out of Cillizza. Each fellow was required to feign regret; below, you see how Christopher did it. So you’ll know, his blog at the Post is called “The Fix:”

CILLIZZA (8/5/09): I would like to personally apologize for the content in last Friday's video as it was inconsistent not only with the Post brand but, more important and personal to me, the Fix brand which I have worked so hard to cultivate.

Good God, that’s awful! Calling a woman a “bitch” is, at this level, remarkably stupid. Unless you’re a modern, upper-end “journalist,” in which case the practice is inconsistent with a long string of brands! Never mind the denigration of the woman in question! The real harm here was carelessly done to Cillizza’s beloved Fix brand!

File under: Apology to self.

Cillizza seems like a nice guy. That said: On which planet do they breed? They arrive here in what sort of spaceship?

PLEASE STEP AWAY FROM THAT METAPHOR: Some policeman needs to tell Allan Sloan: Please step away from that metaphor! Sloan isn’t a nut; he isn’t even a movement conservative, which would be OK, of course. He seems to be a genial, well-intentioned person with thoroughly centrist views. He knows a lot about Social Security. But a certain set of metaphors has taken control of his life.

Mr. Sloan! This is the Public Confusion Police! Please put that metaphor down!

The metaphor in question is on full display in Sloan’s long piece from Sunday’s Post. (Almost 3300 words!) He’s trying to explain why Social Security is in big major trouble—and that’s a very important topic, a topic you’d want to get right. But Sloan has been seized by a metaphor’s grip. Until he wriggles free from its ropes and chains, he will never provide any clarity.

Why is Social Security in big major trouble? Sloan’s argument starts with this:

SLOAN (8/2/09): How can Social Security possibly need a bailout when, by Washington rules, it's “solvent” for another 26 years? To understand the problem, look at me. I'll turn 66 next year, which makes me and my wife eligible for full Social Security benefits. They'll be about $42,000 a year for the both of us starting Jan. 1, 2011, and are scheduled to rise as the consumer price index does.

Sloan goes on to explain that (we’ll simplify a bit) he and his wife have paid more into Social Security than they’re likely to take out in the future. So why is there a problem here? Soon, the gentleman starts to explain. As he does, he drops his first pair of M-bombs:

SLOAN: How can my wife and I pose a problem to Social Security when our benefits are valued at $600,293, while our tax payments plus interest will total $804,686? Answer: Because the obligation is real, but the $800,000-plus asset is illusory, consisting solely of government IOUs to itself.

There they are—two versions of the most destructive metaphor of a political era. The Sloans have paid in more than 800 large. But so what? In this and in many paragraphs which follow, Sloan recites a slew of familiar metaphors—metaphors which have confused a generation of newspaper readers. To wit: Their $800,000 asset is just an illusion! Their money has already been spent! The trust fund is just an accounting entry! The left hand has borrowed from the right! The money they paid is “gone”—it’s no longer there! And of course, the mother of all these metaphors:

All that’s left is some IOUs! Government IOUs to itself!

There you see them—the most misleading metaphors of a long political age. (These metaphors are inter-related.) People have been trained to think in these ways—and Sloan has bought the package. But then, most economics journalists of Sloan’s generation seem to have accepted the misleading notions lodged in the highlighted part of that passage. Among modern mainstream journalists, this is the “debate” which exists about Social Security. Liberals are rarely allowed:

Mainstream economics writer: The Social Security trust fund is illusory. It’s a bunch of IOUs.

Conservative economics writer: The Social Security trust fund is illusory. It’s a bunch of worthless IOUs.

That’s the debate. Everyone describes the trust fund as “just IOUs.” Conservatives add the word “worthless.”

Is the trust fund a bunch of IOUs? It’s a grossly misleading metaphor—a metaphor which was presumably designed to mislead us rubes. Sloan has bought the metaphor thoroughly. He needs to put it down.

Is the Social Security trust fund a bunch of IOUs? It depends on what you mean. In the past few decades, tax-payers have submitted more money to the Social Security trustees each year than the system needed to pay out. This has been done by design. (Sloan: “Social Security has been collecting more in taxes each year than it has paid out in benefits.”) The extra money gets loaned to the federal government. In this way, the federal government has borrowed from the SS trustees, promising to repay the money in the future. And when the government borrows that money, it doesn’t bury the money in a big burlap sack on the national mall! The money is spent, on government programs. In that sense, the money no longer exists. (Sloan: “The cash that Social Security has collected from me and my wife and our employers isn't sitting at Social Security. It's gone.”)

Should that be troubling? Not really. Here’s why:

The federal government borrows money from lots of sources, including (for example) big Chinese banks. But all that money is quickly spent on government programs too! That money is also “gone.” (That’s why people borrow money. They borrow money to spend it!) In the future, the government will pay that money back to those Chinese banks. The government will repay those Chinese banks—and they’ll repay the SS trustees too.

These transactions are essentially the same. In each case, a bunch of money gets borrowed, then repaid. In a slightly more rational world, that would be the end of the story. But you don’t live in that world.

Is it possible that the federal government will go belly-up at some point? That it won’t be able to repay the funds it has borrowed from the Social Security trustees? Yes, of course, that’s always possible—though such a thing would represent a major cataclysm. But it’s possible that the government will go belly-up before repaying those Chinese banks too! Does that lead anyone to say the following things about the money the Chinese loan us? Does anyone say these things about those loans: But the money is no longer there! It’s gone! We’ve already spent it!

No one ever says such things about the money the Chinese loan us. We’ve been trained to apply that framework to loans from the Social Security trustees—no one else.

Presumably, this is the fruit of a deliberate attempt to undermine faith in Social Security. The propaganda campaign has worked very well as decent people have been bamboozled by the “logic” contained in those metaphors. If you doubt that, just read Sloan’s piece.

Guess what, people? Almost all financial transactions involve promises-to-repay which are, in the ultimate sense, “just IOUs.” The balance you maintain at your bank? It’s a bunch of IOUs! If you take a jar of quarters down to your bank, your bank doesn’t bury it out in the yard, then pay someone to guard it for you. They loan your quarters to someone else—and that person spends them! The money you’ve deposited in your bank? That money is mostly “gone” too!

The money you’ve deposited is no longer there! Does that mean your bank balance is “illusory?” (Please don’t lean on the FDIC. In the future, the FDIC could in effect go belly-up too.)

You have an IOU from your bank in the form of your stated balance. In this country, such IOUs almost always get repaid. But so do the IOUs we give to Chinese banks. Presumably, so will the IOUs we give to the SS trustees.

Conservative hack-tanks have worked very hard to invent a set of confusing metaphors concerning those loans from the SS trustees. By design, the metaphors are only applied in one particular circumstance. We’re trained to react with fear about the “IOUs” held by the SS trustees. Meanwhile, no one ever says things like this: We really fooled the Chinese this time! The assets they think they hold are illusory—just a bunch of IOUs! The money we collected isn’t sitting in a federal vault! Their money is gone!

No one ever says such things about those loans. There’s a reason: Such statements are silly.

Sloan’s report contains real information about the damage done to Social Security by the current economic downturn. There is real information in his report—but it disappears down the drain as he defers to those frightening metaphors about those “IOUs.” It’s true: Social Security’s situation doesn’t seem as good as it seemed a few years ago, before the economy collapsed. But Sloan will never provide real understanding about this program until he steps away from those metaphors—until he puts those damn metaphors down.

Essentially, this is a semantic problem. Sloan is describing basic facts in ways which confuse people, thereby spreading alarm. The solution to a semantic problem is typically this: Stop using the language in question. Sloan needs to put all those related metaphors down. If he forces himself to describe Social Security without using the phrase “IOUs,” he might, some day, help readers know more about the actual state of the program.

Allan Sloan! Step slowly away from that metaphor! Train yourself to describe this program without saying “IOUs!”

A standard formulation: At several points, Sloan cites a standard formulation which always creates alarm. Here’s the most potent example:

SLOAN: “The trust fund has no financial significance,” says David Walker, former head of the Government Accountability Office and now president of the Peter G. Peterson Foundation, which advocates fiscal responsibility. “If you did [bookkeeping like] that in the private sector, you'd go to jail.”

The second highlighted statement is basically true. But it leads Walker to the first highlighted statement. And that statement is basically false.

Guess what, people? In the private sector, you can go to jail for doing lots of things the federal government is permitted to do. (If Wal-Mart raises an army and invades Iraq, it might find itself in legal trouble.) But in the case which is under review, there are good reasons why we let the federal government engage in types of “bookkeeping” which are forbidden to private companies. Here’s one reason for the differential treatment: The federal government can tax!

Duh. If private companies could make every worker in the country hand them large sums of money every year, it would be a lot less risky to let them do the type of “bookkeeping” which has Walker so upset. Debt obligations become less risky if an entity has the power to tax! But Walker moves past that obvious point as he pictures the trustees frog-marched to jail. In these ways, the nervous Nellies have constantly frightened the average Joes about the trust fund. It’s time for Sloan to move away from a constellation of misleading frameworks.

This doesn’t mean that a government can’t ever take on too much future obligation. But Sloan will never be able to figure out if we’ve done that till he puts those damn metaphors down.

These metaphors are alarming—and potent. They seem convincing—and spread great fear. Are there reasons to be alarmed about the future of Social Security? You simply can’t tell from reading Sloan. He’s in the grip of misleading pictures. Allan Sloan! Put those metaphors down!