Economics and the English language

In today's news:

To hear Ben Bernanke talk about the housing slump, you might think
the Federal Reserve is still in need of a one-arm economist.

In a speech to a banking conference in Chicago on Thursday, the
Federal Reserve chairman said "the cooling of the housing market is
an important source of this slowdown" in the economy.

In particular, he said, new curbs by lenders on mortgages for
less-creditworthy home buyers, called subprime mortgages, "are
expected to be a source of some restraint on home purchases and
residential investment in coming quarters."

On the other hand, Bernanke said, "we believe the effect of the
troubles in the subprime sector on the broader housing market will
likely be limited, and we do not expect significant spillovers from
the subprime market to the rest of the economy or the financial
system."

As a result, financial newswires wrote apparently conflicting
headlines, including "Bernanke says subprime woes to hurt housing
market," and "U.S. economy to mostly dodge mortgage woes."

Traders in stocks, bonds and currencies found no direction in his
remarks, leaving markets little-changed for the day.

This apparent doublespeak -- call it nuance or equivocation -- was
commonplace under Bernanke's predecessor, Alan Greenspan.

Indeed, in a presentation Thursday to executives in Atlanta,
Greenspan said opaque answers to straightforward questions were part
of the job, because he couldn't say "no comment" and he didn't want
markets to overreact.

"What tends to happen is your syntax collapses," he said, according
to a report of his appearance by the Atlanta Journal-Constitution.

"All of a sudden, you are mumbling. It often works. I created a new
language which we now call Fedspeak. Unless you are expert at it,
you can't tell that I didn't say anything."

And now he can speak freely.
--
--- Joe Fineman joe_f.TakeThisOut@verizon.net

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