Without A Clue: A Jargon Failure

A letter in the FT last week included a swipe at financial journalists that was uncalled for and unfair. It also had a point.

Charles Pugh of SW10 was writing about derivatives, “which have become so complex that senior management do not understand them”.

Then he wades in: “Journalists glibly use the terms without a clue about the mathematical detail behind them, hoping that no one will ask them to actually do a worked example.”

Glibly? How dare you.

I think the problem here is that journalists are so thinly spread that keeping up with new financial terms has become extremely difficult.

In some ways it is worse than Mr Pugh says. We’re not kidding anyone; we know we don’t know.

So we need the flaks and their clients to describe things clearly, which they often cannot.

In his movie Capitalism: A Love Story, Michael Moore goes in search of an expert who can explain derivatives and credit default swaps.

He can’t find one. 

(My quick go: A derivative is something derived from something else. A credit default swap is insurance on a loan.)

Maybe the truth is that the experts who do get it at the most complex level can’t explain it in English.

(Moore prefers the idea that they keep it confusing so they “can get away with murder”. I wish they were that smart.

The hacks who could explain it, don’t quite get it, so it’s left in this comfortable jargon zone with the wider public none the wiser.

Who is failing who here, the hacks or the flaks? Both, I guess.