Plainly Speaking About Finance

Daddy Warbucks was Little Orphan Annie’s adoptive father in the long running comic strip, Broadway show, movie, etc. I have chosen him to chat with because he was depicted as a reasonable – though admittedly fictional – billionaire. The motivation for this posting was a story I heard a couple of times during the day on NPR. June 29th? 30th? I’m not sure and can find no reference to it. Please let me know if you heard it. The gist of the story was that legislation either just passed or pending would require that financial institutions describe their various products and services in a way that could be read and understood by reasonably intelligent adults in the general population. The legislation was being “fiercely opposed” by the banking community on the grounds that the requirements would “severely limit” the products they could offer.

Daddy Warbucks, may I speak frankly?

Didn’t we take care of this a long time ago? 1400s? 1500s? Then it was the Catholic Church asserting that the word of God could only be communicated in Latin. Bad enough that this goldsmith Gutenberg was printing copies of the Bible and selling them to those nouveau riche merchants. Next thing you know people will get the idea that Jesus of Nazareth, a nice Jewish boy, didn’t speak Latin. Adfectus deus! I recall reading that they got rather, well, catholic about the whole issue. My way or the highway – translate the good book into English and we will kill you, dismember you, grind your bones into dust. Princes of the Church acting in behalf of the Prince of Peace, no doubt to guard the common people from holy writ, writ in unholy tongues.

Folks didn’t buy it then and hopefully, we will buy it no longer. It is lunacy when the language that guards or removes our freedom is one we cannot understand. People are reading these words on some type of digital device requiring software. Most likely, they installed that software. During that process they clicked on a link asserting that they had read and agreed to the provisions of the software license or the terms of service. They lied. Nobody reads that stuff unless there is some sort of firestorm over the Facebook or the MySpace terms of service. “Huh?” we then ask, “Wazzat?” We don’t read the lease on our apartment, the mortgage agreement on our house, the service agreement on our rental car, the terms of our credit cards, the patient release forms at the hospital, the entirety of our health or home insurance policies. We don’t read any of that stuff. Are we complete idiots? Yes and no.

Yes, we are idiots because those are important documents; we are signing, clicking, swearing and affirming to agreements that can cost us, literally, life, liberty and the ability to pursue happiness. And, no, we are not idiots because even if we read the documents we could not understand them. My older daughter is a lawyer, and I love her dearly – but her progress through law school taught me a very basic truth. Lawyers do not speak English, they do not write English; I sincerely doubt that they think in English. You may substitute French, German, Russian, Farsi, or Hebrew in that sentence. The truth remains. Here is what happened:

My students will affirm that I am a hardliner when it comes to writing. They will often use other descriptive phrases to describe my insistence that they write according to the formal rules of grammar and style; that words be correctly spelled. When my daughter was an undergraduate I would often proofread her drafts – one of the few perks of being raised by a university professor. She wrote well. Then she went to law school. She sent me a paper to look over. The words were English, the phrases had individual meaning – but the sentences were macabre. There was no discernible meaning in English as it is commonly employed. This is the language of the law. It stands apart from the normal language of the culture. It is the language by which the powerful assert dominion over the powerless. It certainly can be the language through which the powerful can protect the powerless; but it is never the language of the powerless.

As I understand it, this legislation would require financial institutions to define their products – from checking accounts and credit cards to arcane derivatives – in the common language of the culture. Daddy W, it can be done and it should be done.

Something you learn when you teach is that when your students don’t understand you, it isn’t always their fault. Sure, sometimes they aren’t paying attention. Sometimes they don’t care. But sometimes you are not being clear, you are not speaking a language they are capable of understanding. Often in my world junior professors speak graduate school jargon to freshmen. In that case the fault is not in the stars, Daddy, it is in us. Speak plainly, speak clearly. If you cannot communicate the idea behind a financial transaction in the common parlance to a reasonably intelligent adult, then the fault is not theirs, and their suspicion is probably warranted.


You need to tell your billionaire finance cronies that they are going to have a hard time selling this whole “if everyone can understand it we can’t make money from it” gambit. They are without much credibility these days. We used to believe the powerful when they said, “You don’t really need to read all that. Essentially what it means is . . . . .” We now assume they are lying. Besides, they’ll survive, the grandest cons use simple language. “150% return on your investment is guaranteed.” “There is no risk at all.” “I’m going to put a simple pea under one of these three shells. . .” If we fall for that – a con in simple, clear language, then the blame does rest with us. But at least show us the respect of stealing from us in a language we can both understand.

Oops. Excuse me Daddy, I have to take this. “Yeah, Bernie, I heard. 150 years. That’s cold. No, Bernie, I can’t lend you 20 bucks. No, my daughter doesn’t do criminal law . . . Bernie, you know I hate it when you whine like that.”