In today’s media, assisted by politicians and others, the real meaning of many words is being lost. Separate words are often merged into a single usage, meant to obscure the difference (bend the truth). Here are some common examples:
- Income and Wealth, while vastly different, are blended to imply the single concept of “the Rich.” This helps clever politicians, who often have a high net worth (wealth), propose to “tax the rich.” These politicians really mean “tax people with high incomes.” Note that the proposed tax on income deftly avoids taxing the wealth of the politicians, while sending a populist message to voters. “Tax the Rich, attack Income Inequality.”
- Debt and Deficit are entirely different concepts, although an accumulation of deficits will result in rising debt. By interchanging these words, one can craft a message that a proposal will “reduce the deficit.” The politician, economist, or journalist thereby implies that the idea will help our nation get out of debt. The truth is usually far different, in that the same proposal may (or may not) reduce the current-year deficit. However, the debt continues to grow.
- Heath Care and Health Insurance are terms easily manipulated by politicians and their media supporters, who make the claim that “millions of people will lose their Health Care. This is patently false, as for decades, in this country it is a crime to refuse treatment to anyone who shows up at a hospital emergency room. This does not depend on the insured status of the patient.
There are also individual words that have been usurped by the political class, who are constantly trying to curry favor with the voting masses. A few of the most notables include:
- Fair is the one usurpation with which I take the most umbrage. The very essence of our organized society, starting with the Declaration of Independence, has been the establishment of fundamental fairness. Today, I cringe at the term Fair, as it is often misused in a manner contradictory to the original definition of the word. It is painful to hear a politician claim that some very discriminatory position (particularly taxation) is “only Fair.” Further evidence is found in the absurdly-abused term “Fair Share.”
- Living Wage is hot topic these days. Advocates play on emotions, eliciting empathy for the poor minimum wage workers. What’s wrong with this? First, a Living Wage in New York City is far higher that a Living Wage in Tupelo, Mississippi. Additionally, increases in minimum wages, implemented frequently across the Fruited Plain, cause the price of goods and services to rise. This renders the higher wages useless in terms of purchasing power. We all lose. The other unintended consequence of a rising wage is the loss of entry-level jobs, and reductions in hours for others. For proof, look no further than St. Louis, where the hourly minimum wage was recently reduced from $10.00 to $7.70 to help low-wage workers make more money. Minimum Wage was never designed to be a Living Wage.
In the financial advising industry, misuse of terminology can be illustrated by the term “fee-based,” which is a linguistic smokescreen “wrapped” around the concept of commissioned sales. The term is intended solely to fool customers into believing that “fee-based” is the same as “fee-only.” Fee-only means that your advisor is a fiduciary, and therefore, never accepts a commission for any reason (clients’ interests are always placed ahead of the advisor’s interests). Currently, there is a national movement to shed some light on the true nature of financial advisor compensation. This is called the fiduciary standard, and its passage is a high priority for us, as it should be for you.
Is our language as we know it lost forever? Perhaps it depends on what your definition of the word “is” is.
Van Wie Financial is fee-only. For a reason.