“Bailout”: A Failure to Communicate … Accurately

Words matter. That’s especially true for public relations professionals in industries subject to regulatory oversight, such as investment banking, financial services and insurance.

The legislation that was originally introduced under the title “Troubled Asset Relief Program” and evolved into the “Emergency Economic Stabilization Act of 2008” was more popularly referred to by the average citizen — and quite a few legislators — as the “Wall Street Bailout.”

According to Wikipedia, “bailout” is a term used to describe a situation in which “a bankrupt or nearly bankrupt entity, such as a corporation or a bank, is given a fresh injection of liquidity, in order to meet its short term obligations.” Please note: a “bailout” would not be available to a consumer swamped by debt. And that may be at the crux of the overwhelmingly adverse reaction of American citizens to the initial proposals for averting the financial crisis.

In an article entitled “Main Street's Rage at the Financial Crisis,” BusinessWeek quotes Carol Madura, a waitress in her 50s, on the topic: “I brought up my kids to work hard and save money. Now what? The rich are getting bailouts. … The government just keeps taking our money and giving it to people who don't deserve it. We should be worried about those who are really struggling.”

If you’re involved in financial services public relations, insurance PR or investment banking PR, I’m sure you’ll agree that “bailout” is an altogether inadequate way to describe a proposed solution to a complex economic problem that threatens the financial well-being of all Americans.