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To Bailout, or Not

Ammon Shea recently spent a year of his life reading the OED from start to finish. Over the next few months he will be posting weekly blogs about the insights, gems, and thoughts on language that came from this experience. His book, Reading the OED, will be published by Perigee in July. In the post below Ammon, an expert dictionary reader, takes a close look at the word “bailout”.

In the past few months there has been a good amount of talk about the Federal Reserve’s plan to loan a rather large sum of money to J P Morgan, in order that they might buy the fiscally challenged Bear Stearns. There seems also to be some disagreement about whether this is the right or wrong thing to do, and furthermore whether or not it constitutes a bailout. Critics of the plan are saying rather accusingly that this is a bailout – unfairly giving a hand to a large corporation. The government has been saying rather defensively that it is not a bailout – it’s merely trying to save the overall economy from further damage.

The word bailout is a fairly recent addition to our language, with its first usage dating to some time around 1940. As a noun it derives from the verbal phrase ‘to bail out’, although it is not quite clear which of the several meanings of this phrase is the parent.

Another thing about bailout that is not terribly clear is what exactly it means. Different dictionaries provide definitions that are somewhat at odds, making it difficult to pin down a completely specific meaning. So rather than quibble endlessly over whether this is or is not a bailout, I am proposing a compromise: both sides agree that it is in fact a bailout, but they each get to consult the dictionary of their choice to establish what a bailout is.

Those who oppose the Federal Reserve’s plan can point out that the Cambridge Dictionary of American English defines bailout as ‘the process of saving a company, plan, or other thing from failing by providing lots of money.’ This would bolster their claim that the Fed is courting moral hazard on a grand scale by subsidizing poor business practices, and potentially throwing away some thirty billion dollars that could help struggling homeowners.

The Federal Reserve could counter with the definition found in the New Oxford American dictionary, which states that a bailout can also be an instance of giving assistance to a failing economy, which would bolster their claim that they are acting to save the larger economy, and are not simply trying to help a privileged few.

Their opposition could then come back with the American Heritage Dictionary definition, which swears that a bailout is nothing more than ‘a rescue from financial difficulties’.

“Aha!” the Federal Reserve will cry, “we were referring to the bailout that is defined in the Random House Dictionary of the English Language, Second Edition – ‘Of, pertaining to, or consisting of the means for relieving an emergency situation’”.

Their opponents will then throw down their trump card, and cite the unshakable authority of the Merriam-Webster and Garfield Dictionary (whose cover reads ‘the 1st dictionary with attitude!’ and ‘with comics!’), which avows that a bailout is simply ‘a rescue from financial distress’.

Given that none of the dictionaries that the Federal Reserve has in its arsenal come equipped with comics it is doubtful that they will have a suitable rejoinder to this. But it doesn’t really matter – giving a name to something won’t change what that thing is, and it won’t change whether you are for it or against it. And it can be risky to give too much authority to what a dictionary says – I have a sneaking suspicion that the current President Bush has fashioned his own personal definition of what torture is based on sense 2b in Merriam-Webster’s Third New International Dictionary – ‘an extreme annoyance or severe irritation.’

Both the Fed and its naysayers should give up on quibbling about what is and what is not a bailout, and go back to quibbling about more substantial matters, like how many thesauri you could buy with thirty billion dollars.

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