By Tera Ertz
In the past several months reporting of the current job climate and the multiple “jobs speeches” given by the president, the word leverage or leveraging has come up often enough to have wended its way into my very full and distracted mind. Amidst bits and bobs of commentary on the GOP debate and the President’s speech the following day this word again surfaced and caught my attention. The President has often said that his plan to “create jobs and get this economy moving” involves leveraging private investments with federal dollars. Now, this phrase has always bugged me but today I decided to try to figure out why. So, as always when I have a linguistic curiosity, I landed over at dictionary.com. And I found that the word leverage has a couple of different meanings, as I suspected. One of them is as follows:
The use of a small initial investment, credit, or borrowed funds to gain a very high return in relation to one’s investment, to control a much larger investment, or to reduce one’s own liability for any loss.
Now, in a capitalist society, when discussing the job market and economic difficulties, this is of course the definition that will come to mind. And, while this was a dirty word in late 2008 and early 2009 when applied to private companies, it is apparently okay for the government to invest our funds on the chance of a high return where it is not okay for people to invest their own funds. They’re a bunch of smart folks up there in DC, don’t ya know. So, the message the media and the President are trying to frame through the use of this word is that their on the job and the money they are stealing… er, appropriating from tax payers and borrowing from China isn’t really theft or debt, it is simply a means to “invest” in the private economy to gain a very high return. This of course leaves out the rest of this definition, “controlling a much larger investment.” Did anyone else immediately think “GM” and “Solyndra” when they read that part?
The problem with this definition, even if we assign the motive of control rather than return on investment to the word is that it doesn’t fit the picture of the current policies of the federal government. When we look at the “investments” made we do see companies like GM and Solyndra where the company eventually wound up filing for bankruptcy, the investment was lost, and in the case of GM control was handed over to the government’s minions.
But, we also see things like the NLRB suing Boeing to stop them from building a plant in South Carolina. Now, think about that. Boeing is a private business, working with private capital that decided to build a plant on private land and hire people with its private money, ie creating jobs without government “investment.” The response? The Obama administration is suing to stop them because they won’t be hiring the people they want them to hire in the state they want them to do business in.
We see the raid on Gibson guitars where the Obama administration confiscated wood building materials for the second time, not because Gibson broke a US law, but because the Obama administrations interpreted an Indian law to have possibly been broken and acted costing the company quite possibly millions over the course of the 2 years it has held the materials from its previous raid and the additional materials taken a few weeks ago. The administration took this action even after Gibson was not charged with violating the law in 2009 with the wood they imported from Madagascar, and without the consent of the Indian government in the current raid. To recap, India says that Gibson’s paperwork is in order, Gibson has been a high-profile player on conservation of endangered wood, and in two years of investigation the administration had not found any violation of US or Madagascar laws on the part of Gibson guitars. But, it chose it initiate and armed raid, threaten employees of the company with up to five years in jail and confiscate thousands of dollars in inventory on the basis of a 2008 update to a 1900 law called the Lacey Act. The Lacey Act basically states that the US can prosecute a company if it violates another country’s laws in the importation of rare or endangered materials. But wait, didn’t we just determine that India stated that Gibson did NOT break its laws?
So, what’s the difference between these two reactions by this administration and how does it relate to our word of the day? Let’s take a look at one of the other definitions of the word leverage:
to exert power or influence on.
Now perhaps the picture becomes a little clearer. GM, Solyndra and the myriad of other companies who have been blessed with funding and or a blind eye to wrong doing and poor business practices fall into an easily identifiable category. These companies have leadership that are supportive of the President and his agenda, or are influenced by powerful outside groups, such as the unions, that support the President and his agenda. Solyndra’s CEO was a major campaign bundler for President Obama in 2008 and the company itself is a cheerleader for the “green movements” governmental control policies. GM got a new CEO that was a friend of the administration and fell in line with the President’s “green initiatives” as they produced far more Volts than they could ever hope to sell and undermined their evil, but top selling, models in the SUV and truck categories. The result is that these companies have profited from tax payer funding but still gone bankrupt, in the end losing jobs and shrinking the economy.
In contrast, Boeing’s decision to locate a plant in South Carolina was a slap in the face to the unions, one of the main support groups for President Obama and the Democrat agenda of a command and control economy. And Gibson guitars? Their great sin was to contribute heavily to Republican politicians and not to Democrats.
When this President or his minions in the administration in the media start taking about using government programs and money to leverage private investment, the conclusion can easily be drawn that they aren’t talking about the kind of leverage you find in the banking industry, but the kind you find in the back allies and bar rooms where loan sharks and strongmen can be found. Learn the Lingo, and be wary the wielders of words.