Guest Post: The First Step to Solving A Problem Is Stating It Correctly

Tyler Durden's picture

Submitted by Of Two Minds

The First Step to Solving a Problem is Stating it Correctly

By Brad L

In "1984," George Orwell describes a totalitarian state that employs "newspeak" to enforce its aims. Rather than merely suppressing statements that endanger the ruling party, newspeak constricts the language itself, making dangerous ideas impossible to formulate.  This proves to work far better than post-hoc crackdowns on radical speech, inspiring one state functionary, Syme, to exude, "It's a beautiful thing, the destruction of words."

With that in mind, I'd like to explore a problem I see in the current economic debate. The path before the nation in general, and the federal government in particular, is usually framed as a choice between "quantitative easing" and "austerity," and even those who oppose the action represented by the former phrase, and support the course represented by the latter, tend to use these terms as if they truly described the two paths that might be taken.

But of course they don't.

"Quantitative easing" is, linguistically speaking, quite new. The original Japanese expression for "quantitative easing" ryoteki kinyu kanwa was minted in the mid-1990s, and became official Japanese monetary policy after Toshihiko Fukui was appointed governor in February 2003. It did not pass into American parlance until roughly 2005, but in a mere six years, it's a linguistic bestseller - a Google search for "quantitative easing" garners over a million hits.

It's easy to see why the term was pushed vigorously by the forces that support the action it represents. Evolutionary psychology asserts that humans have two basic drives - accumulating resources and minimizing effort. Throughout human history, anyone who could gather real resources without expending much time or energy had a huge survival advantage. "Quantitative easing," has, then, a hugely positive emotional valence, as it embraces the two things humans prize most - quantity and ease.

Of course, in reality, "quantitative easing" offers no such thing. It creates no real resources whatsoever, and whatever "ease" it might provide will be more than counterbalanced by painful side- and aftereffects.

An alternative phrase that policy critics sometimes advance - "money printing" - is, ironically, almost as attractive. The reason is that "money" has multiple meanings, and in the popular mind is conflated with possessions that can be purchased with currency. In other words, at a fundamental level, "money printing" sounds like a pretty good idea - the creation of a real resource with little effort. Sign me up!

So let's be clear. The most accurate description for the action described by "quantitative easing" is actually "fiat creation." Here, the type of money being created is specified - a fiat currency, untethered to any real resource, with no more intrinsic worth than the paper (or electrons) that constitute it. And "creation" reveals the voluntary bringing-into-being of this intrinsically valueless commodity. Using these words makes it clear that there is no imaginary constraint at which the fiat strains in search of "easing," instead, human beings make choices and perform actions to create it.

The fact that the average American has no idea what fiat is, is no excuse for those who do understand it failing to employ the phrase often in writing and speaking. If it is used enough, even Americans can learn a new word.

So use it, please.

Next is the term, "austerity," which is used, in government-budget discussions, to describe spending cutbacks necessary to balance tax inflows to spending outflows. The first-listed synonyms for this term are "harshness," "strictness" and "ascetisim," all of which have a strong negative emotional valence. Absent from these synonyms are any positive results that might come from actions described as austere; the entirety of the word's meaning is unrelieved by any awareness that austerity might have a benefit.

So again, let's be clear. The most accurate description for the set of measures described as "austerity" is expressed by the phrase "living within our means." This expression aligns with the average person's understanding that he or she must personally balance revenue inflows and outflows - even people who don't do this are usually painfully aware that they should. "Living within our means" then, has a positive valence that is hard to over-state - immediately, intuitively, it just makes sense.

Reframing the choices before us from a battle between "quantitative easing" and "austerity" to one between "fiat creation" and "living within our means" is a necessary first step to making the right choices as a culture. If we can't even properly state the problem, we'll never arrive at a solution.

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Rodent Freikorps's picture

"The first casualty of War is Truth"

nope-1004's picture

Manipulation and selective word usage by Obummer is at an all time high.

With inflation raging across the middle east and Egypt revolting, he steps up to the mic and says "I praise the people of Egypt.  Change is near."  He is totally trying to skirt the real issue:  Food inflation.  He is trying to cover up the truth about what this gov't is doing, and how they are slowly forcing the people of other nations into poverty.

This propaganda machine, the same one exporting inflation at a torrid clip not seen EVER in history like this to other nations, now also thinks they can bring the Egyptian people on their side.  The statement wreeks of "Come with me.  Join our side..... pretty pleeeze."

There is a last ditch effort now being waged by the US gov't to keep people from uprising, to keep people in a trance, and to try to attempt to keep them on side; meanwhile, exporting inflation and starving the world through Benocides' satanic actions.

Mr. Quiver Lip will one day pay dearly for his genocidal stupidity.


WestVillageIdiot's picture

Our attempts to limit language can be summed up as "political correctness".  There is nothng more advantageous to the beasts in power than political correctness.  The words most used to enforce political correctness are "racist", "bigot", "chauvinist", "discrimination", etc.  These titles are often hoisted on people that are bringing up very sound and rational criticisms of the behavior of TPTB.  Criticize Mr. Obama and watch how long it takes somebody to call you a racist.  Criticize Frau Clinton and watch how long it takes somebody to call you a chauvinist.  Criticize illegal immigration and watch how long it takes somebody to call you a bigot or a racist.


PC is definitely one of the favorite, and most powerful, tools of the Thought Police in America.  Once they have deemed something "offensive" you can guarantee that something is being said that contains common sense and challenges their stupidity and destruction. 

Fighting anybody that attempts to enforce Political Correctness is a blow for freedom and a blow being struck against the Thought Police.  Call a spade a spade and I will call it Doubleplusgood. 

Azannoth's picture

No law is made against people who say Earth is flat, nor that the Sun revolves around it

No law is made against saying 2 + 2 = 5

No law is made against stupidity, incompetence, ignorance nor lack of knowledge

But when you do think, research, explore, discover, question well watch your back than

slewie the pi-rat's picture


Hahahaha!!!  lQQks like tyler wantzta pull the train, sportz fanz.

this is cute:  "Evolutionary psychology asserts that humans have two basic drives - accumulating resources and minimizing effort."  so much 4 eat, sleep, shit & fuck (apologies to golferz). all my life whenever someone as asked me what i DO:  "As little as possible!"

QE = Fiat Creation? here's the politically correct polycritical polynomial, wonderblessed wunderblusss:

i'm laughing too Hard, bro.  gotsta stop, you IDIOT!  ++++++++XeXQE

you shameless babylonian hookster, i know what you want, but blythe won't answer yer calls unless you get baptized into her dreamz:  quod per twat: YouTube - Doug Clark & the Hot Nuts "Baby Let Me Bang Your Box Pt. 1"


Rodent Freikorps's picture

Heh. Evolutionary Psychology says men only acquire wealth to attract trophy wives.

Women could change the world if they wanted to. Appears they don't.

slewie the pi-rat's picture



OK, i'll confess:  i yam a fan of 'of 2 minds', and enjoy the stuff ona regular basis.  this just seems like the wrong mind, if ya don't mind.  what abt the other one?

Mach1513's picture

.... As well as "socialist" or "pinko" or "lwft-winger" or "class warfare" - all terms used by the right to impose their politically correct vocabulary. You see - there you go again - to use one of those handy but basically meaningless Reaganisms that equal in banality Obama's "change you can believe in" or "we are the people we've been waiting for", whatever the hell that's supposed to mean.

Each side in this battle of words uses their own spin to try to demean or intimidate the other - sickening, on both sides. As in war, in politics:  The first casualt is (always) the truth.

Can't we stop this nonsense.  By the way, I did NOT vote for Obama (or Clinton in '96) - I just exercised my Democratic option to abstain.

And I do admire Ron Paul even though I often though not always disagree with him. At least he attempts to speak the truth.

Kayman's picture


They sure beat the lying drum before the invasion of Iraq.  You're with us or you're agin us.

Then, to kill Colin Powell's career, they have him disclose fake poison gas trucks to the UN.

Clever little cretins that run the show. 

But I think this time, too clever by half.

Rainman's picture

The greatest enemy of the correct decision is a problem poorly defined. 

Azannoth's picture

You can get fined or go to prison for 'hate speech', 'racial discrimination', 'holocaust denial' etc. soon anything other than Keynesianism will be punishable too

No1 ever bothers to outlaw falshoods and lies it's always the truth that gets outlawed

WestVillageIdiot's picture

CNBC lies every day.  That is good.  Bernanke lies every day.  That is good.  The government lies every day.  That is good.  Meredith Whitney speaks some truth and Congress wants to get her on the spot and attempt to make her look unpatriotic and silence her.

Lies are acceptable but the truth must be punished with every means available. 

Waterfallsparkles's picture

Where I live you can get fined or imprisioned for not putting the lid on your Trash Can, pealing paint on your house, anything stored on your property that they do not approve of,  unliscensed vehicle on your property, etc.  They can also take your property from the excessive fines for not having a lid on your trash can.  Fine is $200. a day just for this violation.  If you also have another it is an addition $200. per day for each violaion.  5 violaions in 30 days it equals $30,000.  A form of adverse possession of property.

America is more like Orwells book every day.

SilverFiend's picture

What is the fine for fire bombing city hall?

snowball777's picture

Depends on who's city hall you bomb, I suppose.


Calmyourself's picture

How about red paint+ balloon+ city hall, drop 200 flyers out the car door as you speed away??  Simple tactics, big impacts..

slewie the pi-rat's picture


i'm sure you'd move except 4 the negative eQUITee.  those fuking HOA's are nazi magnets, eh?  cuntz w/ brown shits, black boots, and no assholes?  hey!  ya get whatchu pay for!  don't ferget 2 keep the lid on!  see if ya can get abt 12 hits of UNOwhat and drop it into the tea at the next meeting.  then start playing Abbey Road.  then, the Sarge, pepper-spray.   see what happenz. 

Rodent Freikorps's picture

HOAs are evidence that the natural state of Man is slavery.

Waterfallsparkles's picture

This is not a HOA this is City and County wide.

Racer's picture

Wow, that is some bad place to live. I think you would be better off in prison!

MayIMommaDogFace2theBananaPatch's picture

I predict that Keynesianism and Quantitative Easing will both be renamed "Mo' Money" for purpose of marketing to the general public.

This also accomplishes additional confusion as people argue whether K == "Mo' Money" or QE == "Mo' Money"...

...Or possibly which word means MORE "Mo' Money" then the other "Mo' Money."

Then they crack a beer and High Five each other -- 'cuz "Mo' Money" is "Mo' Money".

cossack55's picture

to continue the "1984" theme:

In a time of universal deceit, speaking the truth is a revolutionary act.

One of my personal favs.

WestVillageIdiot's picture

I am paraphrasing Winston Smith but "being a minority of one does not make you insane".  Amen.

kaiserhoff's picture

How about this question?

How long will the government starve the private sector and destroy free markets in the service of the banksters and public employee unions?  Will someone please ask Genocide Ben, or better yet brand it into his sorry ass?

QQQBall's picture

The US hosts will be maintained until the parasites no longer need them and they have moved onto to new consumer hosts in the emerging markets. Matrix.

Diogenes's picture

According to Catherine Austin Fitts the big boys moved on in the 1990s. They no longer look on the US as a going concern to be exploited for profit and dividends. They look on it as a dead economy to be asset stripped, looted and abandoned. They moved their long term investment money to Asia in 1997. The asset stripping is almost complete. All they have to do now is convince you to throw Granny under the bus and give what's left of her retirement savings to the big banks.

The next stage is to treat you as a colony, a  source of cheap raw materials and a market for overpriced junk made elsewhere.

The final stage is to become a source of cheap labor, starting with tourism. When you  hear tourism touted as the solution to unemployment and balance of trade issues you know you have reached full third world status.

Lord Koos's picture

Tourism in the US has been going on for years. Here in the west there are countless towns who have tried to make themselves as cute & tourist-friendly as possible after losing all local jobs that depended on manufacturing and natural resources.  The resources are used up and the mfg has been exported.

Kayman's picture

And since it takes money to be a tourist and most tourism is local, there are endless towns with worthless tourist facilities.

Cleanclog's picture

Using redevelopment dollars (yes, tax revenues that you paid) to cutesy up the town while the mentally ill are denied services so live under the freeways.  Redevelopment to improve urban blight?  That is soooooo 80's, but no one bothered to sunset any of these concepts and their funding.  

Everything you look at now is so contrived and inappropriately directed. Tax incentives are the devil.

StychoKiller's picture

Hey, Radiator Springs is a fine little town and carz will return some day...

cranky-old-geezer's picture

Occasionally I see a comment that sums up the state of affairs unusually well. This is one of them.  A keeper.  Well said.

Kayman's picture

Good Question, clearly defined.

AladdinSaneGirl's picture

This reminds me of the field of "inverse problems" in maths. Trying to reconstruct an image from scattered data is an "ill-posed problem" and small errors in the measured data lead to huge instabilities in the solution... i suppose some quant has applied the theory to the markets already?? 

Kayman's picture

Ala Girl

Quants are boxed in by the math.  Math will never replace the human imagination.

ps. think of the "markets" -stocks, bonds, and commodities as the home turf of the manipulators and then and only then will you have the slightest chance.

stollcri's picture

There are many Americans who cannot work one job and "live within their means," so they have to search for other sources of income (e.g. a second or third job). Should we not consider that the government needs to search for other sources of income as well? Another source of income could be, I don't know, taxing the individuals and corporations who "gather[ed] real resources without expending much energy" during the boom years? Isn't at least part of the problem the drastically unequal income distribution in the US?

Funny how that option never shows up anywhere. What were you saying about elimination of ideas?

StychoKiller's picture

The third choice of Default/debt repudiation has no place in "One of Two Minds".  Kinda like:   "Would you like the arsenic or cyanide tea today?"

hedgeless_horseman's picture

I wish the author would have included, "disintermediation."

What does disintermediation mean?  From

1. In finance, withdrawal of funds from intermediary financial institutions, such as banks and savings and loan associations, in order to invest them directly.
2. Generally, removing the middleman or intermediary.

I believe that disintermediation is the answer to many of the questions asked on this forum. 
  • How do I fight the banks? 
  • How do I protect my wealth? 
  • How do I find an efficient market?
slewie the pi-rat's picture


or, get out now & avoid the rush.  get physical. THE END.

topcallingtroll's picture

Too bad we cant focus on improving productivity and capital formation, but those are hard and dont break down into easy soundbites.

InconvenientCounterParty's picture

Improving productivity and capital "formation" are easy and break down to sound bites just fine.

ever hear of "right-sizing" and "off-shoring"? Those tactics both raise productivity.

ever hear of "financial innovation" , privatization, deregulation? those increase "capital" (read debt) formation.

stay tuned for the onslaught of cash from the corporates in 2012. The puppets will be singing all right.


Kayman's picture


1. We have ever increasing productivity in the production of currency and credit. After all Bernankinstein (of the quivering lip) has clearly stated that he can create money and credit nearly cost free.  Ya can't beat that for producitivity.

2. Capital Formation, contrary to what you learned in Econ 101, is NOT SAVINGS, rather in these here modern times, it is created electronically by the Fed and its Shareholders.

So... don't worry about Productivity and Capital Formation. The Bernank and the Criminals have already solved that one fer ya...   

/sarc off/

Snake's picture

reality is made of language  

war are fought for meanings

Zero Govt's picture

"If we can't even properly state the problem, we'll never arrive at a solution"


Michael's picture

We can't even state the real problem why foreigners hate and attack the US. Two simple words people dare not utter on TV and learn to understand; "Motive" and "Blowback", respectively.

slewie the pi-rat's picture

tru enuf, M, but why not just give toiler the toilet pasting he craves, and go wax a banana, or something?

cranky-old-geezer's picture

"We can't even state the real problem why foreigners hate and attack the US."

Hate yes, attack no.

False flag events don't fit the definition of "attack". 

Michael's picture

True. You have a better chance of being struck by lighting twice in the same year then being killed by a terrorist or the CIA/Mossad.