It was politics at its worst and representative democracy at its best.
On Monday, the United States Congress voted down a plan engineered to bail out financial institutions. Investors responded by selling stocks at a record pace and the Dow Jones Industrial Average posted its largest single-day point decline in history. Many Congressmen and Congresswomen who voted against the bill cited opposition from their constituents.
The bailout package failed to get through Congress mainly because of bad public relations. The bad PR started at the top and trickled down to the bottom, resulting in a political and financial nightmare.
First, and foremost, referring to the bill as a “bailout” package was and has been a colossal blunder. The term “bailout” is extremely negative and is associated with rescuing someone or something at a cost (i.e., the bail). A wiser choice would have been for politicians to refer to the bailout as “The Financial Stability Act” or “The Home Owners Rights Bill.”
“What if this had been called a ‘rescue’ from the beginning? Or the ‘Save Our Homes Act’? Supporting a ‘rescue’ is a bear of an entirely different species. It is not only a redemptive act, restoring things to their rightful order – it is heroic,” Andrew Benett, CEO of Euro RSCG New York, told Ad Age.
The second major problem is that the need for the bill most likely shocked many Americans. Why? Because politicians (I won’t name names) were saying less than two weeks ago that the economy was not only sound, but growing. If that was the case, then why would we need to “rescue” the most important sector of the economy?
This leads us to our third big problem: people talking about things they know nothing about.
The sad truth is that the vast majority of our elected officials have little financial or economic intelligence. They rely on staffers to remain informed, but you can’t replace education with mere information. Either you understand how the financial system works – and what exactly these assets that must be “eaten” are – or you don’t.
Based on my experience and knowledge base, most of what’s been said by politicians over the past week or so has been garbage. They simply don’t understand the situation, the assets in question, the type of financial instruments that have brought banks and others to their knees, and exactly who would and would not benefit from a “bailout.” You will never get good PR by sounding stupid (unless you’re Jessica Simpson).
Finally, the evolution of this situation took a long time, but it wasn’t until the stuff hit the fan about a dozen times before action was taken. Despite all the time that went by, the powers that be tried to ram home legislation in the blink of an eye, leaving almost no time for real debate and an honest dissemination of information. The poor planning inevitably led to bad PR.
The “bailout” package is a controversial piece of legislation, and as I write this, the ultimate fate of the bill is still undecided. All parties involved – for or against – have done themselves and their constituents a disservice by ignoring basic tenets of public relations. Come November 4th, many may pay a big price.
This article, written by Ben Silverman, originally appeared in PR Fuel (http://www.ereleases.com/prfuel), a free weekly newsletter from eReleases (http://www.ereleases.com), the online leader in affordable press release distribution. To subscribe to PR Fuel, visit: http://www.ereleases.com/prfuel/subscribe/.