Show Hide image

Call it a load of old bull

Bad banks, troubled assets and securitised loans – such linguistic tricks just add to the madness of

Euphemisms, by their nature, are supposed to plaster over unpleasant truths. In my adopted home town of New Orleans, a city known for its straight talking, the estate agents have lately taken to renaming the little residen­ces at the backs of main houses - long known by their truthful name, "slave quarters" - as "dependency units". The mind rebels.

I always thought of the economic and financial worlds as similarly resistant to euphemising. We had bulls and bears, of course, but those were metaphorical caricatures of real attitudes. Most of the jargon of the money world was, if anything, mind-numbingly literal: puts and calls, debentures and debt. But that all changed during the recent madness, a madness that may have been exacerbated by the looseness of the language.

This was a time, after all, when financial services began to be called "products". Conventional thinking would suggest that if I lend you money I haven't given you a product; I've afforded you (temporarily) the means to purchase products or services. But that was the term financial firms, insurance companies and banks started to use to refer to what they were offering.

Did it make people in these enterprises feel more muscular, less nurturing? Was it a linguistic farewell wave to a manufacturing economy, disappearing just as finance took centre stage? Seemingly innocuous, this change naturally led, as it did in the world of actual products, to an important next step: product innovation. Loans are loans, but a loan product seems awfully lonely up there on the shelf, all by itself. It needed some friends, some fellow products. Some friends.

Enter Ninas, home loans that required from their prospective borrowers "no income, no assets". Like the other loan "products", they had something in common with their manufactured brethren: once sold, they left the purview of their sellers. As with products, future responsibility for them was farmed out to someone else, preferably in Bangalore. Calling these things products made it possible, maybe even mandatory, to treat them as such. The only "service" left in the equation was the "servicing" of the loans, which itself was a euphemism for collecting.

Calling these loans Ninas feminised them, made them seem cute, charming, a little naughty, perhaps, but not criminal. Just as referring to the whole class of loans as "sub-prime" avoided the unpleasantness of the reality that they were junk. It's like describing someone on his deathbed as "sub-well".

When things started going bad, the language started getting even cuter. A year ago, we were told that the main cause of the crisis was the crushing burden of "toxic assets" - home mortgages lent to borrowers who could afford to pay them off just as soon as pigs filed flight plans. That's why three-quarters of a trillion dollars went from the US treasury into the Troubled Assets Relief Programme, or TARP (reassuring, isn't it? A safe plastic covering, in capital letters), supposedly to get these toxic assets off the books of the banks. In fact, entirely something else happened with the money, and with the language. While the federal funds became a simple cash infusion into favoured banks, the word "toxic" was nudged aside in favour of "troubled". Really. The assets were now to be seen as delinquent youths, their faces smudged with dirt, their clothes tattered but their souls still full of potential. It wasn't really their fault. They didn't need to be wiped off the books, just . . . understood.

Where were those assets supposed to go? Many officials proposed the notion of a "bad bank". Again, just a miscreant, like the dog that poops on the living-room carpet. Bad bank! Sit over there in a corner and think about those stinky mortgages you're collecting! It's a rolled-up newspaper to your noggin if you try it again. Of course, the main thrust of this particular euphemistic gambit was a brave attempt to convince us that there was, by contrast, such a thing as a good bank. Nice try.

When you want your euphemising to be particularly opaque, you go French. Hence, "tranche". Look it up and the dictionary will tell you it means "slice", but that sounds like something that's done in a delicatessen, parcelling out thin portions of pastrami to the waiting rye bread. That's not what sophisticated gents (and ladies) in bespoke suitings do inside Important Offices. The desired effect of tranche was to induce a tranche-like state, in which investors would come to assume that the people slicing up pieces of bad mortgages actually knew what they were doing.

This leads us to "securitising", which is to securing as "believitising" is to believing. In fact, believitising would be the creation of exactly the level of credulity this stuff called for; unfortunately, nobody bothered to coin that word until just now. The essence of securitising was persuading the financial ratings companies, by means as yet unknown, that a collection of slices of crappy mortgages (or a slice of a collection, take your pick) could be an AAA-grade investment. Those letters are themselves a kind of linguistic shorthand, as what they're really saying is: "Of course, this posits a new scale on which, if securitised mortgage packages are AAA, a truly secure investment would be ratedAAAAAAAAAAAAAAAAAAAAA+++." That is, it would be ratingised.

When the market tumbled a year ago, there was an uptick within a few weeks. That started a discussion about whether or not this was a "dead cat bounce", the short-lived surge upward before the destined plummeting resumes. When I first heard the phrase, I thought it was the name of a particularly inelegantly titled 1940s dance tune. But no, it's an example of financial malphemism, in which a mere reversal of market direction is depicted as an act of cruelty to animals - the dropping of an expired (or soon-to-be-expired) feline for the purpose of measuring gravity's effect on its air-worthiness. The deliberate crudity of the phrase probably reflects its origins among short-sellers and their contempt for any sign of hope.

Which brings us to the pedlars of positive thinking, among whom "green shoots" have contended with "glimmers of hope" as the optimistic usage of choice. "Green shoots" implies an organic process of growth, outside human control, but dependent on the season. "Glimmers" are more promising, requiring neither a green thumb nor the right time of year to make their appearance. This phrase has been a par­ticular favourite of the US treasury secretary, Timothy Geithner. Visualising these glimmers became for him almost an evangelical enterprise. Were they just an aurora geithnerealis, or were they signs of a true recovery? Don't ask, brothers and sisters, just believe.

And then there is the word tossed around blithely by CEOs and financial journalists alike, designed to drain all the dread out of one of the most frightening consequences of economic slowdown. That word is "shed" - not as in the little building out back where you keep your tools, but as in what prudent companies do to jobs. We've not been experiencing the widespread throwing of people out of work recently, just the shedding of jobs.
The word makes the process sound all National Geographic, like what snakes do with their skins every whenever. But its progress has not yet led it to the scene of the actual transaction: "Bill, we value your contribution to the company over the years. I'm sorry, but we're going to have to shed you." No, "let you go" still is the go-to euphemism. Which raises the question: "But what if I don't want to go?" We're still letting you do it.

Contemplating these linguistic tricks inspired me. I have written songs around them, including "Bad Bank", "Troubled Assets", "Dead Cat Bounce" and "Glimmers of Hope". They appear online as part of a collection of compositions about the meltdown, named after the two contending forces in stock markets: Greed and Fear. It was an act not so much of composing, frankly, as of songitising.

Harry Shearer plays more than 12 characters in "The Simpsons" and was Derek Smalls in "This is Spinal Tap". For more information, visit his website.

This article first appeared in the 07 December 2009 issue of the New Statesman, Boy George

Wikimedia Commons
Show Hide image

The secret anti-capitalist history of McDonald’s

As a new film focuses on the real founder of McDonald’s, his grandson reveals the unlikely story behind his family’s long-lost restaurant.

One afternoon in about the year 1988, an 11-year-old boy was eating at McDonald’s with his family in the city of Manchester, New Hampshire. During the meal, he noticed a plaque on the wall bearing a man’s face and declaring him the founder of McDonald’s. These plaques were prevalent in McDonald’s restaurants across the US at the time. The face – gleaming with pride – belonged to Ray Kroc, a businessman and former travelling salesman long hailed as the creator of the fast food franchise.

Flickr/Phillip Pessar

But this wasn’t the man the young boy munching on fries expected to see. That man was in the restaurant alongside him. “I looked at my grandfather and said, ‘But I thought you were the founder?’” he recalls. “And that’s when, in the late Eighties, early Nineties, my grandfather went back on the [McDonald’s] Corporation to set the history straight.”

Jason McDonald French, now a 40-year-old registered nurse with four children, is the grandson of Dick McDonald – the real founder of McDonald’s. When he turned to his grandfather as a confused child all those years ago, he spurred him on to correct decades of misinformation about the mysterious McDonald’s history. A story now being brought to mainstream attention by a new film, The Founder.


Jason McDonald French

“They [McDonald’s Corporation] seemed to forget where the name actually did come from,” says McDonald French, speaking on the phone from his home just outside Springfield, Massachusetts.

His grandfather Dick was one half of the McDonald brothers, an entrepreneurial duo of restaurateurs who started out with a standard drive-in hotdog stand in California, 1937.

Dick's father, an Irish immigrant, worked in a shoe factory in New Hampshire. He and his brother made their success from scratch. They founded a unique burger restaurant in San Bernardino, around 50 miles east of where they had been flogging hotdogs. It would become the first McDonald’s restaurant.

Most takeout restaurants back then were drive-ins, where you would park, order food from your car, and wait for a “carhop” server to bring you your meal on a plate, with cutlery. The McDonald brothers noticed that this was a slow, disorganised process with pointless costly overheads.

So they invented fast food.

***

In 1948, they built what came to be known as the “speedy system” for a fast food kitchen from scratch. Dick was the inventor out of the two brothers - as well as the bespoke kitchen design, he came up with both the iconic giant yellow “M” and its nickname, the “Golden Arches”.

“My grandfather was an innovator, a man ahead of his time,” McDonald French tells me. “For someone who was [only] high school-educated to come up with the ideas and have the foresight to see where the food service business was going, is pretty remarkable.”


The McDonald brothers with a milkshake machine.

McDonald French is still amazed at his grandfather’s contraptions. “He was inventing machines to do this automated system, just off-the-cuff,” he recalls. “They were using heat lamps to keep food warm beforehand, before anyone had ever thought of such a thing. They customised their grills to whip the grease away to cook the burgers more efficiently. It was six-feet-long, which was just unheard of.”

Dick even custom-made ketchup and mustard dispensers – like metal fireplace bellows – to speed up the process of garnishing each burger. The brothers’ system, which also cut out waiting staff and the cost of buying and washing crockery and cutlery, brought customers hamburgers from grill to counter in 30 seconds.


The McDonald brothers as depicted in The Founder. Photo: The Founder

McDonald French recounts a story of the McDonald brothers working late into the night, drafting and redrafting a blueprint for the perfect speedy kitchen in chalk on their tennis court for hours. By 3am, when they finally had it all mapped out, they went to bed – deciding to put it all to paper the next day. The dry, desert climate of San Bernardino meant it hadn’t rained in months.

 “And, of course, it rained that night in San Bernardino – washed it all away. And they had to redo it all over again,” chuckles McDonald French.

In another hiccup when starting out, a swarm of flies attracted by the light descended on an evening event they put on to drum up interest in their restaurant, driving customers away.


An original McDonald's restaurant, as depicted in The Founder. Photo: The Founder

***

These turned out to be the least of their setbacks. As depicted in painful detail in John Lee Hancock’s film, Ray Kroc – then a milkshake machine salesman – took interest in their restaurant after they purchased six of his “multi-mixers”. It was then that the three men drew up a fateful contract. This signed Kroc as the franchising agent for McDonald’s, who was tasked with rolling out other McDonald’s restaurants (the McDonalds already had a handful of restaurants in their franchise). 

Kroc soon became frustrated at having little influence. He was bound by the McDonalds’ inflexibility and stubborn standards (they wouldn’t allow him to cut costs by purchasing powdered milkshake, for example). The film also suggests he was fed up with the lack of money he was making from the deal. In the end, he wriggled his way around the contract by setting up the property company “McDonald’s Corporation” and buying up the land on which the franchises were built.


Ray Kroc, as depicted in The Founder. Photo: The Founder

Kroc ended up buying McDonald’s in 1961, for $2.7m. He gave the brothers $1m each and agreeing to an annual royalty of half a per cent, which the McDonald family says they never received.

“My father told us about the handshake deal [for a stake in the company] and how Kroc had gone back on his word. That was very upsetting to my grandfather, and he never publicly spoke about it,” McDonald French says. “It’s probably billions of dollars. But if my grandfather was never upset about it enough to go after the Corporation, why would we?”

They lost the rights to their own name, and had to rebrand their original restaurant “The Big M”. It was soon put out of business by a McDonald’s that sprang up close by.


An original McDonald restaurant in Arizona. Photo: Flickr/George

Soon after that meal when the 11-year-old Jason saw Kroc smiling down from the plaque for the first time, he learned the true story of what had happened to his grandfather. “It’s upsetting to hear that your family member was kind of duped,” he says. “But my grandfather always had a great respect for the McDonald’s Corporation as a whole. He never badmouthed the Corporation publicly, because he just wasn’t that type of man.”

Today, McDonalds' corporate website acknowledges the McDonalds brothers as the founders of the original restaurant, and credits Kroc with expanding the franchise. The McDonald’s Corporation was not involved with the making of The Founder, which outlines this story. I have contacted it for a response to this story, but it does not wish to comment.

***

Dick McDonald’s principles jar with the modern connotations of McDonald’s – now a garish symbol of global capitalism. The film shows Dick’s attention to the quality of the food, and commitment to ethics. In one scene, he refuses a lucrative deal to advertise Coca Cola in stores. “It’s a concept that goes beyond our core beliefs,” he rants. “It’s distasteful . . . crass commercialism.”

Kroc, enraged, curses going into business with “a beatnik”.


Photo: The Founder

Dick’s grandson agrees that McDonald’s has strayed from his family’s values. He talks of his grandfather’s generosity and desire to share his wealth – the McDonald brothers gave their restaurant to its employees, and when Dick returned to New Hampshire after the sale, he used some of the money to buy new Cadillacs with air conditioning for his old friends back home.

“[McDonald’s] is definitely a symbol of capitalism, and it definitely sometimes has a negative connotation in society,” McDonald French says. “If it was still under what my grandfather had started, I imagine it would be more like In'N'Out Burger [a fast food chain in the US known for its ethical standards] is now, where they pay their employees very well, where they stick to the simple menu and the quality.”

He adds: “I don’t think it would’ve ever blossomed into this, doing salads and everything else. It would’ve stayed simple, had quality products that were great all the time.

“I believe that he [my grandfather] wasn’t too unhappy that he wasn’t involved with it anymore.”


The McDonald’s Museum, Ray Kroc’s first franchised restaurant in the chain. Photo: Wikimedia Commons

Despite his history, Dick still took his children and grandchildren to eat at McDonald’s together – “all the time” – as does Jason McDonald French with his own children now. He’s a cheeseburger enthusiast, while his seven-year-old youngest child loves the chicken nuggets. But there was always a supersize elephant in the room.

“My grandfather never really spoke of Ray Kroc,” he says. “That was always kind of a touchy subject. It wasn’t until years later that my father told us about how Kroc was not a very nice man. And it was the only one time I ever remember my grandfather talking about Kroc, when he said: ‘Boy, that guy really got me.’”

The Founder is in UK cinemas from today.

Anoosh Chakelian is senior writer at the New Statesman.