It can be interesting to watch the evolution of a word or a phrase as it emerges from the cocoon of a community of specialists and becomes part of the popular discourse. “Leveraging” is a good recent example. In banking circles, it used to connote using tangible assets to get credit for much larger amounts of assets, at least on the company books, that then, in their totality, enabled the player to conduct his business on a larger scale than would have been the case if he had felt constrained to work with only those assets he really possessed. Like a man moving a rock with a crowbar, it was a term for a fiscal force multiplier.
The basic idea of credit, of course, is essential if you want new startups and expansions of existing ones. The term “leveraging”, however, became a kind of code word within the upper reaches of high finance to cover the emergence of ever fancier fiscal devices that tended less toward expansion of the economy as such, and more toward refined ways of extracting money from the many for the benefit of the few. For quite a few years, these refinements were understood only by the privileged cognoscenti and worked pretty well. Some of the maestros of high finance who ran these shenanigans got greedy, however, and crossed a fine moral line between helping themselves by helping society, and just helping themselves. Worthless paper was “bundled” and sold to the unsuspecting many as if it had more value. The bubble burst, banks went broke, and here we are.
The foregoing is an amateurish analysis, and no doubt flawed, but it is enough to set the stage for my main point, which is what has happened to the word “leveraging”. I was never a banker and I seldom if ever heard the term used except in the Physics 101 sense until fairly recently, when the banks started to collapse and the media discovered it. From a term reserved to a smallish community of specialists it morphed into a bit of jargon (along with “bundled”) that the media pounced on to show their sagacity, and from there on to the vocabulary of the average layman.
One can hope that term will morph right back again if we can settle on a decent way of preventing this kind of excess from recurring, but that is a pretty big “if”. Meanwhile, to the extent that the popularity of term results from public realization that ordinary people have been mulcted, let’s hang on to it.