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The Federal Reserve's most recent policy move is simply a way of driving down interest rates. But how does it work? Sr. Producer Paddy Hirsch explains Operation Twist with a simple analogy. Karen Bleier/AFP/Getty Images
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Explainer: Fiscal hawks vs. fiscal doves

Paddy Hirsch Nov 14, 2013
The Federal Reserve's most recent policy move is simply a way of driving down interest rates. But how does it work? Sr. Producer Paddy Hirsch explains Operation Twist with a simple analogy. Karen Bleier/AFP/Getty Images

The descriptors Hawk and Dove are usually applied to people who take a position on foreign policy matters, and particularly on the use of force. A hawk is a bird of prey, while a dove is the symbol of peace.

Foreign policy hawks advocate aggression and spending money on military intervention, while doves disagree and argue for peace and dialogue.

But when it comes to finance, the positions are reversed.

The fiscal dove is the interventionist: He or she argues that we should pump money aggressively into the system, borrow as much as we can, and spend our way to recovery. The fiscal hawk, on the other hand, is much more reticent. He or she argues against intervention: Cut spending! Borrow less! Reduce the deficit!

So why are the reluctant interventionists called hawks? Maybe it’s because they’re more likely to be conservative – as are people who argue for use of force.

I like to think it has to do with the way they look.

Doves are pretty creatures that look like they’re smiling all the time. In foreign affairs that translates to, “Let’s not fight, let’s talk!” And in fiscal matter, “Sure you can have some more money, we’ve got plenty. And if we run out, hey, we’ll just print a bit more!”

Hawks on the other hand look stern and forbidding. In foreign affairs that means “Get off my lawn, or I’ll rip your eyes out!”

And in fiscal affairs, “No you can’t have any more spending money. In fact, I’m cutting our spending. And reducing our credit line. And those after school programs!”

In other words, fiscal hawks are aggressive – in tearing stuff up!

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