Blaming our nation's financial crisis on Wall Street is easy to do. And perhaps partly necessary. But it is incomplete. Not that any politician would do so in an election year, but some blame also needs to laid upon the American people. Yeah, that's right. Joe Six Pack. Hockey Moms. The folks who live on Main Street and who shop at Home Depot. You betcha.
You see, we Americans like to spend money. We don't like to cut back. The word sacrifice is something we want our war hero politicians to have, but nothing that we want to touch ourselves with a ten foot pole.
George Will touched on this a few days ago:
We are waist deep in evasions because one cannot talk sense about the
cultural roots of the financial crisis without transgressing this
cardinal principle of politics: Never shall be heard a discouraging
word about the public.
Concerning which, a timeless political trope is: Government should
budget the way households supposedly do, conforming outlays to income.
But the crisis came partly because so many households decided that it
would be jolly fun to budget the way government does, hitching outlays
to appetites.
Bethany McLean also did so, on the pages of The New York Times:
I’ll say this upfront: I hope the titans of finance who expect us
little people to save them are ashamed of themselves. But at the same
time, in painting Main Street solely as a victim of a rapacious Wall
Street, we are being hypocritical.
We are all to blame.
. . . .
But who made the decision to
take on that mortgage she couldn’t really afford? Who lied about her
income or assets in order to qualify for a mortgage? Who used the
proceeds of a home equity line to pay for an elaborate vacation? Who
used credit cards to live a lifestyle that was well beyond her means?
Well, you and I did. (Or at least, our neighbors did.)
In response to a post by John Petty (whose blog Progressive Involvement is worth reading) – in which he (wrongly, in my opinion) assails any attempt to blame borrowers for our current crisis – I made the following comment:
From the top down (or the
bottom up?) we are not a country that knows much about sacrifice these
days. From our "need" to have cable or satellite television (at $100 a
month) to the first major war in our history accompanied by major tax
CUTS, we are a nation that resists making sacrifices. Many of my
friends and neighbors – and me, too – buy and consume things we don't
need and which we can't always afford.
I carry credit card debt – some of it is simple life needs, such as
baby formula and diapers. But some of it is fast food and books I won't
finish reading. And I can surely save money by making better decisions
on my groceries – clipping coupons, switching stores, eating less
expensive foods. But I don't do all I could. And I'm just like many
Americans who are living anywhere from slightly to dramatically beyond
our means . . .
The problem is not just on Wall Street. It's on Main Street, too.
And all this boils down to a moral crisis. We scream at our elected officials to cut our taxes, but then we get angry when bridges collapse. We buy bigger cars and huger houses, even though we can hardly afford them. We must buy brand labels, satellite television (with the MLB or NFL packages), multiple cars, the latest and greatest cell phone/MP3 player/swiss army knife gadget. We can't be bothered with the inconvenience of public transit – which we wouldn't support with our tax dollars, anyway.
Yes, this is a moral crisis. We have come to expect alot for a little, and now we're going to pay for it. As our country goes into debt, from whom does our government borrow money to patch up potholes? China. What happens when they turn off the credit spigot? And on a household level . . . what happens when we can't get that eighth credit card, or that car loan for a used car, or that education loan? What then? Will we then and only then consider buying generic, taking public transit, or advocating for increased federal support for education? Isn't that a little late?
We need to start now. Now with any bailout bill for Wall Street or Main Street, but by cutting down on our own credit card bills. Eat out less. Don't buy that extra bag of chips at the grocery store. Walk more. Drive less. Cancel cable television and listen to the radio. Get more life out of those old pair of shoes. Buy a $20 Timex rather than a $1000 Omega. You get the idea.
Change doesn't begin in the White House. It begins at home. Let's change our ways at home, first. Perhaps if the people lead, the leaders will follow . . .
The Lutheran Zephyr 
Thank you. Brilliant and bold.
Wendell Berry has been saying for years that this is a moral crisis.
But here is the real moral crisis: Today you and I got screwed. We got screwed so some house members could get some more pork. People should be really really pissed off. Not agitated. Pissed off. Like Boston Tea Party pissed off.
Good post! This is a tremendously complex problem but not one that was unforeseeable. One financial adviser on the radio here in DC predicted, in 2004, that the mortgage industry would collapse in 2008 because of the sub prime loans.
I think a more fundamental cause was and is the need for instant gratification. Why lay away when you can get a department store card? Why rent for a few years when you can get a mortgage now?
I find it interesting that a couple of years ago there was major bankruptcy law reform which was enacted by Congress to tighten up the provisions of the Bankrptucy Code because people were abusing it. ( I will concede that there were some who were). The result was it became much more difficult for individual debtors ( note- not commercial debtors) to obtain relief. Because it “should not be easy to get a bailout and walk away.” This was the cry of lenders. Complex forms and nitpicking every cent for average people to see if they deserved relief. Yet here we are now with these same finanical institutions moaning about, and getting relief they were adamant should be denied others. Chris, well stated, and Sam is right about instant gratification, to which I would add, instant solution. There is an alarming ethos at work at many points on the spectrum.
Every time we use plastic, the card companies make a percentage from both you and the vendor. So why are the banks and credit companies hurting? But we’re encouraged to use our cards, and I do, but mostly just the bank card, yet I know that there is that hidden fee.
My credit card company tried to “sell” me a free $8000 check last week when I had to call them to activate a card.
The home dec shows tell us normal houses aren’t good enough.
And wages aren’t keeping up with “expectations.” My son is one of three “managers” in a large chain store of home improvements stuff. His wage is so low that he didn’t buy the health insurance, which isn’t smart either. But he earns less than people who clean houses for a living. He needed a college degree to get this job. He has to be there years to get bonuses.
You make a good point, Chris, as far as it goes. Yes, there is a lot of blame to go around. Yes, I have probably benefited from what has been going on, even without a subprime mortgage or a credit card balance.
Cutting back cable, vacations and fancy chips may be a solution for the middle class (all praise be to us). But what about the people who already look at military service as their college savings plan, who have to sit at the kitchen table and figure out if they’ll pay for food, medicine or heat, who can’t get college loans (which are probably less of a good idea now, anyway)? In the midst of this plenty a lot of people have been hurting, and now they’re really screwed.
It is a moral crisis, that goes beyond moderating the obvious greed of recent years (or, as you so charitably put it, expecting a lot for a little). If God has truly given us enough for all, if we really believe in sufficiency rather than scarcity, then we need make sure everyone gets enough. And that’s another area where we’re going to have to lead house by house, neighborhood by neighborhood.
Did you hear Sarah Palin call on Americans to save, not spend in the vice-presidential debate? It was the first time I have ever heard that out of a politician’s mouth. I notice no one is replaying that little clip.
Amen. I find that the more we use the word “they” the easier it is to pretend that “we” are not complicit in this mess.
Just as “they” never come to worship. “They” can’t be trusted to teach Sunday School. “They” might want to find a different church. “They” want to ordain homosexuals. “They” are homophobic.
The sooner “they” become “we,” the sooner a lot of things will start getting right again.
Chris, this is really really good analysis. I was by and read it before but have not commented. just wanted you to know what I think.
C’mon Chris. This is not about putting diapers on your credit card, or eating out too much. You forget that the banks are making up to 30% interest on those diaper purchases, and it’s all perfectly legal. I’m all for personal responsibility, and I also know what kind of cover personal responsibility provides those who have loaded the dice, and marked the cards and then piously tell the losers that “they chose to play.”.