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The Democratic Strategist

Political Strategy for a Permanent Democratic Majority

Meltdowns and Morality

As we all watch anxiously to see what the various maneuvers of the Fed and the Treasury and Wall Street mean for the rest of us, Matt Yglesias has made a simple but profound point that tends to get lost at times like these:

Unlike the guy who runs Lehman Brothers, the guys who clean the bathrooms in the Lehman Brothers office have, as best one can tell, been doing an excellent job. And yet if the company going under results in everyone involved losing their jobs, the guy who runs Lehman will wind up being better off than the guys who clean the bathrooms. This is because in the United States of America, hard work is the way to get ahead.

This probably sounds like Marxist demagoguery to most conservatives, but Matt’s not arguing for a dictatorship of the proletariat; he’s simply drawing attention to the fatuous nature of moral arguments for free-market ideology.
You can make a good argument that capitalism is far and away the best vehicle yet invented by the human race for the creation of wealth, and wealth, up to a point, does typically trickle down enough so that most people can have access to food, shelter and consumer durables. But unregulated capitalism also tends to produce large booms and busts, with the latter wreaking havoc on people without significant capital assets. And this havoc has little or nothing to do with personal merit, hard work, faith, love of family, or other fine bourgeios qualities. To cite the most extreme example, the (roughly) three of ten Americans thrown out of work during the Great Depression didn’t suddenly lose their work ethic, and it’s hard to argue that they were being punished for any collective sins of self-indulgence, either; those generally were found on Wall Street and amongst the free-market ideologues of the Hoover Administration.
Some conservatives today hold a thinly-disguised opinion that the victims of the housing meltdown were pretty much responsible for their own troubles: they accepted mortgages they weren’t sure they could handle, or gambled on ever-higher home prices to keep them ahead through equity borrowing or resale profits. Never mind that real estate speculation is the national pastime, the most prevalent form of asset-building, and the factor that in the early-to-mid 1980s and from the 90s until quite recently, separated the upwardly mobile sheep from the struggling middle-class goats.
But the impact of a broader market meltdown, of the sort we all fear today, is hard to dismiss as a punishment of the morally deficient. Falling stock prices hit the assets of precisely those righteous, organized savers and investors that conservatives laud so consistently. And a credit crunch, not to mention widescale business failures and rising unemployment (compounding the effect of skyrocketing health care premiums and energy costs), devastate all sorts of people living lives that are, according to conservative ideology, the bedrock of western civilization.
It’s hardly a novel observation that government regulations, a social safety net, and the collective will to override markets when they produce perverse economic and social results, have repeatedly saved capitalism from its excesses. But I can’t recall a recent time when there was such a vast and unsustainable gap between the Republican Party’s commitment to the Golden Calf of unregulated capitalism, and its commitment to “traditional morality,” religious and secular, holding that a life lived well should produce a good life.
So we should think about the janitors of Lehman Brothers, and all sorts of good people who will suffer from the financial meltdown without personal fault. And so, particularly, should “values voters.”

2 comments on “Meltdowns and Morality

  1. bacaangel on

    If McCain can so easily and readily lie to you without blinking, how can you believe him when he tells you ANYTHING! You can’t. A man’s word is his bond. You just can’t trust McCain to be honest, nor his running mate Sarah Palin.
    John McCain — “he walked the anti-regulatory party line, with only occasional exceptions…and tried to lay down a smokescreen of righteousness by campaigning against small potato[e!]s like legislative earmarks–money to study the mating habits of, uh, crabs, in, uh, Alaska (proposed by Governor Honorable).” Joe Klein

  2. sporcupine on

    Three core principles for the Democratic party:
    1. Capitalism works best with honest book-keeping.
    2. We owe our children appropriate vaccinations, decent nutrition, and adequate education.
    3. Making the world safer for democracy is, in fact, our job.
    Once again, the Republicans have forgotten that the honest book-keeping thing means regulation. The regulation that has meant what Mario Cuomo described years ago as “the longest sustained prosperity in the known universe.”
    Being Democrats, it’s our job to clean up the mess they’ve created again. Not by abolishing or undermining capitalism. By making sure that publicly traded customers are more careful with stockholders money than they are with their own money at the poker table. By protecting capital from gamblers, thieves, and Phil Gramm.


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