One of the submerged but very important political battles of our era is between those who look at the financial and economic crisis of 2008-09 and see many working people losing their jobs and far more losing their meagre wealth, and those who look at the same phenomena and see non-credit-worthy, incompetent Homers getting their just deserts. We see the divide pretty starkly in a Kevin Drum comment on a Paul Samuelson column. Here’s the key assertion in the latter:
[T]he financial crisis and Great Recession are typically blamed on the miscalculations and greed of financial institutions and their overlords. There is much evidence for this, but it ignores the deeper cause: an intellectual, political and social climate that legitimized lax lending policies in the name of promoting middle-class well-being.
In other words, the Wall Street wolves’ only screw-up was excessive generosity to the unwashed, who didn’t deserve to be homeowners. Here’s Kevin’s take:
For more than a decade, income gains have been going almost exclusively to the rich; the housing bust, by contrast, was a calamity mostly for the working and middle classes; and government aid programs have been aimed largely at rescuing the financial sector and (in a pinch) helping the poor. The middle class folks thrown out of work have gotten a few grudging extensions of our meager unemployment insurance and a slight expansion of our meager disability system, but that’s about it.
Next time you hear someone argue our differences of opinion in this country are minor, and that partisan differences are vastly exaggerated, you might want to ask them if they think the people most hurt by the Great Recession are object lessons in virtue defrauded or vice punished. It has unfortunately become a Rorschach Test for the chattering classes.