Intellectual Usury Feels Good, at First
Occasionally people ask me why I'm so hard on New York Times columnist David Brooks, who some find quite insightful and others so irrelevant they can't understand why I get angry at all.
At last, I've found a way to explain it. It's all there in his column of today, "The Culture of Debt." I'm sure that many of my correspondents will find the column reasonable on first reading. Yet it captures everything that is wrong with this man and his ideas -- and maybe with readers who believe him.
Brooks, a self-described conservative and sometime practitioner of "comic sociology," author of On Paradise Drive and creator of the all-American working-class "patio man," knows he has to say something about the devastation raging through countless recently-viable neighborhoods like the one in Cleveland featured on Bill Moyers' Journal last Friday night.
Brooks knows that millions of the very homeowners he's been rhapsodizing may lose not only their present homes but any prospect of owning homes again. But he never comments honestly on information such as that presented by The Nation economics editor William Greider and public officials in Ohio, in one of the most riveting and instructive Moyers shows I've ever seen.
Brooks makes what we have to presume was an individual, moral decision to deflect the truth and, indeed, to lie. To do it, he shifts from comic sociology to pathetic sociology: With great sobriety, he wrist-slaps predatory lenders, but he really sticks it -- more in sorrow than in anger, of course -- to the hapless, desperate homeowners who sat in their own living rooms listening respectfully to smooth talkers they'd invited in to offer them fistfuls of "cash back" in return for signing their savings and hopes away.
Citing a Times story about a woman whose home was foreclosed in a tsunami of predatory lending, Brooks frets that Times readers posting comments on whom to hold accountable have been talking past each other: Blame the predatory lenders, one side says. No, says the other side, blame homeowners who lacked enough grown-up self-restraint to say, "I can't do this deal," or "I'd better not go there."
Brooks, fresh from deep reckonings in sociology and political philosophy, announces a way out of this either/or debate by proclaiming a "third position... held in overlapping ways by liberal communitarians and conservative Burkeans." (Whenever he does this, he's about to drown some truths in euphemisms and plausible half-truths like the ones predatory lenders tell.)
Brooks' truism-drenched "third position" starts "with the notion that... individuals don't build their lives from scratch. They absorb the patterns and norms of the world around them. Decision-making -- whether it's taking out a loan or deciding whom to marry -- isn't a coldly rational, self-conscious act. Instead, decision-making is a long chain of processes, most of which happen beneath the level of awareness. We absorb a way of perceiving the world from parents and neighbors. We mimic the behavior around us. Only at the end of the process is there self-conscious oversight.
"According to this view, what happened to [the borrower who was dispossessed], and the nation's financial system, is part of a larger story. America once had a culture of thrift. But over the past decades, that unspoken code has been silently eroded."
So blame the culture. Blame the individual decision makers. Blame both. And be sure to step back and remember that the individual and the society are interdependent. This is a shell game on the edge of an abyss, and since Brooks chatters on about our individual responsibility for eroding norms, let's hold him individually responsible for his decision to play this game.
1. Brooks lies about how the devastation occurred. An "unspoken code has been silently eroded," he reveals. Silently, David? Marketers of all kinds have spent billions for 40 years telling Americans they deserve a break today and that marketers from McDonald's and credit-card companies to mortgage lenders will give it to them instantly.
This has been the most monumental, unrelenting, intrusive, mindless and therefore irresponsible campaign in history to destroy a culture, barring perhaps the fascist and communist propaganda juggernauts and worse of the 1930s. We are destroying neighborhoods. We are destroying hearts and minds. Our governments are in on it, not just via de-regulation but via lotteries and big bailouts to shareholders who are never held responsible for their individual decisions to back these scams.
What else does Brooks need to know before he'll make his own responsible decision to write that decency hasn't "silently eroded" but has been clamorously assaulted? Hello? Last year in New Haven, we wound up saying "Hello?" four or five times an evening during the dinner hour to callers from local mortgage lending companies. How hard is it for David Brooks to imagine that poorly-educated people, desperate for cash and barely meeting their mortgage payments, would take those calls?
Brooks makes sure to finger, ever so deftly, the specific, real-life weaknesses and moral lapses not of those people who made decisions to design, invest in, and conduct these assaults, but of the woman in the Times story, who, "after her divorce,... went on a shopping spree to make herself feel better." He tells us nothing about shopping habits and decisions of her many white-collar assailants. Why not?
Ever since I wrote The Closest of Strangers after spending the better part of a decade in black north and central Brooklyn, I've had a reputation for not letting poor people off the hook for bad decisions that were ultimately, irreducibly, matters of personal responsibility. Drawing from intimate experience you can read about in the book, I've rebuked some liberals for refusing to pay disadvantaged people the elementary compliment of holding them to the same standards of decency and self-control to which they'd hold their own children. I don't need cheap sociology from Brooks; I need the candor of a talented writer's honest reflections.
2. Brooks lies about the true sources of the devastation. With caveats and cameos, he keeps readers focused on the erosion of norms among us all. There were no "pushers" behind this process. But, in truth, It was unleashed by corporate capital and, politically, by the Republican Party, whose deregulatory, bailout, and other corporate-welfare tactics Brooks has defended shamelessly for a decade. (I'm not letting Democrats off the hook; Chuck Schumer, as a New York Senator, played a big role in deregulating Wall Street and the banks.)
3. Brooks lies about the fact that most of the individual decisions in this crisis were not made by homeowners. He's fastidious in noting that the foreclosed homeowner hasn't always behaved responsibly, be he doesn't find a single instructive anecdote to illustrate the irresponsibility of those who sought her out and zoomed in on her.
Why not? Brooks might tell you that he was quoting a Times story that didn't provide that information. (Surprise, surprise.) But I'll bet that that's not the reason. It's that he didn't even think of putting a spotlight on those people. This mental blank, astonishing in so astute a social observer, amounts to a lie, because it's derivative of his lying about where and how to hold people accountable for the collapse.
Brooks doesn't tell us about, say, the stressed and, yes, morally irresponsible telemarketer who signed on to accelerate the storm. Not a word about the individual irresponsibility of the mortgage executive and his consultants and lawyers who designed the campaign, or about the sharpie salesmen who visited the homes whose equity they were about to steal while sitting politely on the targets' sofas, or of the bankers who bought up the mortgages and foreclosed. Nothing about politicians, fed by all these predators, who eased the miscreants' way in more ways than I can count.
Didn't these people make any of the individual decisions Brooks claims had ripple effects on social norms? How can a Burkean conservative be silent about this? When Brooks writes that a culture of responsibility has "silently eroded," isn't his own silence about that erosion part of the reason for it? What does he think his job is?
The closest he comes to telling the truth is in the following paragraph, which begins by blaming both sides equally, if euphemistically, for irresponsible decisions. But tell me who you think Brooks expects you leave the paragraph blaming -- and then watch the Bill Moyers Journal segment, please, and see how he is lying:
"McLeod [a foreclosed homeowner] and the lenders were not only shaped by deteriorating norms, they helped degrade them. Despite all the subterranean social influences, there still is that final stage of decision-making when individual choice matters. Each time an avid lender struck a deal with an avid borrower, it reinforced a new definition of acceptable behavior for neighbors, family and friends. In a community, behavior sets off ripples. Every decision is a public contribution or a destructive act."
Again, notice how this has been tilted. Brooks doesn't wonder about predatory lenders' and countless other marketers' own shopping sprees, stealing sprees, or other compulsions. "Norms changed," he shrugs, "and people began making jokes to make illicit things seem normal. Instead of condemning hyper-consumerism, they made quips about 'retail therapy'..." Oh, so that's what really happened.
On the Moyers show, William Greider offers a better explanation of how norms change and cultures decay: He describes the virtual repeal of laws against usury, the kind of predatory lending that, like loan-sharking, virtually enslaves desperate borrowers or squeezes them to death.
Brooks would rather keep us focused on the individual responsibility borne by homeowners and a few of the nastiest predatory lenders than he would make us notice the multi-billion dollar advertising campaign that promoted the culture of debt, or the massive deregulation and government bailouts that have made usury an unstoppable and devastating assault on the America he pretends to defend but on which he really just feeds, week after week. Where is the national greatness? Where is the social contract? Where, indeed, is the intellectual leadership?
The reason Brooks can't do better is that he is an intellectual usurer. He palms off dollops of Burke and Oakeshott, swathing the people who are destroying the American republic -- and all of us who are targets of their systemic depredations -- in bromides about a kind of moral responsibility which Brooks does not himself exercise.
His pseudo-scholarly ruminations flatter some readers and make others deferential, but they are always suspiciously easy to follow. They're the intellectual equivalent of "cash back" on an easy loan of false knowledge that leaves you feeling "had," empty-handed,and politically paralyzed. That is how Brooks makes his living: He charms you up the garden path toward a politics that is nowhere.
What perversity drives him to it, I don't know, but the crime itself cannot be doubted. How does this Burkean look at himself in the mirror? How do his employers and talk-show hosts look at themselves?
The Mortgage segment was devastating! I will have to go back and the two remaining segments. It is so depressing!
July 22, 2008 7:09 AM | Reply | Permalink
I don't know much about Brooks and care even less. But your article seems to be complete bullshit.
Snake-oil peddlers, patent-medicine quacks, used-car dealers, oriental rug salesmen, hucksters, quacks, quick buck artists, have been around FOREVER!! For God's sake, the Romans complained about them, Jesus complained about them!! I think it was P.T.Barnum who famously said "I never lost a nickel by underestimating the intelligence of the American Public".
Get a life. Get a real job.
July 22, 2008 7:23 AM | Reply | Permalink
offensivetoyou,
PT Barnum was supposed to ahve said "There's a sucker born every minute."
HL Mencken said 'Nobody ever went broke underestimating the intelligence/taste of the American public.'
Now go back to school and this time OPEN the books!
July 22, 2008 2:52 PM | Reply | Permalink
But that's not what I'll bet is the reason. It's that he didn't even think of putting a spotlight on those people. This mental blank is alie because it is derivative of his lying about where and how to hold people to account for what is happening.
Like most Republicans, it appears Brooks is a defender of ye olde tyme American norms "A sucker is born every minute" and "Caveat emptor", and is probably a closet believer in Social Darwinism as well. He doesn't blame the lenders, of course, because he thinks they are just doing what the hawkers of goods and services have always done: treat other people as objects and try to make a buck within the limits of the laws governing their marketplace. And he doesn't blame the deregulation of that marketplace, because he is a classical liberal who thinks the fewer rules the better. The aggressive and ruthless exploitation of others is part of the exciting dynamism and genius of of American capitalism. It is a bracing, rugged and socially improving competition which reveals natural winners and natural losers, and teaches the losers strict individual lessons in the school of hard knocks, which they will hopefully respond to by adopting the individualistic virtues one needs to thrive in American society. If they knew how to resist and fight off the blandishments of pitchmen and confidence artists, then they too could become winners who successfully exploit and profit from others, unlike the ignoble losers they are.
This is one kind of "conservatism" I guess. But it is only conservatism according to the weird notional standards of American society in which we classify classical "free to choose" liberals as conservatives. An older variety of conservatism started with the observation that people are naturally greedy, vicious and selfish. But rather than go on from there to the conclusion that we should harness all that viciousness by maintaining a free enterprise economy in which we derive aggregate public gain from private vices, they concluded you need law and governing power to restrain the anarchic and aggressive impulses of human beings, and bind them into an actual society.
July 22, 2008 7:25 AM | Reply | Permalink
Well put, thanks.
July 22, 2008 8:39 AM | Reply | Permalink
@ Dan K
Ever notice how many smokers there are? How many drug addicts? Drunks? Fat pigs? I was in a restaurant recently when four fats pigs walked in - daddy fat pig, mommy fat pig, 14 yr old daughter fat pig and 12 yr old sister fat pig. I watched them eat. It was so gross I had to leave with my meal half eaten.
The evils of alcohol, tobacco and drugs are well known. The habits are horribly expensive. Prohibition was tried. Many drugs are still illegal with severe penalties imposed for violation.
We've gone through I don't know how many business cycles and manias, all fueled by lust, greed, and too much credit. Countless laws have been written to try to control them. Muslims even banned rewarding lenders with interest. Within the last hundred years we watched what happened when people tried to eliminate private property and the market altogether.
And yet you learn nothing. You continue to think a bunch of smarty-pants, know-it-all, sanctimonious, do-gooders - just like yourselves - can reform human nature if only you can find a way to control everything and everybody.
I think there should be laws insisting on honesty, and transparency. I think education should be available for all to the extent they can absorb it, and as free as possible. I'm sure there are plenty of other societal controls I would agree with. But, at heart, I'm a social Darwinist. Openly. I don't like you or your philosophy. I'd sooner fight and cheat than see it imposed.
July 22, 2008 9:48 AM | Reply | Permalink
I'm a little concerned that you became so disgusted you couldn't finish your meal.....Did you hear voices in you head telling you to "kill them all"?
July 22, 2008 12:28 PM | Reply | Permalink
Dorn,
hahahaha
July 22, 2008 2:54 PM | Reply | Permalink
It's human nature for powerful individuals to keep gathering more power to themselves and to trod heavily on all the Peons they can control. They also have exaggerated ideas of their own abilities as leaders to know what is right for everyone else to do. This is called a tyranny. As I say, a tyranny is human nature.
Then you say "You continue to think a bunch of smarty-pants, know-it-all, sanctimonious, do-gooders - just like yourselves - can reform human nature if only you can find a way to control everything and everybody."
The funny thing is, the system of checks and balances that our smarty-pants, know-it-all, sanctimonious, do-gooders founding fathers built into the Constitution to force the tyrants to depend on input from the people they ruled over. The Constitution is exactly the kind of effort to overcome - not change, but overcome and prevent the worst abuses from tyrants. Much of what you call "human nature" comes from a social system that does not even try to meet the needs of the general population, just cater to the rich.
Just like the Constitution sets up checks and balances to prevent the abuse of power by would-be tyrants, a better designed social system can prevent many of the social bad effects of so-called human nature.
But you'll never believe that, of course. You are one of the would-be tyrants - you hope. And you, like Bush, Cheney and Addington, don't believe in the Constitution, either. Too restrictive on would-be tyrants.
July 22, 2008 2:28 PM | Reply | Permalink
Richard,
excellent post.
July 22, 2008 2:55 PM | Reply | Permalink
@ Richardxx
You're talking about the Marxist Founding fathers; Lenin, Trotsky, Stalin, Mao. With the notable exception of Tom Paine, ours were largely aristocratic gentry who positively abhorred populism and egalitarianism. But I can understand why you would make such a mistake.
July 22, 2008 11:19 PM | Reply | Permalink
@ Offensive
Good to see you admit to being a social Darwinist. I'd always thought of you as just a self righteous jerk. But you think you actually have a coherent, if abhorrent, philosophy. It gets me wondering why you have any interest in political debate. After all, politics is primarily about people joining together for mutual interest or to resolve mutual problems. A true social Darwinist wouldn't be interested in these sorts of activities. Perhaps you need to reconsider how you label yourself. You may really just be a self righteous jerk.
I just wonder how "socially Darwinist" you would be as you're sinking in quicksand and a few of us are standing around with rope, just watching.
Sorry for all the flaming, fellow postes, but I feel offended and want to lash out.
July 22, 2008 4:52 PM | Reply | Permalink
you say:
"I think there should be laws insisting on honesty, and transparency."
but then you say:
"I'd sooner fight and cheat...."
you are obviously an idiot and you don't even know what you think. let alone what it is you are so angrily disagreeing with.
July 22, 2008 7:04 PM | Reply | Permalink
What would Burke or Oakeshott or even Friedman think about mortgage salesmen who are mere middlemen in an over-leveraged risk pyramid of debt and thus have no incentive to care about the performance of the financial products that they are selling?
July 22, 2008 8:06 AM | Reply | Permalink
Perhaps the question would be this: Do they bother to think about that at all?
July 22, 2008 8:32 AM | Reply | Permalink
@BobFred2
They'd think about tulips.
July 22, 2008 9:22 AM | Reply | Permalink
Let me offer some considerations....
Isn't this a description of schooling behavior in fish, or mob behavior in general? It is indeed human nature to mirror what they see in others.
Before the advent of mass media such mirroring would be local and elicit feedback from other citizens. Today the mirroring is of people one will never see, or meet, often times people who escape the consequences of bad behavior. That can describe Linsay Lohan or the shareholders of Fannie Mae.
I think Brooks and Sleeper are right that both sides of failed transactions can be fingered, but miss the larger points of why we aren't the saving culture of the depression, or the productive culture of post WW2. We are now the "I want to be viewed as successful (with little apparent effort), like the people I see on TV," culture. Sadly that applies to both lender and borrower.
July 22, 2008 9:13 AM | Reply | Permalink
Predatory lendors were a problem, but so were applicants basically lying about their income to get a mortgage. The system allowed them to lie, but they knew they were lying at the same time.
July 22, 2008 9:18 AM | Reply | Permalink
If the income-tax reporting system allowed people to lie, they would. Oops, it does, sort of. And they do. So the system is also set up to make it harder to lie about income, as in requiring up-front documentation.
If we don't care how effecitve a system is we can leave it up to people to use it honestly or not. But if it leads to damage outside the system we will act to limit that damage. So we regulate banks to require them to have a minimum amount of funds to cover their deposits. We could also regulate mortgage originators to require more up-front documentation.
We can simply ask people to not lie about their income for acquiring a mortgage. Let me know how that works out. I guess we could throw them in jail if they are caught. Can we also jail the people that encourage lying?
A problem will arise in this scenario when there is no support for the applicant's income claims, (de facto crime), but also no evidence of verbal encouragement or alteration of numbers on the application. Guess which party will go to jail?
July 22, 2008 9:48 AM | Reply | Permalink
In many cases, banks didn't even bother to verify income or other details on mortgage applications.
Compound that with 0% down and you're in for a world of hurt.
In my state, you are required to use a lawyer for the closing - I do recall spending hours with my attorney going over the mortgage details - making sure the fees/rates were the same as in the original application. I knew what I was signing - the only surprise was that the grace period before my first mortgage payment was 60 days - I thought it was 30!
July 22, 2008 12:05 PM | Reply | Permalink
And yet, liar loans were under the guidelines set by the investors. The investors who bought the CDOs encouraged the mortgage brokers to sell their customers on lying about their income (You'll never get the loan if you don't, and everyone is doing it. I know what I am doing. Would I steer you wrong? Do you REALLY want that house?)
And as time went by, the investors loosened the standards even more, then never bothered to check on what the mortgage brokers were doing. Hey, how could they? A collaterized debt obligation would have thousands of mortgages in it, and the paperwork was not sent to the investor anyway.
That's called an unstable and unregulated system that is designed to fail. When the guys whose money is on the line don't care how good the underwriting is, you can't blame the home buyers from going along with what the system encourages.
Where were the grown ups? The experts who knew how the system worked and were so sophisticated that they didn't need regulation? Off living in their second, third or fourth home and bragging about how many millions they made last year. Oh, and paying lobbyists to lobby politicians like Phil Gramto remove all regulations from the financial industry. Remember Enron? It was just a small warning of what deregulation of he financial industry was leading to. So was Sunbeam and WorldCom, but Enron was the real classic. No regulation means the crooks run wild, and Gresham's law applies. Like bad money runs out good in the system, unrestrained crooks run out the people who are trying to do a good job.
The American banking system stinks from the top down.
July 22, 2008 2:42 PM | Reply | Permalink
I'm not sure why Sleeper is outraged.
It seems to me that he's agreeing with Brooks' premise -- namely, that mores govern (or at least influence and/or explain) just about every decision we make.
Brooks' article isn't primarily intended to explain how we became a nation of shoppers but rather the consequences thereof. Given an additional 983 words (The Times gave Brooks 777 words; Sleeper took 1760), perhaps, Brooks would have launched into a sociological analysis of how we got here. That he didn't can be excused by noting that it wasn't the subject of his essay.
July 22, 2008 10:48 AM | Reply | Permalink
I might add that Brooks has, in the past (six weeks ago) listed the malefactors -- in his words, the "agents of destruction."
State governments . . . aggressively hawk their lottery products . . . Payday lenders . . . seductively offer fast cash — at absurd interest rates . . . Credit card companies have . . . found that they can make money off the young and vulnerable . . . Congress and the White House . . . have always had an incentive to shove costs for current promises onto the backs of future generations. It’s only now become respectable to do so . . . Wall Street has played a role . . . what message do the compensation packages that hedge fund managers get send across the country?
The list could go on.
July 22, 2008 11:52 AM | Reply | Permalink
The lotteries, Payday lenders, subprime mortgages, high interest rate credit cards - they are all substitutes for saving in a climate in which saving is discouraged. Cam anyone collect interest on a secure savings instrument that beats inflation? That's even if you could collect it tax free, which is not often the case.
That six months of salary all the financial planners say you should have available for emergencies is always being worn down by inflation and bank fees.
That's the way the merchants and bankers want it. That way most of us stay in debt and have to work hard just to make the payments. No time for vacations, even if you got the minimal two weeks a year to take off. Keep working, keep building productivity, and the gains from productivity go to the wealthy, not the workers.
It's a system of exploitation, and the bankers and money men revised the bankruptcy laws so that fewer workers could escape the treadmill.
July 22, 2008 2:53 PM | Reply | Permalink
While it is difficult to get off the "treadmill," it is possible to refuse to get on in the first place.
Brooks' opinion piece is a response to Gretchen Morgenson's rather patronizing report of "Diane McLeod’s spiral into indebtedness." (For another view, see Tanta giving it to Morgenson and then, taking on Brooks for his phony nostalgia for the lost "culture of thrift."
But, in the end, we are still left with the question of whether consumers have sufficient free will and sufficient knowledge and intelligence to reject the blandishments of the "agents of destruction."
July 22, 2008 11:10 PM | Reply | Permalink
The answer is clearly no! Is there some reason people are being foreclosed on left and right other than they didn't have the capacity -- bracketing out the reasons why -- to recognize they were getting into a bad deal?
I mean, people are awesome, but if you've got a mortgage broker who knows he can sell a mortgage at a profit about five seconds after he gets some bad risk borrower to sign on, he's incentivized up the wazoo to convince the borrower he/she can pay back the loan. And even if the borrower is skeptical about his/her own ability to pay, the broker just says, "Oh don't worry -- home prices will rise forever, you'll be able to sell this baby at a profit if you get into trouble." And then, even if the borrower is still skeptical, there are -- or at least there were -- any number of quasi authoritative figures saying the same thing about home prices, relentlessly and passionately.
Calculated Risk has shown video clips of real estate boosters getting at least equal time on Cable TV going ape-sh!t on people who suggest that home prices might not continue to appreciate at an astronomical rate.
At a certain point, people start to buy the messaging they're receiving, especially when it's relentless. My impression is that this is hardly a controversial point among psychologists and ad buyers.
So -- I wouldn't put the point as emotionally as Sleeper does, but I agree that Brooks is wrong not to see how significantly the consumer's information landscape around real estate and mortgages was manufactured by people who had a financial interest in getting people and not just subprime borrowers to take on more than they could afford.
July 23, 2008 4:47 PM | Reply | Permalink
The force of relentless advertising of "easy credit" was not criticized by David Brooks or any other mainstream pundit until borrowers began to default on the loans. To be sure, borrowers have a lot to do with their own debts but they have nothing to do with the rapacious additional charges added to those debts by credit card companies and pay day lenders.
I do not remember Mr. Brooks pointing his finger at the lenders who abandoned the old fashioned values of vetting the credit worthiness of debtors for the heady profits of higher interest rates and debts bundled as securities. It was pretty obvious to me that the credit card and mortgage industries were after my business. New offers for credit cards sent to me have slowed but not stopped. Why not question that aspect of our current crisis?
July 22, 2008 11:06 AM | Reply | Permalink
You forgot Republicans.
"I never lost an election by underestimating the intelligence of the American Public". ...Karl Rove.
McCain, too, thinks Americans are dumb as dirt:
McCain blames high gas prices on Obama, claims all we have to do is drill to get energy independence. McCain and Dubya never bothered to tell us or do anything about it before. All McCain did is make this lying ass TV ad (as if we need another liar in the oval office): link
July 22, 2008 11:27 AM | Reply | Permalink
How helpful! You admit not knowing what you're talking about, yet you are kind enough to dismiss thoughtful and informed analysis (flawed as it may well be) as "bullshit." Thanks of the illuminating contribution.
July 22, 2008 11:35 AM | Reply | Permalink
A great article, actually. No, it hasn't always been quite this way. Some of us are old enough to remember a different climate.
To those of you who don't get it, apparently the majority here, no, he's NOT agreeing with Brooks. The money graf of Sleeper's argument is here:
Yes, the borrowers have some moral responsibility too, but Sleeper's point is that the the banks, the credit card companies, the lenders bear more, much more. And he's right.
The point is not lost on those who can remember the day when the top ranking CEO's made 20x the salary average worker instead of 20000x, when McMansion ostentation was frowned upon and not the norm all were taught to aspire to.
Sleeper mentions lotteries. A good point. Those who can't remember when state lotteries were introduced may not know the arguments that were made at the time to justify them:
"those people" will always play the numbers rackets anyway, it was said. Better to harness this drive behind "worthy social purposes" like education. It was not long after that argument won the day that the benevolent backers of these worthy social purposes were hawking the lottery to the poor as the "poor man's bank". And of course, the bait and switch on the "worthy social purposes" as the lottery funds became a replacement to social spending rather than an augmentation.
Mores have decayed, but the key point is the people who like to sneer at the mores of the poor are the pushers who sold them their debased mores.
Do as I say, not as I do is the order of the day.
Now that it appears likely that the Democrats may actually win the presidency, I think, and it sounds like Sleeper thinks, that we need to think about these issues. They are the direction in which we need to move.
July 22, 2008 11:38 AM | Reply | Permalink
. . . Sleeper's point is . . . .
Unfortunately, his point isn't responsive to Brooks' point.
July 22, 2008 12:03 PM | Reply | Permalink
Disagree, Ellen. Just above the point in the previously identified money graf is this:
Brooks is throwing up his hands, sadly, at the "erosion of the moral code." Sleeper is naming the people primarily to blame for that erosion.
Why so coy, Ellen? I don't think I'm telling you anything you don't know.
July 22, 2008 12:26 PM | Reply | Permalink
sTiVo,
Brooks should have thrown up his hands when Reagan was President. Reagan put the sharks in the water with his; Government is the enemy, get government off our backs, deregulation, deregulation, deregulation bullshit.
Reagan came into office with his deregulation mantra and we quickly had the HUD scandal, the Savings and Loan, the Leveraged buyout scam that was no more than a 'stolen car chop shop' writ large, tens of thousands lost their jobs as companies were sold off piecemeal.
Reagan told the sharks; 'Go forth and multiply', and they did. Some are running Fannie Mae and/or Freddie Mac and earning $20 million? per year.
$25 Billion to bail out Fannie and Freddie? Peanuts compared to the S&L.
George Bush Sr., New World Order, Phil Gramm, Ivan Boesky, Micahel Milkin, the ENRON gang, Global Crossing, World Com, Adelphia, Tyco, Bush/Cheney, Halliburton/KBR, Blackwater, EXXON's Lee Raymond retirement package $400 million.........
And oh yeah, Clinton's BJ.
The sharks are in the water, thanks Ron.
July 22, 2008 4:02 PM | Reply | Permalink
@sTiVo
You must be talking about the Garden of Eden. I don't remember back that far.
In the early '60s, before VietNam, in the halcyon days you THINK you remember the top tenth earned more than the bottom half and wealth, as always, was even more skewed. It's been pretty much the same always. The business cycle, you know; depression (conceal wealth), recovery (hawk products, buy better stuff, more display), mania (ostentatious wealth, unrestrained greed), depression. The political cycle of chest thumping, complaints, chest thumping is pretty directly correlated.
July 22, 2008 12:36 PM | Reply | Permalink
"You think you remember"?
Screw you, pal.
July 22, 2008 4:15 PM | Reply | Permalink
@ STiVo
Try reading "Wealth and Power in America" by Gabriel Kolko, published in 1962.
July 22, 2008 10:45 PM | Reply | Permalink
Great piece. As it happens, I had just read the Brooks OP/ED before visiting here.
America once had a culture of thrift. But over the past decades, that unspoken code has been silently eroded.
And the culture of debt has been aggressively pushed by our policy makers... every man woman and child now owes over $15,000 toward the national debt, due to the reckless policies of the Bush/GOP regime.
And maybe just maybe the culture of thrift took a beating when - after 9/11 - Bush urged us to fight terrorism by going shopping?
July 22, 2008 11:57 AM | Reply | Permalink
@ kensch
America never had a culture of thrift. We've had repeated cycles of mania and depression going back to the 1870's for sure...and probably long before that. Certainly the gold rush of 1849 could be described that way.
July 23, 2008 12:12 AM | Reply | Permalink
Simple explanation for Brooks (from APOCALYPSE NOW): He is an errand boy for grocery clerks collecting a bill.
In other words, the community of citizens does not pay his bills and feather his nest. The Corporatocracy does, and so he defends their interests with pseudo-sociology. Day in; day out.
July 22, 2008 12:04 PM | Reply | Permalink
I think Brooks' piece dovetails nicely with the new mantra of the corporate right: privatize profits and socialize losses. It works particularly well with both corporate greedheads and small-town cranks, as it provides them a nice dose of cognitive dissonance avoidance. It looks to me like debtors are being set up as the 21st century 'welfare queens in Cadillacs.'
By the same argument, it is the people's fault that the US invaded Iraq; nevermind the imbalance of the people vs. the corrupted establishment which spent billions of dollars to buy the results that it wanted.
July 22, 2008 1:01 PM | Reply | Permalink
Ellen, you seem out of sorts. Perhaps a little more eye shadow ...
July 22, 2008 1:45 PM | Reply | Permalink
I’m not sure that David Brooks, or anyone of a Neoconservative bent, is capable of understanding the dynamics he’s trying to describe. There’s too much denial involved.
In 2001 President Bush embarked on extreme supply side economic policies with enormous cuts in taxes for the wealthiest in his first four years – making the rich richer at most everyone else’s expense. He did this despite inheriting a deflationary depression where there was already too little demand chasing to little supply. The problem with supply side economics is that it is steeped in myth. Truth: ours is a market based economy, 2/3rds of which is based upon consumption (i.e. demand). Nothing happens if there is no demand. When wealth concentrates, demand contracts undermining the commercial economy.
To buttress demand then, the Bush simply borrowed money, at low interest rates, to bridge the gap from places like China. That money found it’s way into lowering home mortgages which released purchasing power shoring up demand. When that string ran out, the more artful forms were added: second, flexible and subprime mortgages. For a while this did the trick.
Since 2001, even as the economy grew, median family income has declined over 5%, while the top .1 % went up 50% and the top .01 went up 500%. The rich got richer, but for ‘median families’ the recession of 2001 never ended.
Whenever income declines, families borrow money to bridge the gap and maintain lifestyles, especially if they have children. Be it personal, or national, if the bridge doesn’t make it to the other shore, then things start to unwind.
While their will always be people who mismanage money or take on too much risk at the wrong time, one has to view them in the context of the times they live in. ‘The median family’ has been under increasingly severe pressure for almost 8 years now, and the near future doesn’t look better. Growing up, I recall, whenever my mother was upset, a shopping trip, even if it was only a run to the grocery store for milk, always calmed her down. In the face of a macro-melt down, I don’t think solutions will be found focusing on individual meltdowns. Furthermore, individuals aren’t doing anything different than what the nation as a whole has done since 2001– borrow money to bridge the gap.
Even now, there’s evidence that many conservatives, don’t want to admit that their policies have failed. Some are calling for more tax cuts to fix our problems – even though that’s exactly how we got here. Given this denial, it seems likely that some will want to focus on anecdotal individual failure and site it as the source of the problem. Anything but admit that wealth concentration was the source of the problem. Throughout history, whenever wealth concentrates, demand contracts, and with it, the commercial economy: most epic collapses in history, from the fall of the Roman Empire to the Great Depression were cast from this formula. T’was always thus, and thus it t’will always be.
July 22, 2008 2:05 PM | Reply | Permalink
Ding ding ding!!! Give the man a prize!!
I've been pointing out repeatedly for the past year that the mortgage meltdown can almost entirely be traced to the increasing concentration of wealth in fewer and fewer hands. When only a very few people have all the money, far more than they can ever spend, they have to find places to put it. When consumers are already squeezed by rising prices, stagnant wages, and maxed-out credit cards, manufacturing and retail enterprises cease to be good investment vehicles. So that money turned to the "safe, sure thing" - real estate. The mortgage meltdown quite simply resulted from too much capital chasing too few qualified borrowers; the pressure from that money flooding into the mortgate market resulted in lax lending standards, and voila, here we are.
The great irony of course is that the wealthy generally fare better in terms of net gains when there are bulwarks - such as rational tax, wage, and regulatory policies - against too much money concentrating in too few hands. If you look back at the Clinton years, when the wealthy were taxed at the "unconscionably" (according to George Bush) higher rate of an additional 3%, they actually had higher net gains than they have realized over the last 8 years. And the rest of the country not only wasn't bankrupt, it was doing better as well.
The inescapable conclusion is that so-called "supply-side" economic policies result in a smaller money supply, which ultimately benefits no one other than the Republican politicians who hawk it.
August 12, 2008 8:40 AM | Reply | Permalink
Several points I'd like to add to your excellent article.
1) The homeowners who bought into loans they could not afford were simply following the old rules of mortgage lending. And what were "the old rules" you say?
The buyer decides that he will try to buy a home, negotiates a price and then asks a lender to fund it. It's the lender who is the financial expert and who has the most to lose, so it has always been the lender who said "No." They are the experts, they know the risks and possibilities, and they can best evaluate the dangers inherent in the proposed mortgage contract.
For the most part, the potential homeowner does not know enough about the nature of the contract he is signing to make a realistic evaluation of how risky it is. It is ridiculous to even expect him to. That is why he hires a specialist - a mortgage broker - to help him negotiate a loan. The buyer has always depended on the lender to say NO when the loan doesn't work. They are the experts and it's their money.
Only the rules changed, and no one told the homeowners.
The mortgage broker and even the bank lending the money are no longer on the hook for the money. They will sell the contract to investors who know nothing about the deal. The investors set standards they want followed, and the mortgage broker and the originating bank fudge the paperwork to appear to follow the standards - which themselves got looser and looser as the years went by. Here's a story by an ex-subprime-mortgage broker that describes a lot of it. The brokers themselves did not know what was going on. They were just collecting every commission they could get, and the banks were paying premium commissions for sub prime and ARM loans even if the buyer qualified for a safe, bland 30 year fixed rate loan.
This is all really arcane garbage. No home buyer can be expected to understand what was happening.
2) As you point out, the culture has not "silently eroded." It has been destroyed by the Federal Reserve who has kept interest rates at levels below the rate of inflation. There is no motivation to save - every dollar you have in savings is eroded by inflation. b> And as you say, the banks and marketers urge you to spend NOW! Using your credit card and paying only the minimum payment every month, preferably late so that they can collect fees on top. The banks get as much money each year from fees as they do from the exorbitant interest rates they charge on credit cards.
The federal government has a type of bond that pays an interest rate set by the government to exceed inflation by some reasonable rate - except that this spring they set the new interest rate below the rate of inflation. A person who saves money today is a fool. Buy gold. The return is more likely to be reasonable.
The real problem is that the banks, the large corporations, the extremely wealthy conservative and the Republican Party of Ronald Reagn declared war on the average American at least as early as 1980. Their takeover of the federal government, with the aid of the social conservatives who they also bamboozle, has gone on for three decades. Reagan's breaking of the Air Traffic Controller's strike was a major change in how America works. It said that the middle class was to have no effective power in the new America. The middle class was under major attack and that attack continues to this day.
It took George Bush's extremist handler, Dick Cheney, to totally knock the wheels off the American wagon and expose the plot to destroy this nation. Their intention is to turn it into a North American version of a Latin American country with about 10% of the population either wealthy or extremely wealthy and powerful. The rest of the population is to be desperate working people who have no security except by selling themselves to the wealthy, together with a minimal middle class that is desperately trying to hang on to some level of status above that of the working class.
July 22, 2008 2:06 PM | Reply | Permalink
Excellent point, Richardxx. Borrowers are supposed to ask for money. Lenders are supposed to know when to say no.
Instead, bankers behaved like Mexican pharmacists.
http://www.mexicandoctorsdir.com/Discount_Pharmacy.htm
Want some Viagra? Here's a prescription, rubber stamped in advance. Let me just write it down for you, in case the border guard asks any questions.
July 23, 2008 2:33 AM | Reply | Permalink
All human action--from those of saints and sinners-- can be traced to a combination of two sources: genetic inheritance, and environmental factors.
Free will (in the strong libertarian sense) is a myth.
It is hard to disentangle what part genetic predisposition and environmental factors play in any give action. However when it comes to attributing moral responsibility to a person's actions, it becomes very important to make that determination.
I think there is little debate in the vast majority of cases as to what a morally right action is and what is not. The aim of both individuals and society should be to maximize the former and minimize the latter.
It is disingenuous indeed to blame the individual for example for making a bad financial choice in a society that actively and aggressively promotes it. It is a case of a toxic social environment being a causative factor in bad behavior.
This is why I'm interested in communitarian ideas.
It is the responsibility of all of us to bring about 1) a society that maximizes good and minimizes bad behavior as well as 2) a pluralistic social environment that promotes the "good life" which is subordinate to 1).
In such a society--which ours is not--we can be more confident in holding people morally responsible for their bad actions since the social environment would not be actively promoting it so that it can be ruled out as a cause.
Brook's rather cruel blaming of individuals for making irresponsible decisions shows a disregard or unawareness of the relationship between social environment and people's behavior.
Perhaps he entertains a notion of "free will" which would have it that an individual does not have to succumb to bad behavior even in the most toxic of social environments.
Such delusions are common amongst conservatives with a libertarian bent.
July 22, 2008 2:35 PM | Reply | Permalink
Careful Andrew.
The totalitarian abyss is looking back at you.
July 22, 2008 8:53 PM | Reply | Permalink
No doubt that the danger is there.
The battles that I like to see fought are the battles in ethics not of economic power.
The ethics of economic power can be summed up by saying that those who thrive do so because they deserve to thrive and they deserved to thrive because they do in fact thrive.
That's basically Social Darwinism and the rage these days and apparently even with people who have higher pretentions than the hoi polloi.
The real abyss in my opinion is not some Nietzschean fear of the common man but the disintegration of the social fabric into a state of near anarchy facilitated by the sirens of libertarianism and the "individual freedom" ueber alles crowd.
July 22, 2008 10:37 PM | Reply | Permalink
Shorter Brooks, in this column:
"I'm not going to mention Bush's name as responsible."
July 22, 2008 2:39 PM | Reply | Permalink
Poor David Brooks, he seems to have been sucked into the myth that those of high-birth, powerful social position, great wealth always feel a moral obligation to act with kindness, honor, generosity - noblesse oblige, if you will. Thus, the rich would never take advantage of the poor.
If the poor come up on the short end of a deal, it is no fault of the rich, it is a character weakness in the poor.
July 22, 2008 4:40 PM | Reply | Permalink
Great piece, Jim. I agree.
I was looking at some youtube videos of the Everly Brothers and some '60's groups, and one thing that struck was how thin we all were back then. I tell my kids that there was a time when you couldn't just pull into a drive-thru fast food restaurant every time you felt a twinge of hunger. I can see from their faces they find this shocking.
But as for the predatory lenders: Yes. People who imagine they'd have no trouble withstanding the slick, too-good-to-be-true offers are people with options. When you're out of options, offers that strike others as ridiculous on their face begin to sound more reasonable. That's why the elderly so often fall prey to various schemes -- it's not just fading faculties (although that's a problem too), it's that the elderly more than other groups are more likely to be out of options.
July 22, 2008 7:00 PM | Reply | Permalink
In all of this I hardly find it patriotic to focus a marketing campaign on persons that are unable to actually afford the product I might be selling. That is why I find the mortgage meltdown particualrly troublesome.
The persons that are being defended by some and who taxpayers are being asked to bail out merely represents a deepening of the same ethical hole the industry has dug for the country. It is absolutely ludicrous that taxpayers are being asked to come to the aid of a bunch of crooks who arguably promoted programs that have harmed so many. Given their conduct why are they not being prosecuted. I think the top level managers in the industry should be subject to some civil discipline if not criminal. Instead, congress is trying to figure out how to save their sorry asses and preserve their ridiculous salaries.
This is an insult to every American who puts in an honest days work. Those Americans are patriots not these crooks who manipulate people and dollars for a living.
July 22, 2008 7:28 PM | Reply | Permalink
Awesome job, Jim. Finally a piece of genuine political thought and solid writing on this nitwit site. (And you can tell by how all the Obama monkeys have jumped all over you.)
This slime Brooks has been oozing all over my hometown paper for years now. And perhaps the most amazing thing about his reign is how consistently wrong he is -- always, about everything.
Yet there he is, week in and week out. Not just in the NYT, but all over the tube. With that condescending smirk and room-tone voice. In the 22nd Century, when historians are puzzled as to what happened to the long lost American Republic, they couldn't do better than to follow this guy's rise to prominence for an answer.
Keep up the good work!
July 25, 2008 9:00 AM | Reply | Permalink
Well, the obvious answer is "no -- American people do NOT have the knowledge" to handle quite a few financial transactions. It's why privatizing Soc. Sec. is a horrific idea: most people can't handle a credit card, so giving them complete control over even the most basic of income in retirement could turn out very, very badly.
IMHO, some basic and mandatory financial education in high school and college would go a long, long way to solving a lot of these problems.
If people knew enough about APR and fees, they would almost never go to a payday lender. If they knew about YSPs and adjustable rates, they wouldn't sign a mortgage without reading every piece of paper. If they realized that paying a minimum payment on a card will take YEARS to pay off, they would use it less often.
Yes, some reinstatement of usury laws would be nice, and increased regulation is a must -- after all, banks would never have offered these products if the folks on Wall Street weren't demanding them, risk be damned.
But if people are given the knowledge to completely understand what they are getting into, then a lot of the shady characters would see their business dry up as consumers made better choices.
Not a perfect plan, but I fail to see how it'd hurt.
August 12, 2008 11:16 AM | Reply | Permalink
The philosophy of "offensivetoyou" seems to be that America is destined to go down the tubes because the country is full stupid people. Whatever, Debbie Downer.
And I'd like to ask Mitchum22: what does Obama (or his monkeys) have to do with any of this?
August 12, 2008 2:12 PM | Reply | Permalink