Attacking the Wise for the Sake of the Fools

The immorality of wealth is a notion that has been in the air lately, with the latest example being David Brooks’s lamentation of “The Great Seduction” in the New York Times:

The United States has been an affluent nation since its founding. But the country was, by and large, not corrupted by wealth. For centuries, it remained industrious, ambitious and frugal.
Over the past 30 years, much of that has been shredded. The social norms and institutions that encouraged frugality and spending what you earn have been undermined. The institutions that encourage debt and living for the moment have been strengthened. The country’s moral guardians are forever looking for decadence out of Hollywood and reality TV. But the most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money.

Inasmuch as I believe conscience and social pressure to be ultimately more likely to precipitate the sharing of wealth than political demands (short, perhaps, of violent revolution), frequent and visible criticism of the unproductive amassment of wealth is certainly to be encouraged. Brooks’s allocation of blame, however, misses the critical other side of the coin:

The agents of destruction are many. State governments have played a role. They aggressively hawk their lottery products, which some people call a tax on stupidity. Twenty percent of Americans are frequent players, spending about $60 billion a year. The spending is starkly regressive. A household with income under $13,000 spends, on average, $645 a year on lottery tickets, about 9 percent of all income. Aside from the financial toll, the moral toll is comprehensive. Here is the government, the guardian of order, telling people that they don’t have to work to build for the future. They can strike it rich for nothing.
Payday lenders have also played a role. They seductively offer fast cash — at absurd interest rates — to 15 million people every month.
Credit card companies have played a role. Instead of targeting the financially astute, who pay off their debts, they’ve found that they can make money off the young and vulnerable. Fifty-six percent of students in their final year of college carry four or more credit cards.
Congress and the White House have played a role. The nation’s leaders 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. Bill Gates built a socially useful product to make his fortune. But what message do the compensation packages that hedge fund managers get send across the country?

Failing to mention those who’ve sought the instant gratification facilitated by debt (a group that most definitely includes me) leaves open a frame of mind that greatly contributes to our culture’s financial problems. We whom the above listed role-players have affected are taken to be reactive children with no capacity to withdraw our demand in response to the pushed supply. We’re “vulnerable.”
Brooks lauds Ben Franklin as an archetypal advocate of “hard work, temperance and frugality,” so it’s conspicuous that his emphasis is so different from the founder, who penned such aphorisms as the following:

Fools make feasts, and wise men eat them. …
Wise men learn by others’ harms, fools scarcely by their own. …
Get what you can, and what you get hold; ’Tis the stone that will turn all your lead into go.

Well, ’tis better to be wise than to be a fool, so “rather go to bed supperless than rise in debt.” To some extent, the steps toward healing our financial culture that Brooks enunciates are determined by his audience, which probably includes more lenders than lower-income borrowers.
What is needed before all else, however, is confirmation of the individual’s agency and responsibility, because without a sense of those, we’re all just waiting for that winning lottery ticket, heedless of Franklin’s suggestion that “diligence is the mother of good luck.”

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15 years ago

2006 Rhode Island claimed #1 ranking in nation for dollars spent on state lottery and VTL paying $4,256.73 per RI household.
SOURCE: The Tax Foundation

15 years ago

I am a stupid liberal. I don’t understand the complexities of your free market theory. Ed Achorn is too deep for me and too esoteric for my leftist brain. All I know is that since Ronald Reagan and the inception of supply side economics,a solid middle class supported by a solid manufacturing base has been splayed and gutted by an ever increasing deregulated invisible hand. This disembowelment has only been further exacerbated by eight years of neocon psychotics and their ilke lead by the most incompetent CEO of all time. The capitalism promoted on this website is predicated on lies and manipulation, a game of musical chairs being played in a house of cards.It’s a ‘take the money and run ethic’ that thrives on the exploitaion of bubbles, distraction and hype. Toss all your economic books into the trash. People want nothing more than more money and more leisure time. Paradoxically, the free market has given us just the opposite. And you don’t need an MBA to understand that Globalization perforce promotes a race to the bottom. You ask Americans to give up a standard of living that took centuries to create in order that the rest of the world can catch up, failing to take into consideration that in the meantime we will eventually grow old and die. Oh and finally, the proverbial elephant in the room…nature…that which capitalism ignores. Newsflash….WE DO NOT LIVE IN A FREE MARKET……WE ARE ANIMALS LIVING INTERDEPENDENTLY IN AN ECOSYSTEM and nature doesn’t give a s..t about job creation, capital gains or inflation. Time to grow up or perish.

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