Financial Crisis a Cultural Failure

Financial Crisis a Cultural Failure


The more I read on the current financial crisis and the more I think about the ramifications, the more I realize that September 2008 will probably have as much of a lasting effect on our nation as has September 2001. That’s because what we’ve witnessed is not just a political failure and not just a financial failure. This is a cultural failure.

Victor David Hanson has it right when he lays the blame at all our feet. Yes, insufferable Wall Street greed played a major role as did incompetent, ignorant, servile and just plain corrupt Washington politicians. I’d like to lean back in my chair, point fingers and quietly absolve myself and all the rest of us who neither work on Wall Street nor in Washington. But I can’t.

A lot of us took part in the credit-shuffling game that was the real estate boom. I was even one the lucky ones who sold a property at a ridiculous profit. I didn’t intend for my home to be such a tremendous investment, but I sure as heck didn’t care what cultural forces or what financial shenanigans made my windfall possible. I took the money. Gladly.

A lot of other people did too. And many of those who eventually got caught holding the bag were not innocent victims of the system. They were players. They knew they were taking out unsustainable loans but they believed the profits they could make in the market more the justified the risk. They were stupid and wrong. Their banks were stupid and wrong. Our culture that demanded easy credit and high returns was stupid and wrong.

We took the wealth and prosperity part of the American Dream and jettisoned the hard work part. We believed that the house flippers on TV were smarter and more interesting than the people and businesses doing real work and slogging out real, if mundane and small-margined, profit. Even as many of us decried our nation’s free-spending, gilded-age ways, we grumbled when our investment accounts fell short of the high returns enjoyed by others.

Blame the Wall Street profiteers. Blame the Washington imbeciles, cowards and thieves. They deserve our scorn and whatever punishment the law allows. But $700 billion is not the indulgence that absolves the rest of us. We have much harder tasks ahead if we really want to get our nation back on track. Now, I don’t know how to change a culture. Chances are, it will take much more than a rocky autumn to make most people stop lusting after easy credit and high investment returns. These bailouts might just be postponing the needed reckoning.

But I’d like to think that these last few weeks have at least opened the eyes of enough of us – have made enough of us realize that wealth is not something that can be generated quickly if we want to generate it sustainably. That sounds like commonsense. But, apparently, most of us had, in one way or another, forgotten the realities of markets. The market has shown us our folly. Let’s see if enough of us can remember the lesson.

  • kaseyd

    You hit the nail on the head. Maybe this is the wake up call Americans need to finally start working on their financial health.

  • AubreyJ

    Last night after President Bush spoke to the nation… my wife asked me who I thought was to blame for all this mess we find ourselves in today.

    I thought on it for a second and imagined this very question, this very same conversation… going on in millions of households, not only around this great country of ours, but all around the world too.

    Now… I’m not sure how others would answer such a question, but in my household… I found the question to be a simple one to answer and with only 3 simple words. And Alan… those words are the same as you spoke in this post. Those words — We All Are.

    With that said… I think a lot of people got scared last night, for the first time, after hearing what President Bush had to say. And so should they be.

    May Politics not play into whatever Congress does over the next few days… for this is not the time in history for a — Washington As Usual.


  • Jimmy the Dhimmi

    A lot of us took part in the credit-shuffling game that was the real estate boom.

    Don’t blame me, I’m rock solid on my fixed rate mortgage payments. I got nothing to do with this. My retirement portfolio is clear of all these investment banks that are going under. Its your fault ASC (=P)

    Oh, ya and Barney Frank. Watch this video. Ya I know its Fox news, but they just cued up archival footage so don’t blame the messanger.

    Do you blame the people who saw it coming and tried to stop it? Are they included in those 3 words, “We all are”?

  • gerryf

    House was a 15-year fixed mortgage and is paid off, I have a modest portfolio of socially responsible investments, and I volunteer my free time at the animal shelter and coaching poor youths soccer.

    I blame ASC for everything, too