The culture of debt

I generally thought this David Brooks column on debt was interesting, but I've got a couple quibbles. His invocation of culture bothered me, not because I don't think it's true, but because of how selective he was in applying it:

Some of the toxins were economic. Rising house prices gave people the impression that they could take on more risk. Some were cultural. We entered a period of mass luxury, in which people down the income scale expect to own designer goods. Some were moral. Schools and other institutions used to talk the language of sin and temptation to alert people to the seductions that could ruin their lives. They no longer do.

It's interesting that he applies a "economic" explanation to home owners and " cultural" explanations to "people down the income scale." This, basically, is my beef with conservatives who invoke culture. It isn't that culture isn't an important factor--it is--it's that culture impacts people at all levels. So if you live in the projects and you got a big-screen TV from Rent-A-Center, you are crazy, no question. But if you live in the suburbs and gambled on a second mortgage, so you could build a a home theater, you are equally crazy. Furthermore, you're a victim of the same culture as the person who lives in the projects. The fact that other factors--some of them cultural, some of them not--allowed you to move into the middle-class doesn't mean your values are automatically different from that person who lives in the projects. Some of them are. Some of them aren't.

Conservatives often whip out the culture card to reinforce this idea that if this large group of people change their individual behavior, then they too could have the American dream. Bet. But don't switch up the logic because we now have middle-class people foolishly running up credit card bills, taking out second mortgages which they can't afford and then crying to the government for relief. We've seen this transference game before--let's not talk about antisemitism, let's just focus on black antisemitism. But it's a dodge, in that it allows folks to not deal with their own issues. It's like saying "Yeah, my kitchen is on fire, but look over there, that dudes whole house is burning down."

Comments

Bingo.

Posted by varneer | July 22, 2008 1:23 PM

"But don't switch up the logic because we now have middle-class people foolishly running up credit card bills, taking out second mortgages which they can't afford and then crying to the government for relief. "

Take it to the next level. The people who own the mortgages and credit card co's are ...wait for it....WHITE!.

I'm willing to bet there is at least a white guy that got fired from Bear Stearns defaulted on his Manhattan Apartment. While his company will get absorbed and worked out by the Fed, his home will go on the foreclosure block.

Posted by WestIndianArchie | July 22, 2008 1:26 PM

You've hit the nail on the head, here. Unfortunately, this is where racism (and classism) still plays well in politics. Few people are aware of their own shortcomings, and few people like to be reminded of them.

Posted by Gregory Conen | July 22, 2008 1:27 PM

Followup: In this case, I'd almost say that it's "Yeah my whole house is burning down, but look over there, that dudes kitchen is on fire".

The economic barriers to rising out of poverty are constant, real, and significant. On the other hand, the economic hardship to the middle-class is relatively mild. For most middle class "victims", culture plays a larger role in their suffering compared to that of the poor.

Further, the economic well-being of the middle class gives them fewer excuses to make bad economic decisions. They have more education, which is at least partly derived from their relative wealth, and so should be more capable of weighing risks.

Posted by Gregory Conen | July 22, 2008 1:48 PM

I kind of think you're not reading this they way Brooks intended it - my impression on reading his column (before I saw your post) was that the cultural aspect affects everyone regardless of income, which is what he meant by saying 'down the income scale'. Also, I think he was right to talk about cultural overspending - as in the smaller things like clothing, electronics, etc. that has been present in America for awhile now, and try to differentiate that from the sudden jump in home equity that folks experienced a couple of years ago and then was misused by a significant number of home owners, since using one's home as a piggy bank on such a large scale is a relatively recent phenomenon.

Perhaps I'm wrong, but I think you're reading too much into his choice of wording.

Posted by Arclight | July 22, 2008 3:27 PM

This is an excellent post, because I think it concisely grapples and succesfully makes a point that might actually persuade an open mind or two about their own bias. This is a simply a gem. Thank you.

Posted by Michael O'Neill | July 22, 2008 4:01 PM

Thanks Michael!

And Arclight, as I said, I don't disagree with idea that culture affects something like overspending. Clearly people who came out of the Depression-era--in the main--saw the world, and their finances differently. But it's not culture for one group and then econ for the other, more likely it's both for both. In other words, the changes in credit card company practices described in the original Times article--the idea that you can make money simply off fees--certainly made more credit available to people "down the income scale." That's an economic change.

I want to be absolutely clear here--this is not an economics vs. culture argument. I read the original story and was kind of horrified by the woman's practices. My point is there is a cultural line that runs from that very middle-class woman to the poor mother who buys her kid $120 tennis shoes--on a credit card. Maybe that was Brooks's point, but if so why did he mention econ when talking about the homeowner and culture when talking about the people "down the income scale." In fact, isn't it a collision of both for both groups?

Posted by Ta-Nehisi Coates | July 22, 2008 4:22 PM

"But it's a dodge, that keeps folks from dealing with there own issues, like saying "Yeah, my kitchen is on fire, but look over there, that dudes whole house is burning down."

One problem is that many blacks get so caught up in fighting (or in some cases, succumbing to) that onslaught of transference, they don't pay enough attention to black problems.

Posted by Plantsmantx | July 22, 2008 4:23 PM

Jim Sleeper rips the silly, disingenuous twit Brooks a new one, here:

http://tpmcafe.talkingpointsmemo.com/2008/07/22/intellectual_usury_feels_good/

Money quotes:

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.

Brooks doesn't ever mention the politicians, fed by all these predators, who eased the miscreant's way in more ways than I can count.

Didn't these people make any of the individual decisions Brooks claims have had ripple effects on social norms?...

Brooks doesn't wonder about predatory lenders' 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..." He ends up damning the desperate homeowner and the predatory lender with fine impartiality.

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, or the kind of predatory lending that, like loan-sharking, virtually enslaves borrowers or squeezes them to death. ending,

But Brooks would rather have keep us focused on the individual responsibility borne by homeowners and a few of the nastiest predatory lenders than he would have 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?

Posted by brucds | July 22, 2008 4:37 PM

Here, incidentally, is the Bill Moyers show on this problem that Sleeper mentions:

http://www.pbs.org/moyers/journal/07182008/watch.html

Posted by brucds | July 22, 2008 4:44 PM

I think part of the problem here is that in the US our culture of home ownership has been so successfully sold that we no longer even recognize that it is a culture and not a Moral Law. From the president on down everyone tells us that it's Good to own a home and very little attention is paid to the ways in which home ownership purchases stability at the price of flexibility and mobility. A mortgage doesn't have to be predatory to cause problems when the economy is sluggish; if you get laid off, or your small business fails, or the price of your health coverage skyrockets, the most reasonable mortgage can become too much to handle. It's beside the point whether or not people in these situations are more "innocent" than those with new plasma TVs or designer handbags. The fact is that we've fetishized the idea of owning a home to such an extent that we've lost sight of the fact that what is a good investment that forces people to save in a healthy economy can be a ball and chain that keeps them from adjusting to new realities in an unstable one.

I'd like to see some of these discussions of the "culture of debt" acknowledge that any mortgage, however reasonable it seems when it's taken on, is likely to be the largest debt any of us will ever incur. At times like these, it's worthwhile to look around at renters who can relatively easily downsize apartments or move to where the jobs in their fields are, and acknowledge that that kind of debt isn't for everyone, and it's not necessarily healthy for us to pretend that home ownership is the God-given hallmark of a productive life.

Posted by professordarkheart | July 22, 2008 9:54 PM