The Great Seduction
The New York Times, June 10, 2008
The people who created this country built a moral structure around
money. The Puritan legacy inhibited luxury and self-indulgence.
Benjamin Franklin spread a practical gospel that emphasized hard work,
temperance and frugality. Millions of parents, preachers, newspaper
editors and teachers expounded the message. The result was quite
remarkable.
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.
Sixty-two scholars have signed on to a report by the Institute for
American Values and other think tanks called, “For a New Thrift:
Confronting the Debt Culture,” examining the results of all this. This
may be damning with faint praise, but it’s one of the most important
think-tank reports you’ll read this year.
The deterioration of financial mores has meant two things. First,
it’s meant an explosion of debt that inhibits social mobility and ruins
lives. Between 1989 and 2001, credit-card debt nearly tripled, soaring
from $238 billion to $692 billion. By last year, it was up to $937
billion, the report said.
Second, the transformation has led to a stark financial
polarization. On the one hand, there is what the report calls the
investor class. It has tax-deferred savings plans, as well as an army
of financial advisers. On the other hand, there is the lottery class,
people with little access to 401(k)’s or financial planning but plenty
of access to payday lenders, credit cards and lottery agents.
The loosening of financial inhibition has meant more options for
the well-educated but more temptation and chaos for the most
vulnerable. Social norms, the invisible threads that guide behavior,
have deteriorated. Over the past years, Americans have been more
socially conscious about protecting the environment and inhaling
tobacco. They have become less socially conscious about money and debt.
Read more of this articleAbout Reverse Mortgages: Learn all about reverse mortgages at NewRetirement.com
Annuity Advice for Retirement: Evaluate and compare annuities at NewRetirement.com
NewRetirement Retirement Calculator: Assess your retirement plan with the NewRetirement Retirement Calculator.