Something occurred to me while I was driving on I-595 earlier today, right after the bailout package failed in Congress. Might it have been easier to pass had we not seen the massive increase in income inequality over the past few decades? After all, when income differences between financiers and the average worker loom gigantic, it becomes very difficult to sell people on the idea that the financial system needs an infusion of government money. On the other hand, if the banks were smaller and their executives poorer, people might feel more of an emotional connection to them, making a bailout easier to sell.
The real effect of a bailout wouldn't change, of course. Executives would have been hosed under the Dodd-Frank plan, and the average person would have benefited hugely from keeping the financial system afloat. But the emotional politics are all different in a world where the financiers have pulled away into a different economic universe from the person on the Port Everglades Expressway.
Does this make sense?
I think you are dead on. I have heard more than once remark on the line of "They already have all the money, they can bail their own damn selves out."
Posted by: Steven Rogers | September 29, 2008 at 05:08 PM
I don't know if developments of the last decade have had much to do with it. After all, bank robbers have often tended to achieve kind of a folk hero status. The disconnect that people feel between the great financiers and themselves seems to be pretty old.
Posted by: Andrew R. | September 30, 2008 at 02:20 PM