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What I meant about the statement was that I try to argue against the government spending trillions of dollars to try to prop up asset prices, and people like my dad who is very responsible says things like “well so many people are counting on that, it would destroy their plans. I don't see how we could have all these policies that help the rich but not have any that help most people that are trying to make something and have mostly put a lot of money into their homes.” Or he also said the government should bailout the automakers because it'll be easier to transition to newer car designs that we do need, and I said I didn't think that was necessarily the case and they should fail so they can be replaced.He said that then so many people would lose their jobs that it would be awful and I pointed out that since there is so little demand then it doesn't make sense to waste resources building stuff no one wants when people could just be supported directly at a minimal level. Again he brought up the bank thing and I couldn't disagree.

So when I talk about moving towards a different one I don't mean new ideas and potential solutions apart from the present, I mean addressing people's underlying concerns about fairness, having security if you work full time, etc. I think that a lot of people that are crying out for government handouts (either directly or indirectly…like to prop up prices) do so because they feel that they deserve a part of the pie that they're not getting and won't ever get no matter how hard they work. This is where I think we agree but disagree about the source. We both agree that people are more irresponsible than they should be, but I believe (based on my interactions with people) that a driving factor is hopelessness that independence and prudence will actually pay off. [This is a very well studied component of asset bubbles, where the largest gains come in the last 25% of the length of the bubble...often the bubbles double or triple in value because people on the sidelines that are trying to do the right thing see the irresponsible people raking in "fortunes" and so they get jealous. I think a lot of this issue is because the government's monetary policy has been to provide too much liquidity and support asset increases at all costs.] So where you see government programs as a primary driver behind irresponsibility, I see the existence of many government programs as a symptom of larger imbalances (the same for unions, ideally there should be no need for unions) that are corrupt the government programs. So I see it more as a vicious cycle where many people want to be independent but feel the system is stacked agaisnt them, so they want compensation.

In times like these trying to point out all the negative aspects of stupid government policies is like throwing grains of sand into the wind, because even people that would normally be more critical are saying “enough…we've worked so hard for so long and gotten so little, it's time that we get at least a little.” That's what I mean by how instead we should focus on addressing people's base concerns about both governmental and non-governmental policies and start giving hope about moving to a more fair society. It will be a terrible adjustment, but I think people would be willing to go through it if they felt that their hard work would pay off more in the end.

I don't understand this statement at all:
I feel that at this point in time acknowledging the climate and talking about suggestions to move towards a different one in the future will get further than trying to talk about unintended consequences.

That sounds an awful lot like a desire to move forward to new ideas and potential solutions before learning what has already had negative effects, and I don't see how you can create a new solution until you know what was wrong with the old ideas. Maybe I'm misunderstanding the statement completely though.

I believe that the same policy can be both a negative or positive reinforcer depending on the amount and quality of interaction with the participants. The statistics on subprime mortgages are amazing, where some smaller regional banks that really had a personal connection with clients had (I have seen recently but at least as of August) a nearly identical default rate as prime customers because they selected people that they felt had the personality traits to make good and also they had a very open line of communication. Conservatives are very right that large government policies get standardized in a way that destroys that and leads to an entitlement mentality and increases negative reinforcers. However, I feel that they could also be very positive if there was more intimate communication and projects (which is a reason I have no problem with faith-based initiatives since churches are the most integrated social structure in many places) and had competent ground managers that could make judgment calls.

In any case I don't mean this completely just about government programs but about mindsets in general. It's difficult to argue against government expansion to “help people” or to argue that we need to take our lumps, when a lot of the arguments against it don't acknowledge the larger environment as being a very strong factor. I feel that at this point in time acknowledging the climate and talking about suggestions to move towards a different one in the future will get further than trying to talk about unintended consequences.

The plural for anecdote is not data, and good individual moral policy isn't necessarily good social policy. True, not always- but the converse isn't true either. Sometimes the individual moral policy really is better for society.

I know this is something that you'll disagree with but it is something I find ironic about many conservatives…they rightly chastise liberals for believing that the government can help create a utopia since it's against people's nature, but on the other hand ignore some very well studied aspects of human nature when it comes to some topics like drugs/sex/fairness/individuality.Well, I actually don't disagree. Both liberals and conservatives sometimes ignore the evidence of what is possible or not possible regarding the shaping of behavior via government policy (and probably even more hypocritically, they both ignore how that infringes on freedom and whether or not it's Constitutional to do those things, etc.)

But I think you're applying too broad of a criticism because often the things the conservatives are discussing involve government policies that are already in place, and regardless of whether or not you take into account the antecedents to people's behavior there is still going to be a consequence that's put in place by the government policy in question. So I think what the conservative side of those arguments usually involves is a reality check on whether the consequence will be a negative or positive reinforcer.

The whole question of antecedents and consequences is no different than in parenting. To be a good parent you have to consider both, but when you're deciding on when and how to put the consequences in place (or if you're going to do that at all) then you don't vary those consequences based on consideration of the antecedents. You don't give in to your toddler's temper tantrum because he's hungry or tired, you just make a mental note to do a better job keeping the schedule so he'll get enough sleep and eats meals and healthy snacks at proper intervals. But for the consequences to be effective (in this case, the consequence that you don't get what you want if you throw yourself on the floor and scream, even if that thing that you were wanting was perhaps possible before you had the tantrum if you'd controlled your behavior and asked for it properly), you have to enforce the consequences consistently regardless of any realization that the antecedents affected the behavior (and even in some cases, the parent being partly responsible for them.)

So it's not a matter of condemning someone, it's just a recognition that the discussion of all of those things that might be influencing the behaviors aren't relevant to whether or not our societal 'rules' are providing consistent feedback to either encourage or discourage the behaviors. And I agree, of course, that everyone has to be realistic about the extent to which we can effect control over those behaviors (or whether we'd want to live in a society that tried to exert that much control) but when we've already decided that we're going to enact policies that do reinforce behaviors (by giving a negative consequence or protecting against the natural negative consequence that would have occurred), then we have to consider that separately from the considerations of what produced the behaviors to begin with.

In any case, I will concede that anecdotally I've seen a lot of people that personally lived within their means but then let their children run wild. So many of my friends with parents that have far less than mine have been given so much more than I was and it is obvious that they are struggling to do so even as they live pretty spartan lives. So maybe some of my bias is focusing on how the actual income earners are living as opposed to their overall expenditures.

As for the difference between “natural” and “OK” that touches on a larger point that we just fundamentally disagree with. I believe that being a moral being is something that should be aspired to. In my own life I'd never even come close to living beyond my means and am quite confused about how people (especially without kids) can have such a hard time making ends meet when I do it fine on $24k a year salary. I realize that some of what makes it easier for me is my choice, I could easily make $100k+ working someplace else but I've chosen to stay here the last three years of my life and whenever I had a twinge of wishing I had more money I just remember it's what I want to do. On the other hand, I don't get how people can waste so much money on “stuff” when they aren't in a secure position. And I think it's the parents duty to teach kids to be responsible, live within their means and work hard. There is nothing special about being responsible, it's how things should be for everyone.

However, from a scientific/political point of view I don't believe that you can simply extend personal morality on a larger level. The plural for anecdote is not data, and good individual moral policy isn't necessarily good social policy. I know this is something that you'll disagree with but it is something I find ironic about many conservatives…they rightly chastise liberals for believing that the government can help create a utopia since it's against people's nature, but on the other hand ignore some very well studied aspects of human nature when it comes to some topics like drugs/sex/fairness/individuality.

I'm not calling for the government to ensure that everyone is happy, you left out the end part: “especially whether it seems that their compensation is fair.” Experiment after experiment in both humans and primates (and increasingly other animals) shows that it is natural to work to receive a reward…and that different individuals have different amounts that they are willing to work and be compensated for. When the reward is given freely, then the individuals are less likely to work (or cooperate if they are animals). However, it's also been shown that if an individual is contributing to a group/working for a reward and then feels cheated because they believe the compensation is not just, then they will refuse to work and even perhaps actively sabotage the cooperation. A recent experiment showed how chimps that had trained to do a task to get rewards would continue to cooperate for a long time even after the reward was no longer given, in expectation that it eventually would……..unless they saw another chimp get the reward either without doing anything or by doing the exact same thing that the rewardless chimp was doing. Very quickly they became uncooperative and refused to do the task as their “sense of fairness” was breached. Similarly there are many examples of group experiments with people where if everyone cooperates the group gets richer, but if you trick people into cooperating and you don't then you will be better off…and if no one wants to cooperate everyone is penalized. What they consistently show is that at the beginning everyone wants to be cooperative but if some people stop being cooperative and are getting an undue amount of gain then everyone will refuse to play along and would rather get nothing (to ensure that the selfish person wasn't getting anything) than to go home with something but less than the selfish person.

So when it comes to individual morality I agree with you completely. Regardless of your circumstance there is no excuse to be irresponsible or not be held to account for bad decisions. I'll be the very first one to argue against foreclosure relief even if the person has a good excuse, or that there should be assets protected in bankruptcy (although that goes for companies too, it's up to them to make good decisions…the fact that in credit card debt isn't wiped out in a personal bankruptcy is insane). I even chastise any friend that is making bad decisions financially and try to convince them to save and show them how to live within their means and make a budget, etc. I have no respect for people that don't.

However, I can't condemn them for their decisions when their thinking is just a reflection of those scientific studies. So many times growing up I tried to help kids that were very poor and wanted to be different but they just said “I've tried so hard to do the right thing and no one cares. Even if I'm perfect from here on out I'll grow up and it won't matter because I'll just get screwed since I'm poor.” And several times I convinced them to try only to see their efforts go for naught and saw them lash out. [And that's with my background...I've talked a lot about this with a friend that grew up poor in the inner city and where things aren't mixed and she never even had any clue what the habits were like of successful people. It's not that they had a choice and made a bad decision like some of the people I grew up with...they didn't even know what the options are.]

It's even a long running joke amongst research scientists that we countless hours in the labs, fighting for every scrap, taking years of schooling and tons of debt, and then our work enriches businessmen and doctors who barely even understand the results…but the joke turns to resentment as the dollars dry up, positions are cut, hundreds of grant applications are chasing a handful of grants and we're told that we should focus less on exploration and possibilities of making a real paradigm shift, and more about just doing minor extensions to things already in place. A lot of the best people are so demoralized (not to mention that we spend all our time trying to convince people to give us money instead of being able to calmly and excitedly do science) that it really hurts productivity.

Those are a few examples, but it's pervasive in our society on all levels and it's sick. Teachers/nurses/blue collar workers/academics/service employees/take your pick have millions of people that are excellent at what they do and make a fraction of the amount that a mediocre financial guy or middling middle manager do. Again, I'm not saying this is a good excuse (and I'm not saying that the government can fix it) but when people see this, and they've been working hard for decades and sharing in literally zero of the increase in wealth once you count for (understated) inflation, then of course they are going to tune out and be more irresponsible. It's not what they “should” do, but it's just natural when you're looking at behavior in general. And that's why I focus most of my criticism on the system itself, because while I think it is important for people to realize that they have a role in the problems and can't blame “Them” because we all collectively compromise the system, I do believe that when the system is so broken that abdication of personal responsibility is a given.

Also meant to mention, Mikkel, that politically I can't get behind the idea of trying to guarantee everyone's happiness and this statement you made is precisely why. There's a reason that the founders named the pursuit of happiness as a basic right, not happiness itself. All we can do with a political system is make sure that the opportunities are there but freedom means that some will be more successful in their pursuit than others.

What I tried to say is that I don't disagree about those other factors and I didn't mean to ignore the real ways that income for the middle class has shrunk (or buying power when you're talking about inflation, energy prices, etc.) I was focusing on the other part of the picture because I felt that Kim and Mikkel were too dismissive of it. When talking to conservatives who don't believe that there are real hardships and income disparities, I'd be arguing the other side of the coin because I think it's all of the above.

And in reading your last comment, Mikkel, I still think you're too dismissive in your final paragraph. My parents were part of a generation that didn't see wealth gains either- they were hit very hard by the recession in the northeast during the 70s- but they became more disciplined in their spending habits (and they'd always been responsible anyway), not less. I think it's an excuse to say that if the upper tier is rising in luxuries that it's natural for others to want to share that. Of course they do- but that doesn't mean it's OK to be irresponsible, because acting responsibly is what will eventually have the best chance of helping you rise to the higher standard of living no matter what.

There's nothing wrong with examining the psychology but I think you're wrong to assume that most Americans have been more responsible than I'm giving them credit for. If you're going to base your arguments on that, you'll have to show me some evidence, not just your gut feeling because I see plenty of evidence of the irresponsibility.

Of course it's all about extremes…at some point creativity and exploration can become hubris that you can solve anything. Risk taking becomes destructive and personal freedom becomes narcissism. Respect for tradition/authority becomes blind obedience, duty/honor/self-sacrifice become oppressive to self expression, caution becomes helpless fear.

I agree with the observation that not only do are these things evident in a society's values, but that they are self reinforcing to a large extent. While individuals may maintain balance, it is very hard for society as a whole to not succumb to feedback loops that eventually drive to extremes. I also buy the idea that the ideals are generational (there is increasing evidence for this on a physiological level as well) — and at turning points can cause wholescale psychological wounds. My grandparents were telling me how much the Depression and WWII defined their outlook, and how in hindsight their generation tried so hard to shield their children that they were oppressive…and how they felt that a lot of the worst excesses of the 60s and 70s (which backlash to that eventually led to the Gen X mentality…and some of the roots of our hyper consumerism) were due to overreaction of trying to make up for their childhoods.

I'm not really sure there is much that can be done about that, it could just be part of nature. I'm ascribing more to the viewpoint that intelligent people inaccurately think that they can engineer away our problems, that wise people accept that fluctuations are natural and that intelligently wise people recognize that you shouldn't spend all your energy fighting against the tide, but you can spend it to minimize the number of people that are swept away completely.

I also agree with Jim. Test after test shows that happiness is a relative measure based not only on how your needs are met, but how you compare to people around you — especially whether it seems that their compensation is fair. I think that it is only natural that people will be upset if they don't share in wealth gains and thus live closer to the edge when their incomes haven't risen in 30 years. Then when basic needs are rising on top of that and making them effectively much poorer then it is hard to adjust. I'm not sure that the bulk of Americans are really that irresponsible and make adjustments faster than they are given credit for…it's just that inflation in basic needs was making people much poorer much faster than they realized.

The problem with your claims of where the responsibility lies is that it you completely ignore that real income for the middle class has been flat for years now even before accounting for increased out of pocket health car expenses even for those who have insurance. The volatility of energy costs don't exactly help either. Look where gas prices were before the recession hit. In addition the real estate bubble ate incomes by running up housing costs for large numbers of people.

It would be nice if society could be structured in such a way to encourage and reward only positive behavior but to a large extent I think things work out better when we take into account our lesser angels as well (Plus, it's impossible to avoid reinforcing negative behaviors if we're going to provide safety nets for people who fall short.)

The lesser angels of our natures thing is why I believe capitalism generally makes a lot more sense than socialism; people generally aren't motivated to be as productive as they can be for the collective good, but when there's a selfish motivator they are. It's up to us as citizens and parents to superimpose the value system on that which says that ambition is good but greed is not, and that the accumulation of wealth should be for some purpose other than pleasure and is going to be more successful if it's planned for long term acquisition and savings, not short term consumption.

Hopefully the younger generation seeing our current collapse will see that their elders deluded themselves into believing the greed was sustainable, and will learn from that. But I hope they see that this was a failing of CEOs and middle class working grunts too- otherwise I think they'll have learned the wrong lesson.

As a brief aside I believe this in general. My friend said his coworker was getting a divorce because his wife cheated on him and she was also trying to get all his money…and the way he described certain parts of her behavior I knew that she was the type that would have shown warning signs long before the marriage even began. So I asked my friend if the coworker had mentioned whether she always had similar problems and he said yes, and I said it was kind of his fault for getting married then. It's not to take the responsibility off her, of course she is doing something awful. Of course she needs someone to sit her down and try to get her to be an adult, and of course the system needs to hold her to account to minimize the damages to the innocent spouse. But on the other hand, he should have made a better decision, but he was blind with love and focusing on what they had then…as opposed to how things would be after 30 years together. I'm not even saying that he necessarily made the wrong decision, as long as he was more willing to accept how the situation has turned out. But instead he views himself as a helpless and self pitying victim.

I think you see my point. The difference of course is that he has the system behind him to protect him so she can't actually take everything from him, because it is so obvious that she is in the wrong. But when it comes to the financial system, the rules of the system are dictated by “her” because our government is too feeble to stand up and punish those that failed. Just his bad decisions led to emotional suffering that a divorce court cannot compensate, so too will we in a collective fashion. And while she probably will never feel regret, she needs to have a judgment against her that will do as much as it can to minimize her gains and make her think twice before doing it again.

But it's up to him to accept that it's over. The only way that the court will not come down on his side 100% is if he goes to easy because he succumbs to the delusion that if he gives her what she wants then maybe she will change her mind, go back to him and everything will be normal again. That's not her nature, and even if she did, it would only be a matter of time before she left again with even more emotion and money extracted.

To me it's almost like the people (politicians, businessmen, etc) that failed us are like rabid dogs..they're at a point where it's just their nature to do these things and can't exactly be blamed. It's up to us to do a better job of creating a society that rewards the “good” values better. I have to admit I do a very poor job of this, because it's so much more time consuming and a hassle. What I really would like to see is more large corporations that strive to live up to hard working ideals and reject the mentality that a corporation exists merely to maximize profit for its shareholders. I think that it does…but it must be sustainable, and that includes pursuing policies that are more holistic with society in general. I also would like to see more mega non-profits that compete in areas of basic needs.

Unfortunately, tax policy is primarily effective only at decreasing the rate of wealth disparity increases. The basic nature of our current economic system pretty much guarantees that it will eventually become top heavy and unstable. This is a fundamental mathematical characteristic of compounding growth and there is no way around it. The only current alternatives are systems that tend to become top heavy because of corruption due to concentrated power or are very stagnant.

At the end of the day, major economic crashes and depressions are inevitable…and the government bailing out bad decisions at some points eventually just compounds the problem. We are at a period where it is now a rising probability that some countries will see a Greater Depression, and that's a consequence of 30 years of supporting poor decisions.

This sounds crazy, but the only thing that will get rid of our problems is if the people that have money and power make good decisions. Our society as a whole let the Fulds and Thains and Mozilos and hundreds of thousands of lesser demons get power at the expense of the middle class — and even the Gates and Buffetts of the world. And I don't think I need to even mention the politicians…

So I assume by this you mean that you favor short term measures which will have a definitive expiration, not program expansions which will go on indefinitely? Have you reviewed the House bill to see if it meets that criteria? Have you contacted your Congressional reps to make sure they know how you feel about this?

I don't see how you can compare what has happened to middle class America to Latin America either in scope or according to the cause. The fact is that I think much of the problems faced by middle class Americans are self inflicted- we've squandered opportunities by engaging in excessive consumption, and in many cases created financial instability through divorce or single parent households. Those problems can't be scapegoated on 'the rich' or 'the man' holding people back, and the solutions don't come from government policy.

What we need is to restore the vibrancy of the middle class- whose wages have been stagnating since the '70's. We've seen that allowing those who possess most of the country's wealth to accumulate more is not trickling down to the middle or lower class. The top 20% of income-earners cannot sustain the nation's economic growth on their own.

There's been a huge sentiment in our country for a need for change, and that's understandable and probably good. But not enough people are asking what form that change should take, or asking the right questions about the changes that are being prescribed. When you're going in one direction which is clearly the wrong one, there are still 359 degrees of change to choose from, and unfortunately people seem to fall for the absurd twist of logic that says that the direction 180 degrees opposed to the current direction is the correct option.