What’s the Matter with Main Street?

Given all the (often self-inflated) celebration of the blogosphere, it’s remarkable how much the print media remains the chief touchstone and springboard of its most interesting debates and discussions. (Take a certain recent New Yorker cover, for instance.)

Consider a couple of particularly provocative newspaper pieces over the weekend.

In Saturday’s Wall Street Journal, financial commentator Paul Grant wonders why Main Street isn’t more P.O.’d about the bailout of Bear Stearns, the Fannie/Freddie debacle, and the mortgage mess—the costs of which will be borne primarily by the average taxpayers, while a great many well-to-do financial players will remain well-to-do.

So where is the outrage?

There is some, but it’s not well organized. Americans haven’t done group outrage for a long time. Call it a “silent majority” thing. In Freedom of Fear, his Pulitzer Prize–winning history of the U.S. during the Depression and World War II, David Kennedy notes that despite the images of union strikers and other protesters, the vast majority of Americans during the Depression were far from a revolutionary class. Beaten down? Perhaps. Overly optimistic that prosperity was just around the corner? Maybe that, too.

In any case, Americans as a whole don’t seem to make particularly good populists anymore. They simply don’t tend to see banks and business in general as the enemy. In fact, thanks to 401(k)s and other similar products, we’re more tied to the financial system for our well-being than ever.

Perhaps another reason why we aren’t as mad as hell: The out-of-pocket costs are, so far, hidden from us. At least our income taxes haven’t gone up!

The other article, which appeared in the Sunday New York Times, tells the story of one consumer-debt-burdened individual and how she went from solid financial citizen to harassed and stressed-out debtor. An excellent commentary on the article is this post about the article from the estimable housing-industry blog Calculated Risk.

The key question that the article and the post wrestle with: Who’s responsible for these debts—the spendthrift debtor or the incautious lender? It’s not as simple as it seems.

In the good ol’ days, credit card companies and other lenders didn’t lend out to people who weren’t likely to pay back. Now, as one Calculated Risk commenter notes: “Lenders are lending out MORE THAN THE PERSON HAS THE ABILITY TO REPAY. And they are doing it at huge profit...until they aren't. And then we as taxpayers have to swoop in and save the day.”

In the current crisis, we’re all a part of the problem. Maybe that’s why, so far at least, we’re fretting more than complaining. But when we start paying while others walk away with millions, things will change.

Maybe.