Are the Ponzis taking over?
When I was young and much more liberal than today, people told me I would become conservative when I got older. I didn’t think it would happen. But when I look at how far the pendulum has swung to the bailout-and-take-care-of-me side, I wonder if we haven’t lost our way. Consumers outnumber producers, and everyone wants a free ride. Enough already.
You’ve played by the rules. Worked hard to put yourself through school. You’ve gotten a decent job and you pay your taxes. You’re faithfully paying down your mortgage and saving money in a 401(k) – all to secure your finances and your future. But now there are a lot more “takers” than “makers” in this country – and the impact is systemic and long-lasting.
A prevalent new “moocher culture” is changing the character of this nation – that’s the core message of A Nation of Moochers: America’s Addiction to Getting Something for Nothing, a new book by Charles J. Sykes, senior fellow at the Wisconsin Policy Research Institute and the author of six previous books.
“This has been the flash point in American politics for the last several years,” Sykes told The Fiscal Times in an interview this week. “In the wake of the Great Recession, we’ve shifted from a culture of celebrating and encouraging those who are productive and hardworking, to a culture where handouts, bailouts, freebies and entitlements dominate. You start to wonder, Why am I paying the freight for those who have been reckless and irresponsible, whether it’s on Wall Street or in Washington or anywhere else in the community? I think we’re becoming a very different nation.”
The Fiscal Times (TFT): With so many people out of work and so many suffering – through no fault of their own – how do you draw the line between real need and a so-called “culture of mooching”?
Charles Sykes (CS): That’s obviously the most difficult part, the gray area in the middle. There’s a distinction between needing temporary aid versus using a vast network of dependency as a way of life. Unemployment compensation, for example, is necessary for an amount of time. But when you start getting into 90-plus weeks of unemployment, hasn’t a temporary stopgap now become an excuse for people to avoid taking jobs? A number of economic studies have shown that the longer these benefits are extended, the higher the unemployment rate is. People make a rational calculation that it’s easier to stay on the couch than to get a job that maybe isn’t as great as what they had before.
TFT: Isn’t it a big leap to go from someone on unemployment to a wholesale expansion of dependency?
CS: If we have hungry children, of course we as a compassionate society have an obligation to take care of them. But I think we’re going through a massive concerted effort to expand the number of people who are dependent, who are looking to the government to buy them free breakfast, lunch and dinner, far beyond any reasonable definition of genuine need.
TFT: Is this new learned helplessness, as you describe it, a replacement for the employed-for-life, taken-care-of-for-life notion that many in earlier generations have known?
CS: Maybe. But ultimately the use of other people’s money and the vast expansion of benefits won’t substitute for what used to be provided for by the private sector. You can certainly understand the attraction of the bailouts, the freebies, the handouts, the dependency – for people who are nervous about the economy. But some politicians play upon this anxiety by promising things that are ultimately unaffordable and unsustainable. This endless promise that there’s always enough money in someone else’s pocket won’t work. It’s very seductive in some ways, but it’s not a solution to our economic problems, and it’s changing the culture and character of our society. It’s not the self-reliance and sense of independence and industry that our nation was founded on.
TFT: You worry about the children and the young people coming up.
CS: Yes, I do. Other people take a slightly more optimistic view. They say the reality is that most Americans still have the belief of working hard and being rewarded for it, that we still have a middle class that wants to do the right thing, and that these folks don’t become somebody different even if we are in economically tough times. That’s true. But I also see a new class of dependency. How many generations does it take before the younger people look around and say, “Of course somebody else is going to pay for me. Of course there’s a bailout. If I screw up or don’t save any money, it doesn’t matter.” I say we’re living on borrowed time. We’ve drawn down the balance of our bedrock values. Once the stigma of being dependent is eliminated, more and more people want to be that way.
TFT: As the economy improves, do you foresee a swing back to bedrock values?
CS: If you change the incentives, you change the culture and the character. The expectation of getting handouts began before this recession. And a lot of the policies we’ve put into place are intended to be in place long after. So we have to ask, At what point does this country stop running trillion-dollar deficits? When are we going to understand that now’s a good time to become fiscally responsible? We have lived off our children and grandchildren long enough. It’s time to turn things around. But like other binges, the debt binge is difficult to stop.
TFT: Do you hope that in this presidential election year some pragmatic solutions take hold and move forward?
CS: I’m somewhat frustrated by some of the dialogue right now. I know that the president would like to make this society fairer between the rich and the poor – the 1 percent and the 99 percent. But rather than a discussion of class warfare, I hope we make this a debate about the makers vs. the takers. We won’t get ourselves out of our economic problems by increasing spending and debt, and increasing the number of people who are dependent on others. And no matter how responsible our young people are – and I have two kids in college right now – my generation is leaving our young people with an economy of crushing debt. They’re going to inherit a completely different country than what we inherited. We’ve spent it all. That’s tremendously worrisome.
TFT: Your commentary in a chapter entitled “Step Away from the Trough” attempts to change this. How?
CS: We can say no to the things we want but can’t afford. We can’t have everything. But I don’t know that we have the political will to do that right now. Europe is the distant mirror for us. That’s not a talking point – that’s reality. We have to change the dynamic in which everybody is at the trough. People won’t step away from it until everybody else steps away, everyone else from Goldman Sachs, to farmers, to Hollywood celebrities. It needs to be a culture-wide understanding that this is just not sustainable. But if the notion of inter-generational transfer of wealth takes hold, then we might have a more serious willingness to make that distinction between needs and wants.
TFT: Who among the current presidential candidates would accomplish that, in your view?
CS: Unfortunately the person I’m politically closest to is not running. That’s Paul Ryan. He’s just about he only political figure who has tried to grapple with this and say, How would we slow this entitlement world – slow the growth of spending? And if it proves to be the third rail of politics in this election season, then I think we will have squandered one of the best opportunities we’ve had in a generation.