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Photo Courtesy of ScramEd (Flickr.com CC License)

In the coming years and even decades, our political and economic fortunes as a nation will depend in significant part on the way in which the story of the current financial crisis is told.

If it is a cautionary tale of the dangers and excesses of unregulated “wild west” capitalism, then the story may serve to justify sweeping changes in the relationship between government and the private market and aggressive measures to ensure a more equitable distribution of resources. If it is an account of government corruption and distortion of the housing market, then, on the contrary, the story may serve to underscore the need for limitations on government and "government-sponsored enterprises" such as Fannie Mae and Freddie Mac.

Different versions of the story have already been used in support of TARP, the federal stimulus bill, extraordinary interventions in the financial and auto industries, massive increases in deficit spending -- and even environment and health care legislation. Most politicians, our President included, are telling and retelling the tale of the financial crisis in order to rally support for their agenda items, and we can expect to see this kind of rhetorical opportunism for years to come.

Yet one dimension of the story has been largely neglected. Progressives like to say that budgets are moral documents, and this is true insofar as budgets reflect priorities and decisions for which we are morally culpable. Yet it is also true that economic histories are moral histories. The story of the financial collapse is, among other things, an account of the actions of human agents. These actions -- whether they are the discrete actions of major players in government and finance or whether they are the everyday actions of Americans going to work and spending their money -- are susceptible to moral examination. Words such as “greed” and “corruption” have been much in the air, but a more extensive examination of the moral dimension of the financial crisis has been lacking.

Thus the question is posed: What is the moral story of the financial collapse? What does this crisis reveal about the moral character of our society and its forms of organization?

The answers to this question are many, and I will address them in a series. In this article, I want to speak not of specific misdeeds of powerful men and women but of a general moral drift among American workers and consumers.

The near-collapse of the American economy was preceded by a far longer and more general moral deterioration. Free market economies perform best when they are undergirded, and the millions of their daily exchanges supported, by the kind of shared values that the United States long derived from its Judeo-Christian faith. These values worked in concert with (and went beyond and filled the interstices between) the legal structure of our economy to inspire hard work and fair play, to strengthen contracts and partnerships, to discourage debt and reckless consumption and encourage wise saving and spending habits, and to cultivate a sense of loyalty, shared responsibility and social conscience.