Even when our policies offer aid to the poor, they often require bureaucratic hoop-jumping, work requirements, or some condition that demonstrates the recipients’ need and moral uprightness. This sanctimony is partly a function of human nature. In the famous “ultimatum game,” in which one player is given a small sum of money and the discretion about how to divide it with another participant—whether 50–50 or 80–20—the second player will frequently refuse to take any money if the first proposes an unfair split. In other words, we would rather go without ourselves than see others take more than they deserve. Our desire to punish bad actors may have given humans evolutionary advantages, but it has led to punitive economic policies that harm us all. Policies built to punish supposed freeloaders above all else end up punishing society as a whole. Shutting out the unworthy may feel good—but not for long, if doing so pushes our economy into an ice age.

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American welfare policies have long been rooted in the belief that poverty is a personal failure rather than a systemic one. The civil-rights movement won some early successes in promoting a measure of economic justice for the victims of racism and segregation. Then came the backlash. With encouragement from Richard Nixon and conservative think tanks, economists, and media commentators, many Americans believed that what ailed the poor—a category often treated as synonymous with African Americans—was only their bad choices, “broken families,” and lack of work ethic. From Ronald Reagan’s tales of welfare cheats to Bill Clinton’s attacks on a “culture of dependency,” blaming poverty on its victims has been a winning political strategy and has resulted in large-scale suffering and increased inequality.

Moral arguments are more easily weaponized against people than against complex banks and other large corporations. While this is partly an ideological matter, it is also a reflection of the limits of human understanding. We can easily reach the judgment—as many Americans did during the subprime-loan crisis a dozen years ago—that our neighbors spent too much on their house and took out a dishonest mortgage. But the far more costly misdeeds of massive corporations are often too large and too distant to factor into our moral code. This was exactly the logic guiding the 2008 bailout. Though a few people urged policy makers to bail out homeowners instead of banks, that became politically unsavory. The CNBC commentator Rick Santelli helped launch the Tea Party movement with a rant: “The government is promoting bad behavior! … How many of you people want to pay for your neighbor’s mortgage that has an extra bathroom and can’t pay their bills?”

The culpability of individuals facing financial ruin was paramount. You knew what you were getting into, many commentators said. Helping you would create a moral hazard, they said. Let people bear personal responsibility for their own decisions, they said. So America did. And thus, the rich got richer and the poor got poorer. Inequality reached crisis levels, wages stagnated, the racial wealth gap grew, and jobs became less secure—which consequently explains how, in 2020, 10 million Americans could lose their jobs in two weeks’ time.