AIG: Moral Outrage May Be Bad for Your Health March 17, 2009Posted by Dwight Furrow in Current Events, Dwight Furrow's Posts, Ethics, Philosophy.
Tags: AIG, federal bailout, moral outrage, utilitarianism
The exploding populist anger regarding bonuses paid to AIG executives is entirely justified. The very people who caused a lot of this mess are receiving tax-payer financed bonuses rewarding their incompetence.
But moral outrage is a cheap emotion. It is easy to generate, costs the outraged person nothing, and makes her feel better, relieving the frustration of pent up feelings by “letting of steam”. It also permits the outraged person the illusion that they have done something even though the emotion requires no action.
Most importantly, moral outrage is cognitively impoverished. One can feel and express moral outrage without ever considering the consequences of doing something to rectify the injustice.Thus, it is a dangerous emotion.
In the survey released just today by the Pew Research Center, nearly half of Americans say they are “angry” about the government “bailing out banks and financial institutions that made poor financial decisions” (39% say they are bothered but not angry, only 12% are not bothered). Not surprisingly, this anger translates into considerable skepticism about bailouts of banks and financial institutions:
62% say the federal government has spent too much on “large banks and other financial institutions in danger of failing,” 8% say it is spending too little and 21% say the amount is about right (Newsweek [pdf]).
59% oppose “giving aid to U.S. banks and financial companies in danger of failing,” while 39% favor it (USA Today/Gallup).
50% disapprove of “the federal government providing money to banks and other financial institutions to try to help fix the country’s economic problems,” 39% approve (CBS/New York Times [pdf]).
The attitudes reflected in this poll (which was taken before the latest AIG flap) represent perilous times. As Ed Kilgore writes:
The growing frenzy over AIG’s insistence on providing $165 million in employee bonuses…reflects an entirely legitimate belief that this scandal will serve as a popular tipping point between widespread unhappiness and marching-in-the-streets popular outrage over government bailouts of the financial sector.
But for many reasons, we may have to live with the outrage and get over it. AIG was writing insurance for much of the securities trading business—trillions of dollars worth of securities all backed by this very weak link. If it can no longer function (even as a ward of the state), the already seriously weakened financial system may head over a cliff.
The moral consequences of this happening are frightening and the devastation would be felt by millions of ordinary, innocent people around the globe. Ironically, it may be that the only people who understand these transactions well enough to unpack and reassess them are these whiz-bang fraudsters who are getting the bonuses. (Here is that story via Kevin Drum)
As odious as the bailouts are, there may be no other alternative if we want to avoid catastrophe, a point that seems lost on many of the people participating in the above poll.
Far be it for me to defend utilitarianism in toto (or condemn a little moral outrage)—but consequences do matter. And moral outrage ignores them.
Moral outrage tastes good, but it contains very little nutrition and in large portions can be really bad for your health.