Callum Makkai | Trickle-up solutions

I never thought I'd see the day when a top Republican publicly decried "greed and corruption" on Wall Street.

In last week's debate, Sarah Palin let loose a stream of words you'd normally associate with the left: "Never will we be exploited and taken advantage of again by those who are managing our money."

That reminded me of Benjamin Rush, a Founding Father and Penn professor. When America began to develop its banking system, Rush bemoaned the way the young country was becoming "a bebanked, a bewhiskied and a bedollared nation." What he likely feared is what we're seeing now: Banks don't always make the best citizens.

Our economy is in shambles, thanks largely to the folly of our financial institutions. To support them, Congress recently approved an $850 billion bailout, yet global markets still teeter on the brink.

These troubles began with the ideology of the free market, a dogma that over the years the Republican Party has elevated to a national obsession. It's grounded in the belief that the market is all-knowing and self-correcting.

But housing advocates tell us these theories have failed American families. "A market is a human creation, and markets respond to incentives," said Elizabeth Hersh, executive director of the Housing Alliance of Pennsylvania. "The federal government has been incentivizing the residential real-estate market since right before the Great Depression."

Today's problems stem partly from the government letting lenders run wild in pursuit of those incentives. If we're to blame excessive deregulation, then better regulation should play a part in whatever solution Washington devises.

As much as the debate over solutions is important, it belies another concern. That's the question of justice, a preoccupation that runs like a silent thread through the media coverage.

When people use words like exploitation and greed, they reveal the moral underpinnings of our collective thought. Though we're taught from an early age that our economy rests on impartial laws of supply and demand, as humans we approach almost everything in moral terms. Even Adam Smith, the key progenitor of classical economics, wrote about moral sentiments long before he tackled wealth creation.

Remember that the crisis originated at the bottom of the economic ladder, when banks started handing out high-interest loans to people who already couldn't afford them - and who, in many cases, were blatantly deceived. That's why we use a moralistic word like "predatory" to describe these practices.

And there's a moral to the story of how we bungled the mortgage market: You can't expect windfalls from tricking the working poor into loans they can't pay any more than you can hope to squeeze blood from a stone.

That's the conversation I had with Wardell Holt, a bus driver who works in his retirement shuttling students around West Philadelphia. As we cruised through the neighborhood last week, he told me his thoughts on how government money could help the little guy. "Why don't they give it to the people at the bottom who spend money and let it trickle up?" Holt suggested.

I heard similar suggestions at People's Emergency Center, a United Way Community Partner located a stone's throw from campus. In addition to providing shelter and services for homeless families, the PEC restores properties for low-income occupants and offers financial education.

Kira Strong, vice president of community and economic development, described the women and children most affected by this crisis as "the unseen homeless."

"There was lack of oversight for so long that should've been there," Strong said, "Some responsibility really does need to be shouldered by the government."

With a downturn looming, PEC anticipates troubled times. Their president, Gloria Guard, recently sent a letter urging Congress to think "about the impact this financial crisis will have on homeless families who are most vulnerable."

It's clear this situation will play a decisive role in the election. Whatever your political persuasion, we can all agree that low-income families will take the hardest hit in the months ahead.

As Penn people, we really can't afford to ignore the local effects, because what hurts West Philly is bound to hurt the University. For everybody's sake, a remedy to our woes must start with those who need help the most.

Callum Makkai is a 2nd year doctoral student in the School of Arts and Sciences, from Halifax, Canada. His email is makkai@dailypennsylvanian.com. Moment of Clarity appears on alternating Thursdays.

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