Our credit culture

Too often, I see stories treat the subprime mortgage meltdown as an isolated event that resulted from otherwise responsible banks and lenders making a series of bad decisions and breaking seemingly arcane rules.

From my perspective, the meltdown has more to do with a decades-long shift in our economic culture from one in which middle-class worth was based in ownership to one in which worth is based on paper. Hundreds of thousands, if not millions of families have entered the middle class through credit card debt, car loans and mortgages, not through real earnings.

We've stubbornly held onto our lifestyles by putting off our bills. That's true on a micro and a macro scale. And we all know we were doing it.

Now the Los Angeles Times presages another potential meltdown, this time in the automobile sector. Shockingly, those loans for giant, expensive SUVs came with some loaded terms.

Common sense should have told us that people were buying cars they couldn't really afford. After all, wages were depressed, unions and manufacturing jobs disappearing, employment largely stagnant. The collapse in the automobile lending market was probably staved off because so many people folded this debt into their subprime mortgages.