Read this excellent post on the balance between rational self-interest and cultural norms that emphasize the common good.
I guess what I’m saying is that without elites who have a sense of virtue it is going to be really hard to maintain a moral window on personal behavior. This isn’t a matter of judgement, I think it’s a description. The people who are “walking away” are probably leading indicators of the sort of rational behavior which will become the norm as people realize that that sort of selfish behavior is spreading. In some communities with a strong spirit of collective identity and leadership from the top perhaps ostracism will prevent rational behavior on the individual level which might be a liability in the aggregate, but I suspect that more often many average Americans will simply justify their behavior to each other by pointing to the fact that a substantial number of elite Americans have no hesitation of screwing them if they can and it is in their interests. In other words, it has gone from what should you do, to what can you get away with. Of course this is a vicious circle, and not good for anyone. But that might not matter.
The financial sector is systemically important for a healthy economy. But a sense of virtue is systematically important for a healthy society. Bailing out the former has resulted in pulling the rug out from one of the perceptions which has buttressed the latter; that those who do well do so because they do good.
The principles Razib describes are difficult to “operationalize,” but it’s clear that they are very important. This is one reason why Americans are so lucky. We benefit from what Razib calls an “accumulated capital of norms which lead to virtuous cycles,” and usually through no effort of our own. This is why I’ve always felt that the right kind of nationalism or patriotism is grounded in gratitude and humility, not a sense of superiority.