Via Tyler Cowen, one reason why a background of recession and bailouts makes it hard to expand social insurance:
Three experiments demonstrated that feeling wronged leads to a sense of entitlement and to selfish behavior. In Experiment 1, participants instructed to recall a time when their lives were unfair were more likely to refuse to help the experimenter with a supplementary task than were participants who recalled a time when they were bored. In Experiment 2, the same manipulation increased intentions to engage in a number of selfish behaviors, and this effect was mediated by self-reported entitlement to obtain positive (and avoid negative) outcomes. In Experiment 3, participants who lost at a computer game for an unfair reason (a glitch in the program) requested a more selfish money allocation for a future task than did participants who lost the game for a fair reason, and this effect was again mediated by entitlement.
Soon after the election, Rahm Emmanuel was quoted as saying something about how you don’t let a good crisis go to waste. And in general I think there’s a belief among many that bad times are good time to press the charge for reform. This, however, is based on a pretty simplistic reading of the New Deal (FDR’s first term, 1933-36, was actually a time of rapid economic growth wedged between the Hoover-era collapse and the 1937 recession) and Benjamin Friedman’s The Moral Consequences of Economic Growth shows that the pattern from these experiments is much more likely. A bad situation makes people feel selfish and risk-averse.
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