I’m glad David Brooks sticks up for the Germans today. So many people have been yelling about how awful they are to see the Eurozone crisis as a moral drama in which responsible northern Europeans are being goosed to spend the money they responsibly managed to cover the debts of irresponsible southern Europeans. Krugman et alia spite the Germans for cutting off their noses to spite their faces by insisting on seeing the economic crisis in moral terms. Yet as Brooks points out, successful capitalism has to be undergirded by reasons for people to believe there is a solid and defensible moral structure undergirding it. Here’s what it should look like, says Brooks:

People who work hard and play by the rules should have a fair shot at prosperity. Money should go to people on the basis of merit and enterprise. Self-control should be rewarded while laziness and self-indulgence should not. Community institutions should nurture responsibility and fairness.

This ethos is not an immutable genetic property, which can blithely be taken for granted. It’s a precious social construct, which can be undermined and degraded.

And not only in Europe, but here as well. Brooks says, sensibly, that in the heat of the crisis moment, the US government did what it needed to do so save the system (flooded it with money, basically). But that was not followed by rebalancing the moral books, including holding the people who blew up the system to some kind of meaningful account, and reforming the system to discourage morally reckless behavior, and to reward honesty, responsibility, and hard work (versus get-rich-quick gambling, crony capitalism, and so forth). Result?:

Right now, this ethos is being undermined from all directions. People see lobbyists diverting money on the basis of connections; they see traders making millions off of short-term manipulations; they see governments stealing money from future generations to reward current voters.

The result is a crisis of legitimacy. The game is rigged. Social trust shrivels. Effort is no longer worth it. The prosperity machine winds down.

Brooks says that the deep crisis of trust in the US is in large part the result of the government failing to bring a moral accounting to the system in the wake of the 2008 crash. A real Pecora commission likely would have gone a long way toward restoring confidence in our system. Yes, life would still be hard, and we’d still have a heck of a cesspit of debt to climb out of, but at least the public would be able to have the confidence that the system was morally sound and worth believing in.

I think he’s right, and I can completely understand the terrible choice Germans are faced with, and why they recoil from making it. It destroys the moral structure of capitalism. Let the Greeks and the Italians live by tax evasion, bribes, and destructive cynicism toward their institutions and the responsibilities of citizenship, and it doesn’t matter: the Germans can be counted on to bail them out. If I were a German and my government decided to do this, I would be filled with so much contempt and despair it would be disorienting. And yet, if my government failed to do that, I would be staring into the face of a Great Depression.

I wonder what would be worse: a Depression that serves as nemesis for the hubris of the Eurozone tower of Babel, or saving the Eurozone by throwing overboard the “precious social construct” of moral hazard and an economic system that rewards virtue and punishes vice.

I know some of you readers know a lot more about economics than I do — Pyrrho! — and no doubt disagree with me on this. Please help me understand why it’s wrong to apply a moral framework to this situation, why I’m worried about the wrong thing.