An old high school friend tweeted: “It’s a Wonderful Life has be the most anti-Tea Party movie ever.” I rakishly tweeted back: “False.” Rather than attempting to hash out this disagreement within the confines of 140 characters, we resolved to do a Gladwell vs. Simmons sort of thing, exchanging long-winded emails to see if we could hash it out.

My friend, Chris Schaefer, has led a peripatetic life ranging from Oklahoma to Morocco. As of late, he seems to have settled in Paris. We agreed to let him have the first word:

Chris: I was being a good American and doing my annual Christmas-time viewing of It’s A Wonderful Life when I had this moment. It was one of those eyebrow-scrunching, lip-twisting, just-wait-a-second-there moments: Conservative Americans cherish Frank Capra’s classic, and yet important parts of the film don’t seem terribly conservative. I wondered if conservatives’ appreciation for family, faith, and community in the movie doesn’t cause them to miss echoes that the original audience would have picked up on immediately.

It's a Wonderful Life It’s a Wonderful Life came out in 1946 right as the United States was exiting an extremely difficult decade and a half. There’s a reason why Tom Brokaw coined the term “The Greatest Generation” to describe those who came of age during the Great Depression and World War II. Two of the greatest challenges that animate the film are bank runs and lack of affordable home ownership–the difficulties of The Greatest Generation in Bedford Falls as it were. These two issues play out in significant ways. George Bailey doesn’t go on his own honeymoon because he has to use his own personal savings to pay his clients who are caught up in the uncertainty of a bank run. And the entire business concept of the Bailey Building and Loan was based on providing home ownership for the poor of Bedford Falls, which was not so much a business as a non-profit social organization if we can take Potter’s critique and the bank-examiner’s presence as any indication.

So what happened between the Stock Market Crash of 1929 and the end of World War II in 1945? The New Deal. And in the New Deal, Democratic President Franklin D. Roosevelt pushed through the creation of two organizations that addressed both of these issues. The Banking Act of 1933 created the FDIC (whose sticker you will inevitably find on your bank’s window), guaranteeing deposits up to a certain amount. The bank run in It’s a Wonderful Life happened just before its creation, and so for viewers in 1946 it served as a scary reminder of how things used to be before the Democrats pushed through the New Deal.

In 1938, Fannie Mae was also created at Roosevelt’s behest in order to increase home ownership and make housing more affordable. Both of these programs were pushed through against Republican opposition, and both would have benefited the residents of Bedford Falls–those who did “most of the working and paying and living and dying” in the community, as George so passionately put it. George’s support for the poor on these issues would have recalled the Democratic rhetoric, while Potter’s heartless commentary on the plight of Bedford Falls’ poor would have echoed the anti-New Deal Republicans.

Don’t take my word for it, though: these leftist echoes scared the FBI. A 1947 FBI memo (pdf, pg. 14) indicated concern that the screenwriters were closet Communists and that the portrayal of bankers and rich people was highly suspect. Now, J. Edgar Hoover’s FBI wasn’t always the most level-headed of organizations, but the fact that they were concerned about the leftist tones of It’s a Wonderful Life means that some aspects of the film resonate in different ways today.

So what’s your call, Keith? Am I missing something? Or, in their deep appreciation for the film, do conservatives today ignore the historical and political context of It’s a Wonderful Life?

Keith: I am one of those conservatives who loves It’s a Wonderful Life and actually believe that the film encapsulates a lot of my small government, pro-family political philosophy. While I’m glad to have my presumptions challenged, I think that you’re wrong to say that this movie is anti-capitalist.

I will grant your presumption that we should consider the historical situation at the time of this movie’s release to help us understand how certain scenes would be understood. Like Scalia at the movies, we should consider the original public meaning, right? But we’re not merely asking a purely historical question, right? I’m not particularly interested if some FBI agents struggled to separate the idea of a bad banker from the idea that all bankers are bad. I’m similarly nonplussed by the question of whether Republican identifiers would have been torqued by watching the film in 1946.

Political coalitions have shifted quite a bit in the last two-thirds of a century. Back then, it was not unusual to be for both higher government spending and traditional family values. Indeed, as both parties were rather conservative on social issues, the economic divergences played a larger role in determining voting behavior. Today’s political fault lines obscure these differences. Now, if one is for traditional family values, that identity tends to dominate and make differences of economic regulation seem comparatively minute. All that is to say, that it could be that the folks who wrote this film were both “conservative on social issues” in some sense that we can recognize, while still advocating for leftist solutions to some of the economic issues of the day.

However, I don’t actually see how the movie supports left-leaning economic policy. The movie exults in the way the Bailey Building & Loan helps Mr. Martini escape Potter’s rental slums. You suggest that scene would be a comeuppance to those dastardly anti-New Deal Republicans who opposed the enactment of Fannie Mae. Actually, I bet those Republicans supported the end of the policy–getting folks into their own homes–and merely objected to the efficiency or constitutionality of the means. To see it your way is like maintaining that today’s GOP is against children eating lunch and that a movie showing a non-governmental actor providing lunch to hungry kids would be a real dig against conservatives.

On the contrary, when I see the Bailey Building & Loan helping folks escape the slums, I see a for-profit company improving the lives of its customers. When I see George foregoing his honeymoon and keeping the Building & Loan afloat through the bank run, I see the entrepreneurial genius benefiting everyone around him. When I see George providing private charity to Violet (or even the otherwise unemployable Uncle Billy), I see a demonstration of how a freer market with less of a public safety net would actually work.

Who needs Fannie Mae, the FDIC, or even Social Security when you’ve got George Bailey?

But beyond these incidental plot twists, don’t you see how the actual thrust of the movie is conservative? George Bailey denies himself and his desire for freedom and travel, and ties himself again and again to the small town and community. He was derogatory of his “not much a businessman” father, but eventually became his father and, in doing so, blessed everyone in Bedford Falls. Isn’t that conservative?

Chris: Thanks for this response. You have one very good point, which I concede but have a response for, and several that I must quibble with.

We can return to where you are right in all due time.  First, let’s talk about your unfair summary of my argument. At no point did I say that It’s a Wonderful Life was “anti-capitalist.” My point was much more nuanced. There is a wide, wide spectrum from anarchism to communism, with significant distance between New Deal Keynesianism and Communism. The first accepts capitalism while attempting to improve its outcomes; the second dispatches with it altogether. What I was trying to get at was that a viewer in 1946 would have noticed parallels between Potter’s rhetoric and Republican opposition to the New Deal and between George’s actions and the Democratic New Deal (which was Keynesian, not Communist).

There can be no doubt that George cares very deeply about his community, seeking to improve the lives of those around him. We readily agree on that. But you are saying that George improves the lives of his customers AND that he has a successful business full of entrepreneurial spirit. Is that really what is happening? As far as we know, his for-profit company never makes a profit, and his community spirit interferes with his entrepreneurial spirit at every turn. Think of his comment to the bank-examiner that “between us, we’re broke” or when the real estate agent points out to Potter that the Baileys “don’t make a dime” off of the houses they build. The Bailey Building and Loan isn’t a successful business full of entrepreneurial vim; it’s a community service center subsidizing people trying to live above their means.

Take this scene for instance:

Potter: Peter Bailey was not a business man. That’s what killed him. Oh, I don’t mean any disrespect to him, God rest his soul. He was a man of high ideals, so called, but ideals without common sense can ruin this town. Now, you take this loan here to Ernie Bishop…You know, that fellow that sits around all day on his brains in his taxi. You know…I happen to know the bank turned down this loan, but he comes here and we’re building him a house worth five thousand dollars. Why?

George: Well, I handled that, Mr. Potter. You have all the papers there. His salary, insurance. I can personally vouch for his character.

Potter: A friend of yours?

George: Yes, sir.

Potter: You see, if you shoot pool with some employee here, you can come and borrow money. What does that get us? A discontented, lazy rabble instead of a thrifty, working class…

Republicans often vaunt themselves as the party of financial astuteness, good stewardship of resources, personal responsibility, and the rule of law. Tell me, in It’s a Wonderful Life, which character represents all of those things?

Keith: First, as an aside, your insistence that the New Deal was not anti-capitalist, but merely attempting to improve capitalism’s outcomes reminds me of how Richard John Neuhaus’ characterized the leftist intellectual project: the “earnest search for a ‘third way’ between socialism and capitalism, namely, socialism.”

But returning to Capra’s classic and modern conservatives, I still think you’re operating under a misconception of what small government types actually want. Just because we don’t want government to increase spending to try to meet needs, doesn’t mean that we are against voluntary action which tries to do so. In the private sphere, conservatives like me want Baileys not Potters.

I don’t deny that there are some addled brains on the right who allow their objection to government benevolence to color their philosophy of private action. Thus we get Ayn Rand and the rest of the “greed is good” crowd. But they are a small fraction of the right, and they are most definitely wrong.

A great example of how my conservatism sees the world is found in Bailey’s loan to the cabbie, Ernie Bishop. Potter reports that the bank had turned down Ernie for a loan, but that George had given it to him. You see benevolence and proof that the Baileys are not businessmen, but I see something else. I believe that George is shooting straight when he says, “I can personally vouch for his character.” He gave Ernie the loan despite Ernie’s less than sterling FICO score not as charity, but because he knew Ernie’s character and he believed that Ernie wouldn’t let him down.

Conservatives imagine the freedom of decision making that allows Baileys to make loans to Bishops. Folks on the other side imagine that outcomes can be improved with more regulation. So we get laws like the Dodd-Frank Act: a bill with nearly uniform Democratic support, and barely a token of Republican complicity. Dodd-Frank increased scrutiny on so-called predatory lending which basically means that the George Baileys of the world are legally suspect when they try to assist Ernie. Regulation and central planning is the enemy of character-based credit assessment. The Tea Party’s vision for America is about increasing the scope of freedom George Bailey to make those kind of judgment calls.

Ultimately, the villainous Potter is a morality play about how not to use your freedom. A soul need not ruined by the access to wealth and free enterprise, but by choices made.

George had many opportunities to “shake the dust of this crummy little town.” He wanted to leave for travel and education. He wanted to build skyscrapers. He could have gotten the job his brother got, or taken Sam up on his offer to get in “on the ground floor” in plastics. He could have taken Potter’s offer and got the big salary. But he didn’t.

Potter did not consider the good of his neighbors. He acquired things for the sake of getting wealthier. And he had no one to share it with. That’s how Pop Bailey explains him:

Oh, he’s a sick man. Frustrated and sick.  Sick in his mind, sick in his soul, if he has one. Hates everybody that has anything that he can’t have.

George confirms this diagnosis:

People were human beings to him, but to you, a warped, frustrated old man, they’re cattle. Well, in my book he died a much richer man than you’ll ever be!

This is the message of the movie. By being humane in his economic ventures George Bailey lives a wonderful life in the free market and, at his hour of need discovers that has followed his father’s path to prosperity. His brother delivers the happy verdict:

Good idea, Ernie. A toast… to my big brother, George. The richest man in town!

Chris: I think this wonderful character study is spot on. I’m not sure I could have put it much better myself. It’s a Wonderful Life is a morality story about two different bankers, their opposing values, and how those values work themselves out. George Bailey loans money to benefit his community–to help his friends escape Potter’s slums and live better lives. Henry Potter loans money to amass even more wealth and to extend the ambit of his power. As you point out, it is Bailey’s values of family and community that ultimately win out over Potter’s accumulation of power and financial wealth.

I’d like to push your character study a little further, though. What happens when George Bailey gets his wish and sees how Bedford Falls would have been had he never been born? Bedford Falls ceases to be Bedford Falls; instead, it becomes Pottersville. Absent one virtuous banker, Bedford Falls descends into a den of vice, harsh and hostile, where one man’s monopolistic control of the town is so complete that the town takes on the monopoly holder’s name.

If anything, It’s a Wonderful Life is a story of how easy it is for the conservative ideal of Bedford Falls to slip away into nothingness. When one virtuous man disappears, none of the other characters-not Ma Bailey or Martini or Bert or Ernie or Mary–has enough power or smarts or community spirit to impede Potter’s relentless march to control the town. You praise the film as an exemplary story of liberty, but how many George Baileys do you see in positions of power exercising their liberty with wisdom and virtue. You tell me: are most American bankers these days, like Henry Potter, intent on maximizing profits and extending their control regardless of the outcomes on individuals and communities, or are they, like George Bailey, exercising their liberty virtuously in love for their community even to their own financial detriment? Perhaps some of the bankers themselves are fairly virtuous, but their range of action is limited by the system they are currently working within. There are always exceptions, but I think it’s pretty safe to say that, sinful humans being what it is and current corporate culture being what it is, the Potters of this world vastly outnumber the Baileys. And even if the non-George Bailey bankers don’t resemble the heartless caricature that is Potter–their primary motivation in banking certainly is not to benefit the community. The caricature is strong enough, though, that it crops up in parodies of the right-wing political positions–Potter’s comments could easily be used in a sketch on The Daily Show or The Colbert Report making fun of conservative positions on sound financial management.

Beyond the average banker’s motivating values, though, there’s another wrinkle that needs to be addressed: over the past several decades, the inexorable push for economies of scale and maximized margins–supported by conservatives in the name of economic liberty–has centralized control of firms and eroded local and regional control of companies. As a result, today local and regional managers of national chains do not have the same flexibility to make community-improving decisions that Bailey had in the 1940’s. If George Bailey were running the Bank of America branch in Bedford Falls today, would he even have the authority to loan money to Ernie or Violet? Or would rules handed down from national headquarters restrict his virtuous action? And here we’re not talking about government regulation, but private corporate culture.

In short, it’s highly questionable that the mythic community of Bedford Falls is even a possibility in 21st century America. While we may learn a lot from George Bailey about how to live on a personal level, once we begin looking at the economic and political context necessary to imitate the community of It’s a Wonderful Life, more leftist readings suggest themselves. It wasn’t for no reason that the FBI suspected the movie had strong potential to influence people in anti-capitalist ways. Sometimes the stories that influence our lives turn out to be not quite what we think, including some of our most cherished myths. And to turn a blind eye to relevant facts and important context is to do an injustice to both the past and the present. On the other hand, It’s a Wonderful Life is just a movie. It’s not a political or even historical documentary. As fun as this back-and-forth has been, I’ll be the first to admit that the nature of the story severely restricts what kind of firm conclusions about politics we can draw from it. Still, though, given its political and economic context, it’s hard to not conclude that It’s a Wonderful Life lends itself to an interpretation further to the left than most conservative fans are willing to admit.

Keith: This has been fun, though it is unclear if any persuasion has taken place.

We still disagree deeply on the motivation behind the movie. You believe that only a leftist (i.e., pro-New Deal) would make a movie with a heartless banking character like Potter. You’re right to note that Stewart and Colbert would feature a similar caricature to make their case that the GOP policy of the day is heartless and cruel. But just because the Left makes great use of the greedy, money-grubbing trope doesn’t mean that Conservatives don’t make similar objections. Indeed, it is precisely because our culture sits in near universal condemnation of Potter’s lifestyle that the Democrats tend to wrap their agenda in the anti-Potter flag. The inverse of this point would be the endless bureaucracy of many government agencies. Everyone agrees that red tape can also be obscene, and that is why the GOP is always trying to focus attention on it. But “Vote for Me, I’ll Stick it to Potter” and “Vote for Me, I’ll End Regulation” are sugar-high slogans with very little substance.

Despite those FBI suspicions, I believe that a conservative could have easily made a movie with a power and soulless banker as the bad guy. Such a conservative filmmaker would probably avoid showing regulation as the solution to Potter’s avarice, but instead show that ultimately those who act virtuously will end up richer than Potter ever could imagine. That’s the movie I see when I watch It’s a Wonderful Life.

Posted by Keith Miller

Keith Miller is an Assistant Solicitor General in the Federalism Unit of the Arizona Attorney General’s Office. He is married and has four children. You can follow him on Twitter.

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  • Chris Burton

    Nice discussion, and a good example of how folks *ought* to discuss such things. I watched this movie countless times as a teen and in my early twenties, then took a break for a long time and took an interest in politics in the meantime. When I watched the movie again I couldn’t help but think of many of the points you raise. I think my favorite quote here is, “Who needs Fannie Mae, the FDIC, or even Social Security when you’ve got George Bailey?” Indeed. I doubt we’d even have some of the political issues we have if we had more George Baileys.

  • John

    I think this whole debate becomes clearer when posed in a slightly different context: In short (and somewhat oversimplified), Dems and Reps take two differing approaches to dealing with human nature: Dems attempt to minimize the effects of bad actions (within the context of It’s a Wonderful Life, this would mainly be greed) via regulation and oversight, while Reps act on the hope/assumption that good will overcome evil if given a level playing field (a govt that provides a basic framework to provide security and basis for peaceful living).

    Ultimately, neither of these approaches provides a holistic solution, as sin is not solved via political or social means. This, of course, does not mean that one is not superior to the other in given situations, but, particularly as a Christian, one must realize that neither of these options will solve our world’s ills. They are simply band-aids that do what they can to reign in the effects of sin in our fallen world.

    A mix of these two approaches would likely provide the best results, but our only true Hope is found somewhere else – and that is something we should never overlook in these kinds of conversations – regardless of which political Band-aid we think works best.

  • MgtSchool

    The mortgage market today does not work like the one in the movie. In the movie, George loans money to Ernie based on a personal judgement about his character and is willing to back up the the risk to the bank with his personal assets.

    Today, in real life, the loan to Ernie would go something like this:

    10 minus after Ernie signed the papers, George flipped the note to an investment bank for the amount of the loan plus a discounted share of the potential interest Ernie would pay over the life of the loan if he did not default. George has made his profit and is no longer involved.

    The investment bank buys thousands of loans and then securitizes them, splitting the risk and profit of each loan multiple ways and combining it with slices of hundreds of other loans to create a portfolio with an attractive risk/benefit ratio.

    Then the investment bank pays a credit rating firm to judge the quality of the securities and give them a rating. Since the firm is paid by the issuing bank, it gives the securities a high rating, maximizing their selling price.

    The bank then sells the securities to a number of institutional investors such as pension funds.

    The pension funds then buy insurance against the loss of its investment from yet another investment bank in the form of credit default swaps.

    Unregulated, the credit swap issuing bank is under no obligation to maintain enough capital to cover all of its bets.

    This system all works as long as the risk of the original mortgages was judged accurately all along the line.

    The risk and profit are split between many firms, none of which care about Ernie.

    How could anything go wrong?

    My questions to Keith or the rest of you – if you think this isn’t accurate, what part of this business model isn’t how the world actually works today? If you admit this is accurate, how does that affect your story of the altruistic banker unfettered by government regulations?

    The problem with the Tea Party is that its ideal world of altruistic firms – unfettered by government and providing a better safety net – can’t exist with the way corporations work nowadays.

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