I read this Ross Douthat Washington Post piece on my cell phone while stuck in a traffic jam. That may have affected my response to it, but basically, the point seems to be that if ol’ man Potter in “It’s a Wonderful Life” had been running the banking industry this past decade, we’d all be a lot better off now. Two points: If Potter were around today, does anyone think he wouldn’t have been all over those unreliable financial instruments that have put us all in such hot water? And Dick Cheney, the closest real-life equivalent to Potter in public life today, has already been functionally in charge of the country for nearly eight years now.

Seriously, the piece is an interesting if not quite coherent elegy for and condemnation of American suburbia. The problem with it is that it links together disparate trends whose only common thread is their unsustainability – and to the degree they are connected, misidentifies the culprit.

Are unsustainable lending policies somehow equivalent to ecologically unsustainable land use policies? Suburbia has been on an ever-expanding arc for the past 60 years, with an ever-expanding carbon and ecological footprint, a trend driven by market forces most economists would consider unremarkable. And for most of that time, the mortgage industry has functioned reasonably well. In other words, when the market “worked” it led us down an unsustainable ecological path. In the mortgage meltdown the markets obviously “didn’t work,” but the ecological damage was already done.

The piece also locates the seeds of the lending crisis in George Bailey’s modest efforts to get people out of tenements and into tract housing in Bedford Falls. But having a reasonable policy that promotes homeownership need not inevitably lead to the wild profligacy of the recent bubble. This type of post-hoc reasoning can be used to condemn, or justify, just about anything.

Douthat is looking to blame government policies encouraging homeownership for various disastrous consequences of suburbanization. But the real problem is in the fetishization of free markets, which don’t account for environmental consequences and are prone to bubbles.

In other words, Potter’s slums might have been more ecologically sustainable than Bailey Park, but I don’t think that’s the message we should take away from our current troubles.