In the run-up to this Christmas, like most years, I watched It’s A Wonderful Life. And this year, like most years, I then annoyed my friends by noting at the end that under any reasonable system of financial regulation, George Bailey was still going to jail. The moral here is “don’t watch Christmas films with an economist,” you’re setting yourself up for a lecture on either the proper workings of the banking system or an explainer on the “deadweight loss of Christmas.”

But this year I found myself thinking more about the politics and the political economy of the film than previously, which in their own way are oddly fascinating.

(Before proceeding it’s worth noting that this post will contain spoilers but (i) the film came out 71 years ago and that is surely beyond the spoilers statute of limitations and (ii) if you haven’t seen It’s A Wonderful Life and have clicked on this link, I really have no sympathy.)

It’s A Wonderful Life is as quintessentially American as La Marseillaise is French and like that anthem its political legacy is contested, with both sides of the divide claiming this cultural icon as a celebration of their own beliefs.

To conservatives, Bedford Falls is the perfect representation of their traditional American values—small town, family-centric life and community-spirit. Of course this wasn’t always their view—indeed an FBI