Another Piece of Clarity and Almost Courage

“When Saul heard their words, the Spirit of God came upon him in power, and he burned with anger” – 1 Sam 11:6

It’s a part of our religion that honestly gets downplayed a bit too much these days, I think. Saul heard their words (messengers that had come from Jabesh Gilead, which was under siege from the Ammonites), the Spirit of God came upon him in power, and he burned with anger. He heard something that was offensive to him, in this case an attempt to destroy and utterly embarrass a town in Israel, and he was pissed. And his anger burned, perhaps even more hotly because he was feeling the power.

It’s OK to be angry about injustice. The Bible is replete with men who saw injustice and had the courage (and ferocity) to act.

In our day, it is easy enough for people to see injustice. It’s the “acting” part that comes with difficulty. Even short of taking action, I would say there is a “killing your idols” part that comes with difficulty … or perhaps just time. That is, people see injustice, recognize it clearly as such, but refuse to take the bold step of ascribing that injustice to a system which they have known their whole lives and come to view as a natural part of life.

Almost a year ago we wrote “The Pope Almost Gets It” in response to some statements by Pope Benedict about the disintegration of the family in Europe. (Please give it a look if you haven’t, it’s a more comprehensive post about the conflict of social structures than time usually permits.) In it, we note that the Pope rightly understands that the family is disintegrating in Europe, which is bad, and that a change needs to happen. He somehow felt that “change” was simply one of “recommitting” ourselves to keeping the family together. He didn’t grasp (or didn’t express his grasp – the Pope is a bright guy) the fact that the family is disintegrating because the social structure of the nanny-state is built around, by, and for the purpose of family disintegration. Instead of killing the idol that most people have known their whole life, he allows it to live, but asks people to be good anyway.

We see a similar bit of “almost” in a recent article by Edward Hadas: “Finding a way to make finance less sacred“. It’s a good article. Hadas is all over this thing from the start. He starts by quoting the Pope (the guy really does hit the right issues). He then launches into a rather nice pull together of the “finance as god” argument. It’s well done.

Yes, the financial industry, and central reserve banking, has set itself up as a false god. The practitioners see themselves as priests. (Honestly, Goldman Sachs CEO Lloyd Blankenfein claims he’s simply “doing God’s work” – his words.) When banks leverage up their investments time and again to make exorbitant profits and the face collapse and utter ruin because their modeling assumptions were wrong (they always are) what happens? They get a massive tax-payer bailout. Why? Because they “serve an important societal function” … WHOA THERE. Seriously?

Banking is not production. Let me say that again, because apparently few people actually get it: banking is not production. When you go to work today and create a widget, or a car, or an educated child, you have produced something. If, on the other hand, you loan one person’s money to another (and another and another), while keeping a keen eye on the Fed and the markets to know what “bets” are most likely to pay off – what have you produced? A big paycheck, to be sure, but what else?

Now, I have no problem (though Hadas apparently does) with bankers getting paid a ton of money. But only if they get paid without inducing moral hazard. That is, if they get paid millions of dollars in a free and fair market, where nobody is on the hook to cover their losses, then fine. If, however, they get huge sums of money by making leveraged bets that will be covered by the taxpayer when they fail, well that I have a problem with. But my problem is with the bailout, not the paycheck.

So Hadas carries on for a bit, rightly noting the false god argument. This is quite Biblical, I might add – given Jesus’ statements about not serving two masters (see Matt 6:24). Central banking is a religious experience, revolving around the false god of wealth. Oh, they pat themselves on the back and say that it’s all for a good purpose, it’s all for the betterment of society – but the notion that you can live and breathe injustice (fiat currency is driven by false weights and standards) and claim to be serving the right is a bit off base to say the least.

We then get to the end of the article, and Hadas backtracks just a bit:

Still, finance should not be condemned as entirely evil. The modern industrial economy relies on money, credit and the hurly burly of investment to function. For all its flaws, the current financial system is more efficient and flexible than alternative means of gathering and allocating economic resources such as barter or rationing. At its best, and when it works, the business of banking and investment promotes the common good: it creates solidarity among savers and borrowers and rewards both daring and prudence. Lloyd Blankfein, chairman of Goldman Sachs was not entirely wrong to claim that his firm did “God’s work”.

Indeed, at the bottom of the economic ladder, people need more, not less, finance. Financial inclusion of the sort endorsed by the G20 finance ministers last week is desirable. But at the top of the ladder, the industry needs what students of religion call desacralisation.  The modern incarnation of the Israelites’ golden calf should be stripped of the trappings of holiness. It is better for finance to serve the genuine economic good on earth than to aspire to an unmerited place in heaven.

Don’t backtrack Edward. You’ve called “a spade a spade” – now follow through and kill the idol. You almost had it. You almost had a post for justice and freedom. You almost had it. Maybe it just takes time for people to get comfortable with the destruction of their idols.

A few notes on his closing flourish. First, there is clear “false dichotomy” here. Hadas intimates that the only alternatives to central banking and fiat currency, where money is lent into existence based on nothing at all, are “barter and rationing”. This is absurd to say the least. Currency serves as a medium of exchange and a store of excess production. The only thing that is added by fiat currency is the ability to change the value of stored production at any given time to serve political ends … and to oppress the poor in the mean time. There is such a thing as “sound money” which would be just fine with me.

(Side note: if you are uncomfortable with the gold standard, then fine. Let us allow free flowing untaxed transactions in commodities; whether gold, silver, pork bellies, or houses … or any other asset for that matter. Then a person may place their “excess production” in any asset class they choose without being taxed in the process, thereby leaving the major pain of the fiat currency system behind.)

Second: yes, Blankenfein was entirely wrong to claim that his firm is doing God’s work … unless we redefine “God” to mean something other than the holy and righteous One, the Creator of the Universe, the true and living Judge.

Finally, there is the “make the idols serve the good” argument. Unwilling to sacrifice the idol of finance, Hadas claims that it should support a social good. This is a bridge too far. He wants to take an industry built on “getting yours” and getting it at the expense of someone else, and turn it around for social good? Does he honestly believe that he can take a system of plunder (efficient plunder at that) and use it to plunder the “right” people and enrich the “right” people? Better to have a system built on justice, freedom, fairness. We need a system where bankers are unable to plunder, not a hope that they make the right decisions about who to plunder (and perhaps take smaller paychecks).

So it was a good article. Hadas almost got it. He almost got to the point where he took down the idol. He almost got to the point where anger is met with courage and boldness to do the right thing. It’s at least a step though, I suppose.

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One Response to Another Piece of Clarity and Almost Courage

  1. Pingback: Risk No Hurt to the 1% | Freedom at Bethsaida

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