Richard Exley Ministries

Bank Failures and Bailouts
Posted on September 24, 2008

In the past two weeks we have seen something of a meltdown on Wall Street. Some of the biggest investment banks have failed and Congress is debating a $700 billion bailout designed to head off a total financial collapse. Without question it is the biggest crisis faced by our nation since WW II.  Most of us are asking, “How could something like this happen? Who’s to blame?”

Affixing blame, however, is simply an exercise in futility unless it focuses on learning from our mistakes and not just denigrating those who are most responsible.  In truth, there is enough blame to go around. Some of the most obvious culprits – self-serving CEO’s, greedy speculators, mortgage banks pushing sub-prime loans with adjustable rate mortgages, unprincipled real estate agents, naive home buyers and shortsighted politicians. These all share in the responsibility to one degree or another. Now we must turn our attention to the future, to correcting the underlying causes to make sure nothing like this happens again.

Obviously economics are not my forte, and the intricacies of the current crisis are beyond me, so what I say here should be interpreted in light of that.  Still, having said that, I would like to venture an opinion in regard to what should be done; not to solve the present crisis but to minimize the risk in the future.

First, given man’s fallen nature and the inherit perils of power; some form of accountability is absolutely mandatory. Left to his own devises a man (or a corporation) will almost always look out for himself first. Well it has been said, “Power corrupts and absolute power corrupts absolutely.” That’s true whether we are talking about union bosses, CEO’s, mortgage bankers, politicians, or the person in the mirror or down the street.

Secondly, we must return to sound Biblical principles when conducting business, especially when it comes to lending money and charging interest. Excessive interest is called usury and is strictly forbidden in scripture. Nehemiah 5:11 declares, “...let the exacting of usury stop! Give back to them immediately their fields, vineyards, olive groves and houses, and also the usury you are charging them...”

By throwing credit cards at people and then charging exorbitant and compounded interest the Banks have made debt slaves of millions of Americans. By making sub-prime loans that convert into usurious adjustable rate mortgages the Banks have made foreclosures inevitable. It appears that mortgage banks hoped to make a killing on such loans by collecting fees up front, collecting usurious rates of interest when the ARM kicked in and finally by foreclosing on properties that had appreciated when the borrower could not repay his mortgage. The only fly in the ointment was the greed of the lenders. Apparently they never anticipated the excessive number of foreclosures and the impact they would have on the housing market and on their balance sheet. Perhaps they should have read Proverbs 28:8, “He who increases his wealth by exorbitant interest amasses it for another....”

Thirdly we must re-examine our responsibility to the poor. The “Great Society” envisioned by President Lyndon Johnson is simply not working. History has shown that although his heart was right his plan was flawed. By giving people a hand out rather than a hand up we have created dependency and a sense of entitlement. Rather than helping the poor achieve the American Dream we have simply locked them into a cycle of poverty.

Good intentions are not enough. Our relationship to the poor must be guided not only by compassion but also by scripture. The poor in the scripture were not those who would not work, but those who had no way of providing for themselves, the widows, the orphans, and the maimed. Even these, if they were physically able, were expected to help provide for themselves. At harvest time they went behind the harvesters picking up what was deliberately left behind. Leviticus 19:9-10 declares, “‘When you reap the harvest of your land, do not reap to the very edges of your field or gather the gleanings of your harvest. Do not go over your vineyard a second time or pick up the grapes that have fallen. Leave them for the poor and the alien.’”  In the New Testament Paul said, “If a man will not work, he shall not eat” (2 Thes. 3:10).  

The principle is clear: those of us who have been blessed must make sure that the poor (the widows and the orphans) are given an opportunity to participate in the blessing. We are not to harvest it for them but we are commanded to give them an opportunity to partake in the harvest.

How does that work in the twenty-first century? That remains to be seen, but I am convinced that if we can get the guiding principles right, the strategic details can be fleshed out. I know I am being simplistic but I would like to see welfare linked to work. Our inner cities are in desperate need of cleaning up and renovating. Welfare recipients could learn a trade while helping renovate their neighborhoods and building playgrounds and parks.  They could learn a work ethic, develop pride in their accomplishments, contribute to their neighborhoods and provide for themselves and their families. Now that’s the real American Dream; not something for nothing but an opportunity to make something of yourself.

In closing let me remind you that no matter what happens in the days ahead our hope is where it has always been – in Jesus Christ.
    Blessed is the man who fears the Lord,
        who finds great delight in his commands.
     His children will be mighty in the land;
        the generation of the upright will be blessed.
   Wealth and riches are in his house,
        and his righteousness endures forever.
    Even in darkness light dawns for the upright,
        for the gracious and compassionate and righteous man.
    Good will come to him who is generous and lends freely,
        who conducts his affairs with justice.
   Surely he will never be shaken;
        a righteous man will be remembered forever.
  He will have no fear of bad news;
        his heart is steadfast, trusting in the Lord.
  His heart is secure, he will have no fear;
        in the end he will look in triumph on his foes.
 He has scattered abroad his gifts to the poor,
        his righteousness endures forever;
        his horn will be lifted high in honor.
   -- Psalm 112:1-9 (NIV)

Prayer:  Lord Jesus, you are our hope and a very present help in the time of trouble. We do not put our confidence in the government or in the financial institutions of our nation. Our confidence is in You and You alone. We will put our faith in our God. Grant us peace in the time of trouble and strength for the storm. In Your holy name we pray. Amen.

This is Richard Exley straight from the heart.

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Category: Politics