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A Christian Perspective on Financial Reform

I usually agree with Jim Wallis, though I often wish that he would go further in his critique of the current order. But, as he says in the following article, he is a conservative Christian (and I am not). As a nation, is it too much to hope that we may be approaching a new perspective on the systemic crisis that we are facing when conservative Christians start questioning the culture of greed that has marked this country for the last 30 years? Greed that rips apart the social fabric that unites this country? Greed that enriches the few and impoverishes the masses? Greed that skews the moral compass of this country? Greed that worships multi-million dollar athletic contracts and punishes the homeless for not working hard enough to afford a home? The list is endless. Read this article and reflect on it today, Sunday, February 14. Reflect also on the larger meaning of Valentine’s Day and don’t get caught up in the corporate celebration of the day. Instead, reflect on the true meaning of love, which Jim Wallis points to in this essay. His interview of Elizabeth Warren will appear in the April issue of Sojourner’s magazine.

Elizabeth Warren and Goliath

By Jim Wallis

I had a most instructive conversation this week with Elizabeth Warren, the Harvard economist who is also the Chair of the TARP Congressional Oversight Panel. Warren has a way of cutting through the jargon and confusion of many economists and of this economic crisis — right to the moral core of the issues at stake. I knew her for her keen insights, but I didn’t know she was from, as she puts it, a “mixed marriage from Oklahoma” — Baptist and Methodist — and that she is a former Methodist Sunday school teacher. In the interview I did with her for Sojourners, her moral and even theological comments were as impressive as her economic analysis of our present crisis. She said the battle for financial regulatory reform is like the battle between David and Goliath.
Warren’s narrative of the U.S. economy, and the banking industry in particular, was very clarifying. For most of U.S. history, our country went through repeated periods of boom and bust, with all the consequences of those cycles. But after the Great Depression, a number of new financial regulations — rules for the road — were put into place that were designed to protect average Americans in particular from the continued abuses of the big banks and the often terrible results in bad times for ordinary people. Two important examples were the FDIC (Federal Deposit Insurance Corporation) to protect people’s savings and the Glass Steagall Act of 1933 to prevent banks from speculating with depositors’ money. And the new rules worked for several decades, creating both prosperity and security for many American families and an emerging middle class. But starting in 1980, the rules were first watered down and gradually removed, and banks were free again to engage in both the abusive and very risky speculative behavior that helped to bring on the Great Depression, and resulted again in the current Great Recession.

She explained how credit card and mortgage application forms used to be only a page or two and were both clear and understandable to the average person — even allowing people to easily compare and contrast the deals offered. But now, as all of us know, these forms have expanded to 30 pages or more with lots of complications, hard to comprehend provisions, and “fine print” that cleverly hides a long list or traps, tricks, and a myriad of both exploitive arrangements and outright abuses that greatly benefit banks at the expense of borrowers and card holders. In clear moral terms, Warren described the current behavior of our biggest banks as deliberately deceiving, entrapping, and cheating unsuspecting customers into very precarious and ultimately disastrous financial positions. And with no more rules of the road, the banks were leading their customers into the financial ditch. An economic crisis has been the result with massive suffering and pain for millions of Americans.

We are now living in a “lawless” economic environment, according to Warren, where our biggest banks have become our most dangerous predators — and with no protections for the rest of us against the “law of the jungle,” as she puts it. The consequences for our economy, our culture, our families, and even our souls have been disastrous. This is not the way we should want to live, Warren says, and it is creating a world which we should not want our children to grow up in. She makes the urgent case for reform with the compelling analysis of a top economist, the family values of a grandmother, and the moral arguments of a person of faith. The sins of the financial world have become both a moral, and even religious, issue from the perspective of the Methodist tradition “which still shapes me.”

Warren is the “mother” of the idea for a new Consumer Financial Protection Agency (CFPA),which is in the current financial reform bill recently passed by the House of Representatives, and is now slowly making its way through the U.S. Senate. But the big banks are aggressively fighting back, trying to prevent their own regulation only one year after the financial meltdown for which they were in large part responsible. There seems to be no remorse, let alone repentance, from the big banks — only record new profits enabled by their taxpayer-funded bailouts, and enormous bonuses to the executives who made the very decisions that brought the economic system down on the heads and hearts of so many Americans. The biggest banks in America are giving shame a bad name.

Why are new rules, regulations, and protections necessary? Because of the human condition, the realities of human nature, and a biblically orthodox understanding of human sinfulness. Yes, the reasons we need the protections offered by a Consumer Financial Protection Agency are as theological as economic. And it is amazing to me how many of those who oppose any regulation of Wall Street also claim to be religious conservatives. They subscribe to what I label in my new book, Rediscovering Values: On Wall Street, Main Street, and Your Street — A Moral Compass for the New Economy, “the myth of the sinless market.” I am a conservative Christian too, conservative enough to have a healthy appreciation for human sins, human failings, and fallen-ness, and after witnessing the behavior of America’s biggest banks during this economic crisis, an old theological term called human depravity. It is simply bad theology to trust large corporations not to pollute our waters, poison our air, or cheat their unsuspecting customers. They have to be prevented from doing so for the sake of the common good. Good financial and economic rules reflect, not only good economics, but also good theology. And the free market fundamentalism of Wall Street’s defenders is, among other things, bad theology.

But as Elizabeth Warren, a good Methodist, warns, the banks are trying everything they can think of to kill financial reform. And we must not let them do that. In the name of a fairer economy, of family values, of moral values, and of sound biblical theology, the faith community must now make itself heard on the urgent issue of financial regulatory reform. We must hold our biggest banks accountable to the common good. So let our Senators not just hear from the bankers, but now also from pastors who see what such abusive banking behavior has done to their families and parishioners, to devastated communities with shuttered houses, to the prison of debt that more Americans find themselves in. People of faith across the land must now tell their elected representatives that we will be “watching and praying” to see what they will do about necessary financial reform. We don’t have the money in our financial coffers that the banks do to finance their political campaigns, but we do have our voice and our votes which will be turned against them if they vote against the best interests of our people and for the greed of the bankers. Jesus said it well — choose this day who you will serve, God or Mammon (Money). Let’s now put that choice to our Senators, who need to hear from us this next week while they are in their district offices during the Presidents’ Day recess. Critical decisions are being made for or against critical financial reform right now.

3 Comments on “A Christian Perspective on Financial Reform”

  1. #1 Beth
    on Feb 15th, 2010 at 7:54 am

    Thanks for posting this, Jeff. I actually had no idea there was a financial reform bill going through Congress right now. It’s certainly no surprise that the banks are fighting it. I think we’ve all experienced the tricks the banks use to confuse us and deceive us. Every time we’ve gotten a mortgage loan, we’ve had various bogus “fees” added on at the last minute that have vague explanations. It amazes me that they’ve been allowed to do this, unchecked. And last year, my credit card (through AAA) was changed to a different bank (a large, well-known bank that received a bailout). My statements began to arrive so late that, even though I sent the payment immediately, it didn’t arrive in time and I was charged fees. It was clearly intentional and an effort to squeeze even more money out of their customers. They’re sending them earlier now (due to new regulations passed last year, I think), but I’m still looking for a different credit card now. Not easy to find one, though, that doesn’t use the same tricks…

  2. #2 Mark Thomas
    on Mar 13th, 2010 at 8:22 am

    Hi Jeff,

    I’m in Alabama for a few days attending the Austrian Scholars Conference (www.mises.org/events/114).

    I spent some time speaking with Norman Horn, a young guy from Austin, TX, who runs the Libertarian Christians website (http://libertarianchristians.com/). He says his mission is to drive a wedge between Christians and the religious right’s support of war.

    Since he is a student of Austrian Economics, a Christian, and a Libertarian, you might enjoy his perspective.

    Mark

  3. #3 Jeff
    on Mar 17th, 2010 at 8:46 pm

    Hi Mark,

    Time do fly! I visited the Libertarian Christian website and I wish him all the luck in the world trying “to drive a wedge between Christians and the religious right’s support of war.” Ain’t gonna happen. I listened to the podcast entitled “Are You a Christian Warmonger” and what was clear to me is that Lawrence Vance is writing about authoritarians. By no means are all (or even most) Christians authoritarians – there are a substantial number of social justice Christians out there – just visit some of the links here under the Christianity category. It would be so nice if Christians opposed to war could unite and act as a counterweight to the religious right, but I think the likelihood of that happening is about the same as the likelihood of progressives uniting to achieve the same purpose. Still, if Glenn Beck keeps flapping his jaws about social justice, at least the social justice Christians will have a bigger platform to speak from.

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