Tag: Biblical principles - Probe Ministries

The Bible offers principles concerning blessing and judgment concerning the nation of Israel. Do any of them apply to the United States? Kerby Anderson examines this question.

Is God blessing America? Will God bring judgment against America? These are questions I often hear, and yet rarely do we hear good answers to these questions. Part of the reason is that Christians haven’t really studied the subject of blessings and judgment.

In this article we deal with this difficult and controversial subject. While we may not be able to come to definitive answers to all of these questions, I think we will have a better understanding of what blessings and judgment are from a biblical perspective.

When we think about this topic, often we are in two minds. On one hand, we believe that God is on our side and blessing us. After the attacks on 9/11, for example, we launched a war on terror and were generally convinced that God was on our side. At least we hoped that He was. Surely God could not be on the side of the terrorists.

On the other hand, we also wonder if God is ready to judge America. Given the evils of our society, isn’t it possible that God will judge America? Haven’t we exceeded what other nations have done that God has judged in the past?

In his book Is God on America’s Side?, Erwin Lutzer sets forth seven principles we can derive from the Old Testament about blessing and cursing. We will look at these in more depth below. But we should first acknowledge that God through His prophets clearly declared when he was bringing judgment. In those cases, we have special revelation to clearly show what God was doing. We do not have Old Testament prophets today, but that doesn’t stop Christians living in the church age from claiming (often inaccurately) that certain things are a judgment of God.

In the 1980s and 1990s we heard many suggest that AIDS was a judgment of God against homosexuality. In my book Living Ethically In the 90s I said that it did not look like a judgment from God. First, there were many who engaged in homosexual behavior who were not stricken with AIDS (many male homosexuals and nearly all lesbians were AIDS-free). Second, it struck many innocent victims (those who contracted the disease from blood transfusions). Was AIDS a judgment of God? I don’t think so.

When Hurricane Katrina struck New Orleans in 2005, people called into my talk show suggesting this was God’s judgment against the city because of its decadence. But then callers from the Gulf Coast called to say that the hurricane devastated their communities, destroying homes, businesses, and churches. Was God judging the righteous church-going people of the Gulf Coast? Was Hurricane Katrina a judgment of God? I don’t think so.

In this article we are going to look at blessings and judgments that are set forth by God in the Old Testament so that we truly understand what they are.

Seven Principles (Part 1)

In his book Is God on America’s Side? Erwin Lutzer sets forth seven principles we can derive from the Old Testament about blessing and cursing. The first principle is that God can both bless and curse a nation.{1}

When we sing “God Bless America” do we really mean it? I guess part of the answer to that question is what do most Americans mean by the word “God”? We say we believe in God, but many people believe in a god of their own construction. In a sense, most Americans embrace a god of our civil religion. This is not the God of the Bible.

R.C. Sproul says the god of this civil religion is without power: “He is a deity without sovereignty, a god without wrath, a judge without judgment, and a force without power.”{2} We have driven God from the public square, but we bring him back during times of crisis (like 9/11) but he is only allowed off the reservation for a short period of time.

We sing “God Bless America” but do we mean it? Nearly every political speech and every State of the Union address ends with the phrase, “May God bless America.” But what importance do we place in that phrase?

Contrast this with what God said in the Old Testament. God gave Israel a choice of either being blessed or being cursed. “See, I am setting before you today a blessing and a curse; the blessing, if you obey the commandments of the Lord your God, which I command you today; and the curse, if you do not obey the commandments of the Lord your God, but turn aside from the way that I am commanding you today, to go after other gods that you have not known” (Deuteronomy 11:26-28).

We should first acknowledge that Israel was unique because it had a covenant with God. America does not have a covenant with God. But it does still seem as if the principle of blessing and cursing can apply to nations today.

A second principle is that God judges nations based on the amount of light and opportunity they are given.{3} The Old Testament is a story of Israel. Other nations enter the story when they connect with Israel. Because Israel had a unique relationship with God, the nation was judged more strictly than its neighbors.

God was more patient with the Canaanites–it took four hundred years before their “cup of iniquity” was full, and then judgment fell on them. Likewise, Paul points out (Romans 2:12-15) that in the end time, God would individually judge Jews and Gentiles by the amount of light they had when they were alive.

A nation that is given the light of revelation will be held to greater account than a nation that is not.

Seven Principles (Part 2)

In his book Is God on America’s Side? Erwin Lutzer sets forth seven principles we can derive from the Old Testament about blessing and cursing. The third principle is that God sometimes uses exceedingly evil nations to judge those that are less evil.{4}

Israel was blessed with undeserved opportunities, yet were disobedient. God reveals to Isaiah that God would use the wicked nation of Assyria to judge Israel. “Ah, Assyria, the rod of my anger; the staff in their hands is my fury! Against a godless nation I send him, and against the people of my wrath I command him, to take spoil and seize plunder, and to tread them down like the mire of the streets” (Isaiah 10:5-6). In another instance, God reveals to Habakkuk that He was raising up the Chaldeans to march through the land, plundering, killing, and stealing (Habakkuk 1:5-11).

As I mentioned above, Christians are often of two minds when they think about America. On the one hand they believe America is a great country. We have been willing to rebuild countries after war or natural disaster. American missionaries travel around the world. Christians broadcast the gospel message around the world.

On the other hand, America is a decadent country. We are the leading exporters of pornography and movies that celebrate sex, violence, and profanity. We have aborted more than 50 million unborn babies. Our judicial system banishes God from public life. Will God use another nation to judge America?

A fourth principle is that when God judges a nation, the righteous suffer with the wicked.{5} A good example of this can be found in the book of Daniel. When God brought the Babylonians against Judah, Daniel and his friends were forced to accompany them.

We also see a parallel to this in manmade and natural disasters. Whether it is a terrorist attack or a hurricane or tsunami, we see that believers and nonbelievers die together. We live in a fallen world among fallen people. These actions (whether brought about by moral evil or physical evil) destroy lives and property in an indiscriminate way.

A fifth principle is that God’s judgments take various forms.{6} Sometimes it results in the destruction of our families. We can see this in God’s pronouncement in Deuteronomy 28:53-55. When the Israelites were forced to leave their homes to go to foreign lands, the warnings were fulfilled. Today we may not be forced into exile, but we wonder if “God is judging our families just the same. He is judging us for our immorality.”

In Deuteronomy 28:36-37, “The Lord will bring you and your king whom you set over you to a nation that neither you nor your fathers have known. And there you shall serve other gods of wood and stone.” When the ten tribes of Israel were exiled to Assyria, they were assimilated into the pagan culture and never heard from again.

Seven Principles (Part 3)

The sixth principle is that in judgment, God’s target is often His people, not just the pagans among them.{7}

Yes, it is true that God judges the wicked, but sometimes the real purpose of present judgments has more to do with the righteous than the wicked. Not only do we see this in the Old Testament, we also see this principle in the New Testament. 1 Peter 4:17-18 says: “For it is time for judgment to begin at the household of God; and if it begins with us, what will be the outcome for those who do not obey the gospel of God? And ‘If the righteous is scarcely saved, what will become of the ungodly and the sinner?’”

This raises a good question. If judgment begins at the house of God, is the church today under judgment? Have Christians become too worldly? Have Christians become too political and thus depend on government rather than on God? Have Christians become too materialistic? Someone has said we should change the motto on our coins from “In God we trust” to “In gold we trust.”

A seventh and final principle is that God sometimes reverses intended judgments.{8} We must begin with an observation. God’s blessing on any nation is undeserved. There is always sin and evil in the land. When God blesses us, either individually or corporately, it is an evidence of God’s grace.

Sometimes God calls for judgment but then spares a nation. A good example of that can be found in the life of Jonah. God called him to that city to preach repentance for their sins. He didn’t want to go because it was the capital city of the Assyrians who had committed genocide against Israel. But when Jonah finally obeyed God, the city was saved from judgment.

God also used Old Testament prophets to preach to Israel. But the people didn’t have a heart to care. Consider the ministry of Micah and Jeremiah. Actually, Micah preached a hundred years before Jeremiah and warned Judah that her “wound is incurable.” A century later, Jeremiah is brought before the priests and false prophets who want him killed. After hearing him, they appeal to the preaching of Micah (Jeremiah 16:19). King Hezekiah listened to Micah’s words and sought God who withheld judgment.

Erwin Lutzer gives another example from eighteenth century England. The country was in decline, but God reversed the trend through the preaching of John Wesley and George Whitefield.

Conclusion

I would like to conclude by returning to the questions about whether God is blessing or judging our nation.

First, we must acknowledge that no nation can claim that God is on its side. In fact, there is a long and sorry history of nations that have claimed this. And the “God is on our side mentality” has done much harm throughout the history of the church.

Kim Riddlebarger: “Instead of letting God be God, our sinful pride leads us to make such pronouncements that are not ours to make. In these cases, God is not sovereign, he is a mascot.”{9} As a nation, we must not claim that God is on our side.

This is also true in the political debates we have within this nation. Richard Land in his book, The Divided States of America, says: “What liberals and conservatives both are missing is that America has been blessed by God in unique ways—we are not just another country, but neither are we God’s special people. I do not believe that America is God’s chosen nation. God established one chosen nation and people: the Jews. We are not Israel. We do not have “God on our side.” We are not God’s gift to the world.{10}

This brings us back to the famous quote by Abraham Lincoln who was asked if God was on the side of the Union forces or the Confederate forces. He said: “I do not care whether God is on my side; the important question is whether I am on God’s side, for God is always right.”

Second, we should be careful not to quickly assume that a disease or a disaster is a judgment of God. Above I gave examples of people wrongly assuming that AIDS or Hurricane Katrina was a judgment of God.

We can take comfort in knowing that this isn’t just a problem in the twenty-first century. Apparently it was even a problem in the first century. The tower of Siloam fell and killed a number of people. It appears that those around Jesus thought it was a punishment for their sins. He counters this idea by saying: “Or do you suppose that those eighteen on whom the tower in Siloam fell and killed them were worse culprits than all the men who live in Jerusalem? I tell you, no, but unless you repent, you will all likewise perish”(Luke 13:4-5).

We should wisely refrain from too quickly labeling a disease or disaster as a judgment of God. But we should take to heart the words of Jesus and focus on our need for salvation and repentance.

Notes

1. Erwin Lutzer, Is God on America’s Side? (Chicago: Moody, 2008), 11.
2. R.C. Sproul, When Worlds Collide (Wheaton: Crossway, 202), 63.
3. Lutzer, Is God on America’s Side?, 17.
4. Ibid., 25.
5. Ibid., 35.
6. Ibid., 41.
7. Ibid., 49.
8. Ibid., 65.
9. Kim Riddlebarger, “Using God,” Modern Reformation, November/December 2007, 14.
10. Richard Land, The Divided States of America (Nashville: Nelson, 2007), 197.

Can the just succeed? Can people living by Biblical principles successfully compete in a capitalist economy without compromising? Should we even try? Steve Cable provides a biblical perspective.

Corrupting Cultural Climate

At the turn of the twenty-first century, America was hit with a tsunami of corporate corruption. Names like Enron, Tyco and WorldComm became synonymous with greed and failed corporate leadership. Today, even after Congress and the SEC have strengthened their oversight, high profile cases, such as backdated stock options at Apple, continue to plague us. We can’t even take comfort in some past golden era of corporate ethics as we look back at a history filled with robber barons, ruthless company towns, and shady land deals.

In the light of this discouraging reality, we are asking the question, Can the just succeed? Can people living by Biblical principles successfully compete in a capitalist economy without compromising? Should we even try?

Let’s begin our exploration of this question by considering the overall cultural climate surrounding our free market economic system. A number of recent studies indicate less than honest behavior, and downright dirty dealing are common throughout our culture.

Let’s begin at the top. What type of standard is being set by our business leaders? One recent poll showed that less than twenty percent of Americans had confidence that CEOs would consistently make job-related decisions that were morally appropriate.{1} Is this skepticism well-founded? After all, most CEOs have worked their way to the top as a result of excellent performance in lower positions. Almost fifty percent of corporate executives in a recent Tulane University study were willing to commit fraud in role playing exercises.{2} What was particularly disturbing was that these same executives had affirmed their unwavering commitment to the highest ethical business standards.

Perhaps, we can rely on our workforce to apply their solid middle class values to curb the effects of corrupt leadership. Sadly, a recent study found that forty-eight percent of workers admitted to acting illegally or unethically in the workplace during the previous year.{3} Over thirty percent of them said that their coworkers condone questionable ethics by showing respect for those who achieve success using them.{4} In other words, cheating is not only condoned, it is respected.

We all hope that the upcoming generation will improve upon the sins of the prior generations. Are they bringing a standard of personal values that will clean up the marketplace of the future? Or, are they following in their elders’ footsteps? From 1969 to 1989, the number of students who let someone copy their work rose from fifty-eight to ninety-seven percent.{5} A recent survey published in Education Week found that three out of four students admitted to engaging in “serious cheating” within the previous year.{6}

People emulate the behavior they believe will make them successful. Perhaps, today’s Christians should join Habakkuk as he questioned God: “Why do You look with favor on those who deal treacherously? Why are You silent when the wicked swallow up those more righteous than they?” (Hab. 1:13){7}

It appears that we will be dealing with a culture of dishonesty in the marketplace for the foreseeable future.

The Slippery Slope

Surprisingly, most Americans identify themselves as trustworthy. So, why are all of these good trustworthy people demonstrating by their behavior that they are not worthy of our trust?

Well, Paul gives us a lot of insight in his first letter to Timothy when he writes, “But those who want to get rich fall into temptation and a snare and many foolish and harmful desires which plunge men into ruin and destruction. For the love of money is a root of all sorts of evil” (1 Tim. 6:9,10).

When we want to accumulate money for our own enjoyment beyond what we need to live, we are tempting ourselves to unethical behavior.

In his book There is No Such Thing as Business Ethics, John Maxwell identifies three primary reasons “good” people are led astray in business dealings.{8}

First, we do what is convenient. Many times doing the right thing is a lot more trouble than doing the convenient thing. Have you ever discovered that you were given too much change, but you didn’t want to go to the trouble of returning to the store? Sometimes a convenient lie can help us avoid the consequences of a mistake.

Second, we do what we must to win. After all, everyone is doing it. I have to compromise my standards in order to compete. During my years in a very competitive industry, one of my co-workers often stated, “If you can’t lie on a proposal, when can you lie?” In other words, promise whatever you need to get the job, and try to wiggle out of it later.

Third, we rationalize our unethical choices with relativism. We tell ourselves that our ultimate intentions are good. And, besides, if it is good for me, then it must be good. It is scary to think how easy this will be in a postmodern society where all truth is relative truth.

All three of these relate to putting our success ahead of our values. John Maxwell put it well when he said, “Ethics is about how we meet the challenge of doing the right thing when that will cost more than we want to pay.”{9}

I would like to add a fourth reason I call the Sudden Slippery Slope. We are taught that as long as we can justify our actions by the rule book then they are OK. In order to get ahead, we start to push the envelope of how we interpret the rules. One day we wake up to find that we have clearly gone beyond the boundary. We discover that we are on a slippery slope where the more we try to cover up or undo our actions the more we find ourselves breaking the rules. Enron is an excellent example of this effect.{10} No one at Enron started out with the objective to wipe out $50 billion in shareholder value overnight through unethical business practices, but a culture of pushing the ethical boundaries will inevitably result in a culture of corruption. Proverbs warns us that when we get in this mode, we have a hard time telling right from wrong: “But the path of the righteous is like the light of dawn, that shines brighter and brighter until the full day. The way of the wicked is like darkness; they do not know over what they stumble” (Prov. 4:18-19).

A Christian Perspective on Capitalism

Let’s consider a biblical perspective on capitalism.

People are rarely neutral when it comes to capitalism. Some people blame capitalism for the excesses of unethical behavior described earlier in this discussion. But capitalism as the primary cause of corruption is exonerated by comparisons with many communist and socialist economic systems. Historically, these systems have raised corruption and graft to the highest levels.

On the other hand, some commentators seem to equate capitalism with Christianity, implying that one of the tenets of Christianity is a capitalistic free market system. This premise does not hold up to scrutiny either as Christianity has flourished under a variety of economic systems.

Before we go any further, a simple definition of capitalism is needed. Capitalism is an economic system in which the means of production and distribution are privately or corporately owned, and development is proportionate to the accumulation and reinvestment of profits gained in a free market.{11} In other words, private individuals own the resources and make decisions on how to use those resources based on an expectation of return. The genius of capitalism is that individuals or corporations who can provide valuable services better or more efficiently are rewarded with more resources. So, resources tend to be allocated to those who are most capable of using them to produce desired goods and services.

However, one can approach capitalism from either a secular or a faith perspective. In secular capitalism:

• the purpose for business is to return a profit,
• the standard of conduct is the rule of law, and
• the measure of success is accumulation of wealth.

Under a Christian view of capitalism:

• the purpose for business is to honor God,
• the standard of conduct is the Golden Rule, and
• the measure of success is the ability to bless others with the resources God has entrusted to us.

A secular capitalist is accountable only to himself and his shareholders. A Christian business person is accountable to God with a responsibility to all of the stakeholders in the business, including customers and employees.

Capitalism is not essentially Christian, but, as Max Weber pointed out in his classic book, The Protestant Ethic and the Spirit of Capitalism,{12} Christianity is good for capitalism in many ways including:

• An excellent work ethic motivated by Paul’s admonition in Colossians to “work with sincerity of heart as unto the Lord.” Our work results reflect on our Savior, so we are motivated to excellence.

• A willingness to put integrity above profits and to forego investing in businesses which degrade or take advantage of others. As Proverbs 28 says, “Better is the poor who walks in his integrity than he who is crooked though he be rich. . . . He who increases his wealth by interest and usury gathers it for him who is gracious to the poor” (vv. 6,8). Integrity reduces the “greed tax” which is all of the effort wasted on monitoring others to prevent theft.

• A long term perspective that is willing to forgo near term gratification for long term benefits such as investing in hospitals and schools.

Counter to the view of Michael Douglass’ character in the movie Wall Street, greed is not good. Greed is not what makes capitalism successful. Trusting resources to those who are productive and want to do something of significance is the key to long term economic success!

Called to the Marketplace

What is the role of Christians in the marketplace?

Over the centuries, Christians have had varying responses to the secular marketplace. Some, like the Amish, attempt to isolate themselves from the corrupting influence of the secular world. Others, like the Puritans, believed that excelling in the marketplace was a critical part of the Christian life as evidence of one’s election. In recent years the trend has been for Christians to segregate their spiritual church life from their secular work life. This attitude allows many to believe they can conform to the compromised values of our culture without impacting the spiritual aspects of their life. However, since God’s truth is the truth in all aspects of our lives, this attitude could not be truth.

What does the New Testament have to say on this subject? Out of twenty-two letters to churches, not one advised Christians to quit working in or participating in the Roman economic system. None of these letters encouraged all Christians to leave their secular vocation and immediately leave for the mission field. The overall picture is that some people are given as gifts to the church, devoting their energies to equipping the church for ministry. But the majority of us are called to be ministers in our vocation (whether that vocation is as a business leader, a laborer or a stay-at-home mother). As Christians, we are called to be a redeeming influence in the place where non-Christians can be found, the marketplace.

As we enter the business world, we should be clear as to our purpose. I don’t think that it is to prove our salvation by getting the most promotions. Four clear biblical purposes for Christians in the work place are:

1. To honor Christ through my attitude, performance and integrity (Col 3:22-25). In my career, whenever I was asked to state my career objectives, I would focus on Colossians 3 for my answer. I would tell them that since I was called to “work heartily as unto the Lord” and to serve with “sincerity of heart”, my career objective is to fulfill the role that creates the most value for my employer. That statement was not only true, but was also warmly received by my supervisor.

2. To share Christ in my unique mission field. We interact with more non-Christians in the business world than just about any other venue (Col. 4:5-6).

3. To provide for the physical needs of your family (1 Tim. 5:8).

4. To be able to share with others who need help (2 Cor. 8:12-14).

Jesus summed it up for us when He said, “Let your light shine before men in such a way that they may see your good works, and glorify your Father who is in heaven” (Matt. 5:16).

Compelling Results

Let’s conclude by considering the characteristics of a just business and looking at some measures of success.

Whether for the individual or for a corporation, Christian behavior is going to be characterized by the Golden Rule taught by our Lord: “Treat others the way that you want them to treat you” (Luke 6:31). This means that we are not going to deceive, covet, or steal in our business dealings. We are going to treat others with respect and with grace. We are going to choose integrity over convenience or profit.

Since we all like to win, does the Golden Rule mean that I should always let my competitors win? Should I just turn over the market to them? I don’t know about you, but I absolutely hate it when someone lets me win. Everyone loses if we allow inferior or more costly products to claim the market because no one wants to compete with the status quo (think about the fall of the Soviet Union when you consider this topic). Competition promotes better products and greater productivity which creates more resources and opportunities even for your competitors. The problem arises not from having a competitive system, but from greed causing some to hoard wealth. So, a Christian business will compete aggressively but fairly. They will also realize not to compete by destroying the lives of employees through long hours, poor working conditions, or unfair wages.

Won’t a company or individual applying these principles put themselves at a disadvantage? After all, when swimming with sharks, a guppy will always get eaten. In his book Profit at Any Cost,{13} Jerry Fleming analyzed the results of corporations who appeared to place a premium on a high standard of ethical behavior. He discovered that these businesses typically induce others to behave ethically toward them. There is also a strong correlation between a firm’s commitment to ethics and a lower employee turnover. Typically, a lower turnover rate results in greater productivity from experienced, content employees. At the bottom line, he found a significant positive correlation between a firm’s ethical behavior and its economic performance. Companies promoting unethical practices pay a price in the long run (think Enron). An investment in ethically responsible firms has resulted in a return eight times better than the return on the Dow Jones Industrial Average over a period of thirty years.

What conclusions can we draw from our study of Christian principles in the workplace? Applying Christian principles to business is not:
• a magic shield against failure, or
• a way to always avoid criticism, or
• an assurance that your product will be the best on the market.

But, it is:

• a part of our calling to follow Christ,
• the best way to conduct business, and
• a consistent companion of long term success.

No matter the financial results, we are a success when we follow Christ’s example in the work place.

Notes

1. Barna Update: “Americans Speak: Enron, WorldCom and Others Are Result of Inadequate Moral Training By Families,” The Barna Group, July 22, 2002, www.barna.org/FlexPage.aspx?Page=BarnaUpdate&BarnaUpdateID=117
2. 1996 Tulane University study reported in workforce.com/archive/feature/22/14/56/index.php
3. Samuel Greengard, “50% of Your Employees are Lying, Cheating & Stealing”, workforce.com.
4. “2003 National Business Ethics Survey”, Ethics Resource Center.
5. Urie Bronfenbrenner et al., The State of Americans: This Generation and the Next (Free Press, 1996), quoted on Plagiarism.org, www.plagiarism.org/facts.html.
6. Ibid.
7. All Scripture references are taken from the New American Standard Updated Edition.
8. John Maxwell, There’s No Such Thing as “Business” Ethics, Warner Books, 2003.
9. Ibid.
10. For an in depth look at what happened at Enron see Kurt Eichenwald, Conspiracy of Fools (New York: Broadway Books, 2005).
11. The American Heritage Dictionary of the English Language, 4th ed., s.v. “capitalism.”
12. Max Weber, The Protestant Ethic and the Spirit of Capitalism, 2nd rev. ed. (New York: HarperCollins Publishers Ltd; January 27, 1977).
13. Jerry Fleming, Profit at Any Cost (Grand Rapids: Baker Books, 2003).

The Bailout

Anyone watching the news or looking at their checking account knows that we are in for some tough economic times. I want to spend some time looking at how we arrived at this place and set forth some biblical principles that we collectively and individually need to follow.

Who would have imagined a year ago we would be talking about spending such enormous amounts of money on a bailout? The first bailout was for $700 billion. When these numbers are so big, we lose all proportion of their size and potential impact. So let me use a few comparisons from a recent Time magazine article to make my point.{1}

If we took $700 billion and gave it to every person in America, they would receive a check for $2,300. Or if we decided to give that money instead to every household in America, they would receive $6,200.

What if we were able to use $700 billion to fund the government for a year? If we did so, it would fully fund the Defense Department, the State Department, the Treasury, the Department of Education, Veterans Affairs, the Department of the Interior, and NASA. If instead we decided to pay off some of the national debt, it would retire seven percent of that debt.

Are you a sports fan? What if we used that money to buy sports teams? This is enough money to buy every NFL team, every NBA team, and every Major League Baseball team. But we would have so much left over that we could also buy every one of these teams a new stadium. And we would still have so much money left over that we could pay each of these players $191 million for a year.

Of course this is just the down payment. When we add up all the money for bailouts and the economic stimulus, the numbers are much larger (some estimate on the order of $4.6 trillion).

Jim Bianco (of Bianco Research) crunched the inflation adjusted numbers.{2} The current bailout actually costs more than all of the following big budget government expenditures: the Marshall Plan ($115.3 billion), the Louisiana Purchase ($217 billion), the New Deal ($500 billion [est.]), the Race to the Moon ($237 billion), the Savings and Loan bailout ($256 billion), the Korean War ($454 billion), the Iraq war ($597 billion), the Vietnam War ($698 billion), and NASA ($851.2 billion).

Even if you add all of this up, it actually comes to $3.9 trillion and so is still $700 billion short (which incidentally is the original cost of one of the bailout packages most people have been talking about).

Keep in mind that these are inflation-adjusted figures. So you can begin to see that what has happened this year is absolutely unprecedented. Until you run the numbers, it seems like Monopoly money. But the reality is that it is real money that must either be borrowed or printed. There is no stash of this amount of money somewhere that Congress is putting into the economy.

What Caused the Financial Crisis?

What caused the financial crisis? Answering that question in a few minutes may be difficult, but let me give it a try.

First, there was risky mortgage lending. Some of that was due to government influence through the Community Reinvestment Act which encouraged commercial banks and savings associations to loan money to people in low-income and moderate-income neighborhoods. And part of it was due to the fact that some mortgage lenders were aggressively pushing subprime loans. Some did this by fraudulently overestimating the value of the homes or by overstating the lender’s income. When these people couldn’t pay on their loan, they lost their homes (and we had a record number of foreclosures).

Next, the lenders who pushed those bad loans went bankrupt. Then a whole series of dominoes began to fall. Government sponsored enterprises like Fannie Mae and Freddie Mac as well as financial institutions like Bear Stearns, Lehman Brothers, Merrill Lynch and AIG began to fail.

As this was happening, commentators began to blame government, the financial institutions, Wall Street, and even those who obtained mortgages. Throughout the presidential campaign and into 2009 there was a cry that this was the result of shredded consumer protections and deregulation.

So is the current crisis a result of these policies? Is deregulation the culprit? Kevin Hassett has proposed a simple test of this view.{3} He points out that countries around the world have very different regulatory structures. Some have relatively light regulatory structures, while others have much more significant intrusion into markets.

If deregulation is the problem, then those countries that have looser regulations should have a greater economic crisis. But that is not what we find. If you plot the degree of economic freedom of a country on the x-axis and the percent of change in the local stock market on the y-axis, you find just the opposite of that prediction.

The correlation is striking. Draw a line from countries with low economic freedom (like China and Turkey) to countries with greater economic freedom (like the United States) and you will notice that most of the countries hug the line. Put another way, the regression line is statistically significant.

If the crisis were a result of deregulation, then the line should be downward sloping (meaning that countries that are freer economically had a biggest collapse in their stock markets). But the line slopes up. That seems to imply that countries that are economically free have suffered less than countries that are not. While it may be true that a single graph and a statistical correlation certainly does not tell the whole story, it does suggest that the crisis was not due to deregulation.

The End of Prosperity

It is interesting that as the financial crisis was unfolding, a significant economic book was coming on the market. The title of the book is The End of Prosperity.{4}

Recently I interviewed Stephen Moore with the Wall Street Journal. He is the co-author with Arthur Laffer and Peter Tanous of The End of Prosperity. The book provides excellent documentation to many of the economic issues that I have discussed in the past but also looks ahead to the future.

The authors show that, contrary to conventional wisdom, the middle class has been doing better in America. They show how people in high tax states are moving to low tax states. And they document the remarkable changes in Ireland due to lowering taxes. I have talked about some of these issues in previous articles and in my radio commentaries. Their book provides ample endnotes and documentation to buttress these conclusions.

What is most interesting about the book is that it was written before the financial meltdown of the last few months. Those of us who write books have to guess what circumstances will be when the book is finally published. These authors probably had less of a lag time, but I doubt any of them anticipated the economic circumstances that we currently find.

Arthur Laffer, in a column in the Wall Street Journal, believes that “financial panics, if left alone, rarely cause much damage to the real economy.”{5} But he then points out that government could not leave this financial meltdown alone. He laments that taxpayers have to pay for these bailouts because homeowners and lenders lost money. He notes: “If the house’s value had appreciated, believe you me the overleveraged homeowners and the overly aggressive banks would never have shared their gain with the taxpayers.”

He is also concerned with the ability of government to deal with the problem. He says, “Just watch how Congress and Barney Frank run the banks. If you thought they did a bad job running the post office, Amtrak, Fannie Mae, Freddie Mac and the military, just wait till you see what they’ll do with Wall Street.”

The reason the authors wrote The End of Prosperity was to set forth what has worked in the past as a prescription for the future. They were concerned that tax rates were headed up and not down, that the dollar is falling, and that America was turning it back on trade and globalization. They also were concerned that the federal budget was spiraling out of control and that various campaign promises (health care, energy policy, environmental policy) would actually do more harm than good.

One of their final chapters is titled “The Death of Economic Sanity.” They feared that the current push toward more governmental intervention would kill the economy. While they hoped that politicians would go slow instead of launching an arsenal of economy killers, they weren’t too optimistic. That is why they called their book The End of Prosperity.

The Future of Affluence

Let’s see what another economist has to say. The Bible tells us that there is wisdom in many counselors (Proverbs 15:22). So when we see different economists essentially saying the same thing, we should pay attention.

Robert Samuelson, writing in Newsweek magazine, talks about “The Future of Affluence.”{6} He begins by talking about the major economic dislocations of the last few months:

“Government has taken over mortgage giants Fannie Mae and Freddie Mac. The Treasury has made investments in many of the nation’s major banks. The Federal Reserve is pumping out $1 trillion to stabilize credit markets. U.S. unemployment is at 6.1 percent, up from a recent low of 4.4 percent, and headed toward 8 percent, by some estimates.”

Samuelson says that a recovery will take place but we may find it unsatisfying. He believes we will lapse into a state of “affluent deprivation.” By that he doesn’t mean poverty, but he does mean that there will be a state of mind in which people will feel poorer than they feel right now.

He says that the U.S. economy has benefited for roughly a quarter century “from the expansionary side effects of falling inflation—lower interest rates, greater debt, higher personal wealth—to the point now that we have now overdosed on its pleasures and are suffering a hangover.” Essentially, prosperity bred habits, and many of these habits were bad habits. Personal savings went down, and debt and spending went up.

Essentially we are suffering from “affluenza.” Actually that is the title of a book published many years ago to define the problem of materialism in general and consumerism in particular.

The authors say that the virus of affluenza “is not confined to the upper classes but has found it ways throughout our society. Its symptoms affect the poor as well as the rich . . . affluenza infects all of us, though in different ways.”{7} The authors go on to say that “the affluenza epidemic is rooted in the obsessive, almost religious quest for economic expansion that has become the core principle of what is called the American dream.”

Anyone looking at some of the social statistics for the U.S. might conclude that our priorities are out of whack. We spend more on shoes, jewelry, and watches than on higher education. We spend much more on auto maintenance than on religious and welfare activities. We have twice as many shopping centers as high schools.

The cure for the virus affluenza is a proper biblical perspective toward life. Jesus tells the parable of a rich man who decides to tear down his barns and build bigger ones (Luke 12:18). He is not satisfied with his current situation, but is striving to make it better. Today most of us have adjusted to a life of affluence as normal and need to actively resist the virus of affluenza.

Squanderville

Warren Buffett tells the story of two side-by-side islands of equal size: Thriftville and Squanderville.{8} On these islands, land is a capital asset. At first, the people on both islands are at a subsistence level and work eight hours a day to meet their needs. But the Thrifts realize that if they work harder and longer, they can produce a surplus of goods they can trade with the Squanders. So the Thrifts decide to do some serious saving and investing and begin to work sixteen hours a day. They begin exporting to Squanderville.

The people of Squanderville like the idea of working less. They can begin to live their lives free from toil. So they willingly trade for these goods with “Squanderbonds” that are denominated in “Squanderbucks.”

Over time, the citizens of Thriftville accumulate lots of Squanderbonds. Some of the pundits in Squanderville see trouble. They foresee that the Squanders will now have to put in double time to eat and pay off their debt.

At about the same time, the citizens of Thriftville begin to get nervous and wonder if the Squanders will make good on their Squanderbonds (which are essentially IOUs). So the Thrifts start selling their Squanderbonds for Squanderbucks. Then they use the Squanderbucks to buy Squanderville land. Eventually the Thrifts own all of Squanderville.

Now the citizens of Squanderville must pay rent to live on the land which is owned by the Thrifts. The Squanders feel like they have been colonized by purchase rather than conquest. And they also face a horrible set of circumstances. They now must not only work eight hours in order to eat, but they must work additional hours to service the debt and pay Thriftville rent on the land they sold to them.

Does this story sound familiar? It should. Squanderville is America.

Economist Peter Schiff says that the United States has “been getting a free ride on the global gravy train.” He sees other countries starting to reclaim their resources and manufactured goods. As a result, Americans are getting priced out of the market because these other countries are going to enjoy the consumption of goods that Americans previously purchased.

He says: “If America had maintained a viable economy and continued to produce goods instead of merely consuming them, and if we had saved money instead of borrowing, our standard of living could rise with everybody else’s. Instead, we gutted our manufacturing, let our infrastructure decay, and encouraged our citizens to borrow with reckless abandon.”{9}

It appears we have been infected with the virus of affluenza. The root problem is materialism that often breeds discontent. We want more of the world and its possessions rather than more of God and His will in our lives. What a contrast to what Paul says in Philippians where he counts all things to be loss (3:7-8) and instead has learned to be content (4:11). He goes on to talk about godliness with contentment in 1 Timothy 6:6-7. Contentment is an effective antidote to materialism and the foundation to a proper biblical perspective during these tough economic times.

Notes

1. “What Else You Could Spend $700 Billion On,” Time, September 2008, www.eandppub.com/2008/09/what-else-you-c.html.
2. Barry Ritholtz, “Big Bailouts, Bigger Bucks,” Bailouts, Markets, Taxes and Policy, www.ritholtz.com/blog/2008/11/big-bailouts-bigger-bucks/.
3. Kevin Hassett, “The Regulators’ Rough Ride,” National Review, 15 December 2008, 10.
4. Arthur Laffer, Stephen Moore, and Peter Tanous, The End of Prosperity (New York: Simon and Schuster, 2008).
5. Arthur Laffer, “The Age of Prosperity Is Over,” Wall Street Journal, 27 October, 2008, A19, online.wsj.com/article/SB122506830024970697.html.
6. Robert Samuelson, “The Future of Affluence,” Newsweek, 10 November 2008, 26-30.
7. John DeGraaf, David Wann, and Thomas Naylor, Affluenza: The All-Consuming Epidemic, 2nd ed. (SF: Berrett-Koehler, 2005), xviii.
8. Warren Buffett, “America’s Growing Trade Deficit Is Selling the Nation Out From Under Us,” Fortune, 26 October 2003.
9. Kirk Shinkle, “Permabear Peter Schiff’s Worst-Case Scenario,” U.S. News and World Report, 10 December 2008, tinyurl.com/63sqkh

Kerby Anderson answers some intriguing questions: Is God blessing America? Will God bring judgment against America? What are the biblical principles of blessing and judgment we find in the Bible concerning the nation of Israel? Do any of them apply to our nation?