Saturday, April 04, 2009

Thanks for the Pick-Me-UP

According to Roger Wiegand in the above article, the the financial crisis we are currently experiencing is simply the fallout of the Fed's recession avoidance actions in 2000. However, he thinks the unfolding tragedies will be legendary and will threaten the very existence of the America. Some of his predictions include:

G20 initiated trading wars, massive unemployment and state bankruptcy leading to widespread violence and crime, bankruptcy and breakdown of retail and auto industries, Israel attacking Iran and setting off WW III, class warfare, and expansion of dictatorships around the globe.

Of course all this can be solved, preventing a return to the dark ages, by marking down assets to realistic levels and restructuring economies on sound economic footing.

The problem is there are no hints as to how one goes about structuring an economy on a sound economic footing.

It is very true that slavery and social collapse, as Mr. Wiegand describes, often follow economic upheaval. The hyperinflation and resulting financial devastation destroyed the foundation of German culture in the 1920's and created a willingness to accept industrial nationalization, youth brigades, and increased surveillance and regulation, setting the stage for Hitler's dominance in Germany.

Even John Maynard Keynes, the namesake of a perverted economic theory, understood this quite clearly. In 1920, he wrote in Economic Consequences of the Peace,

By a continuous process of inflation governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method, they not only confiscate, but they confiscate arbitrarily; and while the process impoverishes many, it actually enriches some… There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.
The process engages all the hidden forces of economic law on the side of destruction, and does so in a manner in which not one man in a million can diagnose.[1] [While he understood this, it did not stop him from recommending inflationary policies.]

Now people have been making predictions, like Mr. Wiegand's, for many years. First it was the threat of nuclear war with Russia, then oil shortages resulting in the collapse of the world economy, then holes in the ozone wiping out life on earth, then domestic terrorists, then Islamic terrorists ( Oops, Islam is a peaceful religion, it's just aberrant Islam terrorists), and now finally the global financial crisis that has the potential to knock us back to the dark ages.

However, it should be pointed out that in predicting every conceivable scenario, our friend is really predicting nothing. He's simply setting the stage to be able to make the self-serving marketing claim that "I predicted that."

The truth of the matter is, things are far worse. The roots of these problems go far deeper than the 2000 era manipulations of Mr. Greenspan and his banking colleagues. The solution involves far more than simply getting the economy on a sound footing.

Scripture actually has a great deal to say about the source of economic prosperity. When the children of Israel were preparing to enter the promised land, Moses recounted for them the history lessons that they had learned over the previous 40 years. In Deuteronomy 8, after reciting some of the economic blessings God had sent to them, such as the free food and the shoes that did not wear out, we read:

Therefore you shall keep the commandments of the Lord thy God to walk in his ways, and to fear him. For the Lord thy God brings thee into a good land, ... A land of wheat and barley and vines and fig tress and pomegranates; a land of oil, olive, and honey; A land wherein thou shalt eat bread without scarceness, thou shalt not lack anything in it; a land whose stones are iron, and out of whose hills thou may dig brass.

When thou have eaten and are full, then thou shalt bless the Lord thy God for the good land which He hath given thee. Beware that thou forget not the Lord thy God in not keeping His commandments, and His judgments, which I command thee this day: Lest when thou have eaten and are full, and have built goodly houses and dwelt therein; and when thy herds and thy flocks multiply, and thy silver and thy gold is multiplied and all that thou have is multiplied; Then thine heart be lifted up
and thou forget the Lord thy God …

But thou shalt remember the Lord thy God for it is He that gives to you power to get wealth, that He may establish his covenant which He swore unto thy Fathers as it is this day. And it shall be that if thou at all do forget the Lord thy God and walk after other gods, and serve them, and worship them, I testify against you this day that you will surely perish. As the nations which the Lord destroys before your face, so shall you perish; because you would not be obedient to the voice of the Lord your God. Deuteronomy 8:6-14, 18-20 (KJV).

Clearly, Israel’s economic prosperity would be a direct result of their obedience. So important was this concept that Moses had half of the Israelites stand on one hill and half of the Israelites stand on another and recite the exact consequences of obedience and disobedience to each other. The blessings for obedience that they recited are in Deuteronomy 28. There we read:

And it shall come to pass if you shall hearken diligently to the voice of the Lord thy God, to observe and to do all His commandments which I am commanding you this day, that the Lord thy God will set you on high above all nations of the earth. And all these blessings shall come on thee, and overtake you, if you shall hearken unto the voice of the Lord your God. Blessed shall you be in the city and blessed shall you be in the field. Blessed shall be the fruit of your body, and the fruit of your ground, and the fruit of your cattle and the increase of your kine, and the flocks of your sheep. Blessed shall be your basket and your store.

And the Lord shall make you plenteous in goods, and in the fruit of you body, and in the fruit of your cattle, and in the fruit of your ground, in the land which the Lord swore unto your Fathers to give you. The Lord shall open unto you His good treasure, the heavens to give the rain unto your land in his season, and to bless all the works of thine hand: and you shall lend unto many nations and you shall not borrow. And the Lord shall make you the head and not the tail; and you shall be above only, and you shall not be beneath; if you hearken unto the commandments of the Lord thy God, which I command you this day, to observe and to do them. Deuteronomy 28:1-5, 11-13 (KJV).

Economic prosperity comes from obedience to the Word of God. In other words the first step to economic recovery is
  • Stop abortion
  • Stop inflation (which particularly robs the widows and others on fixed incomes)
When Ezekiel (Ezekiel 34:25-29) speaks of the blessings of the Great Shepherd, he does so in economic terms, saying that the rain would come in its season, and as a result, the produce of the land would yield its fruit in abundance. Even on the return of the Israelites from 70 years of exile, Zechariah (Zechariah 7:9-14) repeats the words of Jeremiah in telling the Israelites that their troubles came as a result of their refusal to obey the Lord. Physical, material, economic, and spiritual blessings flow from cultural obedience to the Word of God. The richest man in the world was the son of the man after God’s own heart. Is it any surprise that the unmatched economic prosperity of Israel under Solomon followed one of the most godly kings Israel every had?

Our spiritual condition has economic consequences. Economic disaster is God's doing. Economic blessing is his doing also. We can not expect God's blessing on a nation built on fraud. We cannot expect God blessing on a nation that so systematically kills the helpless and oppresses and impoverishes the poor and the widow with the tax of inflation as this nation does. As a nation that never pays its debts, we can only expect a life of unending servitude.

[1] Keynes, John Maynard, Economic Consequences of the Peace (Penguin USA, 1988), p 235.