CultureWatch

Bill Muehlenberg's commentary on issues of the day...

Thoughts on the Global Financial Crisis. Part One.

Oct 13, 2008

Some good news and bad news here. The bad news first: I am not an economist or a financial guru, so I cannot provide a learned treatise as to the causes, conditions and cures of the current worldwide financial meltdown. I can’t even give you any decent advice on what to do with your various stocks, bonds, investments and superannuation: wouldn’t have a clue, in fact. So go see your local financial advisor for some real help.

But the good news is, I, like all people of faith, have a perspective on this and other things that not everyone else has. Believers do have, at least in part, access to the divine perspective on the affairs of this world. That is, we do have a God who is fully aware of, and conversant with, the happenings of our day, and we can be privy to some of that understanding.

God knows all about the financial crisis: he knows why it is happening, and he knows how it can be resolved. He knows what is in our bank accounts, and he knows how much so-called value may have been wiped off our portfolios. And he also knows how long this crisis will last. Indeed, he is fully in control of this whole state of affairs.

But the fact that God has everything under control and that nothing takes him by surprise does not imply that we have full and complete understanding of the events of the day. In Old Testament times things were a bit easier. Yahweh sent the prophets to inform his people as to what he was doing, what world events signified, and how they should live.

Indeed, there were not just the prophets informing Israel about what was going on, but we also read about the sons of Issachar. In I Chronicles 12: 32 it says that the sons of Issachar “were men which had understanding of the times, and knew what Israel should do”.

Unfortunately today we have neither the sons of Issachar nor OT prophets giving us the inside divine story of what is happening around us. Sure, God can give his people today prophetic words about various things, but a clear, sure word from God about all the events of daily life are not the usual course of events. We have to live on faith and depend on the general revelation of Scripture to guide us in our daily lives.

Thus I am not claiming any prophetic word here about this financial crisis. I am not offering a “Thus saith the Lord” on what we are witnessing around us in the financial realm. All I can offer here is a bit of sanctified common sense, and some general insights from the Word of God as I seek to throw a bit of light on this mess.

Two things can safely be said without fear of going astray: One, God can and does judge his people, and the nations. Two, God often uses adversity as a way of getting our attention, and getting us to get our priorities right. Let me look at each of these a bit further. (The second point will be discussed in a subsequent article.)

The first proposition is found throughout the entire Word of God: God judges. He judges individuals. He judges nations. He judges rulers. He judges Israel. He judges Christians. Indeed, the judgment of God is one of the most prominent themes of Scripture.

In God’s covenant with Israel, for example, he lays out clear warnings about breaking covenant with himself. If Israel obeys, then blessings will follow. But if Israel disobeys, then curses, or judgment, will follow. The main passage dealing with this covenantal relationship is found in Deuteronomy 28. There we find a detailed listing of blessings which follow obedience, and a detailed (and, interestingly, longer) listing of curses for disobedience.

These covenant conditions are mentioned quite often by the prophets. When Yahweh is about to judge Israel for some sin, the prophets remind Israel of its covenant responsibilities, and how it has broken faith with Yahweh. The judgments can take many forms, but most would be what we today call ‘acts of nature’. That is, God may use storms or floods or famine or droughts to punish his people.

And one means he uses in judgment involves the economy. God can and does judge Israel with financial hardship when they have abandoned him. Perhaps the classic passage in this regard, one which has real bite to it (and one which we need to think seriously about today), is Haggai 1:5-6:

“Now this is what the LORD Almighty says: ‘Give careful thought to your ways. You have planted much, but have harvested little. You eat, but never have enough. You drink, but never have your fill. You put on clothes, but are not warm. You earn wages, only to put them in a purse with holes in it’.”

Wow, what a passage! Does it sound familiar? “You earn wages, only to put them in a purse with holes in it.” Sounds a lot like what we have seen around the world for the past few weeks. As Pieter Verhoef comments, “The theological perspective on the word of God to the people is that their adverse economical circumstances were not the result of mere natural phenomena but were due to God’s judgment.”

Thus hitting the wallet is one tried and true way in which God judges his people when they have drifted away from him. When Israel started hurting financially, it could very quickly get back on its knees and seek God’s face.

And it is not just Israel that Yahweh judges, He judges the pagan nations as well. Indeed, large portions of the prophetic writings are devoted to the nations. These include: Is. 13-21; 23; 24; 34; Jer. 46-51; Eze. 25-32; 35; 38,39; Joel 3; Amos 1,2; Zeph. 2; and Zech. 9;12.

And it is quite interesting to note that often the same language is used, as with Israel. And often the same sins are denounced, as with Israel. And often the same judgments are pronounced, as with Israel. So it is not just God’s covenant people that God judges, but all mankind.

Now of course we might well ask, what about in New Testament times? Are not things different today? Well, yes and no. Obviously the church, for example, is not identical to Israel. The Deuteronomic covenant that we examined does not directly apply to the church. For example, the covenant had very earthly blessings and judgments. They were mainly tied up with the land of Israel. When Israel obeyed, its land was fertile, its crops productive, its livestock healthy, and it was at peace with her neighbours.

Of course the people of God in the NT have no land as such. Our blessings are in the heavenlies, as Paul tells us in Ephesians. So does that mean God is no longer in the business of judging peoples and nations today? Does that mean that the events of nature can no longer be seen as the work of God?

Well, that is not so clear. I see no reason why God has stopped using the events of nature (floods, drought, earthquakes, tornadoes, and so on) as instruments of his judgment. It is just that we do not have such a clear prophetic word about each and every natural disaster as so often occurred in the OT. Often a prophetic word accompanied a crisis back then. Sometimes it preceded the disaster, or was spoken during the disaster, or even after the disaster. But the recipients of the disaster were left in no uncertain terms as to Yahweh’s hand being in it all. It was not a fluke of nature, but the direct work of God.

Today we cannot be so sure, since we seldom have a clear word from the Lord on such specific events. Thus we cannot say with certainty that 9/11 was God’s judgment on America. We cannot say for sure that the recent earthquake in China was God’s way of judging the Chinese people. And we cannot say for certain whether the current global financial crisis is the direct judgment of God.

It could well be. Indeed, I would not be surprised at all if it were. One very good way of getting a person’s attention – whether that person is a believer or not – is to start allowing some economic turmoil to occur. Lose a few billion here and a few billion there, and that sure gets people’s attention.

It is as C.S. Lewis once remarked, “God whispers to us in our pleasures, speaks in our conscience, but shouts in our pain: it is His megaphone to rouse a deaf world.” And the pain of financial loss certainly tends to do the trick. So I certainly believe that if this is not directly coming from the hand of God, he certainly is using it for his purposes. He wants all people to realise that faith in man is vain. Human institutions like banks and stock markets and investment houses have their place. But as soon as they become gods, then they must be countered, and for our own good.

When we trust in riches instead of the living God, we are asking for, and will get, trouble. So God in his mercy allows these shaking times to occur to get us to turn to him, and trust in him. Money cannot save us. Banks and bailouts will not save us. Gold bullion will not save us. Hiding dollars under our mattresses will not save us.

Only God can save us. So God can quite easily use a mega-money meltdown to get our attention. And that includes all of us. It can shake up unbelievers enough to hopefully get their attention, and help them to see that this life is not all there is. It can help them to start thinking about eternity, and about their own soul.

But God can also use these crunch times to wake up a dead or sleeping church. The church of Jesus Christ is without question in very great need of a profound and powerful revival. And if God needs to rattle our bank books and our wallets to get our attention, then so be it.

We Christians can be just as trusting in financial security as non-Christians can. We can worship mammon just as much as nonbelievers can. And we can think that wealth is the be all and end all just as much as nonbelievers can.

The Bible has much to say about wealth and money and possessions and riches. There are numerous warnings in Scripture about not placing our confidence, trust and security in wealth. So I think this financial crisis is a real godsend. If it can wake up some half-hearted believers, and turn around a wayward church, then it is a very good thing indeed.

It is a pity that believers could not be woken from their slumber without such drastic means. But God loves us too much to allow us to slide away from him. He cares about us too deeply to allow us to sink into idolatry and the worship of mammon. He is too committed to us to allow us to remain in a state of spiritual decay.

For our own good, God in his great mercy will take away that which we most cherish, so that we can get our priorities right, and come to see that only God should be the object of our deepest affection and utmost devotion.

Anything else – including riches – is simply a false God, which will disappoint time and time again. So if a comatose church needs a good solid financial shaking, I say, bring it on. And please don’t let up, God, until every one of your people has renounced every idol and false god in their lives, and has fully rededicated themselves to Christ and his Kingdom.

[1994 words]

13 Responses to Thoughts on the Global Financial Crisis. Part One.

  • Thanks for your article Bill! i think it puts things into perspective really nicely.

    You do mention that God “can and does judge his people, and the nations” and later you say that this proposition is “found throughout the entire Word of God”. i think i agree with you but was wondering if you could provide some more support for the argument that God judges nations collectively in the NT/today?

    Joy Clements

  • Bill
    Simply put what has occurred is an exercise in outrageous greed by a lot of people at high places in the financial sector.
    In days gone by, if you wanted to buy a house you went to a lending bank or building society and were interiewed by an employee. The employee took your details and your assets and liabilities and income and expenditure and he or she or someone else worked out if you were a fair risk for the debt you wanted, having regard to the value of the asset you were acquiring and your debt service capability. Fairly simple. If that looked good you got the loan. If it did not stack up you simply didn’t get the loan. And you probably should not have for your own sake as you may ultimately have come to grief. Now the employee by doing that was looking after the interests of the person employing him or her and so was interested in doing a good job so that the employer got its money back and no doubt the employee might progess through the ranks with diligent care in making loans on proper business basis.
    So what happened? Well the banks thought that rather than employ all these loans processing people they could put some funds – say a billion or 2 or more – into a basket and get someone else to lend it for them. They reduce their lending rate but their expenses of loan processing disappear so that is a great deal for them. The loans are still made. But wait. The loans processing officer is an agent for the broker who makes a commission on the amount of money he or she lends. And the money lent does not belong to his or her employer so the need to look after the lender’s interest as a good employee does not exist. So who cares whether the deal makes financial sense? The person gets paid for getting loans out there, not for making good financial sense loans. So there became known as NINJA loans- that’s right – NINJA which stands for No assets, no income and no job. Chances of repayment – almost none – but who cares as the agent gets paid for the commission irrespective of loan performance. Reports say 11% of loans were of this type. These loans are bundled up with other more regular loans in huge groups and called CDOs – collateralised debt obligations and then sold after attaining a credit rating from Standard & Poors and the like, sold to giant funds comprising guess what, institutions that invest investors money. So the broker who lent the funds and the agent who was paid the commisiion to get the deal are out of the picture. Then of course – oops we have one default, now 2, now 2,000 and oh hell we have a huge problem with no perfoming loans. Worse still the loans are non-recourse which means the only value of the debt is the value of the underlying security. Many houses had been abandoned by people who knew they would loose it anyway. Whilst doing that the former occupants helped themselves to removable parts of the house to assist them to establish them elsewhere or to flog off for a few bucks to some other sucker.
    So the empty house in the empty street in the now scarcely populated area is not worth anywhere near what was paid for it, interst is compunding on the unpaid captial, there is no recourse against the borrower and the housing market is falling. So the debt is wrtten down in giant numbers and suddenly there are not the assets in the entity that bought the CDO to repay the investors around the globe. Some are banks, other investment funds, etc, etc.
    As the horrror roles out, some banks start to fail.
    So now banks are not sure if they lend to another bank whether that other bank can repay…which means maybe banks should not lend to other banks. And this means that some banks cannot meet their settlement obligations and the whole financial system which is based on interbank lending wobbles big time. Welcome the golbal credit crisis.
    Fortunately in Australia we do not have housing loans made on a non-recourse basis. If you borrow the money you owe it & if you cannot repay it you loose the house and you still owe the rest so you can’t get another loan to buy another house.
    Further, whilst Australian lenders may not be perfect, they have better lending practices than those in the USA.
    Furthermore, Australia has a regulated financial system which requires capital adequacy to be maintained by financial institutions and this is overseen by APRA – the Australian Prudential Regulatory Authority. This has placed Australia in a much better positon with better lending practices and far better capital adequacy than in the unregulated US.
    So what about the persons and organisations who with gross irresponsibility and without reespect for the position of the rather naive borrower, what about the sellers of NINJA loans into funds, what about the lack of due diligence of the buyers of the CDOs; what about the agencies who gave a credit rating to the CDOs? Where is their duty to ensure that the CDOs matched the integrity of the accredited rating?
    This was simply a quick way to make a buck. Where did “Love thy neighbour” come into this? Not within a bull’s roar.
    In fact before this is through there will be allegations of fraud, of stealing as well as of negligence. I reckon God may have got a little impatient with this and decided enough is enough. Yes He is slow to anger but this was just a giant rip off in a system which did nothing to stop it. The free market! Unregulated, it became an avenue for giant greed and irresponsibility in a huge game for personal wealth.
    This will take some years to unwind. Meantime the suffering of many victims of the greed will be immense and will be across the globe.
    Bill you ae right. God has decided to intervene for the ultimate good of mankind and to get people’s attention to the real reason for our coming on to this earth to stand the test of earning the kingdom of Heaven. And that appears to have been the furthest thing from some people’s minds in their exploitation of innocent people in this mess.
    We should of course pray for them.
    David Grace

  • Without counting Old & New Testament verses on the subject, it seems that the New Testament (viz. Matt 6, 1 Tim 6:6-10, James 4, Rev 3:14-18) gives far greater warning to us on this side of Calvary, about our attitude to riches. I see no foundation for Prosperity Doctrine in the NT.
    Stephen White

  • Thanks Joy

    I have already offered the numerous OT passages showing God judges the nations. And since God is unchanging, we have no reason to believe God no longer judges nations today. Indeed, I am not aware of any NT passage which says God does not have a plan for the nations, including their judgment.

    In fact we have a number of NT passages which tell us that very thing. In the parable of the sheep and the goats in Matt 25 we see Jesus exercising his divine authority as judge of all nations.

    In Acts 14:16 Paul speaks about how God allowed nations in the past to go their own way. The implication is that this will not always be the case. And we certainly see that in the book of Revelation where there are numerous passages about Jesus judging the nations. In Rev. 12: 5 for example we read about how Jesus will rule the nations with a rod of iron.

    God cares about individuals and he cares about nations. How exactly he is working among the nations today we cannot always clearly discern, but the entire biblical revelation makes it clear that God’s purposes are being brought about not only in individuals but in nations as well.

    Bill Muehlenberg, CultureWatch

  • I agree with you 100% Bill. I have had everything material taken from myself several times with my walk with My Lord Jesus, because he wanted to get my attention of what is important which in turn has helped me share this with my Brothers and sisters in Christ to rely on him and not “Man”. I have discovered that my “Lord” provides all my needs, but not my wants, what an “Awesome Father” in Heaven I have and I want to rely on him.

    Keep up the good work Bill.

    Rae Wallace, Devonport

  • David, are you saying that the operation of free exchange between buyer (borrower) and seller (lender) caused the excess of bad lending? If so, you are sorely mistaken.

    US government policies (both Carter and, more recently, Clinton) required the more risky lending you have described to those who couldn’t really afford it. The whole point of those policies was so that loans would be given to borrowers that the banks, in their skill and prudence, were not willing to lend to.

    I’m not saying capitalism should be totally unregulated – man’s sinful nature precludes that – but I am concerned that the apparent solution of government control got us into this problem in the first place!

    Jeremy Peet

  • Jeremy is quite right. Government regulation is more often the problem rather than the answer. There is some good debate about these issues in the comments section of On Barack Hussein Obama.

    Ewan McDonald.

  • Hey Bill,
    firstly just want to say that I think what you’re doing here is really good – it’s good to see a man taking his faith seriously, and endeavouring to evaluate and understand the world through the truth of Gods Word in the Bible.
    Just a question on this one for you though:

    Do you think that the fact that God’s people in the OT were a nation, and the fact that God’s people in the NT are not a nation has any impact on the way that we should understand OT instances of God judging nations today?

    It seems to me (and forgive me if these comments are chronically uneducated – it’s not an area I have looked at anywhere close to enough!), that the judgment of nations in the OT was centered around God’s purposes with his people, the nation of Israel; whereas the church is really non-nation based – and so perhaps that’s the reason that national judgment is not (to my knowledge) empirically addressed in the NT.

    I’m not saying God doesn’t judge nations in the same ways now through means such as floods and famine, I’m just not clear on how we should understand the national judgment in the OT as christians (granted that volumes could be written on it, so if worst comes to worst – point me in the direction of some good literature!).

    So if you could post your thoughts on this, I’d appreciate it.

    Your bro in Christ,
    Isaac Overton

  • Thanks Isaac

    I touch on some of these issues here: https://billmuehlenberg.com/2007/07/19/a-review-of-god%e2%80%99s-judgments-by-steven-keillor/

    I also touch on them a bit in my article above, and my reply to Joy, above.

    Yes you are right. The church today is not a nation, like Israel was. But both are God’s people. And it is interesting that when Jesus speaks about judging the nations in Matthew 25, he indicates that it is how the nations treat the people of God that determines how they will be judged.

    There is of course continuity and discontinuity between the Testaments. Not everything God did with Israel he does with the church, etc. But as I mentioned, I am not aware of any NT passage which clearly states that God is no longer in the business of judging nations, or is no longer concerned about the nations. And the book of Revelation is full of God judging the nations.

    So as I say, we must proceed cautiously here. We do not usually have a clear prophetic word about what is happening as we find in the OT. So that is why I have kept saying ‘maybe’, ‘perhaps’, ‘it is possible’, etc. Thus the current financial crisis may be the judgment of God, but I cannot say for sure. If we do not have 100% certainty that it is, we do not have 100% certainty that it is not either, it seems to me.

    Does that help any?

    Bill Muehlenberg, CultureWatch

  • Yeah thanks Bill,
    Keillor’s book looked to be worth reading.
    I think i agree with you though – there’s certainly nothing in the NT that suggests God has stopped judging nationally.
    We just need to keep searching the scriptures as best we can – and let them shape our thoughts, not the other way round! – like you say, proceed with caution.

    I re-read Matt 25, and I must admit that I was a bit perplexed, my view has always been that the ‘sheep and the goats’ judgment refers to the church (thus the fact that goats seem to have been professing christians-?)
    But I cannot deny that the Bible says ‘All the nations’ were gathered before Him – what that means, i’ve no idea!
    I also thought that that verse is actually refering to Christs return as well, thus it says: v31: when He comes in ‘All His glory’ – so not sure whether that scripture is applicable to understanding God’s judgments at this time?

    So, i’ll keep searching!

    Grace and Peace,
    Your brother in Christ,
    Isaac Overton (also initially of Devonport, good to see the Tasmanians getting a good show on here!).

  • Bill and everyone.

    We can say for sure that this is a judgment on our economic system. The reason is simple and clear we have a global system of banking and currency production that is condemned clearly in the bible. We lend money into existence creating currency that is inherently flawed from the start. Our very way of creating money amounts to usury as its described in the bible. Lending money to the poor who have no chance of repayment is how the bible describes it. Yet today we create our very money as debt so we’re lending money to all poor and debasing the currency because the system creates inflation.

    Christian writers on biblical economic theory like Rousas Rushdoony and Gary North have been warning for years that the system is immoral and flawed. The Mises.org web site predicted the collapse and the processes we are in with great precision. See http://mises.org/story/3128

    There’s nothing supernatural needed to have this crash, God has not withdrawn his protection. He has had people in the Christian economics field crying in the wilderness for years now. Few listened; we left most of the work to the people at Mises.org and the libertarian parties and as you will know they are not all christians.

    I’ve been listening and trying to do my bit but its not been enough, sorry. Take a careful look at Gary Norths books, most are free at http://garynorth.com/

    It gets worse the measures taken this month are identical to those tried in 1930. It failed badly then. Its failing faster this time because some remember the Hoover bailouts and the failed price and wage fixing that F.D. Roosevelt tried.

    How do we fix it. We need to return to a sound free market in currency allowing gold and other commodities to operate as currencies. We need to understand and ban Fractional Reserve Banking. We need to create new business structures that more closely match the payment cycles in various industries and simplify investment to a one click process on a business website. The stock market is digital but the laws and regulations are still paper bound in red-tape. We need new charitable institutions that design, build and finance low income housing in the first and third world. The sub-prime mortgages were a government program to do that but it totally backfired.

    The blessings and curses in the end of Moses law books are not lightening bolts from God, he is not arbitrary, they are direct cause and effect from his laws. We are not bound to the Hebrew ritual laws but If God tells Moses to do something only a fool would make laws that do the opposite and the wise learns from these laws and crafts modern laws guided by them.

    Wesley Bruce

  • Wesley!
    Spot on!
    We reap the results when we ignore God’s natural law – and this is what is happening today.
    What a refreshingly mature opinion – keep it up!
    By the way,
    Mises has some good points but C.H.Douglas’ Social Credit is more complete (in case you are interested).
    Find wikipedia article on Social Credit – it was written very recently by some well respected authorities on the subject.
    Terence Holmes, Melbourne

  • Brother Bill, you have indeed show that God’s word is a lamp to our feet and a light to our path in your analysis of the global financial crisis and the seemingly increasing frequency of natural disaster occurrences. In an ironic way, this light also shows the nations that they can’t run and hide from His judgement. A timely and necessary wake up call for the world as well as believers. Thank you.
    SC Chak

Leave a Reply