Economic Parables author comments on current economic crisis

By Staff
Oct 13, 2008

Even if our nation’s economic troubles have not yet impacted your family, it is worth noting that—to a great degree—we all will pay the price for many consumers pledging to buy things, including homes, they could not afford. At its heart, our economic system is solid; it has simply been corrupted by foolhardy decisions made by citizens and government leaders alike.

David Cowan, author of Economic Parables: The Monetary Teachings of Jesus, says “The debate about the economy is more out of control than the economy itself. This talking down of the market is creating a self-fulfilling prophecy.”

There is an illusion that the economy will look after us. It is not a function of the economy to do this. Ever since God sent Adam into the garden and told him, “Life’s gonna be tough!,” we have had to find ways to negotiate conflicting wants and needs in the world. This is what the economy does. We need to use the good times—as a country, as households and as individuals—to prepare for the bad times. We have lost the habit of our grandparents of doing this, which is why we have such a mess today. In downturns we can get economically punished, but remember that in the alternatives of Socialism and Communism, and in high tax regimes,we get punished ALL the time.

Below, Cowan addresses questions that many of us are asking about the current economic situation:

Who is responsible for this mess?

We all are. The current crisis has to be put into perspective. In some ways, we have become a spoiled society, only happy in the good times and unprepared for the bad times. Unlike our parents and grandparents, we only think of things getting better, but this is unrealistic. The economy has its own rules of gravity, what goes up will come down. We didn’t hear complaints when it was easy to get loans, without backing it up with any assets, but now the markets have gone against us we don’t want to take responsibility.

Will the bail-out work?

The bail-out will have to work. Not because it is wise, sadly, but because that is what the loudest voices are baying for. On the plus side, there is an opportunity for government to make money and return a profit to the America taxpayer a year or two down the line. This was done back in the 1930s, the Home Owners Loan Corporation, and again in the 1980s with the Resolution Trust Corporation in the Savings & Loans bank failures. On the negative side, there is the possibility the profit could just get squandered by various lobbied interests and government bureaucracy.

Is this is all the fault of bankers?

It’s easy to attack the fat cats of Wall Street, and they deserve a lot of criticism. But what about the big pay-outs to sports stars, movie stars, celebrities and others? Isn’t it the case that we have a culture of greed? This is a tough thing to say, which is why you won’t hear the politicians say it, but we all share the blame. There is a gambling mentality in our economic behavior. We’ve all—not just the banks but all of us—been putting our chips on red, and now that the market has gone black we look for someone to blame. Too many of us, on Wall Street and Main Street, have been managing our desires unwisely.

Is this proof that Capitalism doesn’t work?

This is not the time to question the future of Capitalism. It is not a question of whether Capitalism works or not. It is not a time to go back to the tired old debates of the last century about Capitalism. The alternatives like Socialism and Communism caused oppression, and they were unsuccessful. We still believe in democracy, even when elected leaders have become dictators. Equally, we still have to believe in Capitalism, even when we see irresponsible leadership in the market.

What is the way forward?

This is the question to ask: what kind of market do we want? The answer should not be a kind of European Socialist-lite. It should be about robust Capitalism, made robust by effective regulation, increased individual responsibility by all, and greater accountability of financial institutions and businesses so that managers actually know what is going on in their organizations.

What should we do as individuals?

What is happening right now is a bleak message to us all; we know that. But there is a bleaker message when we do not listen to Jesus when he says in the parable, “You can’t take it with you.” If you are hurting right now from this economic crisis, you have to ask yourself what you have left, and you should see indeed there is much left, for there is the love of Jesus in your life. Just like the economy, this is an opportunity for you show Him that you can go through the bad times with him, not just the good times.

What questions should I ask of myself?

Many people, as they find their material life difficult, will also find they have nothing left in the spiritual bank, because they have based their life on material things. If we base our life on the parables, we learn that Jesus tells us to use our worldly wealth wisely, so this is a time to ask, did we do that? Did we do that economically? And more importantly, did we do that spiritually?

I’m surviving, what should I do?

For the faithful who have managed both their economical and spiritual wealth wisely, this is a time for you to reach out into your community and see how you can help people in trouble. Help people with debt counseling, and give people spiritual counseling. When 9/11 and New Orleans happened, we knew we had to reach out. This is an economic storm we are in, we need the same approach, money doesn’t make it different.

David Cowan brings a unique perspective to the current situation, one that incorporates theological study with real-world economic experience gleaned from over twenty years as a journalist, editor, and bank executive in Europe and North America. He is also a respected and much sought-after speaker on faith and finances, with a fall schedule that includes appearances at Christian chambers of commerce and the Christian Leadership Alliance.

To purchase a copy of Cowan’s book, “Economic Parables: The Monetary Teachings of Jesus,“ please visit our online bookstore.

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7 Comments

1 On Oct 14, 2008, at 8:33am, David Cowan wrote:

I really appreciate your putting my book and points on your website, and you have it absolutely right when you say our system has been corrupted by foolhardy decisions. If your readers are looking for furhter commentary or want to listen to a variety of interviews from Christian radio, they can visit my blog abd follow this issue through the coming difficult period:
http://economicparables.blogtownhall.com/
Thanks and blessings!
David

2 On Oct 14, 2008, at 11:22pm, Vince Eccles wrote:

I disagree, the ‘tire old debates about capitalism’ must be remembered!  Your extreme capitalism is not the proper Christian economy as you suppose.  Examine the wonderful Christian socialistic movements in response to the Social-Darwin Capitalism during the 1800’s.

You are blinded by your obsession with individual freedom, which again is not entirely Christian either.

Extreme Capitalism has no basis in Christianity.  It is too individualistic and too lawless.  A system that accommodates both the individual and the community has some concepts that mirror the Church and can provide some limits to Sin and Selfishness. It would have a better basis for an economy of moderation.  Pure Capitalism and Pure Socialism are economies of extremes and will ultimately be manipulated by the wealthy individuals or the powerful leaders of the community, respectively.  A mixed system limits both extremes.

3 On Oct 15, 2008, at 1:08am, David Cowan wrote:

Thanks Vince, but there is a misapprehension here. It is not my “extreme capitalism”, nor am I blinded by individual freedom. Page 18 of the book: “Wealth and material things will not save us, nor will the pretense that we can build a good society. Though the economy we have is the most effective economy humanity has developed, we recognize that it is not possible to construct a perfect economy. The notion that we can save the world with just a little more cooperation and organization is a fallacy, for the world is fallen.” Capitalism has lifted more people out of poverty in the last 250 plus years than any form of economic organization. When we see bad things happen we need to tackle this. When Adolf Hitler became elected as leader of Germany and created a vicious dictatorship, we did not say “Hey, Democracy is a bad thing”. My call is to recognise how Capitalism is the best tool at our disposal, and to change the hearts of individual economic agents to make things better.

4 On Oct 20, 2008, at 8:35pm, Ed Nelson wrote:

Please do study on the two party’s health insurance proposals showing their comparative benefits for receiving abortions, the abortion clinics, the individual practitioners, Planned Parenthood etc organizations, the “middlemen” receiving and reselling the babies’ body parts to labs, etc etc.

5 On Oct 20, 2008, at 10:29pm, vince wrote:

I disagree again.  The robber-baron capitalism from 1860-1910 put many people in poverty time and time again and focused the nation’s wealth into a few families (Carnegie, Rockefeller, Guggenhein, Morgan).  It wasn’t until Theodore Roosevelt started the trend to put some muscle into government regulation that the cycle of labor abuses and monopolistic tendencies of unregulated capitalism started be controlled.  Well-regulated capitalism (with government recognition of labor unions), which is often labeled socialism by capitalistic ideologues, is what produced the enormous movement of wealth to a broad middle class from 1930 to 1980.  This has now been reversed by de-regulation efforts of the ideological free market capitalists. 

Again, the mixed capitalism-socialism system is the most stable and it encourages the broadest base of wealth.  It is a bit more sluggish on market innovation, but does dampen the cycles of a boom and bust economy.

6 On Oct 21, 2008, at 12:10am, Vince Eccles wrote:

The mixed system concept also works for Democracy.  Please note the arguments against a pure democracy by Plato in “The Republic” and note the arguments for a mixed form of government (president, representative body, judges) by Cicero in his “The Republic”.  I am certain every educated U.S. founder was well aware of the Roman form of mixed government from reading Cicero in their Latin studies.  Pure democracies can lead to abuse.  Mixed government has proper checks and balances. 

An important part of any successful democracy are additional checks and balances.  For instance, freedom of the press is essential.  The pure unregulated free market is as bad as an unrestrained, democratically elected leader.  Robert Mugabe of Zimbabwe was originally a democratically elected leader, but there was no mixed government that distributed power over a range of institutions.

Unregulated capitalism is just as dangerous as an unregulated democracy.

7 On Oct 22, 2008, at 8:46pm, David Cowan wrote:

I think there is an unspoken assumption here. I, for one, do not advocate unregulated capitalism. I would advocate less regulation and caution against government interference. Milton Friedman explains in his own definition of capitlaims that there have to be rules in the game, but government cannot and should not manipulate the market to promote particular social progressive agendas. The job of business and the economy is to promote wealth, and it does this best when it is not over-regulated. This is not mixed government, it is clear definition of economic and government roles. As Ronald Reagan said, the most dangerous words in the English language are “I’m from the government and I’m here to help you.”

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