Do you like roller coaster rides? I certainly do. But only at an amusement park! I don’t like to experience them at home when I open my retirement portfolio or switch on the nightly news. Yet the past week has been a high speed, death-defying national and international ride, with the financial markets, banking, and mortgage crisis twisting and turning, leaving our lungs empty, our heads pounding and our stomachs queasy.
But here we are, with our Federal Government planning and struggling to intervene with the largest financial bailout in US history. Much of this aid for Wall Street could come from Main Street: out of taxpayers’ pockets. I don’t feel so good. When will this ride end? I want to get off now…please?
Why is this happening? I have asked myself that question frequently. Partisans want to blame a particular political party. But our politics and politicians in both parties are only a reflection of our American culture. So if we blame them, we can only blame ourselves for electing them. This is a democracy after all.
The Bible provides some insight into our current economic crisis. Words written thousands of years ago still ring true today because they describe human nature, which the last time I checked, has not changed. The Bible has a lot to say about money: where it comes from and how to wisely use it. In fact scholars estimate that 15% of everything Jesus said relates to money and possessions. That is more than his teachings on heaven and hell combined! Jesus sternly warned you and me: “Watch out! Be on your guard against all kinds of greed; a man’s life does not consist in the abundance of his possessions” (Luke 12:15, NIV). In his famous “Sermon on the Mount” Jesus asserted that “No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money” (Matt. 6:24, NIV).
At the danger of oversimplifying a seemingly complex issue (which I assume the risk for), I think it all boils down to good old greed. Think about it: predatory lenders and mortgage brokers wanted to make a killing while interest rates were historically low, so they offered teaser, adjustable rate mortgage loans to many people who couldn’t afford to own a home once those rates inevitably increased. Yet the lenders convinced people that they could afford to BUY and PAY for a home (two very different things), and in fact, they deserved it, it’s the American dream. Their only chance to own a home is now, and never again. So many Americans stretched themselves beyond their means.
As a former home owner, I understand this situation. When my wife and I lived in Denver, we bought a house in April of 2005 when the market was starting to slide. Consequently, we got a good deal using a sub-prime mortgage. It was difficult paying the bills as a one income family, but we found a way to do it. And it was only by the grace of God that we sold our house in February of 2007, after it had been on the market for only one month (there were 5 houses on our block alone that had been sitting for sale for at least six months).
But let’s face reality: many Americans are chasing the Almighty Dollar and delayed gratification is not a popular choice. Our current TV may be functional, but that flat screen, HDTV sure looks good! Our cell phone works, but the iPhone is so cool and relatively cheap! That mentality has gotten us to the place where it is legal to pay someone millions of dollars for a job poorly done. Foxnews.com reported last week that Washington Mutual’s new CEO, Alan H. Fishman is set to make “…$20 million for 17 days on the job…and his company failed.” Based on their filings with the SEC, “WaMu threw a $7.5 million bonus at Fishman when it hired him on Sept. 8, and guaranteed him an immediate cash severance of $11.6 million — both of which he gets to keep.”
Should we blame Wall Street? How about the US Government? Perhaps we have all played a part in this mess. This would be an appropriate time to reflect on a national and individual level as to what we value most. It’s scary to look in the mirror—we might not like what we see. But it’s time to get off this ride. It’s one we don’t want to repeat.