Rigged to Win

Since Christmas, I’ve been working my way slowly through George Packer’s masterpiece The Unwinding, which chronicles the slow decay of American society and politics over the past generation in poignant prose that follows the struggles and triumphs of a handful of more-or-less-ordinary citizens, using them to illuminate the story of a nation.  It climaxes with the events following the 2008 financial crisis, which revealed how thoroughly corporate money and power had taken the American political process captive.  This passage was particularly eye-opening:

“The previous October, in the last month of the [Obama] campaign, Connaughton had picked up signs from [Delaware senator] Kaufman that the Obama team wanted to bring Robert Rubin on as Treasury secretary.  ‘Don’t you realize that half the country wants to hang Bob Rubin?’ Connaughton asked when Kaufman expressed enthusiasm at the prospect.  Kaufman would later say, ‘It was like a car had broken down and we needed a mechanic.’  Obama, inexperienced in government and a novice in finance, seemed to believe that Rubin and his followers were the only competent repairmen available.

No more proof was needed that the establishment . . . would emerge from the disaster in fine shape.  The establishment could fail and fail and still survive, even thrive.  It was rigged to win, like a casino, and once you were on the inside, you had to do something dramatic to lose your standing. . . . Rubin was no longer viable for Treasury, but his people were practically the only candidates under consideration by Obama, who, after all, had fought his way into the establishment from farther back than any of them.  Michael Froman, Rubin’s chief of staff under Clinton, later a managing director at Citigroup, introduced Rubin to Obama, and he continued working at the bank while serving on Obama’s transition as personnel director, then collected a $2.25 million bonus before joining the administration.  Jacob Lew, another Citigroup executive, became deputy secretary of state with a $900,000 bonus in his pocket.  Mark Patterson, a Goldman Sachs lobbyist, was hired as chief of staff at Treasury despite the lobbying ban.  Timothy Geithner, a Rubin protégé and the architect of the bailouts, was appointed Treasury secretary and survived the revelation that he had flagrantly underpaid taxes to the agency he was going to lead.  Larry Summers, whose meaty fingerprints were all over the pro-bank policies of the late nineties, and who earned millions in speaking fees from various future bailout recipients, became the leading economic adviser at the Obama White House.  Even Rahm Emanuel, Obama’s chief of staff, a career public servant, had made a cool $16.5 million at a Chicago investment bank in the thirty months he spent between government jobs.  All at the top of their field, all brilliant and educated to within an inch of their lives, all Democrats, all implicated in an epic failure—now hired to sort out the ruins.  How could they not see things the way of the bankers with whom they’d studied and worked and ate and drunk and gotten rich?  Social promotion and conflict of interest were built into the soul of the meritocracy.  The Blob was unkillable.”

Three More Reasons to Ditch the GOP

Unbearable as the experience often is, I can’t resist peeking in on news related to the Republican presidential nomination race from time to time, and each time, it seems, I find another damning testimony which reveals how tenuous the connection between the GOP and anything recognizably Christian is becoming.  Perhaps it is now not so much the party of the “Christian Right” as the “Cold-Hearted Pelagian Right.”  Here are three examples I’ve saved from the stories of the past couple weeks:

The new media favourite of the race, Herman Cain, whose chief qualification for governing the most powerful nation on earth seems to be that he ran a pizza chain once, had this to say about the recent Wall Street protests: “Don’t blame Wall Street.  Don’t blame the big banks. If you don’t have a job and you’re not rich, blame yourself. . . . It is not a person’s fault because they succeeded. It is a person’s fault if they failed. And so this is why I don’t understand these demonstrations and what is it that they’re looking for.”  

Excuse me?  Not that long ago, even Republican leaders had been willing to join in the chorus of hatred against Wall Street, against a banking system that is fantastically rich and incorrigibly corrupt, and which, after nearly leading the whole world into the abyss, has happily resumed its intemperate ways.  And not only does Cain have the guts to defend them, but he wants to tell everyone who hasn’t managed to pull themselves up by their bootstraps and become super-wealthy, that this is simply their own fault and they don’t deserve any sympathy.  Survival of the fittest, you know.  If you don’t have it in you to succeed in this dog-eat-dog world, then you’re not worth the world’s time, and should resign yourself to being trampled underfoot.  

But Jesus said, “Blessed are the poor, for theirs is the kingdom of heaven.”


Meanwhile, Rick Perry has been having a rough time of it lately because he has dared to show any sympathy for the scum of the earth.  Perry, of course, presides over a state with a large number of  “illegal immigrants.”  His state has passed a law that decides to treat the children of these impoverished workers as state residents, with access to Texas’s lower in-state college tuition rates.  Perry argued, sensibly enough, that the alternative is to deprive children of illegal immigrants of the opportunity for an education, thus increasing the likelihood that they will become a costly drag on society, and that “If you say that we should not educate children who have come into our state for no other reason than they’ve been brought there by no fault of their own, I don’t think you have a heart.”  Unfortunately for him, most Republicans do not, it seems, have hearts.  Strategists and pollsters say this is a “90-10 issue” (against Perry) for Republican voters, and voter testimonials confirmed this picture.  One declared that she liked Perry “until I heard about him giving all these kids a free ride.  I absolutely, positively disagree with any benefits that these people are getting, and if it were up to me, I’d round them all up and sweep them out of here.”  Others were turned off by Perry’s disinclination to back the building of a fence along the entire US-Mexico border to keep these workers out.  

But Jesus said, “”When you give a dinner or a banquet, do not invite your friends or your brothers or your relatives or rich neighbors, lest they also invite you in return and you be repaid. But when you give a feast, invite the poor, the crippled, the lame, the blind, and you will be blessed, because they cannot repay you.”


On one front, though, Perry has shown a hard enough heart to lure Republican voters: capital punishment. In a recent Bloomberg article, Margaret Carlson reports how, “In a debate in September at the Ronald Reagan Presidential Library, moderator Brian Williams tried to pose a question to Perry, beginning: ‘Your state has executed 234 death row inmates, more than any other governor in modern times. Have you — ’ Before he could finish, Williams was drowned out by lusty cheers and piercing whistles from the audience.”  And she comments acidly, “It’s one thing to support the death penalty. It’s quite another to relish it like fans cheering a winning touchdown.” 

After discussing the troubling record of modern death row cases, Carlson tells us Perry’s equally disturbing response to the question: “Perry confidently told Williams that he had never lost sleep over any of the 234 people executed during his tenure as governor,” and goes on to comment, “It’s an alarming statement if false, a contemptible one if true….It’s worth losing sleep over life-and-death decisions. It’s what presidents, and other moral beings, do.”

But Jesus said, “Blessed are the merciful, for they shall receive mercy.”


(NB: In each of these stories, especially the last, I am at the mercy of how the media is portraying things.  It is possible that each of these stories has been reportedly falsely or one-sidedly, and if so, I welcome the corrections of anyone who follows this news more thoroughly than I do.)

John Calvin–Friend of Usury?

By defenders and detractors alike, John Calvin and his followers have often been identified as laying the foundations for modern capitalism.  Weber’s version of this thesis, focusing on the so-called “Protestant work ethic” is the most well-known, but a great deal of attention has also focused on Calvin’s reinterpretation of the usury prohibition to allow for commercial lending.  As Reformed pro-capitalists (like Hall and Burton of Calvin and Commerce) tell it, Calvin’s thought facilitated massive social progress by liberating Christians from the oppressive constraints of backward medieval economic thinking, that simply didn’t understand the productive capacity of money.  He removed the stigma on money-lending, thus helping Western Europe embrace all the wonderful advances in productivity that come with a credit-based economy.  In previous posts, I have pondered the question of to what extent Calvin’s new ethic worked as an interpretation and application of Scripture, but here I want to ask a more fundamental question–what did Calvin actually say about usury?

When you read his Letter of Advice on Usury, the striking thing is not its permissiveness, but its restraint; not a sanguine embrace of the possibilities of credit-based economics, but deep suspicion and hesitance of the practice, mindful of the greed of the human heart.  While, in one short and crucial passage, he does question and dismiss (though without much argument) the medieval dictum “that money does not engender money,” a move with potentially radical consequences, the tone of the letter as a whole is remarkably conservative.  Indeed, anyone wishing to follow the principles Calvin lays down would have to condemn almost the entirety of the modern system of credit, and if he were a banker, investor, or mortgage lender, would have to subject his business practices to serious scrutiny.  Let’s look at some of the letter.

In Luke 6:35, he says, Christ

“corrects the world’s vicious custom of lending money [only to those who can repay] and urges us, instead, to lend to those from whom no hope of repayment is possible.  Now we are accustomed to lending money where it will be safe.  But we ought to help the poor, where our money will be at risk.  For Christ’s words far more emphasize our remembering the poor than our remembering the rich.  Nonetheless, we need not conclude that all usury is forbidden.”   

In other words, “Yes, of course, the majority of our lending should be to the poor with no hope of return; I’m just saying that loans at interest to the rich are not completely forbidden; they are the exception to the rule, to be sure, but a permissible exception.”  Ha!  Imagine an economist or ethicist today saying that.  

A little further on he says, “What am I to say, except that usury almost always travels with two inseparable companions: tyrannical cruelty and the art of deception.  This is why the Holy Spirit elsewhere advises all holy men, who praise and fear God, to abstain from usury, so much so that it is rare to find a good man who also practices usury.” 

Wow, that’s pretty stern stuff.  Calvin does not feel that he can legitimately pronounce a ban on all usury, but he hardly wants to present himself as a fan of the practice, and wants anyone contemplating the practice to examine themselves and the circumstance very carefully before they do so–in stark contrast to we moderns, who waltz nonchalantly into the world of paying and charging interest about as soon as we’re old enough to drive.  Moreover, his permission of usury is not a permission of usurers…because of the dangers of the practice, he doesn’t think anyone should make it his regular line of work: “I must reiterate that when I approve of some usury, I am not extending my approval to all its forms.  Furthermore, I disapprove of anyone engaging in usury as his form of occupation.”  

Loans at interest, Calvin goes on to say, are only legitimate if they are made for the benefit of both parties, not merely the creditor.  Just because someone wants a loan and is willing to agree to a certain interest rate does not mean a creditor should give them the loan–only if they are confident that the debtor is in such a position of stability that he is almost certain to derive great benefit from the loan, even after repaying the interest.  Calvin develops this principle to list seven rules to distinguish lawful from unlawful usury: 

“The first is that no one should take interest (usury) from the poor, and no one, destitute by virtue or indigence or some affliction or calamity, should be forced into it.  The second exception is that whoever lends should not be so preoccupied with gain as to neglect his necessary duties, nor, wishing to protect his money, disdain his poor brothers.  The third exception is that no principle be followed that is not in accord with natural equity, for everything should be examined in the light of Christ’s precept: Do unto others as you would have them do unto you.  This precept is applicable every time.  The fourth exception is that whoever borrows should make at least as much, if not more, than the amount borrowed.  In the fifth place, we ought not to determine what is lawful by basing it on the common practice or in accordance with the iniquity of the world, but should base it on a principle derived from the word of God. [Which means that one can never appeal merely to the “market rate of interest” as justification for charging a certain rate, but must determine what is just and appropriate for the needs of the debtor.]  In the sixth place, we ought not to consider only the private advantage of those with whom we deal, but should keep in mind what is best for the common good.  For it is quite obvious that the interest a merchant pays is a public fee.  Thus we sould see that the contract will benefit all rather than hurt. [Thus, for instance, a creditor should not lend to an investor who proposes to build a development or expand a business that, while quite profitable, will harm the surrounding community.]  In the seventh place, one ought not to exceed the rate that a country’s public laws allow.  [Which means, of course, that Calvin is presupposing that it is legitimate for governments to put restraints on the interest rates that can be charged, instead of taking a laissez-faire approach.]”

Needless to say, if these principles were consistently followed, it would rule out a substantial majority of the lending and borrowing that goes on today–not just the dubious dealings of “Wall Street” investment bankers, but even much of the ordinary flow of credit that comes from “Main Street” banks and mortgage lenders.  It seems that once you actually look with any attentiveness at his work, it becomes impossible to enlist Calvin as an early proponent, or even an ancestor, of laissez-faire capitalism.