Christians, socialists and the culture of blame for the Credit crunch

The Credit Crunch has brought a rash of socialists and so-called Christians onto the media to condemn the immorality of bankers and capitalism. My advice to all who feel a strong urge to do so is to remember the Christian injunction, let he who is guiltless throw the first stone.

The moralisers think the crisis is an easy story. A small group of very greedy bankers lent too much so they could pay themselves huge bonuses. The answer recommended by these self appointed national preachers is equally easy. Nationalise the banks, and in some magic way lending too much and paying bankers too much will no longer be possible, whilst at the same time the economy will miraculously grow again. As we have seen, the nationalised banks still seem to pay large pensions and salaries to people working for loss making concerns, whilst the government itself decides it and its nationalised banks need to lend and borrow more, not less. Meanwhile the economy goes from bad to worse, with all too many people losing their jobs or their businesses.

If lending too much was greedy and wrong, wasn’t it also wrong for so many people to borrow so much, especially if they cannot now repay it and are going to walk away from their obligations? Who was more guilty – the lender or the borrower?

If the bankers who did the lending were greedy and wrong, weren’t the shareholders in the banks similarly guilty as they were happy to receive the dividends from all that excessive lending? Didn’t that include most people in the country? The Church Commissioners who pay the clergy salaries doubtless owned lots of bank shares, as did practically every pension fund in the country. I don’t remember them speaking out at Bank shareholder meetings asking for the banks to grow less and pay smaller dividends.

If the bankers who did the lending were immoral, surely the governments and Regulators who allowed them to do so by signing off their balance sheets and business plans were also wrong? Weren’t they employed as upholders of public morality, and didn’t they set the tone for the age of irresponsibility?

And if it were morally wrong for us collectively to borrow too much from the private sector, isn’t it even more immoral for us now collectively to borrow staggeringly larger sums through the government, as we are being forced to do?

It it were immoral for the authorities to sanction so much easy credit in the good days, wasn’t it even more immoral for them to bring the whole system crashing down in the bad days, by hiking interest rates too far and by demanding the banks suddenly held more capital? Why is too much private sector credit immoral, whereas too little private sector credit is moral? And why above all is too much public sector credit moral? Is printing money the height of morality and responsibility, a new kind of public duty, as some now have it?

I think it unwise to make this a morality tale. I could take no pleasure in thundering against the immorality of one or two scapegoat groups. We all lived through the age of private sector irresponsibility, and are now all having to live through the age of government financial irresponsibility. It’s a very one sided morality which condemns lending too much but does not condemn borrowing too much. It’s even more bizarre that over lending only matters if it is done by a private sector bank but is encouraged if done by a nationalised one. If lending and borrowing to excess is immoral these socialist and Christian moralisers should be on the airwaves condemning the excess of public debt now being built up on a scale which dwarfs the credit boom of 2003-7.

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28 Comments

  1. Ian Jones
    Posted March 9, 2009 at 7:39 am | Permalink

    The words Labour Government and morality cannot be said in the same sentence. They have twisted the true meaning of morality to meet their own narrow minded views and anything which does not fit in with this view is by definition illegal including the recently added crime of being a banker!!!

    It also hides the fact they are blowing as much cash on their key voters whilst they can. The only true measure of that will be the pound as they cannot control it.

    • THE ESSEX BOYS
      Posted March 9, 2009 at 10:38 pm | Permalink

      Key tenets of Christianity are the offer of a helping hand, a willingness to turn the other cheek and the courage to say ‘sorry’ for past mistakes and unkindnesses when it is justified and it helps.
      You know what we’re leading upto don’t you!

      Probably not many of JR’s faithful following get to read The Sun but Trevor Kavanagh’s Monday column always lifts the spirits of Brown baiters so here below is his take today on the ‘Say Sorry’ issue…and remember this stuff is what the ordinary swing voter is more likely to read than much of the comment that appears on the blogs so avidly gobbled up by folks like us!

      ********************

      Flying home from Washington last week, the PM turned on journalists who asked him to apologise for his part in the Great Recession. But once Gordon started saying sorry, where would he stop? Would he apologise for turning Britain into a giant welfare state, with 12million adults dependent on taxpayers, either for their salary or benefit?

      Is he sorry for opening the door to millions of unchecked migrants now in cut-throat competition for British jobs?

      Is he sorry for selling off our gold at rock-bottom prices and wrecking private pension savings while bloating the public sector’s.

      Will he apologise for refusing to build nuclear power stations? Or new prisons to hold those dangerous criminals now roaming free?

      Does he regret the failure of schools to educate our youngsters properly for the tough times ahead?

      No. After 12 years in charge, he can’t say sorry.

      That would be to confess Labour has misspent more than a decade in power.

  2. mike stallard
    Posted March 9, 2009 at 8:11 am | Permalink

    Will you please allow me to express my own (Christian) view on this?
    God and Mammon are completely different. You cannot serve both. So Christians try, very hard actually, to serve God first and foremost. And, yes we do start off every mass with the confession of our failures too. We do not pretend to be much good at it!
    Oddly, we aren’t that good at the blame game.
    Second we have to love our neighbour as ourselves. That is why we, at our Church are trying to look after the people who crash and who are about to crash. That is where our focus lies and where I hope it will always lie.
    I really do hope this doesn’t sound either smug or complacent. It certainly doesn’t seem like from inside! It actually sounds rather full of chaos and broken dreams!

    • Posted March 9, 2009 at 11:41 pm | Permalink

      I don’t hold much with christianity, but I rather liked Mike Stallard’s comments.

      It could be a good recipe for social cohesion and recovery from recession – be aware that none of us has all of the answers, and spare a thought for those brought low by this crisis, from the bloke next door to Fred Goodwin. And Gordon Brown too? Well, maybe.

  3. Posted March 9, 2009 at 8:14 am | Permalink

    SKY reported this morning that Lloyds were down 14%. So if I’ve read your earlier blog correctly, we’ve just lost the entire defence budget for the next seven years!!

    It is perhaps well you do not permit profanity on this site, as this is going from incompetent to criminal recklessness. It is no longer sufficient to strip ministers of their pensions for this.

  4. Hayden Smith
    Posted March 9, 2009 at 8:15 am | Permalink

    Superbly well said.

    I just wish views such as these got more then 30 seconds once a month in the broadcast media (especially the BBC of course)

  5. Colin D.
    Posted March 9, 2009 at 8:24 am | Permalink

    If I borrow someone else’s money and do not repay then I am more blameworthy than the lender. At the end of all these toxic debts is someone, somewhere, who is walking away from his/her responsibilities and making society – the rest of us – pay. Strikes me that many of these people hardly get a mention and are increasingly getting off the hook.
    What is truly immoral is that those that saved can be getting 0.1% interest against 3% or more inflation. Today, the savers are paying for the cost of those who cannot or will not repay. Tomorrow (after the election) we all pay with massive taxes hikes.
    The bad thing about nationalising the banks is that we the taxpayers now have to pick up the costs for irresponsible debtors is some far flung corner of the world we have never even heard of.

    • Bazman
      Posted March 9, 2009 at 12:22 pm | Permalink

      Bankers lending money that is not theirs to lend with no personal financial risk to themselves and everything to gain, makes the lender more blameworthy than the borrower. Strikes me that these people and their supporters are getting off the hook Colin.

      • skooch
        Posted March 9, 2009 at 10:29 pm | Permalink

        I’m not so sure.

        I borrowed quite a lot of money c.2004, in addition to the borrowing I had on my first house, to fund the purchase of a house in Italy. We now have 2 houses; both extraordinarily beautiful and in equally idyllic surroundings, which I hope will cushion them from the worst of the property downturn. Yeah, well.

        Apart from the fact that I can remember saying, quite distinctly, to the lovely joe from the bank ‘But are you not concerned about our future ability to pay? What happens if interest rates go back to 15%?’ – his reply was what I wanted to hear.

        I took his money, for heaven’s sake. Mea culpa.

  6. Amanda
    Posted March 9, 2009 at 8:38 am | Permalink

    What I think is immoral is -

    1. stealing people’s pensions, when they have no chance of every recovering that money
    2. stealing people’s savings, that they have worked hard fof and prudently put to one side
    3. stealing people’s shares, in the case of the nearly 1m Bradford and Bingley shareholders
    4. stealing taxpayers money to fund Labour’s political chances
    5. selling out our country to the EU when a democratic vote would say NO.

    Bankers – some are bad and some are good, but Labour are using the same tricks by blaming the bankers as (other propagandists have done in the past -ed). Hitler did by blaming the Jews. Or the Puritains did by blaming witches for the evils in society. And look where that all led!! It is about time the MSM and Church got real and realized they are already supporting the (word left out -ed) Labour Government.

  7. Bazman
    Posted March 9, 2009 at 8:40 am | Permalink

    The morality lies in the breathtaking hypocrisy and deceit of the banks and many other companies, including the church, in their pretence of being somehow independent of the state. Whilst knowing and relying on the taxpayer to bail them out when the whole charade came tumbling down. Operating a separate banking system through tax havens, offshore accounts and the like, running alongside the legitimate one to avoid tax and more importantly believing that they should not pay any tax despite using the facilities and population of the countries involved. Above all using their political stability to make millions of profit for a few people. Not unlike drug dealers who also provide a service, and dictators.
    The lenders are to blame for sure. To blame the borrowers is like blaming a loan sharks customers. The banks where praying on a lot of greedy stupid and vulnerable customers. Hiding the terms of repament which often ramped up to levels the borrower could not pay. There was widespread lending without checking of income. The idiots that took mortgages out on cars and holidays got all they deserved. Anyone who ripped off the banks. Well done.
    The bankers made their bonuses on amounts of money lent, not on profits. They where in effect giving other peoples money away, knowing full well they could not loose personally and had everything to gain with the taxpayer taking the drop. The rest of the population just got on with making a living with the Red Right in council houses cheering. The politicians, the churches and churches of the state like the civil service, made hay while the sun shone. Who could expect more morality from them as they do not have real jobs and do not live in the real world? Amen.

    • Robert
      Posted March 9, 2009 at 4:49 pm | Permalink

      It takes 2 to tango ! Everyone is to blame the lenders and borrowers and FSA/Government to varying degrees – the prudent and cautious/ contarians have been mullahed! Robbing Peter to pay Paul springs to mind. My view , not advice please note as I am not authorised to do so, is to buy real assets over the next year or so gold, property etc using a 5 to 10 year fixed rate mortgage and hopefully watch my debt inflated away over the next 5 years or so. Cash is one place apart from liquidity reasons where I would not be!

  8. Posted March 9, 2009 at 9:51 am | Permalink

    Incisive as always. I challenge anyone in the Bankers’ position to become wealthy beyond imagination, not to. If I had this kind of wealth my pleasure at helping others would be immense. Many wealthy do. Human Nature allied with Christian values, very rightie!

  9. Lola
    Posted March 9, 2009 at 9:58 am | Permalink

    Apply for a spot on R4′s ‘Thought for the Day’ and read that out.

  10. Posted March 9, 2009 at 10:02 am | Permalink

    Personally, I don’t think that the current economic crisis is within the remit of the Archibishop of Canterbury, despite his comments this morning.

    He can talk about human greed all he wants, but I wonder how we would feel if politicians kept sticking their noses into how Christianity operates in this country.

  11. Stuart Turner
    Posted March 9, 2009 at 10:15 am | Permalink

    Spot on

  12. chris southern
    Posted March 9, 2009 at 12:55 pm | Permalink

    Their are a few people that are using this current situation to not only make themselves look attractive to others and thus gain some financial support (the CoE needs money currently) but also to cosy up to the current goverment and protect positions within the Lords.

    it’s populist politics, pure and simple, and they don’t even realize the public sees right through it.
    even uneducated people are far more intelligent when it comes to politics thanks to the last few years.

  13. Posted March 9, 2009 at 1:08 pm | Permalink

    If morality enters into it it was all those who talked about a “post industrial society” where we would all stay rich buying & selling houses while all the nasty productive jobs went to China.

    It was also stupid.

    Yet how many of the “moralists” in government who used the “post industrial” term have even yet said we should support productive industry by cutting the regulations, allowing us to have a world class electricity system or getting rid of much of the government parasitism that sucks up 50% of the economy.

    I object to parasites claiming moral superiority (& as an atheist think that includes bishops).

  14. alan jutson
    Posted March 9, 2009 at 1:30 pm | Permalink

    Call it what you will, but what seems to have been lost in this World is personal responsibility and integrity.

    Unfortunately some well known and well positioned and well paid Businessmen, Politicians, Sportsmen,and so called Celebrities, have shown an excellent example of personal greed and excess, and become some sort of Public Icon in the process.

    The sad fact is that some of the Media has sought on occassion to promote these people and their lifestyle as if it is normal.

    Those people doing Voluntary Charitable work (and there are millions who do) get little mention.
    Neither do those who run their personal life without problems (the majority)

    The problem we have as a Society is that those people with problems are now growing fast, whilst those who had no problems in the past are shrinking.

    The Governments Policies are not helping those who have always in the past been responsible, so it is no surprise that at the moment we are going downhill as a Nation.

    The real question is who will stop it, how will they stop it, and when.

  15. APL
    Posted March 9, 2009 at 1:56 pm | Permalink

    JR: “If the bankers who did the lending were immoral, surely the governments and Regulators who allowed them to do so by signing off their balance sheets and business plans were also wrong?”

    Government, Regulators and those politicians who spent the last ten years bickering, should ‘we’ be the nasty party, should we be ‘more caring’, the triumph of style [not much of that either] over substance. FFS [shorthand for an expletive].

    As there are sins of commission, so too are there sins of ommission.

    But let’s not forget, those folk in control of the ‘independent’ bank of England wanted interest rates low, encouraged people to borrow, and I recall harrangued the banks to lend to the ‘disadvantaged’. That is, they wanted banks to give savers money to people who haven’t a cats chance in hell of paying it back.

    Now they are busy destroying the savings of responsible yes, prudent, folk. Next pensions.

  16. Denis Cooper
    Posted March 9, 2009 at 3:18 pm | Permalink

    Well, some people are more to blame than others, and that should be debated, but the immediate problem is that the government is getting us deeper and deeper into the mire with every passing day, and the Official Opposition is excruciatingly feeble in its opposition.

    This is my suggestion, which I think is the only realistic way forward even though it would mean reversing some of the idiotic, politically motivated, false moves made by the government over past months.

    At least it would not involve the government in

    a) funding its deficit by telling the Bank of England to print more money, and

    b) putting the taxpayer on the hook for future liabilities running to potentially hundreds of billions of pounds.

    A not-for-profit, state-owned, Resolution Bank, established by Act of Parliament, would:

    1. Be owned by the Treasury.

    2. Have an account with the Bank of England.

    3. Be capitalised by a one trillion pound overdraft from the Bank of England – a PROPER use of “Quantitative Easing”.

    4. Have senior managers appointed by the Treasury, in consultation with the Bank and the FSA.

    5. Have other staff seconded from and paid by its clients, the commercial banks, in each case to clear up the mess the client has created.

    6. Have a very closely worded contract with each of its clients, the commercial banks which have got themselves into trouble through their own stupidity.

    7. Have the remit of buying the “toxic assets” from each of its clients, at the minimum price compatible with the survival of the client as a fully functioning commercial bank, and in each case then allowing the seconded staff to gradually sort through their employer’s mess, in some cases no doubt their own personal mess, and dispose of the “toxic assets” for the best prices they can obtain.

    8. Return to each client any surplus over the price the Resolution Bank paid for its toxic assets, less costs.

    9. And/or, claim back from that client any shortfall, plus costs, to be paid over a period of some years if necessary, with interest.

    10. Be wound up when its job had been completed, and it had cleared its overdraft from the Bank of England, down to the last pound.

  17. Posted March 9, 2009 at 5:13 pm | Permalink

    It’s sort of in the same vein here I guess, but not specifically in line with the topic, but I was wondering if anyone else bar me and a couple of bloggers who have not yet been ‘blacked out’, is going to mention the plummeting price of Sterling and the snake pit the FTSE fell into today?

    I notice a distinct lack of political comment and a distinct ‘tape on loop’ feeling from the media?

  18. APL
    Posted March 9, 2009 at 5:31 pm | Permalink

    Mandleson being interviewed by Andrew Marr on Sunday 8th March.

    Marr: “.. Geroge Osborne says ‘we weren’t on the ball, nobody was on the ball’ ..”

    Marr: ” .. Actually ..”

    Mandleson: ” .. Well, it’s rich coming from the Conservatives who opposed the very regulatory system that we put in place, err, err, err, over those years, lets not take any lessons from the conservatives …”

    Now, my immediate thought when I heard that was; Ah yes, the Tories opposed the very regulatory system that has so comprehensively failed.

    Perhaps, Mandleson, if you weren’t so preoccupied with saving Brown’s neck and by association your own, you might be open to the possibility of actually learning something other than how to slither.

    Marr, being a BBC Labourite droid, ignored the point.

  19. Posted March 9, 2009 at 7:58 pm | Permalink

    Dear Sir,

    It just shows how un-Biblical the thinking of modern Christians in Britain is. The Bible advocates charity and a totally free market, not Socialism. Socialism hates Christianity.

    G. McCullough

  20. Alan Wheatley
    Posted March 9, 2009 at 9:20 pm | Permalink

    Consideration of who might be to blame seems to have ignored the credit rating agencies. Are not these the people who were still giving the Icelandic banks a top rating only days before their collapse?

    Should not these people have been identifying the weakness of British banks’ credit worthiness long ago?

    Is not risk inversely proportional to credit rating? If so, and the rating is correct, institutions seeking higher gains from higher risk investments would have their credit rating reduced, and this would provide a compensating mechanism without the need for government or a regulator to “tell” institutions what to do – the market would decide what was acceptable.

  21. Posted March 9, 2009 at 10:57 pm | Permalink

    I quite agree that some of the church leaders have rather shallow and misguided opinions of the current crisis. I believe there are much stronger analogies that can be drawn between the Bible and the current situation.
    1. In Matthew 22, after Jesus says that the Greatest commandment is love of God and the second is love of neighbour as oneself, he then says “In these two commandments hang all the law and the prophets”. For the financial system, what is most important is the general objectives of regulation, with the detail following from that.
    2. In Jesus’s conflict with authority was because he put love of neighbour before upholding the laws and cultures of the time (such as healing. In other words, where the detailed rules conflict with the major objectives, it is the regulations that must be amended. When it is a choice between maintaining a boom with low interest rates, or suffering a mild recession to avoid a bubble, then it is the mild recession that must be endured.
    3. Jesus had strong words for the Scribes and the Pharisees (Matthew 23), the religious leaders of the time, who dogmatically upheld the complex laws and customs. Like the modern day financial regulators, they made sure that everyone ticked all the boxes, but lost sight of the purpose of the exercise. The spin doctors ensured that in was only others perceptions that were important and not substance.
    4. In the Old Testament, the importance is stressed of avoiding risk and stewardship of ones property. The authorities lost sight of this – whether Government’s going on a spending spree or Central Banks in keeping interest rates too low.

  22. mike stallard
    Posted March 11, 2009 at 12:59 am | Permalink

    Since you posted this, I read on the Vatican blog that the Pope is looking hard at Islamic banking! Apparently it could be the answer. It is, we read, based on real principles……

  23. Oli
    Posted March 11, 2009 at 10:47 am | Permalink

    Morality depends on which words you support and which ones you don’t.

    This crises comes down to a few simple words:

    Affordable Housing or Sub Prime Mortgage

    Which words do you think were responsible?

    Both phrases mean exactly the same – but one is morally right, while the other is morally wrong – to the righteous who rule the airways!

    The question is, what will be the words which define the next crises?

2 Trackbacks

  1. [...] MP John Redwood has reacted to the speech. In his blog he says: “It’s a very one sided morality which condemns lending too much but does not condemn [...]

  2. [...] wrote a posting on John Redwood’s blog that is relevant to approach we should be taking, especially when speaking a house of [...]

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    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
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