A Piece of my Heart?

“If only there were evil people somewhere insidiously committing evil deeds, and it were necessary only to separate them from the rest of us and destroy them. But the line dividing good and evil cuts through the heart of every human being. And who is willing to destroy a piece of his own heart?”

Aleksandr Isayevich Solzhenitsyn

In the article referenced below, it is estimated that in the last year and a half as much as 45% of the wealth of the entire world has disappeared, just disappeared. If this estimate is anywhere close to correct, and most likely it is, we are confronted with an economic disaster of staggering proportions.

http://www.iht.com/articles/reuters/2009/03/10/business/OUKBS-UK-BLACKSTONE.php

How on earth could such a thing happen? I believe I have at least part of the answer. Those things we believed to be true wealth were not wealth at all.

Some of it was obvious criminal fraud, such as the Ponzi schemes that have been in the news. I have read that some of the financial instruments accounted in the world’s wealth were very close to fraud. For example, some of the insurance instruments written on bonds based on mortgages that were improperly valued or perhaps the mortgages did not exist at all. In addition, insurance policies were then written on the insurance policies, ad infinitum. Companies like AIG received payment for the policies, counted it as insurance in force, and the salesmen received gigantic commissions. It all went very well until someone looked in the bag of mortgages and found the bag was empty.

There were legal lunacies, such as toggle bonds, that never paid any interest. They only paid in more debt, forever. Such madness was not limited to clever rascals and outright criminals playing with billions of dollars that really did not exist. The middle class and even the working poor got into the action. In the last few years they were given loans on houses and condominiums they could not possibly afford based on the assumption that property value never goes down. This included insane instruments such as reverse amortization mortgages that increased mortgage debt even as the home owner paid the required monthly payment. The banks knew the home buyer was perpetrating a fraud to buy a house they could not possibly afford. In the industry these loans were called “liar loans.” Sometimes the lying was done by the buyer, sometimes by the real estate appraiser, sometimes by a bank employee who wanted a bigger commission. It all went very well until someone looked in the bag and found the bag was empty.

There are really too many villains in this sad story to worry too much about fixing blame. First we need to fix the problem and that may not be possible in my lifetime. The politicians in Washington twisted the arms of the bankers to make loans to the poor that could not possibly be repaid. Fannie Mae and Freddie Mac gave an implicit guarantee to the world that their mortgage bonds would be protected from default by the American taxpayer. The rating agencies, that held a special legal position granted by the government, were paid on the basis of the rating given a particular bond, the higher the rating, the higher the fee. It all went very well until someone looked in the bag and found the bag was full of rot and corruption.

All of us, but particularly my generation, the baby boom, have been weighed in the balance and have been found wanting. As I began to write this entry, I was reminded of this quote from the writings of Aleksandr Isayevich Solzhenitsyn, the conscience of his nation. My generation is responsible for increases in drug adiction, pornography, abortion, and divorce. The scandals that have bedeviled my generation are not limited to corrupt and lying politicians or even business executives that had only two moral imperatives, “What’s in it for me?” and “How soon can I take the money and run?” The scandals that have beset the church in the last twenty years are too numerous, too sordid, and too well known to repeat here. How could we possibly expect a God who is not mocked to tolerate this nonsense forever?

I think we should consider this a wake up call, a shot fired across the bow, a time to repent and ask for forgiveness. A time to ask the God of the Universe to show us the difference between the mammon of unrighteousness and true wealth.

May God have mercy on my soul.

Luke 16:10-13 NIV

Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much. So if you have not been trustworthy in handling worldly wealth, who will trust you with true riches? And if you have not been trustworthy with someone else’s property, who will give you property of your own? No servant 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.