Foundations of economic collapse

[James1:12]

The following is a brief analysis I put on my university's website at the top of a mandatory discussion topic on the economic crisis. I thought it might be useful here as a review of some of the Isaiah 9:10 related events that have happened in the US and the parrallel with the formation of Nazi Germany:

Historical Parallels

There are two (possibly more) historical examples which are relevant to understanding the current economic crisis. One is the 1929 stock market crash that led to the rise of the Nazi part in Germany and the other is an event recorded in the Bible which occurred approximately 2,500 years ago. Before I explain these I will just write a few things about the economic crisis as I understand it.

Banking Governance

The governance of the both the US and European economies is central to the nature of their trouble and the sub-prime mortgage bad debt issue that exploded in September 2008 has been well reported. Some commentators note that this is not so much a liquidity problem but more of an insolvency problem. The concept of having banks (and now nations) labelled as “too big to fail” has meant that instead of the debt being done away with by letting them fail bailouts are used to prop them up. This produces yet another major problem if other banks consider themselves too big to fail moral hazard increases enormously and large banks have the opportunity to go on taking risks with the safety net of the state and international system backing them up come what may.

EU Integration

EU integration and the development of the Eurozone resulted in both economic and political imbalances. The EUObserver has had some useful articles on the failure, or revenge, of neofunctionalism (http://euobserver.com/7/113682) which exposes the inevitability of further integration due to the shortfalls of the last step - the lack of a full economic and fiscal union in the Eurozone being an excellent example.

Failed Solutions

These are issues that at first sight require technical and structural changes to solve the issue but 4 years into the crisis all the experts, leaders and central bankers are still lost in the dark. A mix of unsustainable sovereign and private debt has inflicted the southern European countries with increasingly expensive debt and diminishing access to markets this is in part due to the inflexibility of working with a currency whose rules apply across an economically disparate continent. It seems that current economic thinking at the national and international level has not got to grips with the concept of debt and its potential to distort and even destroy economies once out of control. Each attempt to stabilize the global economy has ended in failure one and the bailouts that are happening in Europe are losing their effectiveness, the markets are simply not convinced that contagion can be halted.



One of the responses has been from central banks which intervene to provide banks with "cheap" money with the idea of stimulating borrowing and economic activity resulting in growth. But this Quantitive Easing (money printing) is creating a short term false sense of stability, that isn't working anymore. The accepted understanding has been that debt is good and that money can be printed infinitely without causing a problem, yet it has been seen that such an approach can incur enormous rates of inflation. Attempts to save the Euro may end in its death.

Democratic Costs

The crisis is being dealt with at a structural or technical level but this is not yet providing the solution to the problem. There are now the beginnings of fundamental political changes because of this as the Eurozone/EU seeks to put in place new governing mechanisms to bring stability. Germany as the strongest Eurozone economy has become the centre of power where, each time, struggling Eurozone nations hope to get the go-ahead for the next round of bailouts this pressure is having huge political implications for Europe. Germany does not want to be the primary fund for bailing out other nations but is now in the position of dictating terms; it will not let the Euro die off because it believes in the ideals of a united Europe too strongly. Germany now wants to introduce some form of economic union where the risks and costs are shared across the Eurozone/EU but needs to choose the right time to do this or it will ultimately mutualise Eurozone debt at its own cost. The pressures of integration will not stop at an economic union and will most likely see the EU head towards becoming a full federal union with its Common Security and Defence Policy finally being given the authority it wants from the national capitals of Europe this can be sold as a cost saving exercise promoting Pooling and Sharing of military assets and reducing capability and hardware duplication. The European Commission is putting together plans for this union and it has already been called upon by some to become the EUs government including voices from Germany.

Historical Parallels



These issues amongst others characterize the current economic crisis, but other questions remain. Why now and why can't our leaders fix the problem?

The Wall Street stock market crash of 1929, which was followed by the Great Depression, had global consequences and devastated the Weimar Republic. Germany was unable to pay back its debts to the US and came under huge pressure from high unemployment which encouraged Germans to vote for more extreme parties. Eventually Field Marshall von Hindenburg gave way to Hitler and the Nazi party.

http://www.historylearningsite.co.uk/we ... n_1929.htm

There are social and political parallels here that ought to be understood by our political leaders if we are to avoid a similar fate.

Since the end of the Second World War the United States has acted as the foundation for the world economy through the introduction of the Bretton Woods Institutes, its military and economic strength, so it makes good sense to start looking there for further understanding.

The next parallel comes from both the Bible and US history including an event that happened just last weekend (16/06/12) which may well have gone unnoticed due to the news coverage of the Greek and Egyptian elections. This requires a deeper level of explanation, but provides a foundational understanding of the current global crisis. The explanation of this parallel stems from the most visible and well known terrorist act this century, perhaps ever; the attacks staged against the US in September 2001. The following day, September 12th an important speech was made by Tom Daschle as the Senate Majority leader, in an attempt to console the American people he quoted the following scripture from Isaiah chapter 9 verse 10.

““The bricks have fallen down,

But we will rebuild with smooth stones;

The sycamores have been cut down,

But we will replace them with cedars.”



This comes across as an encouraging word describing resolve and unity after a terrible incident. It is an unusual text to choose as out of many verses that could have been chosen this one did not in fact have the meaning that was necessarily intended by the speaker. In context:

The Lord sends a [j]message against Jacob,

And it falls on Israel.

9 And all the people know it,

That is, Ephraim and the inhabitants of Samaria,

Asserting in pride and in arrogance of heart:

10 “The bricks have fallen down,

But we will rebuild with smooth stones;

The sycamores have been cut down,

But we will replace them with cedars.”

This lays out the precise pattern of events that the US has taken in the aftermath of 9/11. In fact when one of the towers collapsed a beam from the structure hit a Sycamore tree cutting it down. Isaiah carries on reciting measures taken by God to turn His people back. The prophet Isaiah has spent time warning ancient Israel about its behaviour, idolatry, child sacrifice and in general turning away from the healthy national life intended for them. One of the elements Israel was neglecting was the observance of the 7th year Sabbath when, on the last day of the 7th year when the land was given its rest financial debts were to be totally forgiven, giving Israel a 7 year economic cycle that did not rely on debt as an important element for growth. After much warning God lifts His hand of protection from Israel and the Assyrians stage a swift attack against the country involving a siege that ultimately failed during which city walls were demolished and Sycamore trees were uprooted to construct siege platforms/ramps.

The Sycamore tree is considered a symbol of the nation and its uprooting ought to have been seen as a warning of their impending exile to Babylon where they eventually stayed for 70 years. The attitude to rebuild is well described in several commentaries:



Geneva Study Bible

“The {n} bricks have fallen down, but we will build with hewn stones: the sycamores are cut down, but we will change them into cedars.

(n) We were but weak, when the enemy overcame us, but we will make ourselves so strong, that we will neither care for our enemies, nor fear God's threatenings.”

The Sycamore tree that was struck was seen as preventing the girder from striking a nearby chapel, St. Pauls, it was eventually replaced in 2004 by a cedar during a ceremony at which the same scripture was read out again. The Chapel at Ground Zero is a building of importance, it is where the US government first came together in April 1789 and George Washington consecrated the nation to God. At the inauguration he gave this warning:

“The propitious smiles of heaven can never be expected on a nation that disregard the eternal rules of order and right which Heaven itself has ordained."

The chapel was covered in dust and its foundation was cracked but the message went unheeded. The roots of the Sycamore tree were taken by an artist, Steve Tobin and a bronze cast was made of them, then they were delivered to Wall Street as an interesting piece of art inspired by nature. If this was to be seen in a biblical light this act would have been seen as another warning. The metal bronze is symbolic of God’s judgement and the presence of a sycamore tree on Wall Street is symbolic of the founding of the New York Stock Exchange. Anyone who reads The Economist would know of the Buttonwood column, named after the agreement that formed the beginnings of the current stock exchange system on Wall Street. The traders in New York would gather under the tree for business and became the focal point for trade, it was a type of Sycamore.

The aftermath of the attacks in 2001 shut down the New York stock market until the 16th of September when it suffered an enormous drop in value. The day happened to be the last day of the year in the Jewish calendar the 29th of Elul it also happened to be the 7th year when they were celebrating shmita, the forgiveness of debt. 7 years later to the day on the Jewish calendar the economic crisis of 2008 began proper when the NYSE dropped 777 points, due to the Lehman Brothers issue, wiping out 7% of its value, the US government was forced to raise $700 million to fill the hole in the banking sector. It is interesting to note that the Hebrew term shmita means “to release”, what better way to describe the terrifying free fall of the markets? When elected President Obama told the American people; “We will rebuild” in reference to the economic state of the nation.

There have been several other co-incidences along the way, the use of hewn stone for the foundation of the new Freedom Tower, and the recent signing of the beam that will sit on top of the tower by President Obama echoing the sentiment of Isaiah 9:10 “We remember. We rebuild. We come back stronger.”



History is shouting loudly. True economic recovery is not going to be possible without a change of heart by a humble people. The foundations of this problem are not being addressed.

[burien1]

History is shouting loudly. True economic recovery is not going to be possible without a change of heart by a humble people. The foundations of this problem are not being addressed.

Good analysis, James 1:12. Sad, but true.
From all my reading, I have never seen my country more completely divided. Deliberately, at that. Our media here is completely corrupt, so it's hard to even wake people up. But our media never shows all the folks who are praying, and want our nation to return to God. Our media will never show that to the world.

[Exit40]

Good post James. It has the eery ring of truth to it. Coincidence ? God's way of remaining invisible to the sleepers. Our Father is calling us to rely on Him, and not the work of our hands.

So how is the discussion going at the University ?

God Bless

David

[James1:12]

Hi David, not many posters so far as its early for this part of the course but at least nobody has completely ripped me a part yet! Given the passionate environmental activists that are taking part it might be interesting.

Our Father is calling us to rely on Him, and not the work of our hands.

Very true.

[GodsStudent]

I would love to get your perspective on how the discussion unfolds, as it does unfold, James 1:12.