Friday, May 08, 2009
This is part two of an eight part series on how to live a rich spiritual life in the midst of economic scarcity. Hope you like reading it. Please give me feedback.
Chapter II
Freedom from Restraints
Val J. Peter
One of the casualties of the meltdown of the world economy is a happy one, namely, the growing recognition among all of us of things we sometimes forget: namely, that thrift is important, selfishness and greed are wrong and freedom from restraints is nonsense. The world has changed. It has changed for all of us. We are no longer free to borrow, borrow, borrow. We are no longer free to rack up huge bills in credit cards. We are no longer free to spend, spend, spend. The world will not be the same as it was.
It was St. Paul who said: I learned to live in abundance and I have learned to live with scarcity. If the world has changed, what do we do? We cannot change the world. We cannot change the economy. But we can change ourselves. Yes, there are a number of ways we can change ourselves.
To understand our situation, let us start off with the common place realization that most of us when we were teenagers wanted to be free from moral restraints. We said to ourselves: nobody is going to tell me what to do. In our adolescent fantasy world of the time, we believed that we could perhaps lie a little, cheat a little and steal a little and get away with it. It came as a shocking realization that when we lied we usually got caught. It came also as a shocking realization that if we cheated, we did not always get caught, but some day it would catch up with us. And if we stole, we almost always got caught.
And yet as adolescents, many continued to lie, cheat and steal. At the same time, have you noticed how many young Americans today are prolonging their adolescence for decades when it comes to freedom from sexual restraints? Following the mass media, there are those who engage in sex without feeling and coupling of all kinds, boys ripping off boys, girls ripping off boys, girls with girls, boys with boys and pornography. The result is often depression, loneliness and alienation. We see this very clearly with our children who come to us at Boys Town. Sometimes these young people are slow learners and say next time it will be better, but it is not better. Many more come to their senses and learn to practice self-discipline and self-restraint.
It is very interesting that as restraints were lessened for adolescent youth so, too, there was a movement to gain more freedom without restraint in financial matters. This simply means that the profit motive was allowed to be less and less restrained by any sense of justice or fairness. Freedom in the economic sector meant let the market prevail and the heck with everything else. It did not matter if you lied a little bit or cheated a little bit or even a lot. The harbingers were ENRON, World Com and the collapse of Arthur Anderson.
This was becoming a bad form of capitalism. A good form of capitalism is simply an economy based on private property, free exchange of good and justice and fairness. It means free human creativity in the economic sector, the positive role of business with justice and caring. That is good capitalism.
But what began to emerge was a global economy where freedom in the economic sector was not limited by justice and fairness by economic leaders or government leaders. At the top of the economic ladder, at the bottom and sometimes in the middle, greed, lying, cheating and even self-deception were allowed to flourish…without our hardly noticing it. We call it “making a fast buck.”
How did we lessen restraints in the financial area? It began with the insistence that we should have fewer banking regulations. Who was one of the chief proponents of this? Alan Greenspan and many others like him. Greenspan for two decades (1987-2006) was Chairman of the Federal Reserve with great influence on Congress, the White House and others in promoting deregulation of financial markets. He would say that markets worked best when left alone. Many nodded their heads in agreement. That sounded great to a lot of people. No mention of justice, fairness or regulation. Greenspan argued that government intervention was a problem, not a solution. Many nodded their heads in agreement to this, too. He always advocated for less regulation and called it voluntary oversight. That’s like telling the manager at McDonald’s that when he counts the cash drawer, there will be only voluntary oversight and no further checking.
What were the ideas behind this? In the 1950s, Alan Greenspan joined the inner circle of Ayn Rand who believed that self-absorption, not self-donation, was the answer, not the problem. He joined her inner circle in the 1950s. She praised anyone who pursues their own advantage regardless of others as long as it was not done by force or fraud. She said: “You have no responsibility to others except through self-restraint and self-interest.” She said: “Individual happiness is the ultimate good.” Alan Greenspan believed that in the 1950s and later put it into practice as Chairman of the Federal Reserve. He said it this way: “There should be less government regulation, there should be self-regulation guided by self-interest.” He said that self-interest (code word for selfishness) would stop people from being unjust, unfair and greedy. How foolish that was. He said that was the way to great freedom and great prosperity. He followed Ayn Rand’s book written in 1964 called The Virtue of Selfishness.
On 23 October 2008, Alan Greenspan appeared before the Government Oversight and Reform Committee of the U.S. House of Representatives. The economy was in shambles. He admitted there was “a flaw” in his beliefs about self-interest and market forces. He said:
“Those of us who have looked to the self-interest of leading
institutions to protect shareholder equity, myself included, are
in a state of shocked disbelief.”
He suggested what went wrong was excess demand for home mortgages and failure to properly price them. He failed to mention selfish greed, fraud and neglect of justice and fairness. Justice is about giving everyone their due. Fairness means not just thinking about your own advantage and the heck with everybody else, but treating others the way you want to be treated.
Do you remember the commercial of Chase Bank which ran over and over in 2008: “I want it all…I want it now…”
Too many people believed that. It is nothing more than greed. Why? Instead of saying I WANT IT ALL, we should be saying I want to have my fair share and others should have theirs, too. Instead of saying I WANT IT NOW, it should say: I need to save. I need to discipline myself if I want something more and I have to be fair with others.
Too many people think of our economic system as a sophisticated money driven system “creating” wealth and driving progress in production and technology. What if it only does that for a few people of the world while many others are in abject poverty? Is that fair? Is that good? No.
Here in our country it was this self-interest that propelled our largest banks to successfully negotiate a bill in Congress in 1983 that would, to all extend and purpose, bypass the restrictions of how much interest credit card companies could charge. It was usually pegged at 17 or 18%. The law in 1983 was changed to say that if a bank or credit card company had a headquarters in a state where there were no restrictions, such as South Dakota, then the credit card company could allow the no restriction on interest rule throughout the United States as long as it came from South Dakota. This was in their own self-interest.
Many of us have received two or three monthly solicitations for credit cards. How many did you get in the mail this past month? There is an alumnus who came to me with 19 credit cards and $38,000 in credit debt on them and there was no way he could pay. I helped, through Credit Advisors, to consolidate his debts, but then come to find out, he had received three more credit cards in the next two months. When I chided him for it, he said: “What could I do? They made these offers in the mail and I simply accepted them and they sent me a credit card.” Credit card debt has tripled.
One of our recent high school graduates who is going to college said he did not qualify for a Stafford loan but, on the other hand, he did receive a private student loan from a bank. I asked him if he intended to pay it back. He said: “Why would I have to pay it back? I think it is like a Pell grant.” By the way, so many kids say that a Pell grant is what they call “free money.” You do not have to spend it on school and there is no need to repay it. All you have to do is be enrolled in school the day you receive it. From my viewpoint, this all seems to be very selfish, very unfair and very unjust.
You would not be surprised to hear me say that our most pressing moral threat in the United States is not sexual, but financial. It will destroy our lives.
Some years ago, a variety of politicians argued very strongly that we should “democratize credit.” They meant we should make credit available to the poor so they don’t have to go to loan sharks. It started as a good idea, but then it mutated into selfishness in such a way that many cannot pay back their loans. Some care. Some do not care. This is very complex. It is very convoluted and it is very immoral.
I sat down at a table for lunch the other day with new employees. One, very energetic, middle-age person said she was so happy to be at Boys Town. I asked her why she left the mortgage company she had been working for and she said: “I left because I just got tired of falsifying loan applications by using someone else’s salary stubs.”
In my next installment, I will try to explain how we went from a nation of savers, namely, a thrift culture to a nation of debt ridden slouches. That Chase ad pretty well summarizes it. “I want it all…I want it now.” Another good example is the show on the A&E Channel called “Flip This House.”
A hard working young Boys Town alum told me the story the other day of going to buy a used car. He had only enough credit for a $7,000 loan and picked a car with that price tag. The salesman showed him a $12,000 car, which the boy liked a lot, but said he could only afford a $7,000 loan. The salesman said: “That’s doesn’t matter. We will use someone else’s check stubs when we submit the loan application.” “I want it all…I want it now.”
William Donaldson was head of the FTC and when he said we needed more financial restraints and was told no, he quit. Good for him. This financial crisis is brought to us by some of the best and brightest in the country. And some of them are saying they did not know what they were doing. My response is: We were paying you enough money. You should have known what you were doing.
I tell our kids at Boys Town they cannot live a life without restraint, without a sense of justice, without a sense of fairness and that selfishness and greed are sinful. Our leaders knew that or should have known that, but they followed the crowd. The question they asked was: what’s everybody else doing? And when they did, the result was we are all suffering. Sometime ago, I was in New York and made remarks such as this and the chairman of a very large American company came up to me and said I was making people fearful by saying these things. I told him he had made people fearful and he should reflect on that reality. Needless to say, we did not have any further conversation.
“I want it all…I want it now…” That commercial reminds me of some of our boys and girls who come from very, very poor families and who complain to me: Why can’t we buy brand name foods such as Del Monte? Why do we have to buy Shurfine? They do not know that the same company makes both. But they have been told that just because you are poor you should still buy the finest brand names. I mentioned this one day at dinner with some very, very wealthy people. And one of them said: “This just goes to show you, Father Peter, that the poor have very good taste and a demand for quality.” My response: “This just goes to show you that someone taught even the poor to want it all and to want it now.”
Getting up this morning, it dawned on me that you and I and all of us citizens…on the basis of the mother of all bailouts given by the government to banks, to AIG, to General Motors and so many others makes us citizens owners of all kinds of bad debt. And someone said to me: “You now own bad debt.” In fact, we American citizens are the largest holders of bad debt, perhaps in the world.
In conclusion, we need to discipline ourselves and we need to shed ourselves of the conviction that we should be free from all restraints. We need to help our brothers and sisters. We need to practice self-discipline. We have to start with very small things in denying ourselves. We need to pray every night: Lord, make me a more disciplined person. Make me more unselfish.
Perhaps, like Alan Greenspan, many of us trusted those in important positions in government, banking and industry to be people of character and virtue and too many were not.
Chapter II
Freedom from Restraints
Val J. Peter
One of the casualties of the meltdown of the world economy is a happy one, namely, the growing recognition among all of us of things we sometimes forget: namely, that thrift is important, selfishness and greed are wrong and freedom from restraints is nonsense. The world has changed. It has changed for all of us. We are no longer free to borrow, borrow, borrow. We are no longer free to rack up huge bills in credit cards. We are no longer free to spend, spend, spend. The world will not be the same as it was.
It was St. Paul who said: I learned to live in abundance and I have learned to live with scarcity. If the world has changed, what do we do? We cannot change the world. We cannot change the economy. But we can change ourselves. Yes, there are a number of ways we can change ourselves.
To understand our situation, let us start off with the common place realization that most of us when we were teenagers wanted to be free from moral restraints. We said to ourselves: nobody is going to tell me what to do. In our adolescent fantasy world of the time, we believed that we could perhaps lie a little, cheat a little and steal a little and get away with it. It came as a shocking realization that when we lied we usually got caught. It came also as a shocking realization that if we cheated, we did not always get caught, but some day it would catch up with us. And if we stole, we almost always got caught.
And yet as adolescents, many continued to lie, cheat and steal. At the same time, have you noticed how many young Americans today are prolonging their adolescence for decades when it comes to freedom from sexual restraints? Following the mass media, there are those who engage in sex without feeling and coupling of all kinds, boys ripping off boys, girls ripping off boys, girls with girls, boys with boys and pornography. The result is often depression, loneliness and alienation. We see this very clearly with our children who come to us at Boys Town. Sometimes these young people are slow learners and say next time it will be better, but it is not better. Many more come to their senses and learn to practice self-discipline and self-restraint.
It is very interesting that as restraints were lessened for adolescent youth so, too, there was a movement to gain more freedom without restraint in financial matters. This simply means that the profit motive was allowed to be less and less restrained by any sense of justice or fairness. Freedom in the economic sector meant let the market prevail and the heck with everything else. It did not matter if you lied a little bit or cheated a little bit or even a lot. The harbingers were ENRON, World Com and the collapse of Arthur Anderson.
This was becoming a bad form of capitalism. A good form of capitalism is simply an economy based on private property, free exchange of good and justice and fairness. It means free human creativity in the economic sector, the positive role of business with justice and caring. That is good capitalism.
But what began to emerge was a global economy where freedom in the economic sector was not limited by justice and fairness by economic leaders or government leaders. At the top of the economic ladder, at the bottom and sometimes in the middle, greed, lying, cheating and even self-deception were allowed to flourish…without our hardly noticing it. We call it “making a fast buck.”
How did we lessen restraints in the financial area? It began with the insistence that we should have fewer banking regulations. Who was one of the chief proponents of this? Alan Greenspan and many others like him. Greenspan for two decades (1987-2006) was Chairman of the Federal Reserve with great influence on Congress, the White House and others in promoting deregulation of financial markets. He would say that markets worked best when left alone. Many nodded their heads in agreement. That sounded great to a lot of people. No mention of justice, fairness or regulation. Greenspan argued that government intervention was a problem, not a solution. Many nodded their heads in agreement to this, too. He always advocated for less regulation and called it voluntary oversight. That’s like telling the manager at McDonald’s that when he counts the cash drawer, there will be only voluntary oversight and no further checking.
What were the ideas behind this? In the 1950s, Alan Greenspan joined the inner circle of Ayn Rand who believed that self-absorption, not self-donation, was the answer, not the problem. He joined her inner circle in the 1950s. She praised anyone who pursues their own advantage regardless of others as long as it was not done by force or fraud. She said: “You have no responsibility to others except through self-restraint and self-interest.” She said: “Individual happiness is the ultimate good.” Alan Greenspan believed that in the 1950s and later put it into practice as Chairman of the Federal Reserve. He said it this way: “There should be less government regulation, there should be self-regulation guided by self-interest.” He said that self-interest (code word for selfishness) would stop people from being unjust, unfair and greedy. How foolish that was. He said that was the way to great freedom and great prosperity. He followed Ayn Rand’s book written in 1964 called The Virtue of Selfishness.
On 23 October 2008, Alan Greenspan appeared before the Government Oversight and Reform Committee of the U.S. House of Representatives. The economy was in shambles. He admitted there was “a flaw” in his beliefs about self-interest and market forces. He said:
“Those of us who have looked to the self-interest of leading
institutions to protect shareholder equity, myself included, are
in a state of shocked disbelief.”
He suggested what went wrong was excess demand for home mortgages and failure to properly price them. He failed to mention selfish greed, fraud and neglect of justice and fairness. Justice is about giving everyone their due. Fairness means not just thinking about your own advantage and the heck with everybody else, but treating others the way you want to be treated.
Do you remember the commercial of Chase Bank which ran over and over in 2008: “I want it all…I want it now…”
Too many people believed that. It is nothing more than greed. Why? Instead of saying I WANT IT ALL, we should be saying I want to have my fair share and others should have theirs, too. Instead of saying I WANT IT NOW, it should say: I need to save. I need to discipline myself if I want something more and I have to be fair with others.
Too many people think of our economic system as a sophisticated money driven system “creating” wealth and driving progress in production and technology. What if it only does that for a few people of the world while many others are in abject poverty? Is that fair? Is that good? No.
Here in our country it was this self-interest that propelled our largest banks to successfully negotiate a bill in Congress in 1983 that would, to all extend and purpose, bypass the restrictions of how much interest credit card companies could charge. It was usually pegged at 17 or 18%. The law in 1983 was changed to say that if a bank or credit card company had a headquarters in a state where there were no restrictions, such as South Dakota, then the credit card company could allow the no restriction on interest rule throughout the United States as long as it came from South Dakota. This was in their own self-interest.
Many of us have received two or three monthly solicitations for credit cards. How many did you get in the mail this past month? There is an alumnus who came to me with 19 credit cards and $38,000 in credit debt on them and there was no way he could pay. I helped, through Credit Advisors, to consolidate his debts, but then come to find out, he had received three more credit cards in the next two months. When I chided him for it, he said: “What could I do? They made these offers in the mail and I simply accepted them and they sent me a credit card.” Credit card debt has tripled.
One of our recent high school graduates who is going to college said he did not qualify for a Stafford loan but, on the other hand, he did receive a private student loan from a bank. I asked him if he intended to pay it back. He said: “Why would I have to pay it back? I think it is like a Pell grant.” By the way, so many kids say that a Pell grant is what they call “free money.” You do not have to spend it on school and there is no need to repay it. All you have to do is be enrolled in school the day you receive it. From my viewpoint, this all seems to be very selfish, very unfair and very unjust.
You would not be surprised to hear me say that our most pressing moral threat in the United States is not sexual, but financial. It will destroy our lives.
Some years ago, a variety of politicians argued very strongly that we should “democratize credit.” They meant we should make credit available to the poor so they don’t have to go to loan sharks. It started as a good idea, but then it mutated into selfishness in such a way that many cannot pay back their loans. Some care. Some do not care. This is very complex. It is very convoluted and it is very immoral.
I sat down at a table for lunch the other day with new employees. One, very energetic, middle-age person said she was so happy to be at Boys Town. I asked her why she left the mortgage company she had been working for and she said: “I left because I just got tired of falsifying loan applications by using someone else’s salary stubs.”
In my next installment, I will try to explain how we went from a nation of savers, namely, a thrift culture to a nation of debt ridden slouches. That Chase ad pretty well summarizes it. “I want it all…I want it now.” Another good example is the show on the A&E Channel called “Flip This House.”
A hard working young Boys Town alum told me the story the other day of going to buy a used car. He had only enough credit for a $7,000 loan and picked a car with that price tag. The salesman showed him a $12,000 car, which the boy liked a lot, but said he could only afford a $7,000 loan. The salesman said: “That’s doesn’t matter. We will use someone else’s check stubs when we submit the loan application.” “I want it all…I want it now.”
William Donaldson was head of the FTC and when he said we needed more financial restraints and was told no, he quit. Good for him. This financial crisis is brought to us by some of the best and brightest in the country. And some of them are saying they did not know what they were doing. My response is: We were paying you enough money. You should have known what you were doing.
I tell our kids at Boys Town they cannot live a life without restraint, without a sense of justice, without a sense of fairness and that selfishness and greed are sinful. Our leaders knew that or should have known that, but they followed the crowd. The question they asked was: what’s everybody else doing? And when they did, the result was we are all suffering. Sometime ago, I was in New York and made remarks such as this and the chairman of a very large American company came up to me and said I was making people fearful by saying these things. I told him he had made people fearful and he should reflect on that reality. Needless to say, we did not have any further conversation.
“I want it all…I want it now…” That commercial reminds me of some of our boys and girls who come from very, very poor families and who complain to me: Why can’t we buy brand name foods such as Del Monte? Why do we have to buy Shurfine? They do not know that the same company makes both. But they have been told that just because you are poor you should still buy the finest brand names. I mentioned this one day at dinner with some very, very wealthy people. And one of them said: “This just goes to show you, Father Peter, that the poor have very good taste and a demand for quality.” My response: “This just goes to show you that someone taught even the poor to want it all and to want it now.”
Getting up this morning, it dawned on me that you and I and all of us citizens…on the basis of the mother of all bailouts given by the government to banks, to AIG, to General Motors and so many others makes us citizens owners of all kinds of bad debt. And someone said to me: “You now own bad debt.” In fact, we American citizens are the largest holders of bad debt, perhaps in the world.
In conclusion, we need to discipline ourselves and we need to shed ourselves of the conviction that we should be free from all restraints. We need to help our brothers and sisters. We need to practice self-discipline. We have to start with very small things in denying ourselves. We need to pray every night: Lord, make me a more disciplined person. Make me more unselfish.
Perhaps, like Alan Greenspan, many of us trusted those in important positions in government, banking and industry to be people of character and virtue and too many were not.
posted by Fr. Peter | 4:48 PM
