Below is a response to a request from one of my closest friends from Vietnam War days. He is a great guy with a PhD from the University of Wisconsin, Madison. I have been trying to cure him of his malady of Liberalism for 45 years! Alas, he remains a Liberal!
Here is his request for me to explain why the Wall Street Journal seems to be anti-capitalist:
Myron: explain this to me. The WSJ has been unrelentingly negative on the stock market. Last year, as it surged to record highs, the paper’s opinion was ‘this will end in tears.’ All markets do. If you heeded their pessimism you (me) would have lost a bucket of money. Why / what are they trying to accomplish. I am mystified: capitalists who hate capitalism. Sort this out for me…
After writing my response to my friend Ed, I have decided that for only him to have the privilege of reading the response would be highly selfish on my part! Something this good simply has to be shared!
Humbly,
Pastor Myron Nysether
Eddie,
But of course I will be very happy to explain!
The ridiculous and totally unsustainable bubble in the stock market, about which the WSJ and many others are concerned, will end in another crash. It will be like the crash of 1929; the crash of 1987; the tech bubble burst of the 90’s; and the housing bubble burst and stock market crash which led to the Great Recession in 2008/2009. It will be severe and very painful. The WSJ is not anti-capitalist, but it is rightfully very worried about the present state of economic affairs. I believe, as does the WSJ, that a very serious economic calamity is coming. Dangerous inflation or catastrophic deflation, or both (stagflation) will happen.
In Europe the economies, for the most part are already quite weak. High unemployment in France among the young and higher unemployment among the young in Spain is troubling. Greece and several Eastern European countries are not in good shape. Europe is not in good shape, except for Germany and Scandinavia. This is why the far right parties in France and Greece and even England did better than expected in the recent European Parliamentary election. And of course the Russian economy is not good and this is why Putin is diverting the attention of the people with his antics in Ukraine and elsewhere. China’s economy is slowing and Brazil’s has gone in the ditch.
In America we are living in yet another bubble which, again, will burst. We are living in a dream world of unreal stock market gains, unreal low interest rates and totally unsustainable public debt. Some, mostly speculators who are not real capitalists, are making piles of money in the stock market. Some will be able to keep their immorally gotten gains; most will lose out, which is what they deserve. Others who are crony-capitalists are making piles of money through blatant corruption on their part and that of the government. Such persons in the government and outside of it should go to prison.
The tragedy, however, is that many regular people have been losing out because of the ridiculously low interest rates on savings set by the Fed, and they will lose out again as they did when housing bubble burst and the market plummeted and the Great Recession arrived. As in war, Eddie, we both know that those who suffer the most are the innocent. So also in economic turmoil.
Remember when the market went from over 14,000 to 7,500 in ’08/’09. I knew pastors on their way to retirement who saw their pension portfolios decrease by 50%! Mine did not decrease at all, because just before the crash I transferred virtually the whole balance of my pension account into a very conservative transition fund. My account was not very substantial, because I had never been paid a large salary until I came to where I am now. But I lost nothing of what I had. Now it is true that I had to leave the money in the fund. I can never withdraw it, and it will have to be annuitized. So I have not reaped the gain in the market going from 7,500, to its current 16,500. But I don’t mind. My money is safe, although probably not very sound. Again, the market will crash as it did before and those in it will lose hugely. It will happen. It has to happen. In my opinion!
I believe that the stock market, as it has evolved has nothing to do with capitalism. It is no more than a giant casino. How can a company increase in value 50%, 80 %, 100% in a year? Yet the stock does exactly this sort of thing in some cases. Such is not about investment, such is about speculation. It is no different than the Tulip Bubble of the 1600’s! Everybody knows that the modern stock market is fundamentally governed by two extremely strong emotions – greed and fear. All the financial acumen and knowledge about companies and so forth is of little real value compared to those who understand calls and puts and hedges and instantaneous buying and selling, and all kinds of other high tech stuff that no ordinary person can understand or should have to understand.
Let me be frank. Speculation in the market, crooked banking practices, financial wheeling and dealing, obfuscation so that nobody really understands what’s going on, government corruption – these have nothing to do with capitalism. What these are about is immorality and criminality. I have no respect for the “sage from Omaha,” or George Soros, or the latest billionaire “green guy,” who amassed huge amounts of money through speculation and is now funding “climate change” politicians. My point is that I have no respect for anyone who becomes fabulously wealthy making nothing, producing nothing, doing nothing, providing no meaningful service – but instead figures out how to get rich off the inventiveness, risk taking and hard work of others. Such a person may be very smart, but is no more than a smart scoundrel. There are many smart scoundrels. Bill Gates, on the other hand, invented something which made him fabulously wealthy. Good for him! George Soros never invented anything – he became very wealthy in the currency and other markets. I have more respect for a janitor or a truck driver or a businessman or a teacher or anyone else who works for a living than I do for Soros or those like him!
I respect old style bankers who provided a place for people to save some of their money and receive a modest rate of interest; and a place for others to borrow money at a reasonable rate of interest. Banks like that served a very good purpose. Banks today are mostly corrupt, as was made very obvious by the housing bubble. Banks loaned money to people who could not afford to buy the houses they were buying. Then the banks bundled up all those very questionable loans and sent them up stream to somewhere for somebody else to worry about. Capitalism is the greatest economic system ever, but it requires honesty, virtue, transparency – all the old values which once defined our culture.
I firmly believe that we are living in a post-Judeo/Christian culture and that in my lifetime America will fall. Liberty is not compatible with corrupt capitalism any more than it is with socialism, which is by definition corrupt. Liberty, as so many philosophers and theologians have understood, is only possible among a people informed and shaped by the values and truths defined in the Ten Commandments and manifest in the Gospel. In a free and free enterprise society the people must have a strong commitment to integrity and honesty and justice; and they must have a deep devotion to kindness and generosity and mercy and compassion. These values must be deeply ingrained in the people and reflected in their institutions in order for there to be freedom. This is quite simply no longer true in our beloved America.
There is much corruption in business and commerce, in education, in the professions, in government and even the in the churches. In reality our culture has already sunk below widespread corruption to a level of decadence unimaginable not many years ago. And the pace of destruction is quickening. A culture that countenances the taking of the most innocent human life and defines such as a “Choice” cannot possibly long survive! A culture that departs from definitions of foundational institutions (marriage and family) which go back thousands of years and says that truth is “Whatever We Say It Is” cannot long survive! The dream that once was, even when we were children, Eddie, which was not that long ago, is gone and the nightmare is before us.
Fascism is on the rise in Europe, Imperialism is re-emerging in Asia, and Fanaticism grows relentlessly in Islam. D Day happened seventy years ago this Friday. Does anyone in the known universe believe that something like the D Day Invasion, led by America, could happen today? It would not happen because it could not happen. America in 1944 was far from a perfect nation. There was still much progress to be achieved. But we were a religious people strongly committed to truths and values that nobody of any importance questioned. FDR led the nation in prayer on the eve of D Day!!! Eddie, do we understand what has happened to this country in seventy years? If any president tried to lead the nation in prayer today, the ACLU would call for his impeachment! Europe stopped being a Christian culture a long time ago, so a return to Fascism should surprise no one. Asia has never been Christian, so the Imperialism that is once again rearing its head should surprise no one. And Islam – well. But now, unlike 1944, there is no Bastion of Freedom ready, willing and able to defeat the forces of tyranny and despotism and unspeakable evil. America was not that long ago “a Shining City upon a Hill” (RWR) which enlightened all the world. America was a nation prepared to “bear any burden” (JFK) to defeat the enemies of freedom. America had “nothing to fear but fear itself” (FDR). Remember FDR and HST and IKE and JFK and RWR. Not long ago we were One Great Nation Under God! This is no longer true.
As with Israel of ancient days, we have gone wildly astray, and we will reap the whirlwind – not because God wants this to happen, but because we have turned our freedom into license; we have forsaken honesty for expediency; we no longer care for the least and weakest among us; and we have done vast and irreparable damage to the two most basic and indispensable institutions of any civilized society – marriage and family. I believe we will never be the nation we once were – a nation dedicated to the proposition that all persons are created equal and are endowed with inalienable rights -the right to life, the right to be free, the right to pursue the possible and even the impossible. Not so long ago we were a nation in pursuance of liberty and justice for all. We were a nation to which the world’s “huddled masses yearning to breathe free” once came – seeking to live free and to pursue dreams they had never thought earthly possible. Once we were the greatest nation in the history of the world and the whole world knew it. We were exceptional, not because we were exceptional people but because the Ideals upon which the nation was formed and which the people embraced were God Given and Exceptional! Now we are just another society shaped by relativism, materialism and hedonism. Tocqueville wrote170 years ago, after he had visited America, that America would be a great nation as long as she were a good nation. We used to be good.
The horizon is darkening, and when the night descends the darkness will be for a very long time. Only those who by faith are able to see the Light of a Redeeming Grace, which no darkness can ever over-come, only those shall be safe. Because they know that this life, this world, is not all there is. Before Pastor Dietrich Bonhoffer was executed by the Gestopo at Floessenburg Prison on April 9, 1945, he said, “For me this is the end, but the beginning of life.” Only those who know in their hearts the same truth; only those will be safe and secure and serene and Victorious.
The question had to do with the Wall Street Journal and capitalism. The answer has been somewhat broader in scope!
Your old friend and conservative comrade,
Myron