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God's Politics

Missing from Wall Street’s Calculations: Sin

by Ernesto Tinajero 11-10-2009

Driving home from Seattle, the rain was both daunting and beautiful. So was our immediate future, as our son will have to have some fairly scary surgery soon. In this light I read an essay in The Wall Street Journal on how the field of economics is in turmoil.  The older models of how efficient the markets are failed to predict the current economic mess, and the theorists are scrambling to find models that would have predicted the problem and will hopefully predict future economic problems.

This is a major fall for economics after the triumphant stance of recent years, when many economists ventured out of Wall Street to provide statistical answers to all sorts of areas outside of the economic field. They had the golden apple of knowledge that would give endless answers of good and evil for us all. And boy did they take a big bite out of it. The years leading up to our current economic mess saw books like Freakonomics, or my favorite example of the arrogance of the field, More Sex is Safer Sex: The Unconventional Wisdom of Economics. Yes, book argued that chaste and monogamous people should have more partners in order to make the larger pool of multiple partners safer. Suddenly, their world came crashing down. Bankers blinded by short-term goals created a situation that led us to the brink of collapse. The numbers failed to add up, and they had to deal with an angel of reality hold a flaming sword preventing them from entering their garden of former brilliance.

Underpinning the older model was the idea that people always make the most rational choices available to them. Humans are inherently rational, they argued. Given them better information will, in the long term, lead to better choices. The idea that humans are sinners was left out of their models. That greed could blind someone into making disastrous choices never entered their calculations. We Christians could have told them their model would lead to a crash. Humans have a dark force that leads them to ruin. It makes them come up with games like credit default swaps to game the system, even if it corrodes the system to point of destruction. When the party is now, why worry about the hangover?

That we want to be like gods, controlling the world as masters of the universe, was left out of their equations. The truth is we are not in control of the world — we are not gods, and we need a savior to grant us love. I look at my infant son who will soon have his brain and eye socket operated on, and I know the truth of my own weakness and my need of God.

portrait-ernesto-tinajero1Ernesto Tinajero is a freelance writer in Spokane, Washington, who earned his master’s degree in theology from Fuller Seminary. Visit his blog at beingandfaith.blogspot.com.

Categories: Economics
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  • prk
    "Underpinning the older model was the idea that people always make the most rational choices available to them."

    The reason I am a capitalist is due to my opinion that individuals will do what they believe best for them or their family. I believe the Bible supports this telling me that man has a sin nature(selfishness). I also see this in the animal kingdom are Darwinism.
  • jkc1945
    I agree, generally. Capitalism appears to be the only economic "system" that recognizes the imperfectibility of humankind. Socialiam and communism both presume that mankind is perfectible, given enough social effort and time. For that reason, and that reason alone, I shall remain a capitalist until Christ returns and makes whatever changes He decides to make.

    I appreciate the article. I might add that, at the same time that "Wall Street" made its several mistakes, we out here on "Main Street" were right in step. WE are Wall Street these days. We are the folks who, through our 401K's and similar instruments, drive the investment and trading markets. Additionally, we are the ones who used one credit card to pay off the balance of another "maxed-out" card, thus buying ourselves a few more months until the 'free lunch' came due. "We have met the enemy, and he is us."
  • Minnesotan
    I would add that a socialistic system, like many of the ideas coming out of the Obama White House, also show the arrogance of thinking that "we want to be like gods, controlling the world as masters of the universe." I am concerned when Sojourners talks about the economic system, they are quick to recognize the sin nature at work in free market systems, and oblivious to the sin nature operating in government-controlled and socialistic economic systems.
  • titopoet
    Thank you for your reply. The article is not making the claim that socialism is better then Capitalism. It was nothing to do with that debate. I believe in Capitalism. It is a critique of the Efficient Market Hypothesis (EMH). EMH has been around only since the 1960s and was the dominate model is understanding HOW the markets work. Right now the field is revising its understanding of HOW the markets work and the EMH is being challenged. Not all economists were EMH advocates, EMH was the most dominate theory in the last forty years, and many of the Wall Street brass bought into it, hired EMH economists, invested on EMH premises and are now paying the price for it. It is interesting to see how some of the business leaders who did not buy into EMH are doing quit well in the current economy. (Great capitalists tend to be less theorists and more pragmatists.) Economic theory is fascinating, but I don't think that EMH factored in human nature, which led to an overreaching, which is the point of the article.

    Christian Anthropology is a powerful tool the church seldom uses. Our check and balance system came about through many of our founding fathers understanding this Christian insight into human nature... don't put your trust in Jerks. We, Christian, are aware that we are all sinners, which is simple language means we, Christians, should now we are all Jerks. (Yes, I know I am a Jerk and I need Jesus to transcend my jerkdom)

    After all the Church could be characterized as "Jerks for Jesus."
  • dlowen
    It doesn't matter what economic system you layer on top of humanity, PEOPLE are arrogant in believing they can control things as God does. Capitalism does not "recognize. the imperfectiblity of humankind." Only people can do that. We should purge all socialism from our government? Goodbye Social Security, Medicare, Medicaid, Interstate Highway System, bridges, dams, food stamps, farm subsidies, hydroelectric power generation, public school system, etc., etc., etc.

    Is there any economic system actually described in the New Testament? Let's see, "Everyone around was in awe—all those wonders and signs done through the apostles! And all the believers lived in a wonderful harmony, holding everything in common. They sold whatever they owned and pooled their resources so that each person's need was met." Acts 2:43-45. Oops, that's communism.

    Let's look at the US Constitution then. Let's just base our economic system on what the founders had in mind. No one can actually live like that utopian NT. Let's see, "We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America." Well that sounds like socialism. Never mind.

    It's just self evident that capitalism is godly and all other -isms are ungodly. Let's just leave it at that.
  • scottvolltrauer
    "Underpinning the older model was the idea that people always make the most rational choices available to them. Humans are inherently rational, they argued. Given them better information will, in the long term, lead to better choices. The idea that humans are sinners was left out of their models."

    Yes, if they had spent much time with people their perspective would be different. Sadly, many, perhaps most, people are driven more by their ambitions, hopes, dreams and fears that may be remote from a common understanding of "inherently rational."
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