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Integruptcy – Part One

The banking crisis isn’t one.  It’s really an integrity crisis.  Sure, it’s the financial organ of the Western body that has the tumor in it, but the problem is the tumor, not the organ itself.  In Part One of this series, I’ll deal with the government.  Its role is the most complex and threatens the greatest danger.  In Parts Two and Three, I’ll address the lenders and the borrowers.

Addicted to tampering

The government has been meddling perniciously in things beyond its legitimate scope for a long time, including in the business of lending.  The pernicious nature of their meddling has sprung from a combination of febrile good intentions magnified by inexperience and ignorance.  For too many people in the government, real life occurs in the space of the Rumsfeldian “unknown unknowns.”  Not only do they have no clue, but they don’t know they have no clue.  So operating out of misguided attempts to “stimulate” the economy, repay political favors, redress grievances from the Civil War, manage racial integration, and a Saganesque mishmash of billy-uns and billy-uns of other reasons, they meddle.  Year upon year, the Federal Register is the ever growing excrement lagoon of their meddling, ream upon ream, volume upon volume, the numberless ten-thousands upon ten thousands of rules written by people who — enough of them, anyway —  have no clue.  Above all, regulators are possessed, as if by demons, by a hubris that defies exaggeration.  To borrow from Herbert Schlossberg, there is no arena in which the elite are able to acknowledge themselves unfit to govern.  So they tamper; aggressively, relentlessly, foolishly, and injuriously.

Integrity never was a priority

In virtually all of this meddling, governing authorities have shown a persistent and profound lack of integrity, though they don’t think so.  But consider: One of government’s most basic, legitimate functions is to enforce contracts freely agreed upon by free citizens.  Not content with this limited role, the authorities have steadily encroached on the prerogatives of free citizens by determining what the terms and conditions of contracts must be.  Nobody should be surprised to learn that the government is as clumsy and corrupt at banking as it is at everything else.

Never mind the clumsiness: There has just been no integrity here.  And so, as the banking crisis loomed larger in the sky like an asteroid about to hit the planet, the government gathered up the remaining tatters of its integrity and pushed them off a cliff.  Although the Securities and Exchange Commission is chartered to be the watchdog over the financial sector, they stood around and just watched it all happen.  Who has gone to jail for this?  Who has been indicted?  Who is being investigated?  Who among the financial moguls at the core of this calamity has been publicly rebuked?  Are there only victims in this debacle and no perpetrators?

Next, with their super hero capes flapping lustily in the breeze like Marilyn Monroe’s skirt, legislators passed bail-out bills assuring lenders and borrowers, regardless of their circumstances, that Uncle Sam would prevent the market from upbraiding folly.  At first, Mr. Obama sought to suppress the outrage by saying that only responsible borrowers would be bailed out.  He left it to his little farm of minor league Chaldeans to come behind him and divine the interpretation: It’s too hard to sort out the unlucky from the sinful.  So everybody gets a bail-out. Consequently, the taxpayer is on the hook for every incompetent lender and wickedly foolish borrower in the whole country.

Setting fire to the wheat

If you had any doubts about whether integrity was even a blip on their radar, consider this: In the first bail-out package passed under the Bush Administration, recipients didn’t even have to tell Congress what they did with the money!

And if you still had any doubts after that faith-slaying blunder, consider that the proper governmental role of enforcing contracts is now on track to be completely inverted by the so-called “cram-down” measures which will authorize judges to arbitrarily re-write mortgage terms to suit the borrower.  Instead of enforcing contracts, the government will now revoke them at will.

Your government has ditched all pretense of operating within its proper jurisdiction and of maintaining the rule of law wherein contracts, freely entered into, are enforced as written.  This represents a total loss of integrity by both the legislative and executive branches.  It is getting the wheat off the stalk by setting the field on fire.  And as the Old Book says, “Now nothing will be restrained from them which they have imagined to do.”  In other words, people who would do what they’ve done will do anything — anything at all, anything they please.

Moral dwarfism: a short future

As Mr. Spurgeon once said, I will venture to prophesy a thing about this.  If the cram-down legislation becomes law, credit availability will instantly vanish from all sectors of the economy covered by that legislation.  Think about it: Would you hand your money to the bank teller if you knew the government would allow her to put the money in her pocket and walk off with it?

The demise of the banking industry is by no means the full story.  Regulators, as blindly wonkish as ever, will simply blame some obscure policy detail needing a tweak, or perhaps unkind words from talk radio.

The real deal is here, that our Creator has structured his demand for righteousness into the very atoms of creation.  Shoot, it’s in the cracks between the quarks.  The outfall of the nation’s galloping integruptcy is going to crop up again and again in every realm of life until, if our course isn’t reversed, we’ll see what Jeremiah was talking about:

Take ye heed every one of his neighbour, and trust ye not in any brother: for every brother will utterly supplant, and every neighbour will walk with slanders. And they will deceive every one his neighbour, and will not speak the truth: they have taught their tongue to speak lies, and weary themselves to commit iniquity.  (Jer 9:4-5)

We’ll consider the role of the lenders in Part Two of Integruptcy.  Stay tuned.


  1. Dad

    near the end “galloping integruptcy” needs respelling or definition. Otherwise – great!

    Posted on 04-Mar-09 at 14:09 pm | Permalink
  2. Dad

    sent to Obama, Ross, Pryor and Lincoln

    Posted on 05-Mar-09 at 19:47 pm | Permalink

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