Wall Street and Washington: The Reigning Kings of Overreach (5.2.12)

"Woe to the rebellious children, declares the Lord, who execute a plan, but not mine. And make an alliance, but not of My Spirit, in order to add sin to sin." Isaiah 30,1.

Just because God gave Israel the promised land after 400 years of Egyptian slavery didn't mean her leaders could do whatever they wanted thereafter.

Likewise, just because the United States at the end of the second millenial found herself as the economic, military and political leader of the world, doesn't mean we can do whatever we want.

Could anyone (in our still youngish country) stand a bit of bible history that makes clear what God thinks of man's prideful overeach?

In 920 BC Judah's King Rehoboam (son of Solomon) told the ten tribes of Israel to go pound sand- he wasn't going to relieve their tax burden. This was a declaration of civil war, to which Israel said "bring it on." (2Chronicles10,16) Five years later, the Egyptian King Shishak raided the Jerusalem temple of its gold treasures and armaments leaving Rhehoboam pounding new brass armaments (2Chronicles 12,10).

In 796 BC Judah's King Amaziah got so cocky after killing ten thousand Edomites (like where Iraq is) that he challenged the King Jehoash of Israel to war, just because he could. King Jehoash wisely warned "Stay where you belong! Why do you challenge disaster, to your own and Judah's ruin? (2Kings 14,10). Amaziah paid no heed and Jerusalem's northern fortressed wall was breached, and her treasures and armaments again carried off, this time to Samaria (2Kings 14,11-14).

Around 736 BC King Ahaz of Judah was told by the prophet Isaiah to hold tight and make no military deals, and also to ask for a miracle-sign (Isaiah 7,10ff, about the Messiah Jesus!). He was told this in the face of Aram (Damascus) and the kingdom of Israel wanting Judah to ally with them against the strongman of the day, Assyria.

Instead of doing either (anything faithful at all), Ahaz signed on with Tiglath-Pileser III, and Judah, yet again, gave away all her wealth (2Kings16,9).

All this overeaching left Judah with seventy years of Babylonian exile in 596 BC.

Now fast forward about twenty six hundred years to September 1998 to Washington DC and New York City, whereupon the modern kings of Wall Street and Washington started to overeach in earnest.

The U.S. Federal Reserve Board made the first move. Fearing European bank competition, consolidation and modernization (Euro banks can own and run corporations, while failing U.S. companies go "private equity"), it grants Citicorp, a commercial bank holding company, a waiver to merge with Travelers Group (all things insurance  and investamenty) to form a conglomerate called Citigroup, which gladly combined banking, securities, and insurance services.  

So brands like "Citibank," "Smith Barney," "Primerica," and "Travelers" all became one, happy one-stop-shopper brand.

Fed Chairman Greenspan and inside Washington and Wall Street had spoken with one voice and clearly signalled that the Glass Stegall Act of 1933 and the Bank Holding Act of 1956, which separated commercial and investment banking and prohibited the same person from being an officer-director-employee of both a member bank and a securities firm, were soon to be scrapped.

Thereupon comes the U.S. Congress offering up the Gramm-Leach-Bailey bill, also known as "Financial Services Modernization Act." It ratified the Fed's  and CitiGroup's orchestrated overeach. 

On November 4, 1999 the Senate voted 90-8 in favor and the the House by 362-57. And well, President Clinton quickly signed it on November 12, 1999. Who new that such omninous overeach could happen so fast.

This was sort of like if the NFL Commissioner telling the refs at midseason that all offensive holding penalties are waived, in hopes of ensuring more scoring, and immediately after the season, calling a hasty rules commitee meeting to permanently ratify the change. What about football as we know it? 

Sen. Byron Dorgan on November 4, 1999 hardly even had time to prophesy on the Senate floor "Too big to fail-remember that term." (Guys like him are what make our good old USA worth all the fuss.) 

Then the 9-11 in 2001 brought the overeach of a U.S. military response in Afghanistan ("central Asia, here we outsiders come again") rather than the proven police response of the Brits. No matter that Afghanistan has been Islamacist since the seventh century.

And as to Afghanistan, we know the story, it's one surge after another, and one more general can make it all work. Then Bin Laden is assasinated, and our present Washington finally has some cover to end boots on the ground, and all Amercan lives lost, and protecting Karzai. 

Then 2003 brings talk of Yellow Cake Uranium (not Duncan Hines), and WMD's in Iraq, and lo and behold Valerie Plame suddenly makes her debut, after her husband refuses to back down to the Iraq cake theory.

Military shock and awe rules the day. Then Saddam must be executed by the Iraqis. Then Democracy Now, then how about a surge. Then more "if this" and "if that." 

And by now? We're out with a sigh, and an understanding that it could have been a whole lot worse (praise God it has gone as peacefully as it did).   

2002-2011: About 21 billion dollars for Pakistan economic and military aid, for the U.S. "right" to drone terrorists in Pakistan from a keyboard, somewhere. But isn't all justified warfare utimately a test of honor and justice? If so, how can peace and justice prevail if this tactic proves to eviscerate everybody's humanity?

2003-2006 Subprime mortgages rise from 8% of market to 20% with rise of no doc, "liar loans." Wall Street, especially Citigroup, then buys up the best of the lot (I suppose Fannie and Freddy got the rest), bundles them and sells them as securities to anyone it can. But then the market peaks.

2004-2011 Private Equity Firms withdraw 188 billion in dividends from corporations they buy (Economist Jan. 28, 2012) 

2008 bailout nation (save for Lehman Brothers who didn't apparently play nice on Wall Street, or something?) is born as Treasury Secretary Paulson and President Bush begin the ongoing 14 trillion dollar clean up the crashing political and economic overeach.

2009 "Shovel Ready" stimulus is not ready, even rhetorically, and instead the Federal government basically props up state medicaid funding.

2009 Affordable Health Care Act passes, and it says all of us must buy health insurance from corporate health insurers, who are nicely guaranteed many new customers.

2010 Dodd Frank Financial Reform passes. Washington winks at "too big to fail", tinkers a bit, ignores Paul Volkler's lobbying for a reprised Glass-Stegall, and Wall Street sets sights on a Republican in 2012.

2011 Libya is invaded by NATO, so easy following an enthusiastic Sarkozy. 

2012 U.S. finds itself 15 and half trillion dollars in debt, which is over 100% of Gross Domestic Product.  

The penalty of Judah's overreach was loss of wealth, worsening foreign relations, more wars, an overwrought domestic impasse between Judah and Israel- all the result of fleshy, understandable, prideful, (can't we just admit it) overeach.

Sound familiar dear U.S.A?

Who will be more likely to reign in such overeach in the future? 

Our somewhat humbler and wiser President Obama? 

Or, Mitt Romney, emerging slowly out the political muddle, and yet still seems to have much to prove?

Or, perhaps only God can help the good old USA, buffeted by Wall Street and Washington overeach (well, if that's the case, let's each of us still do what we can and cooperate with him, one sane, non-partisan, humanity enhancing, and balanced, faith decision at a time).