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Regulating Ourselves to Death Part 3

July 15, 2009 by Steve Matthews

A further problem with governmental regulatory agencies is that they undermine the operation of the most effective regulatory agency of them all: the free market.  The free market rewards those who produce and punishes those who do not.  And does this far more effectively than any regulatory body from Washington.

One way government regulation short circuits the free market is by increasing the cost of doing business.  Complying with regulations is costly, and this favors large existing firms over smaller ones without the deep pockets.  For example, if a broker/dealer wants to do business in a certain state, both the firm and its agents must register with the securities agency in that state.  This imposes a significant cost on the broker/dealer both in the time spent dealing with paperwork and the money required to purchase the license.  Large, established firms can bear these costs more easily than their upstart potential rivals.  In a free market, an investor could easily leave a high priced, under performing broker or investment adviser for one that gives him better service.  But by restricting entry into the field,  government regulations create a market where there is less competition.  This shields incompetent established firms from losing business to better run but smaller competitors.     

Government regulations can lull consumers into a false sense of security, thus blunting the salutary effects of the free market.  Bernie Madoff, perhaps the most egregious rip-off artist  in history, enjoyed a good reputation with the SEC (Securities and Exchange Commission), the federal government’s regulatory body tasked with protecting the public from financial fraud.  According to reports, the SEC was warned about Madoff’s phony practices as early as 1999, but did nothing to investigate the matter, let alone put a stop to the abuse.  This is astounding.  The agency, whose job it is to protect the public from unscrupulous investment advisers, completely dropped the ball in the biggest fraud case ever.  If Madoff’s clients had trusted less in the SEC and instead had more incentive to keep in mind the notion caveat emptor, perhaps today we would have fewer outraged ex-millionaires trying to put their lives back together.  

Gordon Clark argued that man does not learn from experience, and the Madoff case is a perfect illustration of this principle.  For ironically the SEC’s failure to prevent Madoff’s crimes is being advanced by some as a reason for more federal oversight of the financial industry, and this, for the purpose of preventing fraud!  While this conclusion certainly seems absurd at first glance, it is not as unreasonable as it sounds.  For apart from a political philosophy based on Scripture, there is no logically valid reason to oppose more regulation of the securities industry.  After all, it can always be argued that the SEC failed, not because of any inherent flaw in the agency, but because it didn’t have enough authority and money to carry out its task.  Until we abandon the notion that government’s job is to prevent crime, and once again recognize the biblical principle that the magistrate’s proper function is to punish wrongdoing,  the regulatory state will continue to grow, personal freedom will continue to shrink, and we all will be the poorer for it.

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Regulating Ourselves to Death Part 2

July 12, 2009 by Steve Matthews

As I pointed out in my last post, Scripture assigns the civil magistrate the job of punishing evildoers.  This is far different from the modern regulatory state, in which the magistrate punishes everyone with burdensome regulations in order to prevent criminal activity.  But the problem with the theory of crime prevention by regulation doesn’t stop with the unjust punishment of the innocent.  Oddly enough, the regulatory state creates perverse incentives that can make it more likely that the crimes supposedly being prevented will, in fact, be comitted.

Take the case of Bernard Madoff.  Here was a man who ran what was apparently, apart from those operated by the US federal government,  the largest ponzi scheme in history.  Wasn’t the SEC created to prevent this sort of thing?  Well, yes, but by setting up a watchdog agency to protect investors, the federal government reduced the incentive for people to exercise due diligence when choosing an investment advisor or broker-dealer.  And when the incentive for doing something is reduced, economic law tells us that there will be less of it.  “After all,” people reason, “if Bernie Madoff is being supervised and audited by the watchful eye of the SEC, and they’ve given him their seal of approval, then he must be alright.”  But he wasn’t alright, and perhaps if  investors had had more incentive to check him out, he wouldn’t have been able to fleece them for the billions that he did.

Another problem with the regulatory state is its incompetence.  In the case of Madoff, the SEC had several opportunities going back many years to bust Madoff but competely dropped the ball.  And what is worse, the failure of the reglators is never seen as the failure of a fallacious theory of criminal justice, rather it becomes an excuse for another round of government regualtion more intrusive and expensive than the last.

The consistent application of the biblical principle of criminla justice, where there is no crime, there should be no punishment, would bring to an end to the regulatory state in this country.  That’s bad news for the bereaucrats and statists, but good news for those who love liberty.

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Regulating Ourselves to Death

July 10, 2009 by Steve Matthews

In his epistle to the Romans, Paul, commenting on the proper function of government, described the civil magistrate in this way, 

he is God’s minister, an avenger to execute wrath on him who practices evil (Rom.13:4).

For Paul, the job of government was to punish crime, not prevent it.  This was also the view of the founders of our nation, who established a system of limited, republican government that did not burden the people with endless regulations and red tape.  But as faith in the God of the Bible waned, and faith in the false god of the state grew, people began to demand more and more the government at all levels.  One of these demands was that the government take an active hand in the prevention of wrongdoing, and thus was born the modern regulatory state.

By way of example, I’ll reference something I recently came across while studying for my Series 6 securities license.  In the Kaplan course I used, I found the following paragraph,

Investigation of the conditions that led to the 1929 market crash determined that investors had little protection from fraud in the sale of new issues of securities and that rumors, exaggerations, and unsubstantiated claims led to excessive speculation in newly issued stock.  Congress passed the Securities Act of 1933 to require issuers of new securities to file registration statements with the SEC [Securities and Exchange Commission] in order to provide investors with complete and accurate information.

The impression left on the reader is that the cause of the crash of 1929 was the lack of proper government supervision of a rowdy, out of control securities industry.  The free market and limited government failed to protect investors; the state had to intervene.   This is perverse for at least two reasons.

No doubt there were then, as there are now, crooked brokers and financial advisers.  But this was not the cause of the crash.  The blame can properly be put on the incompetent central bankers (but I repeat myself) of the Federal Reserve, who erred in contracting the money supply too quickly after having expanded it too much earlier in the 1920s.  Monetary expansion created a bubble in stocks, and when the Fed cut off the money supply, the bubble deflated, leading to the October 1929 crash.  But just as it’s easier today for politicians to heap blame oil companies for high gas prices rather than admit that their policies are largely responsible, so it was easier then for Congress to point the finger at securities dealers instead fessing up to its foolishness in creating the Fed. 

Second, regulating everyone to prevent the wrongdoing of a few violates the biblical principle  no crime, no punishment. The Old Testament required thieves to pay for their crimes, not by jail time, but by restitution plus 20% to their victims (Lev.6:1-7).   The system was just, applying punishment to the guilty and leaving the innocent alone.   On the contrary, the regualtory dragnet ensnares everyone, punishing the honest as though they were guilty, all for the sake of preventing some unknown future crime by some unnamed future ne’er-do-well.   And this is far from biblical justice.

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How do you know?

May 3, 2009 by Steve Matthews

Several years ago when I first started reading Trinity Foundation materials, I ran across a statement that John Robbins had made about epistemology and the Bible.  While I don’t recall the exact passage I read, I do remember that he argued that the Bible was the axiom, or starting point, for Christian thought.  

Although I was intrigued by the argument, I wasn’t sure I could defend the position if I were asked to.   So with that in mind, I sent John an email, not really expecting to hear back from him.  To my surprise, I received and email response within just an hour or two that answered my question.  I don’t have John’s email anymore, but the following quote from Gordon Clark makes the same point John made to me,

Logically the infallibility of the Bible is not a theorem to be deduced from some proir axiom.  The infallibility of the Bible is the axiom from which the several doctrines are themselves deduced as theorems.  Every religion and every philosophy must be based on some first principle.  And since a first principle is first, it cannot be “proved” or “demonstrated” on the basis of anything prior (What Do Presbyterians Believe?, p.18) .

The simple idea that every religion or philosophy has a indemonstrable starting point, and that for the Christian that starting point is the infallibility of Bible, is the basis for the whole Scripturalist enterprise.  And when I came to understand this and accept it as true, it turned all of my thinking upside down.  Or perhaps more accurately, right side up.

Apart from an important lesson in theology, I learned one other thing from John that day: the importance of not despising an honest inquiry, however simple it may seem.  John was a busy man, and he easily could have ignored my email and found something more important to do.  But he didn’t.  And for that I am eternally thankful.

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Immigration Part 3: The Sojourner Argument

April 29, 2009 by Steve Matthews

The Bible has a monopoly on truth.  This holds not just for issues of salvation, but in all areas of life, including politics.  Therefore, immigration policy,  if it is to be sound, must be based on what the Scriptures have to say on the subject.  But acknowledgin the Bible’s authority in political matters is not enough in itself.  When searcing the Scriptures for answers, we must also be careful to interpret the Bible correctly, or our arguments will miss the mark.  And missing the mark is commonplace with writers who attempt to discuss what the Bible has to say about immigration.  

One way writers fall shortl in their discussions of the Bible and immigration mmigration is that they faile to include a definition of the relevant terms.  They’ll discuss the subject of immigration at great length, but the actual meaning of key words such as ‘immigration,’ ‘immigrant,’ and ‘immigrate’ is never brought up.  The authors seem to assume that everyone knows what these words mean.  But do they?  Do the authors themselves know?  Webster’s Seventh Collegiate Dictionary gives the definition for ‘immigrant’ as, “one that immigrates; a person who comes to a country for the purpose of permanent residence.”  The same dictionary says this about the verb immigrate, “to enter and usually become established; especiallyto come into a country of which one is not a native for permenent residence.” The word ‘immigration,’ though not defined by Wester’s, is simply the abstract noun used to describe the the act performed by one who immigrates.     

By failing to define their terms, writers leave themselves open to basic and embarrassing mistakes.  One such common mistake made in discussing the Bible’s position on immigration is the sojourner argument. This argument is often advanced as the Christian, biblical position on immigration and runs something like this,

Major Premise: Sojourners are welcomed based on the Mosaic law.

Minor Premise: All immigrants are sojourners.

Therefore: All immigranta are welcomed based on the Mosaic law.

Now while this is a formally valid argument, it is not a sound argument, for the minor premise is false.  Let’s look at it.

The most common Hebrew word translated ‘sojourner’ is ger.  Ger is defined by the Gesenius  hebrew Lexicon as, “1. a temporary dweller, new-comer; 2.  dwellers in Israel with certain conceded, not inherited rights.” The Zondervan Pictorial Dictonary of the Bible gives this definition of ger, “a resident alien, a non-citizen in a country where he resides more of less permanently, enjoying certain limited civic rights” (Vol.5, p.468). 

Webster’s Seventh New Collegiate Dictionary defines sojourn (noun) in this way, “a temporary stay.” For sojourn as a verb it gives this, “to stay as a temporary resident.” A sojourner, therefore, is one who engages in the activity of sojourning.

Sojourner’ and ‘ger’ mean the same thing, making sojourner a good choice for translating ger, but neither one of these terms means the same thing as ‘immigrant.’  Ger/ sojourner mean temporary resident or resident alien; immigrant means one who comes to a country for permanent residence.  One who sojourns in a country is there on a temporary basis.  A immigrant intends to stay permanently.  These are significantly different situations.

I’ll conclude this brief word study by stating that, because ‘sojourner’ and ‘immigrant’ mean different things, it is fallacious to apply the commandments in the Mosaic law regarding sojourners to the ongoing American immigration debate.   We must look elsewhere to find a biblical answer to the immigration question.

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What is God?

April 19, 2009 by Steve Matthews

During a recent Sunday school discussion on the Westminster Longer Catechism, I heard an objection raised to the wording of question 7.  This question asks, “What is God?”  Now while the wording of this question may seem strange to our ears, there is a very good theological reason why the writers of the Catechism asked this question the way they did.  But to understand why they did so requires a some understanding of the history of apologetics.

Having rejected the biblical principle of Scripture alone, medieval theologians attempted to do God’s work apart from God’s word.  One area where this tendency reared its head was apologetics.  Instead of defending Christianity by the Bible alone, medieval apologists undertook to defend the faith by attempting to prove the existence of God, and this apart from any reference to the Scriptures.  Only after establishing by means independent of the Bible that God existed, would they then proceed to discuss what the Bible had to say about him. 

There were two major problems with this method.  The first of  these was that by starting their defense of Christianity outside the Bible, the medievalists made the foundation of the Christian faith not the Bible, but instead their proofs for God’s existence.  Should these proofs prove invalid, which in fact they are, those who rely on these arguments for the defense of the faith have the philosophical rug pulled out from under them.   

The reformers wisely rejected this method, for they that saw that the starting point for apologetics, as with every other pursuit, must be the Scriptures.  Luther called this the Schriftprinzep, the Scripture principle.  The proper biblical method of apologetics is to defend the Bible using the Bible.   And this was the method of the Reformation. 

A second problem with the medieval strategy of proving the existence of God is that even if it had been successful, it would still have been futile, for all things exist: men, dogs, cats, dreams and Sasquatch.  And if all things can be said to exist, to assert that something exists tells us nothing about it.  The important question is not, “Does such and such a thing exist,” but rather, “What is it?”

By making the 66 books of the Bible the sole basis for the Christian faith, the framers of the Westminster Standards rejected the foolish wisdom of this world in favor of the true wisdom of God.  And having done this, they were able to ask and correctly answer the right questions.

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Immigration Part 2: The Case of Ruth

April 13, 2009 by Steve Matthews

When discussing immigration, the conversation usually revolves around immigrant rights.  Rarely is the subject of immigrant responsibilites ever broached.  But what do the Scriptures say?  Do immigrants have responsibilites?  If so, what are they?  To help answer these questions, let’s consider the example of Ruth, one of the clearest examples of immigration in the Bible.

Elimelech and Naomi were a Hebrew couple, natives of Bethlehem, who had fled from Israel to escape a famine then gripping the land.  Along with their two sons, they settled in the neighboring land of Moab.  AFter their arrival Elimelech died, leaving Naomi and her two sons, both of whom married Moabite women.  After about ten years, both the sons died as well, leaving Naomi alone with her two daughters-in-law.   When Naomi set out to return to Israel, she urged her daughters-in-law to return to their people.  One, Orpah, did so.  But the other, Ruth, upon being prodded to return to Moab , answered Naomi,

Entreat me not to leave you, or turn back from following after you; for wherever you go, I will go; and wherever you lodge, I will lodge; your people [shall be] my people, and your God, my God.     Where you die, I will die, and there will I be buried.  The LORD do so to me, and more also, if [anything but death] parts you and me.    (Ruth 1:16, 17)

The sum of this passage is that Ruth declares her intention to immigrate to Israel.  She is not planning to sojourn in the land, or go there on a short visit and then return to Moab, but rather she emegrates from Moab with the expressed aim of becoming and Israelite.  Very often in discussing immigration, those who use Scripture point to the Bible’s instructions regarding sojourners and strangers in the land, but these passages do not bear directly on immigration.  But the case of Ruth clearly does.  What can we learn about immigration from this passage?

While declaring her intention to immigrate, Ruth takes a threefold oath of loyalty.  She declares her loyalty to Naomi, “wherever you go, I will go,” to the nation of Israel, “your people [shall be] my people,” and to God, “and your God, my God.”  She even invokes God as a witness to her promises, using the familiar oath, “The LORD do so to me, and more also.”  In short, Ruth was not a social revolutionary who sought to impose Moabite language and religion on the people of  Israel all in the name of cultural diversity, but rather she clearly expressed her desire to adopt the ways of the Israelites and become one of them.

From this short study, we see that while the Bible recognizes the right of people to immigrate, neither Naomi nor anyone else questioned the legality of Ruth’s immigration, it also imposes certain responsibilities on immigrants.  Those who argue that immigrants have a right to impose their ways and their costs on the people of their adopted land are not arguing as Christians, but as cultural Marxists and socialists.

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Immigration Part 1

April 6, 2009 by Steve Matthews

The debate over US immigration policy has become heated in recent years and shows no sign of going away.  Part of the reason for this is the failure of those engaged in the debate, whatever their position on immigration, to understand and believe what the Bible has to say about the subject.  It may come as a surprise to some to hear that the Bible has anything to say about immigration.  Others may concede that the Scriptures do address the subject, but dismiss their teaching as irrelevant to the present debate.  But the Bible claims to have a monopoly on truth, not just religious or moral truth, but all truth, political truth included.  Let us briefly consider some of its teachings on the subject.

 The debate about immigration is fundamentally a debate about citizenship, to whom does is rightfully belong?  In Scripture there are only two ways in which a man gains citizenship:  birth, and immigration.  This point is illustrated by Paul’s conversation with the Roman commander shortly after his arrest in Jerusalem,

Then the commander came and said to him (Paul), “Tell me, are you a Roman?” He said, “Yes.”

The commander answered, “With a large sum I obtained this citizenship.” And Paul said, “But I was born [a citizen].” (Acts 22:27, 28)

The task, then, for the Christian scholar is to determine how the Bible applies applies the law in both cases. 

The concept of citizenship by birth may seem so obvious as to need no comment.  But there are two different types of birthright citizenship: jus sanguinis (right of blood) and jus soli (right of soil).  In the former case if one’s parents are citizens of a country, their citizenship is passed on to their children because of the blood relationship that exists between parents and children.  On the other hand, Jus soli is the idea that citizenship is conveyed by place of birth.  If a child is born within the territory of a country, the child is considered a citizen on that country regardless of the citizenship status of his parents.  Our question then becomes, does the Bible approve of jus sanguinis or jus soli, or reject both in favor of some other alternative?  While these are interesting questions, ones which I propose to answer, for now I pass them over and will turn in my next essay to the question of what the Bible has to say about immigration.

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Sticks ‘n’ Stones

March 30, 2009 by Steve Matthews

“But I say to you that for every idle word men may speak, they will give account of it in the day of judgment.  For by your words you will be justified, and by your words you will be condemned.”  (Matt.12:36-37)

 

It’s widely accepted in our culture that what men do matters a great deal, but what they say is of little import.  “Talk is cheap,” we say.  Another popular idiom, “Sticks and stones may break my bones, but words will never hurt me,” makes this same point.  But this is not the Bible’s view.  For in Scripture it is words that are of primary importance, actions secondary.

The Scriptures begin with God speaking the heavens and earth into existence.  Commenting on this, the author of Hebrews states that, “the worlds were framed by the word of God.” Or as John puts it, “In the beginning was the word…all things were made through him.”

And not only did God speak the world into being, but according to Hebrews he also sustains it by, “the word of his power.”

Furthermore, we cannot separate the word of God from God himself.  Consider the following passage,

“For the word of God is living and powerful, and sharper than any two-edged sword, piercing even to the division of soul and spirit, and of joints and marrow, andis a discerner of the thought and intents of the heart.  And ther is no creature hidden from his sight, but all things are naked and open to the eyes of him to whom we must give account.” (Heb.4:12, 13)

In this remarkable passage the author of Hebrews begins by talking about the word of God and ends with a point about God the Word and, in the course of doing so, identifies them as one and the same thing.  When we believe in Christ we belive his words, “Most assuredly, I say to you, he who hears My word and believes in Him who sent Me has everlasting life, and shall not come into judgment, but has passed from death into life.” (Jn. 5:24)

Clearly, the Bible puts great weight on God’s words, but what about ours.  How does God view what we say? Do our words matter to him, or is it only our actions that draw his approval of disapproval?  Proverbs tells us that as a man thinks in his heart, so is he.  And Christ tells us that our words reveal the thoughts of our heart,

“Either make the tree good and its fruit good, or else make the tree bad and its fruit bad; for a tree is known by its fruit.  Brood of vipers!  How can you, being evil, speak good things?  For out of the abundance of the heart the mouth speaks.  A good man out of the good tresure of his heart brings forth good things, and an evil man out of the evil tresure brings forth evil things.  But I say to you that for every idle word men may speak, they will give account of it in the day of judgment.  For by your words you will be justified, and by your words you will be condemned.”  (Matt.12:33-37)

 

 The immediate contex of this passage is the teaching the doctrines of God, metaphorically referred to as “fruit” by Jesus.  But the severe warning that ends this passage is confined not only to what we say about God, but encompasses all of our thoughts.  For Jesus plainly tells us that, “every idle word,” will be judged. 

Jesus further illustrated this point in the Sermon on the Mount.  For in his exposition of the sixth commandment, he refuted the popular rabbinic teaching of the time in this way,

“You have heard that it was said to those of old, ‘You shall not murder, and whoever murders will be in danger of the judgment.’  But I say to you that whoever is angry with his brother without a cause shall be in danger of the judgment.  And whoever says to his brother, ‘Raca!’ shall be in danger of the council.  But whoever says, ‘You fool!’ shall be in danger of hell fire.” (Matt.5:21, 22)

According to Christ, the prohibition of murder in the sixth commandment extended not only to the act of  physically killing someone, but also to unwarranted anger and  slander.  And these evil thoughts, whether expressed aloud or not, of necessity call forth God’s judgment.

In conclusion, while our culture holds words to be of little value, they are of great importance to God.  So much so that Christ makes the point that it is our words [note well that he does not say our actions] that will justify or condemn us. Therefore, in all of our speaking let us choose our words wisely.   

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Diverse weights and measures

March 23, 2009 by Steve Matthews

Dishonest scales are an abomination to the LORD, but a just weight is His delight.  (Prov.11:1)

Diverse weights and diverse measures, they are both alike, an abomination to the LORD. (Prov.20:10)

This past Wednesday, Federal Reserve Chairman Ben Bernanke announced that the Federal Reserve would begin a new program of buying treasury debt.  There are two things remarkable about this program: its size and its method.

According to Bernanke, the program calls for the purchase of up to $1.2 Trillion of government debt instruments.  This is unprecedented.

What is more, these purchases will be made directly from the Treasury Department, not on the secondary market, as has been the practice in the past.  This will enable the Fed to directly underwrite the massive defict spending of the Obama administration.

Some, praising Bernanke’s decision, have described this program as a bold move.  Others have expressed concerns that it is inflationary.  But a man with a Christian understanding of economics would describe it using this word:  theft.  Let me explain.

In the Bible money is a weight of some commodity.  For example, when Sarah died, Abraham bought a field from Ephron the Hittite so he could bury her.  According to Genesis 24:16, Abraham, “weighed out the silver for Ephron which he had named in the hearing of the sons of Heth, four hundred shekels of silver, currency of the merchants.” Since Abraham paid for the field with a weight of silver, he had to have scales to weigh it with.  And  God required those scales to be honest.

For in a monetary system that depended on commodity weight, an unscrupulous merchant could cheat his customer by using heavy weights as counterbalances to buy and light ones to sell.  God explicity condemned this practice several times in the Old Testament.  In Duteronomy25:13-16 we read, “You shall not have in your bag differing weights, a heavy and a light.  You shall not have in your house differing measures, a large and a small.  You shall have a perfect and just weight, a perfect and just measure, that your days may be lengthened in the land which the LORD your God is giving you.  For all who do such things, all who behave unrighteously, are an abomination to the LORD your God.”  Here we see God condemning false units of account and approving true ones.  For more on this see Lev.19:36; Prov.16:11, 20:10,23 and Mic.6:11.

The US Dollar, like the Shekel of Abraham’s time, was originally defined as a weight of silver, but this is no longer the case.  Today the Dollar is a fiat currency, meaning it’s money because the government says it’s money.  As a result, tracking the value of the dollar is more difficult than simply looking at how much silver it can be exchanged for,  yet it is still possible to track the value of the dollar over time.  When economists do this, they find that since 1913, the year the Federal Reserve was established, the dollar has lost something like 96% of its value, or approximately 1% per year.  The result of the dollar’s devaluation is what we call inflation.  Or to put it in biblical terms, the Fed has, since its inception, persisted in using lighter weights every year, defrauding the American people.  Thus, Bernanke’s “bold move,” when considered in the light of Scriptures, far from being praiseworthry, is, in fact, a breaking of the eight commandment prohibiting theft and an abomination to God.

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