The Demise of and Hope for American Capital

The pundits are searching feverishly for the causes and cures of the current market meltdown. At this writing the most likely culprits have been identified as the housing bubble (inflated housing prices), loose lending practices (inflated credit ratings) and complex packaging of investment vehicles (inflated creativity and marketing). These are certainly among the culprits, and more will come to light as the crisis unfolds. I’m not an economist, nor an economist’s son, so I can’t provide any help in that regard—other than the application of common sense (reason) to these various arguments. I’ll leave the economic arguments to the experts because there is another, deeper, more important concern.

Correct diagnosis is essential for proper treatment. The culprits listed above are more symptoms than causes. They are indeed causes of the financial meltdown, but they are symptoms of something else, something deeper, something more important. And if we can get to the root from which these symptoms have irrupted, we may have a better opportunity to provide a real cure.

Moral Capital

That deeper, more important concern is a moral concern, a concern regarding the demise of American moral capital. The demise of American moral capital is the deeper issue. What is moral capital? There are many theories, but I will appeal to the most commonly believed theory based on the biblical concept of righteousness, which broadly means conformity with biblical moral principles, where moral means concerned with principles of right and wrong or conforming to standards of behavior and character based on those principles. The root of the word righteous is right, which is understood as correct or justifiable, and is related to justice. To be moral is to do the right thing, the correct thing, the just thing—according to some standard of rightness, correctness and justice.

There are many proposed standards, but the Bible, which promotes the most common standard in America today, states that God is the source of all righteousness, and that is the foundation for what follows. I am arguing that the Bible has been given to us for times such as these, that the Bible has lots to say about the kind of financial crisis we are currently in. You may disagree with this, and are certainly free to do so. I am also free to believe it, to argue it publicly and to build upon this foundation as an expression of Christian faithfulness and American political freedom.

Most financial analysts tell us that our market meltdown developed because credit dried up, and without credit lending cannot happen, which means that businesses cannot get the capital they need to function. That is essentially correct. The problem is that credit is drying up. But credit is not money, nor is it currency. Credit is the problem because we have a credit-based financial system.

But money is not the root problem. Money problems are a symptom of the credit problem. Money is simply a measure of value. It measures worth. When a thing costs a lot, it means that it is worth a lot. The more people want something, the more they are willing to pay for it. It is not scarcity alone that drives prices up. Something scarce that nobody wants is still cheap. Money is simply an indicator of value. It’s like a gas gage of value on the ship of state. It’s a measure of wealth, of prosperity and the values and policies that create wealth and prosperity. Money is an indicator of what people value. So, a money crisis suggests a values problem, a credit or credibility problem.


Values are tricky, hard to understand. What people value the most are the things that they believe most strongly. Values are the expressions of our beliefs. Or to say it another way, our most fundamental beliefs create our values—and this is not only related to our current credit crisis, but is at the very heart of it.

The word credit means to have trust in something, or to trust in the truth or veracity of something. It’s root (source) is the Latin credite or credo, which means believe. Lenders give credit to those who they believe will pay them back with interest. Financial pundits tell us that we need to have trust in the fundamental soundness of the market, that our trust in the market is what makes the market sound. But there is a fundamental error in this thought, an error that marks the difference between a dupe and a cautious skeptic.

Trust in the market is fine, unless the market is itself untrustworthy. And when a market is untrustworthy it is foolish to trust it. So, rather than emphasize our trust in the market, it makes more sense to emphasize the market’s trustworthiness. In the former case the burden is on the people to exercise trust in the market, in the latter case the burden is on the market to exercise it’s own trustworthiness. The two things are related, but the trustworthiness of the market must precede the trust of the people. To trust something untrustworthy is foolish.

What makes the market untrustworthy? Toxic credit is credit that has been issued by unscrupulous lenders to untrustworthy borrowers in order to create notes (agreements, paper) to sell for a quick profit before the debt drives the person into bankruptcy or foreclosure. Toxic credit is a form of greed and corruption, and it has infected the markets. Toxic credit is actually a form of false belief, and unfortunately false beliefs tend to cluster together. A false belief about one thing tends to lead to false beliefs about other things. Toxic credit produced bad debts and creative financiers creatively repackaged those bad debts by mixing them with good debts, dividing them into various investment packages and reselling them. We can think of those bad debts as a kind of poison that was sprinkled throughout the markets through broad-based investment instruments.


My concern is the fundamental cause of the loss of American moral capital, which set up the inflationary aspects of the market by lacing it with toxic credit/debt in order to inflate the value of various investment vehicles. The value of the market inflated as a result of the over valuing of bad credit, which was hidden from investors by the complexity of the investment instruments. This in turn led to the meltdown of market trust or confidence when the ruse was discovered and made public.

Market trust and confidence are not based upon finances, but upon morality, upon righteousness—honor, honesty, truth, trust, trustworthiness, etc. Being wealthy does not make a person moral, and it often takes a certain amount of immorality to garner wealth in a debt-based economy. It is not the trust or confidence that people have for the market that is critical, but the trustworthiness and honesty of the market that calls forth the trust of the people. Consequently, market confidence cannot be recovered by the infusion of financial capital. Rather, what is required is an infusion of moral capital into the market.

So, the question is how to recover moral capital that has been lost. This is the same issue as building moral capital in the first place, for it is recovered in the same way(s) that it is first acquired.

The Christian tradition affirms that moral capital is acquired by the grace of God alone. It is not something that people can conjure up for themselves, but rather it comes as a gift from God through faith (trust) in Jesus Christ. Moral capital is increased by adherence to the Bible and its teachings. Consequently, the demise of moral capital comes at the neglect of God’s grace and the teachings of the Bible. Apart from Christ as the center of trustworthiness, as the foundation upon which social values are built, trust diminishes—particularly when no adequate substitute is provided as a foundation of faith and trust (fiduciary trustworthiness). To denigrate, deny or eliminate Christ is to denigrate, deny and eliminate the foundation of fiduciary trustworthiness for most Americans.

The root source of the market meltdown is the worldview of the people who are currently at the helm of leadership all across America. It is the worldview of pride and greed that lifted the financial regulations that in previous times had protected the market from the kinds of abuses that led to our current crisis. It is the worldview of moral self-centeredness that led Wall Street to hire physicists and mathematicians to develop arcane and convoluted financial instruments in which to hide toxic debt in order to make a buck in the short run. And it is the worldview of moral irresponsibility that led various mathematicians and physicists to work with those who perpetrate such criminal activities upon the American people.

Education & Worldview

But where did all of these people acquire this worldview that has been so harmful to American society? They all have at least one thing in common. They are all products of the sweeping changes that have come to American education over the past 40, 50, 60 years. The root of the worldview that has produced this crisis is American education. It is the cream of the crop of students that find their way into success, the success that bred the crop of financial and political leaders who are responsible for the collapse of the financial market.

And because these people have the worldview that they have (an un-Christian worldview) they will not be able to lead us out of this current crisis. More than the collapse of the financial market, our current crisis is really the collapse of the worldview or philosophy that has caused it. It has shown the bankruptcy of that worldview. Why is this true? Because there is no substitute for Christ as the source of all human righteousness.

And how can that un-Christian worldview be described? It is godless, liberated, multicultural, relativist, secular, evolutionist, indulgent, prideful, selfish, greedy, etc. In a word it is not the traditional worldview of the people who founded America, nor those who brought it to world power. It is the exact opposite of a biblical or Christian worldview. Whatever Christianity values, this other worldview devalues and despises. It is a foreign worldview, foreign to American hearts and minds. And yet it is the dominant worldview in every aspect of American education today.

This does not mean that all teachers are un-Christian. It only means that the philosophical content of the curriculum that is taught at American schools—Kindergarten through College—is decidedly and intentionally not Christian. Most educators so believe in the worldview they hold that they think that it is a function of Christian values to teach un-Christian values. They believe that multicultural fairness requires the denigration of the role of Christ in society. Their substitute for the role of Christ regarding social righteousness is self-righteousness (human righteousness), which has always proven to be a disaster.


The long term fix for the financial crisis is more likely to be an infusion of righteousness into American society and education than an infusion of capital into failing institutions. And those who are currently in charge will not be able to provide such a fix because they neither believe in the value of righteousness—and certainly not Christ’s righteousness, nor will they have the integrity to accept responsibility for the problem, nor the vision or values to see beyond the worldview that has shaped them.

The kinds of change that are needed are not in the purview of those currently in positions of power. All we will get from those currently in power is more of the same worldview that brought us to this financial crisis. What is needed are new hearts and minds, not just for Wall Street and Washington, but for Main Street and City Street, not just for Obamaites, but for McCainites.

Nor can we simply start with our children in the hope that the future belongs to them. Rather, we must start with the teachers of the children, and the parents of the children, and the grandparents of the children, for if the teachers, parents and grandparents of the children don’t have new hearts and minds that give them new eyes for a new vision of renewed righteousness, the children will continue to learn the same old things from the same old people and continue in the same old rut that we are currently in. This crisis didn’t happen in a day or a week or a month or a year, nor will it be resolved in a day, week, month or year.

American has had a leadership role in world development since its inception, but we all agree that we have taken a wrong turn somewhere. The wrong turn that has been taken, that has led to our current financial crisis, is a product of both Democrats and Republicans, Independents and Libertarians. The wrong turn has been the turn away from Jesus Christ.

Our collective rejection of traditional Christianity over the past decades has been so sever as to embed that rejection into the legal policies of our social institutions, which will make recovery more difficult than most people imagine. So, what can the average person do at this point? How will you and I find an infusion of righteousness? Good question. I suggest that we think about it, and pray about it—but do not pray to the god of your own choosing, nor rely upon faith in anything but Christ alone. There actually is no other hope, no other way.

Amos 3:6 “If a calamity occurs in a city, has not the Lord done it?”
Isaiah 45:7 “I form the light and create darkness, I bring prosperity and create disaster; I, the Lord, do all these things.”
Ecclesiastes 7:14 “When times are good, be happy; but when times are bad, consider: God has made the one as well as the other.”
Lamentations 3:37-38 “Who can speak and have it happen if the Lord has not decreed it? Is it not from the mouth of the Most High that both calamities and good things come?”

Find a Bible and read Luke 16:1-13. Lord, have mercy.

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