One thing that has captured my attention in the past week is the continued news of how Credit Card Companies (i.e. the Banks that own them) have been raising their interest rates rather drastically (some people have gone from 9% to 18% others from 11% to 25%, etc.). As I was pondering this reality last night one of Jesus' Parables seemed rather fitting.
Matthew 18:23-35 (NRSV)
(23) "For this reason the kingdom of heaven may be compared to a king who wished to settle accounts with his slaves. (24) When he began the reckoning, one who owed him ten thousand talents was brought to him; (25) and, as he could not pay, his lord ordered him to be sold, together with his wife and children and all his possessions, and payment to be made. (26) So the slave fell on his knees before him, saying 'Have patience with me, and I will pay you everything.' (27) And out of pity for him, the lord of that slave released him and forgave him the debt. (28) But that same slave, as he went out, came upon one of his fellow slaves who owed him a hundred denarii, and seizing him by the throat he said, 'Pay what you owe.' (29) The his fellow slave fell down and pleaded with him, 'Have patience with me, and I will pay you.' (30) But he refused; then he went and threw him into prison until he would pay the debt. (31) When his fellow slaves saw what had happened, they were greatly distressed, and they went and reported to their lord all that had taken place. (32) The his lord summoned him and said to him, 'You wicked slave! I forgave you all the debt because you pleaded with me. Should you not have had mercy on your fellow slave, as I had mercy on you? (34) And in anger his lord handed him over to be tortured until he would pay his entire debt. (35) So my heavenly Father will also do to every one of you, if you do not forgive your brother or sister from your heart."
As I thought about this parable, I could not help but think of the "government" as the lord and the banking system as the first slave with the individual with credit card debt being the second slave. The government saved the banking industry from its own calamity by offering it a bailout. All this was done to help ward off an economic recession for the benefit of all the people (and really this is worldwide because if the US banking system collapsed the inter-connectedness of the world would lead to a worldwide depression). What have the banks done with this second chance?
Well the good thing is they have at least started to lend a little more to one another and I hope they are getting rid of those "toxic" notes that they thought were wonderful money makers. However, as the economic downturn has started to hit the average household more and more with people losing their jobs, being laid off, or having their hours cut back. Budgets are getting tighter and tighter. Now to be fair many households lived well outside their means and purchased that lifestyle with "credit" thinking they could pay it off later (instant satisfaction!)---of course banks did some of the same style thing when they took on risky and now "toxic" loans thinking they could make some quick money. Many Americans just were not being financially responsible and now they are facing tough situations.
However, the banks (credit card companies) that have just had help from the government to stay afloat are not acting in the same way toward the individual who had debt with them. Rather than asking how can we help you to stay afloat and return to economic viability (i.e. negotiating lower interest rates, etc.), the credit card companies (banks) are trying to get all that they can squeeze out of this cash cow of theirs. The message is clear: "Yeah we got help to stay afloat, but that is because we are important, you though are not important Mr. or Mrs. individual and because of that you need to pay us more to carry your risk. Nevermind that we had help. We don't care."
What would it look like if a credit card company (bank) said this: "We realize that times are tough for everyone now and we want to help you get back on your feet like we were helped. Here is what we are going to do. The current balance you have isn't going to be forgiven, but we can freeze it at a 3.9% APR. All we ask is that you don't use your credit card at all until that balance is paid in full. However, if you do use the card we then reserve the right to raise your interest rate up to prime + 10% (or whatever they choose). We were helped and now we want to help you."
Which one do you think would help stimulate the overall economy more? (Here is where I wish I had an economist reading this blog to theorize and comment) The way the credit card companies are currently operating seems to be the biggest hypocritical stance ever. They were saved and yet there is no mercy on their part towards their "customers." And what can happen from their current stance?
- They make more money (granted this is to offset a rising default rate)
- The consumer (individual) is now using more of their income to pay credit cards (minimum due rises due to interest rate increase) and less on the purchase of goods/products/services.
- The rate of default increases even more (if people are defaulting at the lower rates it stands to reason that those who may be "scraping" by at those rates are going to be pressed into a default stance with the raised interest rates and minimum payments).
I can't help but feel that the more and more the banking system looks out for itself (specifically pointing to those dealing with credit cards, etc.) the more and more it has a negative impact on the overall economic outlook. If it truly is going to take all of us to bounce back from this economic downturn, then banks are going to have to think about how they can help the great mass of individuals help the economy also. It isn't that somebody is "right" and somebody is "wrong," but rather it is we are all culpable for the situation we find ourselves in and we have to work together to get us out and that means sacrifice on all levels.
What would the world look like if the players in the economy actually started to live into the parable Jesus shared? How radical would the world become? Would it be viable?