Give Us A King! (Faith in Government)

In the time of Samuel the prophet, the people of Israel wanted a king like the nations that surrounded them (1 Sam 8). Samuel was utterly dismayed by this development. The people of Israel had no ruler, yet were prosperous. They had no king, yet were thriving in the promised land. God Himself was their King and led the people of Israel through His revelation to the prophets. Yet, this wasn't enough for them. The people of Israel still felt the uncertainties of life and were deceived into thinking that if they had a king like the surrounding nations, then maybe they wouldn't feel so insecure.

When Samuel inquired of God about this request, God responded by saying that it wasn't Samuel that was being rejected, but God. He instructed Samuel to first warn the Israelites about the dangers of having a king. Here was the warning given by Samuel (1 Sam 8):

vs 10 Samuel told all the words of the LORD to the people who were asking him for a king. 11 He said, "This is what the king who will reign over you will do: He will take your sons and make them serve with his chariots and horses, and they will run in front of his chariots. 12 Some he will assign to be commanders of thousands and commanders of fifties, and others to plow his ground and reap his harvest, and still others to make weapons of war and equipment for his chariots. 13 He will take your daughters to be perfumers and cooks and bakers. 14 He will take the best of your fields and vineyards and olive groves and give them to his attendants. 15 He will take a tenth of your grain and of your vintage and give it to his officials and attendants. 16 Your menservants and maidservants and the best of your cattle and donkeys he will take for his own use. 17 He will take a tenth of your flocks, and you yourselves will become his slaves. 18 When that day comes, you will cry out for relief from the king you have chosen, and the LORD will not answer you in that day." 19 But the people refused to listen to Samuel. "No!" they said. "We want a king over us. 20 Then we will be like all the other nations, with a king to lead us and to go out before us and fight our battles."

Simply put, God was warning them that when you request a powerful human government (in any form) to "go before you and fight your battles" that your wealth and your freedom will be consumed by that government and the security sought will ultimately not be found. In the end you will have nothing but the insecurity you were hoping to remedy.

However, God does not force people to trust Him, so He instructed Samuel to go to the tribe of Benjamin and select Saul as king over Israel. They got their King, and the Bible tells the sad story of the history of Israel under those kings.

I see many parallels to the request of Israel and the shift of the balance of power in the United States today. As a people/culture drift away from faith in God, they look elsewhere to find security. Humanity has always been bedeviled by the illusion of the physical. Israel rejected Christ because He spoke of a spiritual Kingdom - they wanted a physical one. We are beset by a desire to see with our eyes, touch with our hands, and hear with our ears the entity that we entrust with our lives. How often did ancient people make useless idols rather than trust in God? It has been a perpetual problem for humanity.

People are no different today, but rather than idols, they look to strong governments to provide for them. Unfortunately, the same warning given by God to Samuel holds true today. When you ask for a physical solution to a spiritual problem, your "solution" will consume all your wealth, take away your freedom, and leave you with nothing but misery. Mankind has never found a way around this problem.

Socialism, the generic term for the system that attempts to provide for people through strong government and central planning, fails time and time again. The ideas that comprise socialism have incredible staying power because of the same issue within the human heart - a desire to trust in something physical that you can see and understand.

Our society today screams out for a king. They are delusional in their adoration of Barack Obama. The love, excitement, and anticipation of what is possible with him as President reaches beyond delusion to the pathetic. Asking one man to provide for you is frankly insane. Governments are bureaucratic systems that are unresponsive to the needs of the people they "serve" while consuming vast amounts of their wealth and passing laws that restrict their choices. A sane mind wants as little government involvement possible. A sane mind recognizes that governmental power rests in the balance against individual rights - as government power increases, individual rights decrease. If a government has the "power" to do a given thing, you no longer have the "right" to choose an alternative. If you give the government the "power" to collect taxes, you lose the "right" to keep your money.

This loss of choice is the ultimate insecurity. You can no longer make decisions that are in your own best interest. The greatest threat to an individual's freedom, prosperity, and quality of life is the concentration of power into the hands of a few. When governments (or kingdoms, or dictatorships, or monarchys, etc) are not limited in their power, people suffer.

The founding of the United States of America is a study in people attempting to escape the ultimate insecurity of life under kings. People suffering under the hand of oppressive governments realized that security wasn't found by the hand of a powerful king. They came to the conclusion that the proper role of government is to preserve liberty, not provide security (in the sense of money, a home, a job, etc). The United States of America was founded to establish this principle of limited government and quickly became the greatest nation on earth because of it.

Faith is the only remedy for insecurity. What we see today is "faith" in government rather than Faith in God. Government cannot provide for you, cannot give you security, cannot solve your problems. It can only make your problems worse by stealing your freedom to resist its choices.

There is a role for government - to protect our freedom. The constitution lays it out beautifully. Those who seek from Government what they should be seeking from God are not only going to destroy themselves, they will destroy this nation in the process.

One Aspect of the Financial Crisis

I've attached a great article below that shows just one aspect of the government meddling that caused the current financial crisis. In a nutshell, when someone can't pay their mortgage, the bank forecloses on the house - this prevents the bank from losing all their money and allows the person living in the house to move on to a place to live that they can afford. Not much is lost by the home owner, especially these days, because not much was put down. Essentially, they paid "rent" while they lived there - in the form of their mortgage to the bank and the small amount of money they put down.

When government; however, prevents the bank from quickly foreclosing on the house and instead wants to protect the "innocent" homeowner (who isn't paying his bills), the bank cannot put the house back onto the market and recoup its losses. This keeps the banks money tied up in houses that it can't unload.

This government policy causes two things to happen:

1. Banks can no longer afford to lend - that is why we have a "credit crisis". If banks can't secure the loan with the value of the home, they have greatly increased risk in making the loan. (Unless it is government backed, which fanny and freddy provided, which is why there was "irresponsible" lending.)
   
2. People have no incentive to pay their mortgage. If they get to keep the house when they decide not to pay, there is no reason (other than character and integrity) to pay their mortgage. Sure, many will pay in this scenerio, but many will not. Hence, irresponsible borrowers ride on the efforts of the responsible borrowers.
   

Halting foreclosures is bad economic policy and one important aspect of this crisis. We must get the government out of this industry! These bad policies distort the market in ways that encourage people to make irresponsible choices. Check out the following article.

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The Libertarian: Greed, Or Incentives?

Richard Epstein 09.23.08, 12:01 AM ET

It had been my devout wish to write a set of disinterested columns about labor markets to illustrate the power of the presumption against state regulation of voluntary agreements. But the financial meltdown of the past week has rudely interrupted my plan to pillory the minimum wage.

Instead, I shall turn on a dime to address two connected questions: How did we get to that sorry state where great institutions topple, and what should be done?

On both questions, our bipartisan consensus is holding true to form. In a system that is chock-full of heavy regulation, they instantly blame the current collapse on the excesses of the free market, for which a still heavier dose of regulation supplies some supposed cure. That indictment contains few particulars. It typically rests on a populist broadside whose centerpiece is greed on Wall Street, but never on Main Street--where there are more voters.

This prior is all wrong. Greed is a constant of human nature. Financial meltdowns are not a constant of economic political life. It takes, therefore, an understanding of the overall incentive structure to explain why selfish economic behavior produces great progress on some occasions and financial ruination on others.

On this question, your stalwart libertarian is persona non grata in respectable company. If voluntary markets normally align private incentives with social welfare, then always look first for a government intervention that knocks those incentives off line. It’s not hard to find some culprits.

One bad move has government legislators and courts intervening to slow down mortgage foreclosures because it is socially unacceptable for people to lose their homes. Unpleasant yes, but unacceptable no. Start with this assumption: Individual tenants can be evicted at the termination of their lease. Only the ardent defenders of rent control (which has ruined New York City real estate markets) find this outcome is unacceptable. Everyone else rolls with the punches.

So what is the difference between the evicted tenant and the foreclosed owner? Only this: The owner has put a down payment on the house. But so what? Foreclosed homeowners typically made only small down payments, or even none at all. Treat their mortgage payments as lease payments, and bump up their amount a bit by dividing the down payment over the number of months before foreclosure. Not much of a financial difference between the tenant and the owner.

Yet once regulators slow down foreclosures, other potential homeowners are denied opportunities to purchase housing they can afford. The housing stock cannot recirculate. Banks that acquired this mortgage paper see their portfolios nosedive. That dicey paper, as William Isaac noted in last week’s Wall Street Journal, drives the entire economy over the edge by strict government regulations that require all financial institutions to “mark-to-market” the various instruments in their portfolio.

Unfortunately, there is no working market to mark this paper down to. To meet their bond covenants and their capital requirements, these firms have to sell their paper at distress prices that don’t reflect the upbeat fact that the anticipated income streams from this paper might well keep the firm afloat.

One bad regulatory turn leads to another, and lo, the bailouts come thick and fast. At the nth hour, wise heads often rightly conclude that some desperate measure has to be taken to prevent the financial disintegration brought on by, well, prior government regulation. Those bailouts, of course, come from the hides of taxpayers who borrowed prudently. The entire system subsidizes destructive behavior, which means that we will get more destructive behavior in the future. We might as well sell flood insurance at bargain prices in Galveston, Texas, and New Orleans.

The moral of this story is that bad regulation metastasizes. Short term heroics are no substitute for dispassionate deregulation, which won’t happen so long as our political leaders are fixated on greed. Taking steps to prevent financial meltdowns is more likely to hasten their unwelcome arrival, so says the libertarian.

Richard Epstein writes a weekly column for Forbes.com. He is a senior fellow at Stanford's Hoover Institution and a professor of law at the University of Chicago.