By Rudy Barnes, Jr.
We all know that the love of money is the root of all evil, and that in American politics, It’s the economy, Stupid! President Trump’s approval rating is at a historical high because of America’s booming economy. America’s materialistic and hedonistic culture is convincing evidence that most Americans are idolatrous. They love money and lack virtue.
Virtue is defined by moral standards and values that are derived from religion. Altruism is derived from the greatest commandment to love others--including those of other races and religions--as we love ourselves. It’s a common word of faith for Jews, Christians and Muslims; and in politics it requires providing for the common good--a virtue ignored in American politics.
Ayn Rand’s self-centered and materialist objectivism is at the heart of American culture. It’s based on the love of money and the power it confers, and it’s prevalent on Wall Street and with most Americans. Rand’s objectivism is compatible with the prosperity gospel that is so popular among Trump supporters, but it conflicts with the altruistic teachings of Jesus.
America’s booming economy is the result of easy money, thanks to the low interest rates set by the Federal Reserve that have encouraged increased debt at the national, business and personal levels. The U.S.national debt is $23.16 trillion and climbing. The $13 trillion held by the public is 76.4% of the U.S. gross domestic product. That’s a danger sign for the economy.
America’s economy is booming despite its burdensome debt only because the U.S. dollar is the world’s currency. That allows the Fed to create trillions of dollars in new money without causing excessive inflation in the U.S. But what happens if the U.S. debt gets so high that other nations lose confidence in the dollar and abandon it as the world’s currency?
That would precipitate a worldwide economic crisis. The health of the U.S. economy today depends as much on the confidence of foreign nations in the value of the dollar as it does on U.S. consumer confidence. If limits are not placed on America’s excessive national debt, foreign nations are likely to abandon the dollar as the world’s currency.
Without other nations to share the inflationary effects of the U.S. creating or borrowing the trillions of dollars needed to pay its massive debt obligations, there would be runaway inflation in the U.S. Such uncontrolled inflation is an invitation for a demagogue to assume political power. That’s what enabled Hitler to assume power in Germany in the 1930s.
The spectre of national bankruptcy would threaten all American megacorporations with excessive debt, and the Fed would not be able to bail them out with low interest money as it has in the past. The threat of bankruptcy to megacorporations that control the means of production and employment of most Americans would create an unprecedented economic crisis.
The stock market is the epicenter of American capitalism, materialism and greed. The Fed’s low interest rates feed Wall Street’s insatiable appetite for cheap money and discourage savings. Many economists think that stocks are overvalued. That hasn’t slowed down investors seeking hIgh returns; but it has exacerbated the risks of excessive debt.
Most Americans are materialistic and hedonistic and indifferent to the corrosive effects of excessive debt; but they can save their democracy by overcoming their love of money with the virtues of altruism and frugality. Americans rediscovered those virtues in the Great Depression, and saved their democracy from their greed by providing for the common good.
William T. Cavenaugh has traced the evolution of the love of money, capitalism and materialism as forms of idolatry, and has cited the thinking of Charles Taylor, Max Weber, Karl Marx and Friedrich Nietzsche in equating the evolution of capitalism into a kind of religion and worship of worldly things, with an emphasis on advertising and “branding” rather than on the product itself. Cavanaugh says, “Weber’s and Marx’s idea that we become dominated by our own creations is embedded in the biblical critique of idolatry,” and that “Jesus is drawing on a long tradition of idolatry as domination when he warns, ‘You cannot serve both God and mammon.’ (Matthew 6:24)” Cavanaugh concludes that idolatry is difficult to avoid: “Idolatry is embedded in whole economic and social political systems that hold us in thrail.” See Strange Gods: Idolatry in the Twenty-First Century at https://www.commonwealmagazine.org/strange-gods.
David Lay Williams, a political science professor, has lamented that the Founders worried that a republic would fail without “virtue.” Today, we don’t. “One of the Founders’ favorite sources, Montesquieu, insisted the defining element of republics is their commitment to “virtue,” which he defines as a “continuous preference of the public interest over one’s own.” Insofar as citizens, and especially their rulers, can maintain this virtue, republics will thrive. Hamilton, in Federalist No. 76, wrote that the sort of government he and the other Federalist authors proposed rests on the assumption “that there is a portion of virtue and honor among mankind, which may be a reasonable foundation of confidence; and experience justifies the theory. It has been found to exist [even] in the most corrupt periods of the most corrupt governments.”
Their belief that republicanism depends on virtue explains why the founders so frequently insist that their constitutional order must empower those “whose minds are guided by superior virtue,” those with the “most wisdom to discern, and most virtue to pursue the common good of the society.”
When [Adam] Schiff appealed to the Senate [in the impeachment trial], he was reminding senators (and citizens) of the Constitution’s nearly forgotten backbone. Without a commitment on the part of enough members of the government to the essential republican virtues, “we are lost.” ...For Madison, a republic without virtue is no republic at all, and such a state would be forced to maintain civic order by force. It would have to rule by fear, rather than trust its subjects with liberty. The United States has not reached such a stage, but that is the natural end point the founders predicted, if “right doesn’t matter.” See https://www.washingtonpost.com/outlook/2020/01/28/founders-worried-that-republic-would-fail-without-virtue-today-we-dont/?utm_campaign=wp_opinions_pm&utm_medium=email&utm_source=newsletter&wpisrc=nl_popns.
Professor Williams overlooked Thomas Jefferson’s emphasis on virtue. Jefferson was a Founding Father who considered the moral teachings of Jesus “the sublimest moral code ever designed by man.” See http://www.religionlegitimacyandpolitics.com/2018/03/jeffersons-jesus-and-moral-standards-in.html.
Balancing the virtue of altruism, which implies generosity, with frugality, which implies thriftiness, can be a challenge for Americans in managing their money at both the national and personal levels. John Wesley addressed this challenge when he said, ”Make all you can, save all you can (meaning don’t spend any more than necessary on what you want versus what you need), and give all you can.”
“As of November 2019, the federal debt held by the public was $17.26 trillion and intragovernmental holdings were $5.9 trillion, for a total national debt of $23.16 trillion. At the end of 2018, debt held by the public was approximately 76.4% of GDP, and approximately 29% of the debt held by the public was owned by foreigners. The United States has the largest external debt in the world. ...The Congressional Budget Office forecast in April 2018 that debt held by the public will rise to nearly 100% of GDP by 2028, perhaps higher if current policies are extended beyond their scheduled expiration date.” See Wikipedia at
Robert J. Samuelson has noted that America’s debt spree isn’t stopping. It might soon be too late. See https://www.washingtonpost.com/opinions/americas-debt-spree-isnt-stopping-it-might-soon-be-too-late/2020/01/26/49241ce8-3ee0-11ea-b90d-5652806c3b3a_story.html?utm_campaign=wp_todays_headlines&utm_medium=email&utm_source=newsletter&wpisrc=nl_headlines.
The Congressional Budget Office (CBO) has projected that “the U.S.deficit will eclipses $1 trillion in 2020, as fiscal imbalance continues to widen“ as the federal government continues to spend more than it collects in tax revenue. “A combination of the 2017 tax cuts and a surge in new spending has pushed the deficit wider. This year would mark the first time since 2012 that the deficit breached $1 trillion, a threshold that has alarmed some budget experts because deficits typically contract — not expand — during periods of sustained economic growth. Overall, the CBO projected that the federal government will spend $4.6 trillion in the fiscal year that ends Sept. 30 and bring in $3.6 trillion in tax revenue. ...This year’s deficit would be an increase from 2019, when the government deficit grew to $984 billion. The deficit in 2016, President Barack Obama’s last full year in office, was $585 billion. CBO now projects that the deficit will be at least $1 trillion each year in perpetuity unless policymakers make changes. With rising annual deficits, the total debt held by the government is also projected to grow dramatically, from about $18 trillion in 2020 to $31 trillion in 2030, according to the CBO’s projections. The U.S. government must pay interest on this debt to keep borrowing money. ...The CBO report shows that tax collections are weaker than they would be without the 2017 Republican tax law, which permanently locked in lower rates for many corporations while creating temporary reductions for households. See https://www.washingtonpost.com/business/2020/01/28/us-deficit-eclipse-1-trillion-2020-cbo-says-fiscal-imbalance-continues-widen/?utm_campaign=wp_evening_edition&utm_medium=email&utm_source=newsletter&wpisrc=nl_evening.
Jared Bernstein, Joe Biden’s chief economist, has asserted that We’re growing our deficits for all the wrong reasons. Bernstein has argued that there are good debts and bad debts, and characterized the Republican tax cuts that favor corporations and the rich as bad debts that worsen inequality, while Democratic debts that invest in productive public goods, including physical and human capital, are good debts that reduce inequality and poverty and aggressively target market failures, the largest of which by far is global warming. Republicans could counter that tax breaks to corporations create jobs and are therefore good debts.
The truth is that all debts/deficits should be avoided to prevent increasing the massive national debt. See
Sam Ro has noted that Fed’s Chair Powell said stock valuations are ‘high,’ but...: He went on to link high stock valuations with low interest rates set by the Fed. “Elevated valuations have caught the attention of Federal Reserve Chair Jerome Powell. "We do see asset valuations as being somewhat elevated,” Powell said during his post-FOMC press conference on Wednesday. ...Valuations are high, but not at extremes.”
“Powell’s brief discussion of stock market valuations — which was part of a broader discussion about financial conditions — echoes what his predecessor Janet Yellen said during her tenure as Fed chair. “We are in a...low interest rate environment. Lower than we’ve had in past decades. That’s a factor that supports higher valuations.” And it’s not just Fed chairs who think this way. Warren Buffett, arguably the greatest investor of all time, will also tell you that valuation metrics must be considered in the context of interest rates. “Everything in valuation gets back to interest rates,” Buffett said said in April 2017.” See
Shawn Langlois of Marketwatch has cited John Hussman’s persistent predictions of a dramatic drop in the stock market (67%) based on investors being overly optimistic about inflated valuations of stock. “What concerns me is that many investors seem to have drawn the ‘lesson’ that valuations don’t matter, that the Fed is omnipotent, and that stocks are always an ‘investment,’ regardless of the price.” See https://www.marketwatch.com/story/sp-500-headed-for-a-67-downturn-seems-preposterous-now-but-so-did-similar-pullbacks-begun-in-2000-and-2007-says-fund-manager-2020-02-04.
On the day after Trump’s acquittal of impeachment charges, CNN reported: Dow Futures Rocket as Trump’s Approval Rating Hits a 20-Year High. Ben Brown observed that ”The real driving force behind this market is politics. A Bloomberg chart shows the S&P 500 moving in lockstep with Trump’s probability of re-election.” See https://www.ccn.com/dow-futures-rocket-as-trumps-approval-rating-hits-20-year-high/.
For related commentary on Christianity and capitalism:
(3/8/15): Wealth, Politics, Religion and Economic Justice
(8/9/15): Balancing Individual Rights with Collective Responsibilities
(10/18/15): God, Money and Politics
(1/30/16): The Politics of Loving Our Neighbors as Ourselves
(6/4/16): Christianity and Capitalism: Strange Bedfellows in Politics
(10/1/16): The Federal Reserve, Wall Street and Congress on Monetary Policy
(2/11/17): The Mega-Merger of Wall Street, Politics and Religion
(3/11/17): Accountability and the Stewardship of Democracy
(9/9/17): The Evolution of the American Civil Religion and Habits of the Heart http://www.religion
(9/16/17): The American Civil Religion and the Danger of Riches
(12/16/17): Can Democracy Survive the Trump Era?
(1/20/18): Musings of a Maverick Methodist on Morality and Religion in Politics
(1/27/18): Musings on Conflicting Concepts of Christian Morality in Politics
(2/17/18): Musings of a Maverick on Money, Wall Street, Greed and Politics
(6/15/18): The Prosperity Gospel: Where Culture Trumps Religion in Legitimacy and Politics
(4/27/19): Musings on the Legitimacy of Crony Capitalism and Progressive Capitalism
(6/29/19): Musings on a Politics of Reconciliation: An Impossible Dream?
(8/24/19): Musings on How a Recession Could Transform Religion and Politics in 2020
(9/28/19): Musings of a Maverick Methodist on the Polarized Politics of Climate Change
(12/28/19): Musings of a Maverick Methodist on the End as a New Beginning
(1/4/20): Musings on How a Depression (or a War) Could Make America Great Again