The Theology of the Glass Steagall Law: Mutual Distrust

Is it the end of the world?  The financial meltdown of the world’s monetary systems is so pervasive that its stretches the globe and affects to some degree a majority of the planet.  This hugely important issue ultimately stems from a theological misunderstanding.  The snowball that started this avalanche of the stock market depends on the work of former President Bill Clinton and former head of the FED Allen Greenspan.  In 1999 they terminated the Glass Steagall Law of 1933.  This one action was a fatal wound to the American economy that was not felt fully until last November.  This financial meltdown is a result of an ideology that is based ultimately in a theological debate over the nature of man.  This disgrace of Greenspan and Clinton is a result of their belief that man is essentially good and can be trusted to morally order himself.  The central tenant for their administering of the government and regulation of the financial system is that given the responsibility, businesses and individuals will choose the good of the masses rather than the good of the self.  The Glass Steagall Law was instituted during the Great Depression with the purpose of stabilizing the markets and especially the banking system so that the fluctuations of the stock market would not adversely affect the banking system.  It worked successfully from its conception and regulated the banking system of America and keep the monetary system secure.  When this law was struck down, (with the help of Clinton and Greenspan) a major regulatory protection for the American consumer was eradicated.  This was not the only thing that these powers did but it was the most destructive to world’s financial system.  The authority of the SEC was limited under Greenspan, as his principle of self-regulation became the government’s view with the mantra of “free enterprise” the unquestioned law of doing business.

Now we find the banking system in shambles with people in Haiti eating baked dirt and factory workers in China loosing their jobs.  The effect of this meltdown reaches to the farthest points of the globe as inflation in Zimbabwe is in the millions of percent and Pakistan has a budget deficit of billions of dollars while its loans are being called in by other nations.  The problem with both big government and small government is that they often ideologically neglect to fully account for man’s sin nature.  The answer for the terrible shape of the world’s banking system lies in the governments doing what they exit to do, which is protecting its citizens from other governments, criminals, and itself.  The reason this democracy (former republic) works so well (comparatively speaking) is that it was based on a system of mutual distrust.  The people elect the politicians, the politicians regulate the businesses, and the businesses employ the people.  The only way a political system can work is through mutual distrust for this alone accounts for the sinful nature of man.  As Christians we should long for the day when we will no longer have to be wise as serpents in a sinfully depraved world and the trust of man will be pervasive, as we trust in the Man who is Christ.



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One response to “The Theology of the Glass Steagall Law: Mutual Distrust

  1. Brandy

    Could you explain what the Glass Steagall law is?

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