Reading about banks and bailouts I am reminded of the Parable of the Unforgiving Servant (Matthew:18-23-35) That’s the one where a man who was forgiven a great debt then went out and demanded payment from one who owed him, “…and cast him into prison, until he should pay back that which was due.”
Of course the scriptural scholarship focuses on the last line, that says that the heavenly Father will forgive us only as we have forgiven our brothers.
But it could be rewritten as the Parable of the Bankers.
Then came the banker and said to him, Lord, how long a grace period should I grant my debtors on their loans? None? Two days? 15 days? When should the harassing phone calls and the increased rates kick in? When should foreclosure proceedings be initiated?
And the Lord said I say unto thee that forbearance must be offered, for those who profit from usury owe yet a greater debt. It is like the story of a certain bank that profited handsomely from falling income and climbing debt of the middle class for many years, but found that its business model depended on growth in debt that was unsustainable.
The government made a reckoning with the bank, and said that it must go into receivership, all of its assets must be liquidated and its accounts opened to examination.
The bank pleaded that it was too big to fail, and asked for patience that it might reform itself. The government took pity and caused the American people to provide a Troubled Assets Relief Program that it might continue to do business.
The bank received the first tranche of the TARP and gave lavish bonuses to its executives. It made not loans to those who most needed them. It imposed harsh penalties for even slightly late payments and turned people out of their homes even where the expense of foreclosure seemed to make it a poor business choice.
It withheld operating capital from businesses, which then laid off employees, who became unable to maintain their payments to the bank.
And its borrowers pleaded for mercy, pointing out that the bank had made boatloads of money using financial “instruments” based on the existence of their loans, and that punishment should fall to the corrupt, not the unfortunate.
Now, in the biblical story, the king finds out about how his debtor treated his own debtor and, “Then his lord called him unto him, and saith to him, Thou wicked servant, I forgave thee all that debt, because thou besoughtest me: (18:33) shouldest not thou also have had mercy on thy fellow-servant, even as I had mercy on thee? (18:34) And his lord was wroth, and delivered him to the tormentors, till he should pay all that was due.”
The end of the Parable of the Bankers hasn’t been written yet.
Will the banks finally begin lending, but only to oil speculators, so as to squeeze the last drops of wealth from the middle class?
Will usury become a sin again, or at least a crime?
Will Little Nell die?
We’ll all stay tuned for this one. We have no choice.