By John J. Blanchard
August 25, 2012
Good morning, brethren. Today is the third in our series of the founding values. This particular value we are talking about is the foundational virtue of honesty.
When we look about us today and we look at the news, it’s the economy, the economy, the economy. It is very stagnant. That stagnant economy is on the minds of many people from poor people to the middle class and right up to the experts. They are somewhat confounded as to what to do and what is wrong with our economy. The United States always has been a very vibrant, powerful, and creative economy. We have had our ups and downs, but over the course of time the Federal Reserve and the economists have learned how to stoke the fires when it was going down and stimulate things when it needed a little help. It seems like right now everything is very stubbornly stuck in place.
Unemployment is stubbornly high. The foreclosure mess seems to drag on and on. Now they are saying there is another wave of foreclosures that will start up in the next few months. The national debt continues to rise, and people are very fearful. They ask themselves, what are we going to do with all this money we have to pay back eventually?
Even more troubling is the sentiment of the people. Americans are very optimistic by nature. They are very enthusiastic about the future, and they always feel the next generation will do better than we have. We are going to hand them a better country than what we had. For the first time, our confidence is shaken. People are starting to talk like maybe we are in decline. Maybe the next generation will not be so well off. People are looking at the lack of confidence. Consumer confidence is down. Business confidence is down. College graduates are feeling a sense of hopelessness. It used to be if you went to college and got your degree, it was the ticket to financial success.
Indeed a lot of experts are wondering if the problems in our economy are solvable at all because they are at such odds with each other when you listen to them arguing. There are so many different solutions and so many identified problems that nobody seems to have a consensus as to what to do. Look at what they have tried in the last four or five years. There’s been massive stimulus spending. We hear about the stimulus packages that they keep putting forth and spending billions, and in some cases over a trillion dollars to stimulate things. There have been massive bailouts. There have been bailouts of our big banks and bailouts of certain industries like the automotive industry.
The government has put in place hiring incentives, like so much off for a business if they would hire an unemployed person. Another example is so many educational credits are granted to help the unemployed get better skills. The Federal Reserve has pushed interest rates down to all-time lows, nearing zero in some cases. It is almost like they want to give money away to stimulate the economy.
Job retraining programs from the local level through the national level are in place across the country. There are mortgage assistance programs for people who are either upside down in their mortgages or who want to lower their interest rates. They have the opportunity to refinance and get a lower rate to help them have more money in their pocket each month. We have had the Cash-for-Clunkers Program. The government put up $4500 in cash for people who wanted to get rid of their old car to stimulate the automotive industry.
There are energy rebates. I am always getting letters in the mail stating if I buy a new refrigerator that is energy efficient or a new washer, they will give me $50 or $30 or whatever. They have lowered taxes. They keep passing tax cut after tax cut and extending unemployment benefits as well to make people get by. You would think all of these trillions of dollars would have helped by now, but nothing has worked. The experts are confounded. We seem to be spinning our wheels.
With the low cost of money and all the other incentives, we should be booming by now. They said this should have been a V-shaped recovery, which means you hit the bottom and then you take right off. Then you have a booming economy within a year. That has not happened. We have been in a recovery for three years, and when you talk to people, they say this is still a recession. Now they are saying if we hit the fiscal cliff in January, we are going into another recession, and it feels like the last one did not end.
THE BLAME GAME
What has this brought about? We have accomplished next to nothing except to increase our huge national debt. We are all involved across the country in the national blame game. Everybody is pointing fingers at everybody else for the mess we are in. You will often hear it’s the bank’s fault. The big banks are to blame for all of this. It’s the Wall Street fat cats who are to blame for all of this. Other people say it is the wealthy people in general. They are not paying their fair share. We have to get after the rich people. People in the middle class and upper class say it is the poor people. They want too much handed to them. It’s the poor people’s fault.
Pundits say we have not been investing enough in education, so Americans cannot compete because we are not educated well enough. Others say it is the politicians’ fault. Look at this money they have spent. Look how they cannot get along. They yell at each other, blame each other, and slander each other instead of getting the nation’s business done. Of course, as a nation we like to point at other nations. It is China’s fault. They are taking all of our jobs. Or they say it’s Europe’s fault. Look at the mess Greece and Portugal are in, and they are sending ripple effects around the world. That’s the problem. The problem is with the rest of the world, and we are doing everything okay. Whose fault is it really?
It is time to look at ourselves as a nation and as a people, and say it is collectively our fault. The reason we can cast blame in so many locations is because there are some of us in all of those locations! Some of us are rich, some of us are poor, some of us are bankers, some of us are investors, some of us work on Wall Street, and some of us work in factories. It is all of our faults. We did this together as a nation. How did we do that, you might say?
It is easy to blame the big and the obvious like the mega-rich or the big corporations. It is easy to make them the scapegoat and take the blame off ourselves. We cannot possibly go into the details of every one of these individual situations, so we are going to have to generalize. In generalizing we can say we have the enablers and we have the participants. All these villains that I just named were enablers. They were the big corporations, the wealthy people, and the bankers. The banks made possible these weird unconscionable loans. They included loans that were interest only, adjustable rates, no down payments, and Ninja loans. If you come in without a job, we will still give you the money. They were the ones that rained credit cards down on the nation. I remember during the hay day of the boom times, it wasn’t uncommon for me to open my mailbox and find three credit card offers. People were literally calling on the phone weekly saying if you want to get a second mortgage on your home or a home equity line of credit, we will help you right over the phone. You will be approved in ten minutes. It was ridiculous. The banks made all that possible.
Wall Street was the one who took the bundled loans from the banks. The banks took our savings and our houses and bundled them into assets that could be sold around the world, and Wall Street cooperated. There was lots of money to be made. They bundled and sold mortgages. They bundled and sold all kinds of collateralized debt obligations. There were all these things you hear in the news. They turned our national housing stock, the homes that you and I live in, into a great big casino, and they gambled with it. They gambled with the nation’s retirement funds. Wall Street did that.
Some hedge funds manipulated the markets. Yes, they did. They forced individual stocks up and down. They made money on the swings. You see their corruption scandals and people going to jail now over some of that stuff. They were investing instead of doing investment into a company or an idea to help it get going. Ordinarily you would then hopefully get a return investment. They turned this into algorithmic hyper-trading which was big ways of siphoning money from the working class and other people. They were siphoning it right off the top.
Gambling became a national addiction. If you have noticed, there are casinos not on every corner, but in almost every town. At least within driving distance of nearly every American is a casino. Thirty or forty years ago it was not like that. The states got involved with lotteries. On-line gambling was made available. Hold ‘em Poker became the national fad. We became a people addicted to gambling. I am not talking about everybody, but as a national habit, it came to the fore. Let’s gamble our way to prosperity.
Of course, this led to famous Ponzi schemes. I am just going to mention Bernie Madoff as the poster child. There were people who wanted big easy returns. If it looks too good to be true, it probably is too good to be true. Nobody can make 10%, 15%, or 20% year after year. It is impossible, folks. We became victims of many Ponzi schemes. We see people going to jail now over that.
Then, of course, there are the politicians redistributing wealth. They are taking from Peter and giving the money to Paul to get re-elected. Of course, that just pits one class of people against another class of people.
There was a lot of blaming, and there still is a lot of blaming going on. A lot of people are looking for a scapegoat. We found a few, and, yes, they were guilty. Not all the people in banking and not all the people on Wall Street were guilty, but certainly there was enough to cause all of this to happen. These were what I call the enablers. Banks, brokerages, politicians, and schemers were the enablers. Too many of us were willing participants. They could not have done it without the general populous.
There is a long list in the ways we participated. Anyone who ran up their credit card and bought things they could not really afford was a participant. They could have thrown those credit card offers that came in the mail into the garbage. They could have hung up the phone on the people who wanted to give you the instant home equity loan. Those of us who bought a house we could not afford, we participated. Obviously some of us did not understand what we were getting into, and I know that. But we needed to be very careful before signing our name on the dotted line to make sure we could afford it.
There were also many people who were flippers. In other words, they were buying a house, putting a coat of paint on it, and selling it for 20% more. They were doing this over and over again so much that builders got fooled. I know because I am a builder. I saw the publications coming through that for two or three years running a third of all sales in the United States were flippers. This demand for housing made builders build houses like crazy to accommodate the demand—supply and demand. Now we are down from 74,000 builders in theUnited Statesto just over 30,000. The rest have gone out of business or retired because there are so many empty houses, and there is so little work out there. Builders have gone out of business left and right. It is not over yet.
We did a lot of things to make all of this possible. We became a nation of gamblers. No one made us get involved with Internet gambling or Texas Hold ‘em Poker. No one made us buy lottery tickets by the bushel basket. We did that. No one made us turn money over to Ponzi schemers. Instead of saying, wait a minute. How did you make 10% a year for the last 20 years, sir? I want to see the numbers. I want to see how you did it. That is just common sense. If you are going to turn money over to someone, make sure they are not going to cheat with that money. This is something that is the responsibility of the person.
On any deal you have someone on each side of a deal. A buyer has to have a willing seller. A seller has to have a willing buyer. On every side of a handshake, there has to be another hand. In other words, we participated. There were the enablers, and then there were those of us who made it all happen by doing it. It comes down to a national preoccupation with materialism and greed. Get rich quick. That explains the mess we are in. It is very simple. Too many wanted to get rich quick or own things they really had no right to purchase or have.
Reviving the economy doesn’t take more dollars. Throwing dollars at a bunch of greedy people who are into gambling and trying to get rich is only fuel on the fire. You are trying to revive the same habits that got us into the situation we are in. Obviously, money may be required to keep us all afloat, but it is not going to solve the problem.
The problem has come down to the fact that we no longer trust each other. We have cheated each other enough, we have been taken for a ride enough, and we have had enough deals broken that we don’t trust each other. We don’t trust the banks. We don’t care how low the interest rates get. They might foreclose on me! Or they might call my credit card debt in! Or they might raise my credit card rate sky high overnight, so I am not going to borrow money! We don’t even borrow for good reasons anymore. They are saying banks are sitting on 1.2 trillion dollars that nobody wants. People are afraid to get into debt.
We don’t trust Wall Street. People see their 401k or their IRA tank. They see the market having flash crashes up and down and stocks going up 50% to 100% in a couple of weeks and then collapsing. The most famous one recently was Facebook. It went up to a huge valuation, and then weeks after it came out it crashed. People know there is something rotten in Denmark, so they are not going to put their money in the stock market.
Companies do not trust the government. What is the government going to do next? We are not going to build that factory. We are not going to hire people because we do not trust the government. The wealthy don’t trust the poor. The poor are after everything we worked hard for. The poor don’t trust the wealthy. They have what we deserve. Workers do not trust their employers. Employers do not trust their workers.
Banks don’t trust each other. The big financial crisis, as far as the depth of it is concerned when it was collapsing, was because banks were all into these weird deals. They did not know how many weird deals the other bank was into. Therefore they would not lend each other money. That is why we had collapsing banks, and the government had to step in. Insurance companies even got involved in this like the AIG collapse. They were gambling on insuring mortgages.
Banks don’t trust borrowers, and borrowers don’t trust banks. If the bank is not going to get repaid, they are not going to lend you any money either.
Corporations don’t trust each other. Look at all the lawsuits between corporations: copyright infringement, people stealing each other’s ideas, and people driving down each other’s stock with rumors. It is crazy! All of this uncertainty is what brought our economy to its knees. There is a lack of trust.
HONESTY IS THE SOLUTION
Dishonesty has led to a lack of trust. It has thrown a bunch of sand in our gears. When you are uncertain, whether it is as an individual and uncertain of the future or if you are a company and you are uncertain of the future, you will not spend your money. Therefore uncertainty is like sand in the gears. The machine just grinds to a halt. The solution is very simple: restore trust by restoring the foundational virtue of honesty and integrity. When we do that, we will find that honesty is the grease that keeps the wheels of the economy turning.
When a person shakes hands over a deal and they know both sides will keep their commitment, the economy will work. I have been in business for 35 years as a partner, and I have seen it over and over again. I have been very fortunate in my 35 year career to be working in the Upper Peninsula of Michigan, where I will tell you 95% or more of the jobs we have done in that 35 years was with a handshake. We did not need contracts. We knew the person wanting the work would pay for it, and they knew the work would get done. This is true throughout the UP even today. Unless you are working for the government or a major corporation, very few contracts get signed. I know it is not that way when you go to Chicago, New York, or Los Angeles.
I was talking to an estimator from a fairly large city recently, and every little change order has to be signed off on a construction job. Even a little job may have a forty page contract. It has gotten to be ridiculous. The lawyers try to nail you on every point, so, of course, the people on the other side of the deal are looking for ways to shave, cut, and make a dollar. It has gotten ridiculous, because we do not trust each other.
Honesty requires people to feel obligated and to follow up their obligations. Obligation is crucial to having a good deal. The borrower must agree I will do all in my power to repay the lender. Circumstances can happen. That is understood. We have always understood as a nation a person or a family can fall on hard times through no fault of their own, but by and large when a debt is incurred, that debt must be repaid. Lenders must not cheat the borrower. When you are an Ivy League Wall Street representative or a big bank representative and you are sitting at a table across from an uneducated, unsophisticated individual, you need to watch out for that person. You do not put them in a situation that you know is going to guarantee failure. That is an obligation, so that when the deal is struck, it is a win-win situation.
Workers need to give an honest day’s work for an honest day’s wages. Companies need to give an honest day’s wages for an honest day’s work. Deals must be fair. They must be win-win, which involves a lot of trust and integrity by both parties involved.
I want us to go back to the biblical principles that our nation was founded upon that brought about a nation that worked. I am not going to say it had no problems with dishonesty, but it was such a given that a person would be honest and have integrity that the nation worked. Deals happened. Things progressed. Generation after generation got better. This is what we need to do as a people.
THE LAST THREE COMMANDMENTS
I want to look at the Bible, and I want to start at the last three commandments. Turn to Exodus chapter 20. It is not fashionable to read the Ten Commandments and talk about them very often, but if this had been more in fashion, we probably wouldn’t be in the situation we are in right now.
Exodus 20, verse 15: “You shall not steal.”
Scheming, embezzling, Ponzi schemes, and manipulating markets are all stealing. Gambling with other people’s money is stealing. It is very simple. God said, you shall not steal.
Continuing in Exodus 20, verse 16: “You shall not bear false witness against your neighbor.”
We can talk about that as far as slandering your neighbor and lying about them, but when you present something as better than it is, that is falsehood. That is false witness. When you say, yes, this is a good contract; this is a good product; this is a good idea; you are bearing witness to the fact that you have done due diligence and that you are treating these people fairly.
Verse 17: “You shall not covet your neighbor’s house; you shall not covet your neighbor’s wife, nor his male servant, nor his female servant, nor his ox, nor his donkey, nor anything that is your neighbor’s.”
Not many of us have oxen and donkeys anymore, but we have cars and houses. When a person of modest means looks down the street and there is a big house—a McMansion—and they get that low-interest or no-interest loan or Ninja loan so they can have one like that, that is coveting. Having the latest smart phone when you cannot afford it is coveting. When you look at other people’s possessions and you want them and you think that is your right, that is materialism. That is coveting.
If we had just followed these three commandments, we wouldn’t be in the fix we are in today.
MY BROTHER’S KEEPER
Turn to I Thessalonians chapter 4, beginning in verse 9: “But concerning brotherly love you have no need that I should write to you, for you yourselves are taught by God to love one another…”
Remember the concept of my brother’s keeper?
Verse 10: “…and indeed you do so toward all the brethren who are in all Macedonia. But we urge you, brethren, that you increase more and more; that you also aspire to lead a quiet life, to mind your own business, and to work with your own hands, as we commanded you, that you may walk properly…”
That word “properly” in the King James Version is honestly.
Continuing in verse 12 of I Thessalonians 4: “…that you may walk [honestly] toward those who are outside, and that you may lack nothing.”
Let’s expand that a little bit. This is saying you are good with the brethren. You are honest with the brethren. Now let’s be honest with the people outside the Church. You could say outside of your company. You could say outside of your organization or outside of your family. We have to be honest in all our dealings. We have to be honest with those we love and care about intimately that are close to us, our associates too, but with strangers we meet on the street. People who come into contact with our business need to be treated fairly, for indeed we are our brother’s keeper.
Turn to Hebrews chapter 13, verse 18: “Pray for us; for we are confident that we have a good conscience [Paul says here], in all things desiring to live honorably.”
That word “honorably” in the King James Version is honestly. We need to live our lives honorably and honestly in our dealings with each other and our fellow man. It is very important that we do that. Then the grease will start to lubricate the gears once again.
Now let’s look at some words of wisdom from the Old Testament. I want to go all the way back to I Kings. I Kings has a valuable lesson. We all know how King David was given the throne. The nation prospered and settled down. He was getting ready to turn it over to his son, Solomon. God spoke with Solomon.
INTEGRITY AND UPRIGHTNESS
Go to I Kings chapter 9, verse 1: “And it came to pass, when Solomon had finished building the house of the Lord and the king’s house, and all Solomon’s desire which he wanted to do, that the Lord appeared to Solomon the second time, as He had appeared to him at Gibeon. And the Lord said to him: ‘I have heard your prayer and your supplication that you have made before Me; I have consecrated this house which you have built to put My name there forever, and My eyes and My heart will be there perpetually. Now if you walk before Me as your father David walked, in integrity of heart and in uprightness…’”
Notice it says in integrity of heart and in uprightness.
Continuing in verse 4: “…to do according to all that I have commanded you, and if you keep My statutes and My judgments, then I will establish the throne of your kingdom overIsraelforever, as I promised David your father, saying, ‘You shall not fail to have a man on the throne ofIsrael.’”
Integrity and blessings go together. We know what ultimately happened with the work from Solomon’s hands and what happened to Solomon himself when he turned away from walking honestly and uprightly.
Now I want to read from Psalms and Proverbs. Go to Psalm chapter 25. Here David tells us something that we should all strive for. As he spoke to God he said this in Psalm 25, verse 20: “Keep my soul, and deliver me; let me not be ashamed, for I put my trust in You. Let integrity and uprightness preserve me, for I wait for You. RedeemIsrael, O God, out of all their troubles!”
We have a lot of troubles in our nation today, and if we would walk in integrity and uprightness, God would help us out of our troubles. That is a prayer that each and every person should pray and beseech God to help with.
Now we will spend the rest of the sermon in Proverbs. Turn to Proverbs chapter 11, beginning in verse 1: “Dishonest scales are an abomination to the Lord, but a just weight is His delight.”
I want to pause and talk about that before we continue. Back in the old days in biblical times here it is talking about when a purchaser was going to buy something and it had to be weighed, it had to be an honest weight. You had to give a person a fair amount of grain, or a fair amount of jewels, or a fair amount of gold, or whatever it was that had to be weighed. It may have been getting purchased by the ounce or the pound. Whatever it was, it had to be honest. If it was dishonest, God says that is an abomination.
It is the same with a stock or a bond or a house or a mortgage. It has to be represented fairly, so when the purchaser makes an agreement, it is everything it was represented to be or else it is not a fair deal. It is a dishonest deal, and it will breed mistrust.
Continuing in verse 2 of Proverbs 11: “When pride comes, then comes shame; but with the humble is wisdom. The integrity of the upright will guide them, but the perversity of the unfaithful will destroy them. Riches do not profit in the day of wrath, but righteousness delivers from death. The righteousness of the blameless will direct his way aright, but the wicked will fall by his own wickedness. The righteousness of the upright will deliver them, but the unfaithful will be caught by their lust.”
We see this in the news over and over again. Someone is rich in some cases for many years. Then finally they get found out to be a crook and a sham. They end up in jail, or they end up penniless or in a multitude of lawsuits. Shame will eventually come. If for some reason you get through life without shame in this life, there will be shame at the resurrection. Being honest in our deals is very important to God.
Verse 28 of Proverbs 11: “He who trusts in his riches will fall, but the righteous will flourish like foliage.”
Riches are not worthy of trust. Trust is something you put in God. Trust is something you put in each other. We need to treat each other honestly. Trust is priceless. To have a good name like God’s and in whom we trust implicitly, is worth more than money. It is worth more than riches. It is worth more than things.
Turn to Proverbs chapter 19. We will work our way gradually through Proverbs. Proverbs chapter 19, verse 1: “Better is the poor who walks in his integrity than one who is perverse in his lips, and is a fool.”
It is better to be the banker who tells someone you cannot afford this house. I really should not give you this loan. Maybe they walk out mad, but you were honest. You had integrity, and you saved them from falling into a lifelong pit. That principle can be expanded into every area where there is a deal involved in life.
BUILD AN HONEST NAME
Proverbs 20, verse 7: “The righteous man walks in his integrity; his children are blessed after him.”
To build a good name and an honest name and pass that way of life on to our children will give them blessings. That is where the United States went wrong. If we want each generation to be blessed and have more, we need to hand it to them honestly. Who wants to hand the next generation of Americans a booming economy which you know is all going to fall apart in a few years like a deck of cards, because we handed off so much debt they could never repay it. That is taking away from future generations instead of giving them something valuable and wonderful.
Turn to Proverbs 22, verse 1: “A good name is to be chosen rather than great riches, loving favor rather than silver and gold.”
The choice can be made in life to be known as a person of honesty and integrity or to die a billionaire. The Bible tells you it is better to have a good name. It is better to be poor and have on your headstone, “here lies an honest person” than “here lies a billionaire.”
Verse 16 of Proverbs 22: “He who oppresses the poor to increase his riches, and he who gives to the rich, will surely come to poverty.”
In other words, when we oppress the poor whether we are working for a big bank or corporation or a Wall Street investment house, we are going to make some people rich, but God sees that. It will come around eventually and get us all. That is exactly what has happened in our own country.
Turn to Proverbs 23, verse 4: “Do not overwork to be rich; because of your own understanding, cease! Will you set your eyes on that which is not? For riches certainly make themselves wings; they fly away like an eagle toward heaven.”
That is so true. We can work so hard to be rich and then find it all evaporates. We are all going to go to the grave anyway. You can’t take it with you. Why not share what you have and help others to have more and to get by? Don’t overwork to be rich. If for some reason we have wonderful talents and abilities and we get good breaks in our life and end up rich, that’s great. That gives you the opportunity to help others. Do not strive for it, because it is like it has wings. It can evaporate. Look at these big corporations that go bankrupt. Sometimes there are these star athletes or famous figures who are rich one day, and then they fall on hard times it seems overnight. It is because they wasted their wealth, or they got taken in by a scam.
The last Scripture I want to read is in Proverbs chapter 30. The Psalmist says here to God in Proverbs 30, verse 7: “Two things I request of You (Deprive me not before I die): remove falsehood and lies far from me; give me neither poverty nor riches—feed me with the food allotted to me; lest I be full and deny You, and say, ‘Who is the Lord?’ Or lest I be poor and steal, and profane the name of my God.”
Notice he says, don’t make me rich, but don’t make me poor. I do not want to feel compelled to steal to feed my family, but I do not want to have so much money that I live for money and for things. There is a lot of wisdom there.
This man is saying here to God, give me what I can honestly have and what is fair, and help me to have honesty and integrity. Take away from me lies, deceit, and falsehood. I do not want to be a cheater of people.
Once we trust each other again, our economy will flourish. The founding virtues are virtues because they are timeless. We need to be honest and make that a part of our national character, and that starts with one person at a time. Each of us has to make a decision to be honest and to have integrity. We need to feel obligated when we make a deal. When we do these things, our country will turn around. The economy will start humming again. But each of us has the obligation and the duty to do our part to have honesty and integrity in all our personal dealings with each other.