Good News on the Law: Congress Can’t Repeal Law of Supply and Demand
By admin | October 2, 2008
Christian lawyer Stephen Bloom’s October “Good News on the Law” column from Good News Daily:
There’s a meltdown in our credit markets. Headlines scream with news about banks, insurance companies and investment firms crumbling under financial pressure. We worry about rollercoastering values in our retirement accounts and annuities, and we fear for the safety of our bank deposits.
Meanwhile, in Washington, D.C., our government runs in frantic circles, proposing plan after plan to “fix” the problems and “solve” the crisis. But let’s stop for a moment and take a deep breath. What’s really going on here? What, if anything, should the government be doing about it? And what about the rest of us? What should we be doing?
In addition to practicing law, I’m blessed to serve on the faculty in the department of management and business at Messiah College, teaching courses on contemporary economics, the economics of social issues, and personal finance. I’ve been fascinated with the mysterious workings of our economy since my undergraduate days at Penn State, where I earned my degree in agricultural economics and rural sociology, with a resource economics option. As a Christian believer who views our economic environment through the dual lenses of academic interest and real life business experience, I’d like to offer some helpful perspectives and insights.
First, it’s important for us to understand where this whole credit crisis came from. Some are blaming Main Street; some are blaming Wall Street; and some are blaming those inside the Washington Beltway, but actually the blame belongs squarely with all three.
Yes, those of us on Main Street had a role in causing the problem. It was regular folks who bit off more than they could chew, buying homes on shaky credit and extracting every last penny of equity through endless refinancing. And too many who borrowed against their homes knew very well that the mortgages would be difficult to repay, but they borrowed anyway. And many of the lawyers, title companies, appraisers, inspectors, real estate agents and loan officers involved with these toxic transactions knew very well that something wasn’t right, but they held their noses and accepted their fees and commissions and did the deals anyway. So yes, some blame belongs on Main Street.
And certainly, Wall Street played a huge role in taking a modest problem and transforming it into a global nightmare, by buying and then leveraging many of those questionable Main Street mortgages into bizarre new financial instruments that ultimately put the entire financial industry at risk.
In short, the players on Wall Street, in their sophisticated human wisdom, figured out they could very profitably sell investors not only bundled interests in the mortgages themselves (“collateralized debt obligations”), but also hedges against the failure of these same mortgages (“credit default swaps”). And, in their greed, they sold so many of these credit default swaps that they exceeded the values of the underlying mortgages by factors of up to 60 or 70 times.
To use a simple analogy, it would be like an insurance company selling fire insurance on my house not only to me, but also to 60 or 70 of my neighbors! When my house burns down (now much to the delight of the whole neighborhood), every neighbor collects a claim for the full value of my home from the insurance company, and the insurance company faces financial disaster. And this is exactly what happened to the big Wall Street firms when the mortgages they had sold and “insured” started going bad. Now they owe everyone in the neighborhood (because of all the credit default swaps), and they simply don’t have the money to pay! So they are falling like dominoes.
And, last but not least, we have the Washington Beltway. While the greed on Main Street and the greed on Wall Street both contributed to the mess, it was the misguided policies of our federal government that made it all possible. Because it was Washington, starting in the 1970’s, but accelerating especially in the 1990’s, that literally forced banks to start making home mortgage loans to people who would ordinarily never qualify for such credit.
First enacted under President Carter, and later modified by aggressive new regulations under President Clinton, the Community Reinvestment Act was used, in the name of equality and fairness, to lawfully require banks to lend to folks with bad or no credit history. This effort was enhanced and encouraged by government sponsored entities Fannie Mae and Freddie Mac, which served as middlemen in the lucrative pipeline pumping a steady flow of these risky mortgages from Main Street to Wall Street. So, essentially, the Beltway crowd decided that economic reality could be ignored and the ability of a borrower to repay was no longer a relevant factor in deciding whether that borrower should receive a home mortgage loan!
Well, the reality is you can’t ignore economic reality! You can’t repeal the law of supply and demand any more than you can repeal the law of gravity! Now, economic reality has arrived. Many of the mortgage loans on Main Street are not being repaid. The borrowers have defaulted and their homes are in foreclosure, as real estate prices fizzle. And, on Wall Street, that fizzle has become an explosive storm, thanks to the overleveraged credit default swaps, as financial institutions around the world find themselves hopelessly short of liquid assets. And, inside the Washington Beltway, the politicians seem once again convinced they can suspend economic reality by passing laws. Bail-outs or rescues or whatever titles they use, the government is attempting to change the basic economics of the situation through legislation. But more laws are not the answer and cannot solve the problem!
We are blessed to live in the wealthiest country in the history of the world during its wealthiest era. It is no coincidence that our prosperity has arisen in the context of our abiding commitment to free market capitalism. Other countries have tried other economic systems, everything from communism to socialism to fascism, and none have measured up. The human toll of these alternative economic systems has been tragic and horrific. While the free market is not a perfect system, history has shown it to be the best way to bring about the most good for the greatest number of people. And to operate correctly, the free market must embrace both risk and reward.
In the Great Credit Panic of 2008, it appears that Washington is now trying to pass laws to protect the very people who made the most unwise decisions from the downside risk of their irresponsible actions. If the government requires the rest of us to insulate the greedy players on Main Street and Wall Street (and inside the Washington Beltway) from the consequences of their own failures, it will only encourage more of the same morally hazardous behavior and we will all suffer. The problems will fester and grow worse over a longer period. The government cannot permanently fix an economic problem by passing laws that say we must ignore economics.
The free market has the power to work the problem out, as it always does. There may be short term pain for many of us, but there will be long term health. We may need to tighten our belts and increase our faith. It might be a rough ride. But the alternatives are unthinkable. And, in my humble opinion, the last thing we need are any more laws!
(Stephen L. Bloom is a Christian lawyer serving clients throughout Pennsylvania. He wrote “The Believer’s Guide to Legal Issues” (Living Ink Books) and frequently speaks on Christianity and law. For information, visit his website www.IsThereALawyerInTheChurch.com. Please note: This column contains generalized information only and is not intended as a substitute for the specific legal advice of your own attorney.)
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“Believer’s Guide to Legal Issues” Goes Global
By admin | September 16, 2008
Stephen Bloom recently discussed The Believer’s Guide to Legal Issues as a featured guest on The Harvest Show, an internationally syndicated live daily TV program with worldwide coverage through LeSEA Broadcasting. Click the picture to on right to view the episode (Stephen’s segment begins at the 43:23 minute mark).
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Book Review: Believer’s Guide to Legal Issues “Highly Recommended” by Pulpit Helps Mag
By admin | July 25, 2008
The Believer’s Guide to Legal Issues is favorably reviewed in the August, 2008, issue of Pulpit Helps Magazine. “The author gives practical advice on a number of issues,” notes reviewer Glen H. Jones, writing in the magazine’s Pastors’ Library literary section. “[Author Stephen Bloom’s] legal calling is geared toward Christians who must often face conflicts between the law and their Christian profession,” he continues, rating the book “highly recommended” for all readers.
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Believer’s Guide Book Tour 2008 - Update #11: The International Christian Retail Show
By admin | July 20, 2008
Steve’s Update: The International Christian Retail Show (ICRS) is the major annual event for Christian publishers and retailers, where industry professionals from around the world get together to learn about new releases and renew friendships. I was blessed to be invited to ICRS 2008 in Orlando, Florida, by the publisher of The Believer’s Guide to Legal Issues, AMG Publishers (Living Ink Books). It’s an awesome opportunity to help spread the powerful healing message of my book! Above, posing with my some of my wonderful new AMG family (from left, Amanda Donnahoe, me, Trevor Overcash and Joe Suter) at our ICRS display.
During ICRS, I was interviewed about my Christian perspective on everyday legal situations by eCounseling.com (top left), CrossWalk.com (top right), Body Builders Television Network (bottom left), and WMBI Radio (bottom right).
I had the pleasure of meeting all kinds of fascinating and amazing people at ICRS, even some old friends like Nashville-based Christian music artist and speaker Paige Armstrong (left) and her mom (right). Paige was doing vocals with the Christian band Saline a few years ago when my son was their sound engineer, so it was especially exciting to run into her at ICRS as she stopped by with other upcoming young artists on the iShine LIVE tour.
Another ICRS highlight was my official AMG Publishers - Living Ink Books sponsored author’s signing for The Believer’s Guide to Legal Issues. It was a busy hour and I signed almost 100 copies for retailers and other Christian leaders. These folks will take the book’s powerful healing message on common legal situations to the ends of the Earth! 
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Christian Lawyer Shares God’s Healing Counsel on Real Life Legal Issues: Listen Now
By admin | July 10, 2008
Click each of the links below to listen in as Stephen Bloom, Christian lawyer and author of The Believer’s Guide to Legal Issues, shares insight on God’s healing counsel for real life legal situations as recorded during a few of his many recent appearances on radio stations and networks around the country:
Crosstalk program on VCY America Network (July 7, 2008).
Impact News FrontPage program on The Path/CDR Radio Network (scroll to July 7, 2008)
FamilyNet Mornings program on SIRIUS Radio Channel 161 (search to July 1, 2008)
Northland Notebook program on WWJC 850 AM (scroll to June 26, 2008)
Save America Ministries Viewpoint program on WGGM 820 AM (scroll to June 23, 2008)
Lay Renewal Ministries Encounter program on KSIV 1320 AM (scroll to June 13, 2008)
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Christian Foundations of a Free Nation: Independence Day “Good News on the Law”
By admin | July 3, 2008
Christian lawyer Stephen Bloom’s July “Good News on the Law” column from Good News Daily:
What does it mean to be an American? What does our nation really stand for? Why, even though some people around the world claim to hate us, are we still the place where so many from so many other places dream of living?
There’s no doubt that God has blessed the United States of America in an awesome way, and that he continues to do so. But with so much anti-Christian spin dominating our secular media and educational institutions, many Americans today might not realize that the U.S.A. was founded by men who unashamedly relied on God for his wisdom and protection.
So during this season when we celebrate our national Independence Day, let’s stop and re-examine our nation’s foundation, and let’s remember to thank God for allowing us to rise up and stand for freedom for more than two centuries.
As a lawyer, when I do research, I like to go back to the original sources whenever I can. In that spirit, let’s take a look at a few key phrases from the document that started it all, our American Declaration of Independence. These phrases might help explain why God has seen fit to bless our country for so many years!
This one is familiar to most of us: “We hold these truths to be self-evident, that all Men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.” Isn’t it interesting that, from the very beginning, our founding fathers humbly recognized God as the source of our rights?
Now, here’s a less well-known passage from the Declaration: “We, therefore, the Representatives of the United States of America, in general congress, assembled, appealing to the Supreme Judge of the World for the rectitude of our intentions, do in the name and by the authority of the good people of these colonies, solemnly publish and declare, that these United Colonies are, and of right ought to be, free and independent states.” Isn’t that an amazing plea? Our founders were prayerfully begging God to keep us on the right path, to keep our intentions for this nation pure!
And here’s one more, the final words of the Declaration: “And for the support of this Declaration, with a firm reliance on the protection of divine providence, we mutually pledge to each other our lives, our fortunes, and our sacred honor.” So from the very beginning, we intentionally entrusted this nation into God’s hands, relying by faith in his protection and guidance!
And that faithful spirit embodied in the Declaration of Independence was carried by the founders into our national Constitution as well, where our religious freedom was specifically and carefully singled out for special protection. The First Amendment to the Constitution states: “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press, or the right of the people to peaceably assemble, and to petition the Government for a redress of grievances.”
Many times we take our American rights to religious freedom for granted. But our rights to boldly proclaim the Gospel of Jesus Christ are something we should never take lightly. These rights to freely exercise our religion, these rights to freely speak about our religion on the public airwaves, these rights to freely publish our religious thoughts in a column like this, these are precious rights which thousands of heroic Americans have literally given their lives to protect for us. These rights to religious freedom are truly a sacred trust.
But in this “post-Christian era” in America, we find these rights (and the very spirit in which they were declared) under attack. And I wonder if we realize how fragile these freedoms are. In Canada, courts have already ruled parts of the Bible as illegal “hate speech” and, considering the trends in our society, I can realistically envision the day when the same thing happens here in the U.S.A. as well. The Bible contains truth and our secular mainstream culture often doesn’t want to be reminded of truth.
So perhaps, as we celebrate Independence Day this year, the prayer on our lips could echo the faithful spirit of our founding fathers: “With a firm reliance on your protection God, we pray for the U.S.A.”
Copyright 2008 - Good News Daily/Stephen L. Bloom
(Stephen L. Bloom is a Christian lawyer serving clients throughout Pennsylvania. He wrote “The Believer’s Guide to Legal Issues” (Living Ink Books) and frequently speaks on Christianity and law. Please note: This column contains generalized information only and is not intended as a substitute for the specific legal advice of your own attorney.)
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Believer’s Guide Book Tour 2008: Update #10
By admin | June 30, 2008
Steve’s update: My journey of appearances spreading the message of The Believer’s Guide to Legal Issues continues! Click here for future venues.
On June 29, I taught “Legal Advice Christians Should Refuse to Follow” at Reigles Bible Church (upper photo) in Millersburg, Pennsylvania, where I was especially blessed by the hospitality of Pastor Ben (middle), 
his lovely wife, Lori (right), and their entire church family.
And the week before, on June 22, I had the honor of preaching the message “How (Not) to Ruin Relationships and Destroy Churches” at both Sunday morning services at Trinity United Methodist Church (lower photo) in Walnut Bottom, Pennsylvania.
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Believer’s Guide Book Tour 2008 - Update #9
By admin | June 15, 2008
Steve’s update: My journey of appearances spreading the message of The Believer’s Guide to Legal Issues continues! Click here for future venues.
On June 13, I signed books for clergy and lay delegates at the Western Pennsylvania Annual Conference of the United Methodist Church, held at Grove City College. Thanks Brenda, Cheryl and Cokesbury Bookstore staff!
And on June 15, I completed teaching an adult Sunday School elective class at my home church, Grace United Methodist, in Carlisle, Pennsylvania.
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Believer’s Guide Book Tour 2008 - Update #8
By admin | June 8, 2008
Steve’s update: My journey of appearances spreading the message of The Believer’s Guide to Legal Issues continues! Click here for future venues.
On June 6, I spent a VERY busy afternoon signing books at Cokesbury Bookstore at the Central Pennsylvania Annual Conference of the United Methodist Church. Special thanks to Mona, Joyce and Gail from Cokesbury!
On June 1, I presented a workshop called “Higher Authority: Integrating Faith and Law Roundtable” as part of the National Faith-Based Service-Learning Conference at Messiah College.
And on May 27, I gave a talk entitled “An Alternative Approach to Legal Issues” to the members of the Kiwanis of Carlisle, Pennsylvania.
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Bringing Biblical Insight on Legal Issues to Christian Radio
By admin | June 7, 2008
Since the book’s release, Bloom has shared his hopeful vision of restoration, reconciliation and healing with radio listeners from coast to coast, including guest appearances on stations in Philadelphia (WFIL 560 AM), Pittsburgh (WORD 101.5 FM), Portland (KPDQ 93.9 FM), Colorado Springs (KGFT 100.7 FM), Carson City (KNIS 91.3 FM and stations across the Pilgrim Radio Network in California, Wyoming, Montana and Nevada), St. Louis (KSIV 1320 AM), New Mexico (KNMI 88.9 FM), and Central Florida (WMIE 91.5 FM), and on the Pennsylvania Family Institute’s “Common Good” program (broadcast on several stations in Pennsylvania and Maryland). Upcoming radio appearances are set for Texas (KBJS 90.3 FM), Minnesota (WWJC 850 AM), Missouri (KNEO 91.7 FM) and Pennsylvania (WQSU 88.9 FM), with more currently being scheduled (visit Bloom’s speaking and teaching website www.practicalcounsel.com for a regularly updated listing of engagements).
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