David Bahnsen Missed The Boat

29 12 2008

Back in August 2002, the Chalcedon Report printed an article by David Bahnsen entitled On Missing the Boat: When Well-Meaning Christian Economists Force Us to Look Elsewhere for Financial Advice. His point? That false financial prophets (Gary North, anyone?) were causing Christians to miss out on great kingdom building (and personal riches to boot!) opportunities in the stock market. It bears mentioning that Bahnsen was a “Financial Advisor” with UBS Paine Webber at the time. At the time, the S&P 500 stood at  916.07.

It closed this past week at 872.80. Let’s look back at some of David’s comments.

Most adults who were alive during the 1980s and 1990s saw a period of economic expansion and financial prosperity that may possibly be the largest of its kind in human history. Sadly, most Christian investors took no part in the gains and growth that the period produced. This is not just sad, however: it is intriguing. In this article, I want to explore why that is the case, and what attitude a Christian individual or investor ought to have towards his financial planning.

Financial prosperity? I don’t think so. It was a remarkable debt-fueled consumption binge, true enough. And surely, we bought more crap, more cheaply than ever before. It was a time of “irrational exuberance.” But prosperity it was not. Would that more Christians had declined to participate in the stock markets and home equity loans.

Several brilliant individuals have written about economics, investing, proper planning, etc. from a Christian perspective. … The large majority of Christians I have met throughout my life have not been successful in this endeavor especially in the Reformed circles I have grown up in. I firmly believe that this is largely due to a “head in the ground” mentality that has ignored the equity markets, prioritized survivalist nonsense over intelligent investing, and replaced rational concerns about certain economic fears with irrational concerns about the future of our nation and economy.

 There needs to be more written about the equity markets. Christians should know what companies they are investing in, and decline to invest inc companies whose “economic expansion” is based on disobedience to God’s laws (e.g. Sabbath-breaking, usury, theft via the State, promotion of adultery and fornication, etc.). I daresay that would rule out 90+ percent of all equities publicly traded. Christians should understand that the idea of the limited-liability corporation is evil (see R.L. Dabney on this topic, among others), and that they are responsible for the actions of companies that they own via equity securities.

Let me preface my next comments with this statement: We worship an awesome God, and He is certainly free in His own covenantal love and wisdom to do with our nation as He wills. However, if God wanted to destroy the American culture for its disobedience by causing a collapse of our banking system, or through any type of “sky is falling” scenario, I do not believe that our biggest concern should be whether or not we have gold coins in our sock drawers, as opposed to stock holdings in our portfolios. God is an awesome God, and He will deal with His people as He sees fit. Our responsibility, in the meantime, is to be “wise as serpents, and gentle as doves,” as the Messiah taught. It is not to tout the “nightmare of the month” every time we feel that an economic collapse is coming, render irrational panic in the hearts and minds of Christian investors, and keep our churches’ and Christian families’ capital forever on the sidelines. The pastors and authors who are guilty of this have done so to the detriment of many people and many churches. I do not want to depress those of you who have held savings bonds or gold/silver positions for the last twenty years, instead of participating actively in the American stock market, by showing a comparison of investment performance. The results would be unbelievable to you, and would probably only force you to commit various violations of the 10th commandment. I do, however, hope and pray that our next generation will not make the same mistakes.

… It is my opinion that active participation in the equity markets through dollar-cost averaging is the greatest means of obtaining wealth available to an investor. Running one’s own business with success can be a greater means (as can finding success as a professional actor or athlete). But for those in a bit more realistic place in life, an intelligent, safe, diversified, proper participation in the equity markets can be the greatest wealth-building habit in the history of America, especially in the twenty-first century.

This is sad in so many ways. Christians should indeed be “investing”, but the equity markets are a lousy place to do so, both from a pragmatic and a moral perspective. It is unfortunate that David did not and does not understand this, but perhaps a look-back can give us some perspective. David sought to chastise the Church while crowing about debt/inflation fueled stock market gains, but a little over six years later it appears that David was the one that missed the boat.




2 responses

3 12 2009
Random Notes in Early December… « North Country Farmer

[…] I thought you might get a kick out of this little trip down memory lane. Floyd remembers some of David Bahnsen’s really poor investment advice. Glad I stuck with the “gold in the sock drawer plan” […]

22 02 2010
Mr. David Rockett

sorry i missed all this…too busy buying silver!

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