Posted by: Peter Laarman, sermon at First Unitarian Church, Los Angeles

Possibly you saw the photos this past week of the White House meeting between the President and the CEOs of a number of leading credit card companies. It was a classic White House photo op, only something went badly wrong. Mr. Obama’s senior economics advisor—Lawrence Summers—sat in on the meeting and occupied the far end of a table that had Obama sitting directly across from the lenders as he lectured them on their responsibilities. And Larry Summers was visibly sleeping during the meeting.

I thought about this, and I later blogged about it, because it the moment seemed to me so expressive of everything that alarms me about the new administration at its 100-day mark. They are doing most things right, except on the two defining moral issues where they seem afraid to really take on some well-entrenched enemies of the public good. The first issue is torture, where the Obama team says it doesn’t want the distraction of investigating and prosecuting Bush-era enablers of official U.S. state torture. And the second issue is banking, where the administration not only doesn’t want to prosecute bad actors from previous administrations but has continued the involvement of those very same bad actors in shaping national policy.

Larry Summers is a perfect example. He was Clinton’s treasury secretary, you recall, and in that role he promoted and helped engineer financial deregulation that allowed the banks to get drunk on subprime lending and allowed them to create exotic securities based on all those bad mortgages—what we now refer to as their toxic assets. Timothy Geithner, the current treasury secretary, may have been the former president of the Federal Reserve Bank in New York. But his more important past associations are with Citigroup and Goldman Sachs. And there are all kinds of obvious and troubling conflicts of interest for Geithner now as he administers nearly one trillion dollars in bank bailout funds in ways that so far have been much too kind and generous to the big investment banks that got the most drunk and took the worst risks and that now take our tax money and pretty much thumb their noses at us while continuing to do what they want.

So Larry Summers snoozed right through the President’s meeting with the credit card companies. Those photos expressed more eloquently than any words just how much Summers really cares about getting relief to everyday people in this country who have been gouged in recent months by huge hikes in credit card fees and penalties or who have been hit by surprise reductions in credit limits or even by surprise cancellations of their cards. 

This morning’s New York Times has a page one, column one story about how Wall Street pay is bouncing back—that’s the actual headline, by the way: “Wall Street Pay Is Bouncing Back.” The story goes on to say that the six biggest banks, all bailout recipients, have set aside over $36 billion in the first quarter to pay their employees. If that pace continues, the money set aside suggests that senior employees at many banks will see their pay—much of it in bonuses—recover from the lows of last year.

Now please join me in a little thought experiment. Suppose that everything in the financial sector could go back to “normal”; that is, suppose we could turn back the clock to 2006, to the peak of the subprime lending boom and boom times on Wall Street. Would we want to go back? That is the question I want to put before you, because the financial industry itself and the Obama Administration have all been talking about restoring normal activity in credit markets. I mean, how many times have they told us that the national objective in giving banks all that taxpayer money is to get them to start lending again.

I want to suggest to you that an economy dominated by debt is “normal” only in a society that accepts torture and accepts extreme inequality and injustice as “normal.” I want to suggest—and here I need to invite your indulgence, because some of you will not like this analogy—that allowing lenders to continue doing what they now are able to do to poor folks through payday loans is not that different from allowing those same poor folks to be waterboarded repeatedly. In each case, the infliction of intolerable pain is left to the tender mercy of a ruthless and unaccountable power.

Allow me to offer a little background on how predatory lenders became the most powerful force in our society. As recently as the 1980s, banking and credit were a hefty part of the economy but they did not dominate. It was actually the Clinton years when they really bulked up, so that by 2003 they had doubled their share of national economic activity to nearly 40 percent of Gross Domestic Product. And, as you know, along with this sector’s growth came greatly increased ability to hire lobbyists and make strategic campaign contributions and thus win ever-more-favorable treatment in Washington and in the state capitals. Without their political enablers, they could not get and keep the kind of power they still enjoy.

How did the bankers and lenders get so fat so fast? The main trigger goes back even farther, to a 1977 Supreme Court decision that effectively ended state limits on usury. The old standard was a nine percent cap on interest. States decided that a nine percent return on investment was quite adequate. It compares favorably to good rates of return in other industries like manufacturing. But when the Court said that national banks cnnot be bound by state-level interest caps, obviously a wildly profitable new frontier was opened up. If I’m an investor, why would I be satisfied with an eight or nine percent return from a manufacturing company when Bank of America or Wells Fargo is able to generate profits of 30 percent or more from lending money? Making money from money: it had always been a good line of work, but after 1977 it became a fabulous line of work—and the only line of work sought by many of our brightest young people.

After usury became completely legal, capital just gushed into the financial sector. And the financial sector in turn began pushing more and more debt onto working people who, by coincidence, needed more and more credit during those years beginning in 1977 because their wages were flattening out. Their wages were flattening out, in turn, because relatively good-paying manufacturing jobs were disappearing in this country.

Do you see a pattern here? Thomas Geoghegan, who wrote a brilliant essay on this topic for Harper’s magazine this month, says that, in effect, workers traded their union cards in for credit cards over the past 30 years: that borrowing heavily, along with the massive entry of women into the workforce, was the only way people had of maintaining a middle-class lifestyle during a time when union bargaining power was effectively destroyed and only the very top of the income scale was actually gaining ground.

So banking—or, more accurately, lending—got very big very fast and with a lot of help from some of the same senators and representatives who now make speeches for the cameras about how Main Street needs relief. (Their heads should explode from the sheer hypocrisy of that, by the way.)

Apart from the staggering interest rates they can now charge, what is different about banking today from the banking of decades past is that, nowadays, banks don’t want to see loans repaid.  Possibly you remember Mr. Potter, the beetle-browed banker so wonderfully played by Lionel Barrymore in Frank Capra’s film, “It’s a Wonderful Life”? Mr. Potter’s obsession was with getting his money back: getting people to repay the principal on their two percent loans.

Today’s bankers—say, Jamie Dimon of J.P. Morgan Chase or Ken Lewis of Bank of America—they don’t want us paying back the principal. Heck no: not when they can collect the kind of interest and fees they harvest now by keeping us saddled with infinite debt.

I suggested earlier that holding people down in debt is actually a form of violence. I even compared it to waterboarding. I need to say more about that, because that connection between violence and predatory lending is what makes pushing back against the banks a compelling religious issue.

The religious traditions we inherit are very clear about the connection between unfair lending and violence. The Bible’s liberation narrative, for example, has everything to do with abolishing debt servitude and debt peonage. Hoarding resources, only to make others pay a premium price for accessing those resources, is a kind of primal sin, as we see in the story of the God’s giving manna from heaven to the newly-freed Israelites. The manna signifies very clearly that the purpose of economic organization in a moral society is to guarantee enough for everyone, not to create opportunities for the strong to exploit the weak.

But the Bible and the Abrahamic faith tradition doesn’t stop with this first lesson in shared abundance. The implied connection between private accumulation and violence is made more and more explicit as the history and the testimony unfold. So, for example, the weekly Sabbath and also a Sabbath of years are instituted for the express purpose restoring right relationships between people and land, people and animals, and people and other people. And then finally there is the great Jubilee year—the 50th year—during which all concentrated power and wealth are to be dismantled and redistributed.

Did economic oppression continue in ancient Israel despite these prescriptions? Of course it did! Otherwise why would the prophet Isaiah be crying out, in the eighth century: “The spoil of the poor is in your houses; what do you mean by crushing my people—by grinding the face of the poor?” Otherwise why would Jesus, in the crowning act of his public ministry—the act that marked him as a target for state torture and death—overturn the tables of the lenders within the courtyard of the Jerusalem temple? And what does Jesus say as he drives out the bankers—using a home-made whip, according to one gospel account? He quotes Jeremiah: “ ‘My house shall be called a house of prayer’;  but you are making it a den of robbers.”

That word “robbers” is important: taking accrued interest is, in biblical terms, a form of theft. And, in the contemporary American context, it is a form of theft that especially wounds people of color and communities of color. I think you know this already, but in case you do not, let me spell it out. There’s a reason why the payday loan stores are thick on the ground in South Los Angeles or in any area with large numbers of struggling people of color. There’s a reason why African Americans were especially targeted for subprime mortgages.

I had an interesting conversation about this around a year ago with a young African American graduate student in Atlanta. She was writing her Ph.D. dissertation on sharecropping, and I happened to mention—in a speech to a progressive Christian conference—that predatory lending is way of maintaining the sharecropping economy in another guise. I said that “plantation capitalism” really is a good descriptor for the contemporary American economy. It doesn’t matter that the head of American Express is a Black man, or that until last year the head of Merrill Lynch was a Black man. Oppression is oppression is oppression.

And let me say also, because I think liberals find this so hard to deal with, that in this case it doesn’t matter that the President of the United States is a Black man. Oppression is oppression is oppression.

President Obama has a perfect opportunity right now—in a moment never to be repeated—to push back against the predators, to use popular anger against banker greed and banker incompetence and banker arrogance to put in place real limits on their power and put in place real safeguards against future abuses. He could drive the moneychangers from the inner courtyard of democracy’s temple. This is not his natural inclination, however. He is not spoiling for a fight against the money power, the way Franklin Roosevelt was spoiling for that fight in the 1930s. Obama is a technocrat. I think he is hoping against hope that the bankers won’t continue to embarrass him by showing that they haven’t changed one bit. He will be disappointed! Worse, the rage that should be directed against the malefactors of great wealth could end up being directed at him. Fascists-in-waiting will know exactly what to do with the situation.

The President quoted Jesus recently in a big speech about his budget priorities. He said that America needs to rebuild its economy on a foundation of solid rock, not of shifting sand. That’s Jesus in Matthew 7: you can look it up.

Well, my friends: Wanting to get back to business as usual with the banks occupying the very center of the economy is building our future on a foundation of sand.

I don’t think it’s too late. I think that with sufficient public outcry we could still turn it around and build a moral economy for our children and our children’s children. But it’s up to us in the progressive religious sector, along with our allies in the labor movement, to raise that hue and cry and to create an irresistible movement for fundamental change, for change we can believe in.

Loan sharking used to be a mafia business that was held in public contempt and punished. When loan sharking becomes a whole nation's signature business—a business powerful enough to control a significant part of the government itself—should it be held in any less contempt?

I’m just asking. The one thing I know is that we who consider ourselves progressive and religious definitely have a dog in this fight.

Let’s not miss the moment.