Empty-Handed

I was disturbed this morning by an article I read on the “Inside Catholic” website. (http://insidecatholic.com/Joomla/index.php?option=com_content&task=view&id=4514&Itemid=48) The Rich He Hath Sent Away proposes that “there is much to celebrate in the collapse of Lehman Brothers and Merrill Lynch”. Lest readers believe he holds a vendetta against these former corporate behemoths, author Jeffrey Tucker explains why the current financial crisis is a benefit to everyone: “It shows the impossibility of holding onto wealth and power in a free society that is always in flux. And this is as it should be.” To support his argument he adds a theological dimension, quoting a section of the Magnificat and suggesting that we are witnessing its fulfillment:

"He hath scattered the proud in the conceit of their heart. He hath put down the mighty from their seat, and hath exalted the humble. The rich he hath sent away empty.”
My first complaint with Tucker’s assessment is theological. To cite Mary in this context is to misunderstand her confession. In the Magnificat she praises God for exalting those who are poor in spirit, those who approach Him as a child would. “Mighty” and “rich” refer to those whose pride is great and who either feel disinterest towards God or who refuse to approach him in a child-like manner.

My second complaint is economic. I’m sorry, but regardless of whether it is Lehman Bros, Merrill Lynch, Bear Sterns, or any other conglomerate, the rich will hardly “walk away empty”. Ever hear of the Golden Parachute?

Golden Parachute: A clause in an executive's employment contract specifying that he/she will receive large benefits in the event that the company is acquired and the executive's employment is terminated. These benefits can take the form of severance pay, a bonus, stock options, or a combination thereof.) (http://www.investorwords.com/2201/golden_parachute.html)
Neither will the rich investors who did business with Lehman and Merrill walk away empty since odds are they diversified their portfolios, insulating themselves from financial ruin. The current crisis will adversely affect the wealthy, but it is a wild exaggeration to refer to them as “empty”.

However, there are some who will walk away empty. The Lehman employee who earned corporate stock options as a reward for his years of service is one example, as is the mid-level investor who wasn’t wealthy enough to diversify her portfolio. No, Mr. Tucker, it is the working “grunts” who leave empty-handed, not the wealthy.

Case in point: my neighbor and his wife were born and raised in Brooklyn, NY. Thanks to his success as a broker, the couple bought a house and settled in a NJ suburb. Recently he sold his home and moved back to Brooklyn to rent an apartment. Why? It is difficult paying a mortgage and property taxes when you’ve just lost $160K in stock options and other benefits because your firm, Bear Sterns, has tanked.

The rich may lose more money in pure numbers, but when you calculate the percentage of a person’s total assets that are lost in this type of financial disaster, the impact to the mid-level employee and investor is much greater.

Perhaps a better biblical analogy to explain the effects of the Lehman/Merrill disasters can be found in Mark 11: 41-44
“And Jesus sitting over against the treasury, beheld how the people cast money into the treasury, and many that were rich cast in much. And there came a certain poor widow, and she cast in two mites, which make a farthing. And calling his disciples together, he saith to them: Amen I say to you, this poor widow hath cast in more than all they who have cast into the treasury. For all they did cast in of their abundance; but she of her want cast in all she had, even her whole living.”

Donald Tremblay