Spending, The Crisis, And Idols

In recent years there was a move to focus Reformed and evangelical piety on “The Idols of the Heart.” Of course as one of those who agrees entirely with Calvin’s dictum that after the fall the “perpetual disposition” of human beings is to be a “factory of idols” it seems difficult to dissent from the new inquisition of the heart.1

Yet, we should observe that the fellow who gave us the dictum about our inclination to be an “idol factory” did not turn every sermon into an inquisition of the heart. This is perhaps because it was not a shock to him that we are idolators by nature. He did comment on it quite frequently, however. With that I wish to consider a popular idol that has caused quite a lot of trouble: the pocketbook and spending habits of the last 25 years or more.

One of the patterns that some economists have noted, in connection with the “Great Recession” we are experiencing, is that consumer spending continued to grow with very few pauses since 1980. [Disclosure: I’m not an economist. I was a political science major way back when but I read more Plato than von Mises.] At the same time, the savings rate dropped. Baby boomers (those born between 1946–1960) had come of age in the era of the credit card. Gone were Mom and Dad’s staid Diners Card. In came a plethora of cards and soon there were “Platinum” cards by which to measure one’s credit and affluence. Buy now, pay later. Cash was not king. Credit was king. Gradually from the 1950s it seems that we moved from being a savings-based economy to a credit-based economy. That move probably reached its apex in the Clinton-Bush years when credit card companies were throwing cards at consumers and, of course, lenders began throwing mortgages at people and then packaging them into “derivatives” to be sold in bulk to investors (backed by a AAA Moody’s rating).

Like everything in this world, credit has a natural market. Sometime after 2004, the credit market began to hit its limit. The mortgage-backed securities turned out to have been backed by overpriced mortgages (fueled by record-low interest rates) and, finally, the housing market began to tumble as interest rates rose on the adjustable mortgages. Home values plummeted (because of falling demand) and suddenly millions of home owners were “upside down” in their houses–and banks owned loans against these severely devalued assets.

We will leave it to the economists to sort out exactly what happened and how to deal with it on the macro level (though I am not sure that borrowing unimaginable sums against future earnings will solve the problem). Our interest here should be the degree to which Christians participated in the culture of credit. Could it be that our problem was not just an idol of the heart but an idol of the credit card?

Is not it true that during a couple of ostensibly “conservative” administrations that, in fact, we Americans were anything but conservative fiscally? I’m not speaking of tax cuts but of personal spending. We came to believe in easy money and high rates of return. I remember hearing someone once say, “You’re only getting 15 percent on your IRA?” That sounds pretty funny in a time when Treasuries are offering almost zero percent interest.

Did you know that, in Reformation Geneva, purportedly the birth place of free market capitalism, that interest rates were strictly regulated? It is true that the introduction of interest rates was a change in policy. Patristic writers generally discouraged lending money at interest and medieval canon law forbade it. The Reformation did allow the charging of moderate rates of interest but usury or unjust rates of interest were forbidden strictly and were a matter of moral and ecclesiastical censure.

This is not an attack on free markets. Generally, as a matter of natural law or creational pattern, markets do a better job of promoting freedom than command economies. In recent decades, however, it has not always been easy to tell the difference between a “free-market” economy and an economy grounded in a spending frenzy. Consider that, when the bad news of the current crisis began to settle in, one of the first responses by some was to say, “We must get people spending again.” Repeatedly politicians have yelled at bankers to begin “lending again” even if those banks are insolvent, i.e. out of balance so that further lending would only cause them to close their doors.

The prosperity that began in the 1980s continued more or less unabated until the recent crash. There were pauses along the way, but not even 9/11 stopped the momentum. Some writers speculated that we might have defeated the historic economic patterns. We knew how the economy worked. We had a system. We had overcome nature. Except that, as it turns out, the prosperity of the recent decades was largely fueled by credit—credit that assumes sufficient future wealth or growth in assets to be able to repay the debt. But consumer spending has outpaced growth in earnings. Remarkably, we have spent our Gross Domestic Product for the foreseeable future. (Savings have risen more sharply in the last few months than at any time since the 1950s. That’s extraordinary because, as many have noted for years, savings had dropped to record low levels.)

The spiritual question we must ask is what drove us all to the frenzy of spending that just ended? This frenzy was not only matter for “the culture” out there somewhere. The culture of spending was in the church. Why have “health and wealth” and “prosperity gospel” preachers flourished at the very same time our credit cards went gold and then platinum? Why was it that those middle-class suburban preachers whose attendance prospered in the same period were those who gave us relatively easy lists of do’s and don’ts instead of God’s impossible lists of do’s and don’ts? It was no coincidence that the phenomenon of the “mega church” occurred during this same period. It was no coincidence that, during the great prosperity of the last quarter century, in some segments of “evangelical” theology, we manufactured a manageable “God” who does not control the future and who is contingent upon our sovereign free choices.

Even Reformed theology, piety, and practice has not been immune from the effects of the prosperity gospel. While Robert Tilton and Joel Osteen were preaching happiness and prosperity—”$29.95, send now before midnight”—some ostensibly Reformed writers were pointing to a coming earthly “golden age” when things would just get better and better. Some of them predicted a coming crash, out of which would rise, phoenix-like, a golden age. It almost seemed that, despite the warnings by some bunkered down and hunkered down prophets of doom, when Y2K didn’t get us and then even 9/11 didn’t bring it about, we were invincible. It was no accident that, in this time period, Reformed congregations were convulsed by a controversy over the doctrine of justification. Are we really so sinful that righteousness with God is purely by the unearned favor of God or may we play a small but necessary part in being right with God?

The prosperity “gospel” of “better every day and every way” or the anti-Reformation message of righteousness “by grace, through faith and works” found a home in too many congregations where the old message of guilt, grace, and gratitude (the structure of the Heidelberg Catechism, 1563) gave way to messages about personal fulfillment and happy marriages or social transformation.

Could it be that we no longer defined ourselves as God’s fallen image-bearers redeemed by His unmerited favor alone, through faith alone in Christ alone who obeyed, died, and rose for us? It seems so. Who wants to talk about sin and salvation when the local clothier has Armani suits on sale? Who needs grace and a bloody Savior when AmEx just extended one’s credit limit to $50,000 enabling a down payment toward the purchase of that vacation home in the Bahamas? Who needs a resurrection when the plastic surgeon is offering monthly payments?

No one knows the future. It may be that, after the current “Great Recession” (or worse) America may again bounce back economically. We’ve had stock market crashes before. The Great Depression lasted 12 years (and, according to Amity Shales, was probably worsened by government spending). But whatever transpires, Christians, those who say they believe in a Creator, a creation, a fall, a holy Redeemer, grace, and life hereafter, should be chastened by the recent crash. We should take stock not only of our retirement accounts but also of our spiritual well-being. We should recognize to what degree we participated in the orgy of spending and why. We should admit that we have been too much “of this world” and not merely in it fulfilling honorable vocations to the glory of God and the well being of others. Contemporary evangelicalism (if there remains any such thing) is a creature of the culture of spending and credit. Now is the time to recognize that fact and repent of it.

We seem to have forgotten a simple but profound Christian truth that we cannot serve both God and mammon at the same time. Jesus said:

Jesus didn’t divorce the idols of the heart from the idol of the coin. Our idolatry of prosperity, of what others think of us, is reflected in our economic behavior. There is no question whether we have idols of the heart and mind. We manufacture them constantly. If we’re going to address the idols of our hearts, then we can start with the idols easy credit, big money, and never-ending earthly utopias.

The good news is that Jesus obeyed, died, and rose for the justification of idolaters, even for those who sold CDOs and for those who spent themselves into oblivion. He died for sinners and he still receives them freely. The banks may not be lending and the credit markets may be frozen, but grace is always free and life in Christ leads us to define ourselves not by the color of our credit card but by the immutable truth of the law and the gospel.


1“Unde colligere licet, hominis ingenium perpetuam, ut ita loquar, esse idolorum fabricam.” Opera Selecta, 3.96.28–30. Institutio, 1.11.8.

©R. Scott Clark. All Rights Reserved.


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  1. Dr. Clark,

    You wrote:

    That move probably reached it’s apex in the Clinton-Bush years when credit card companies were throwing cards at consumers and, of course, lenders began throwing mortgages at people and then packaging them into “derivatives” to be sold in bulk to investors (backed by a AAA Moody’s rating).

    Actually, the practice of bundling mortgages for resale to investors began long before the Clinton-Bush years. It’s known as the secondary mortgage market and should be distinguished from the practice of selling derivative contracts, which can sometimes involve mortgages as one of the “underlyings” on which a derivative can be based. The secondary mortgage market, on the other hand, was well-established when I worked in the savings and loan industry in the early 1980s, and actually went back to the Great Depression when the FNMA (Fannie Mae) was created. Without it, mortgage lenders would have no way to continue making loans after lending out a certain percentage of their assets (which, when we’re talking about banks, consists primarily of depositor’s funds).

  2. I don’t necessarily disagree with you here – but before you go throwing the law at your bretheren you might consider how the current economic situation has hit some of us. We’ve lost our jobs and can’t find new ones even if we spend hours a day applying and looking. Our family did save, were very conscious of our spending and in fact, because of that, by God’s great we aren’t yet in a dire situation (we have savings to live off of and a reasonable mortgage payment).

    However, when I look into the eyes of my 2 yr old daughter who doesn’t know whats going on I don’t need to be reminded of the law. I’m doing just fine at that on my own. Rather what I need reminded of from my christian brethren is the gospel. The law is beating me down now, but its the promises of God that are sustaining us. We truly are being forced to live now the promise driven life. But the sin and idol factory in my heart doesn’t make it easy. As such, my suggestion is to give the soothing salve of the gospel to your bretheren rather than the law and let the gospel promote the good works.

  3. One more note – somethings that have helped are groups like the WHI. When I called to cancel my membership – rather than lecture me on what got me into this mess, they instead graciously offered to keep sending my the CD’s and Modern Reformation until I was back on my feet. That’s the kind of thing that those of us in this situation need right now – and what better source of the gospel than MR and the WHI!

  4. Excellent post, RSC. This is why I read this blog.


    Don’t beat YOURSELF down with the Law, man! It sounds like all of this doesn’t apply to you in the way he meant it. Look at the Gospel at the end of the post!

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