This economic trend is an abomination

Unsplash/Pepi Stojanovski
Unsplash/Pepi Stojanovski

It transfers wealth from the poor to the rich. It distorts absolutely every aspect of economic life. It inflames social tensions. It helps birth totalitarian regimes and scapegoating of outsiders such as ethnic minorities. It destabilizes nations and it has collapsed empires. It is monetary debasement. The more familiar word for it is "inflation," and it is probably the dominant financial story in the news right now. A poll published recently showed that 87% of Americans are extremely or very concerned about inflation. It routinely is showing up at or the near the top of lists of concerns of consumers and business owners. The most recent survey by the NFIB, a small business association, showed such a strong spike in the number of businesses that are planning to increase prices that it was at the highest level in 40 years. Our central bank has decided to target the stability of prices using a specific way of measuring inflation. It is based on something called the Personal Consumption Expenditures index. This particular method of tracking inflation (there are several others) tracks the prices of things people actually purchase. It does this by shifting which goods it uses to match shifts in buying patterns. If we buy half as much beef and twice as much chicken as last year, beef prices will be counted less and chicken prices will be counted more this year. It also takes out high volatility items. This inflation rate is currently at 30-year highs. In other words, the Fed is even failing the particular inflation test it chose for itself.

Who does this inflation hurt? In some sense it hurts everybody, at least anybody who deals with dollars, because it means that the dollar fails to hold its purchasing power. Think of it this way. If I went into your wallet, which has 100 dollars in it, and pulled out a five dollar bill without your permission, we would all acknowledge that I stole from you. But if our government-sponsored Fed manipulated the value of the currency in such a way that your 100 dollars is now worth only 95 dollars, meaning your hundred only buys as much as 95 would have a year ago, you have likewise been robbed, but it is less visible. The hidden nature of this makes it more, not less, objectionable because it adds at least an element deceit to theft.

But inflation does favor some over others. Think of it this way. When the price of consumer goods goes up, those mostly negatively affected are those who spend the highest proportion of their income on consumer goods. What people are those? The poor. The higher someone's wealth, in general, the lower proportion of their wealth goes into spending on consumables. When someone lives "hand to mouth," this means they have to spend it all to live, because there is no margin. A five percent increase in inflation without an accompanying pay raise is a reduction in food or shelter or clothing by a 20th.

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The wealthy, on the other hand, have higher proportions of income in investment assets, and inflationary policies tend to drive up the value of such assets. How? Because the government doesn't just create new money and drop it from helicopters among the people (despite former Fed Chairman Bernanke's analogy about "helicopter money.") No, the Fed injects the money into the economy through the banking system (a big win for the wealthy banking industry) and, since the Great Recession via new policies called "Quantitative Easing," injects it directly into investment markets. In other words, the money is not injected directly into the economy; it is injected through the top of the funnel in the financial industry. This is the real "trickle-down economics." The bad news for the poor and the good news for the rich (in a twist on Luke 4) is that when new money is created those who receive it first get to spend (or invest it) before it trickles down to the rest of the economy, raising prices. So, the extra 5% of money goes to some people before it causes 5% inflation for everyone. It is only when the money has worked its way out to the rest of us that the money loses its purchasing power. For those who like detail, look up "the Cantillon Effect."  Fellow Christian Post business columnist Roger McKinney has explained this elsewhere (Should Bloomberg Exist? - Roger McKinney (

Perhaps this is why the prophet Amos denounces monetary debasement and enslavement of the poor together.

"Hear this, O ye that swallow up the needy, even to make the poor of the land to fail,

Saying, When will the new moon be gone, that we may sell corn? and the sabbath, that we may set forth wheat, making the ephah small, and the shekel great, and falsifying the balances by deceit?

That we may buy the poor for silver, and the needy for a pair of shoes; yea, and sell the refuse of the wheat?"

Amos 8:4-6

Why does "falsifying the balances" "swallow up the needy"? Because the needy never control the scales. Making "the shekel great" is done by whoever defines the value of the shekel, which in the context of Israel was the Temple authorities (who were to hold stable the value of "the Temple shekel.") But they did not hold it stable; they made it great. This is almost certainly behind Jesus' denunciation of the Money Changers, who were granted sole authority during certain holy seasons to offer shekels (the only money accepted by the Temple) in exchange for non-authorized pagan money. But they made the shekel great, meaning that under the fixed exchange regime, a worshipper, tither, or temple tax payer only got half as much shekel as they should have for their drachma. The money changers were like a human ATM which only paid 50 cents on the dollar. No wonder Jesus turned over the tables.

More detail available here (Jesus vs. The Moneychangers: Was He Anti-Finance Or Anti-Religious-Rip-Offs? - Jerry Bowyer ( and, if I might do a bit of cross promotion, here.

It should be no surprise that the Torah refers to unjust weights and measures (which certainly includes currency) as an "abomination" (Dt. 25:13-16), and Solomon, the wisest man of his time, agreed (Pr. 11:1). So did the prophet Isaiah (Is 1:22.)

Their warnings are as relevant now as they were then. As the prophet Amos said after the warning quoted at the beginning of this article:

"Shall not the land tremble for this, and every one mourn that dwelleth therein?"

Amos 8:8

I, for one, do not want to find out.

Jerry Bowyer is financial economist, president of Bowyer Research, and author of “The Maker Versus the Takers: What Jesus Really Said About Social Justice and Economics.”

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