The Economics of Easter: Unraveling Economic Parallels

The Temple Cleansing and the Modern day Role of the Federal Reserve

As we approach Easter, a time of profound significance for many, it is crucial to reflect on the historical and economic context surrounding Jesus' cleansing of the temple, which marks the beginning of this holy week. This event, deeply rooted in religious symbolism, carries timeless lessons that resonate with contemporary governance and economic challenges.

Historical Context: Mark 11:15-18

Jesus entered the temple and began to drive out those who sold and those who bought in the temple, and he overturned the tables of the money-lenders and the seats of those who sold pigeons. 16 And he would not allow anyone to carry anything through the temple. 17 And he was teaching them and saying to them,

“Is it not written,‘My house shall be called a house of prayer for all the nations’? But you have made it a den of robbers.”

With Jesus driving out money lenders from the temple, an act laden with symbolic significance. In this passage, Jesus overturned the tables of the money-lenders and the seats of those who sold pigeons, teaching that the temple should be a house of prayer for all nations, not a den of robbers.

These events highlight the ethical challenges in sacred spaces, drawing parallels to modern governance issues. Just as Jesus confronted exploitation and corruption, today's leaders must address similar ethical lapses in economic stewardship and leadership.

Why Was Jesus Upset: During that era, the temple was utilized as a financial hub where trade and business transactions were conducted. Money lenders acted as currency traders, facilitating currency conversions for travelers needing half-shekels for tax payments. This system resembles today's banking practices, where substantial profits stem from low-risk or no-risk trading in foreign currencies, known as "currency arbitrage." These money lenders essentially operated as arbitrageurs, contributing minimal value to financial transactions while thriving in the complexities of international finance at the time.

The exchange of currency was managed by exchange bankers, responsible for converting foreign coins into local currency and vice versa. Travelers preferred larger denomination coins to avoid dealing with smaller coins.

This exploitative system became evident when worshippers, arriving to offer prayers, found their animal offerings insufficient, leading them to purchase additional animals from money lenders at inflated prices (inflation). This financial arrangement intertwined with Temple taxes, with the temple acting as a secure vault for various coins to conduct business.

Jesus' anger stemmed from witnessing common people exploited through unlawful taxation practices. Money lenders engaged in usury, charging excessive interest rates and inflating prices for goods sold to the less fortunate, effectively stealing from them. In a display of justice, Jesus confronted this corruption, overturning tables and driving out exploiters, emphasizing that the temple, meant for worship and prayer, should not be exploited for economic gain, especially at the expense of vulnerable members of society.

Contemporary Parallels:

The economic landscape today reflects a similar pattern of exploitation witnessed during Jesus' time in the temple. Much like the temple served as a center of financial activity, the Federal Reserve, America's central bank and custodian of the global reserve currency, the US dollar, wields considerable influence over currency valuation and interest rates. As the current Federal Reserve Chair Jerome Powell has stated, when the Fed buys government bonds, this increases the money supply, saying "we print it digitally" in a 60 minutes interview

This has significantly contributed to a national debt exceeding $34 trillion since the Federal Reserve's establishment in 1913. When the government's expenditures exceed its revenue from taxation, it results in a fiscal deficit, which is commonly addressed by securing funds from the Federal Reserve. This process entails the government borrowing money to cover the shortfall in its budgetary commitments. This trend intensified since 2020, with an additional $4 trillion was printed, resulting in a 33% increase in the total money supply from $16 trillion to $20 trillion today. These actions have resulted in significantly higher inflation rates, as reported by the Bureau of Labor Statistics (BLS), effectively acting as a hidden tax that disproportionately impacts individuals who do not own assets and those burdened with debt. This widening economic disparity is particularly concerning for individuals who may lack understanding of these economic mechanisms, leading to exacerbated social and wealth inequalities.

Economic Theory of Supply and Demand:

In economic terms, when the money supply increases without a corresponding rise in available goods and services for purchase, it triggers inflation. This phenomenon occurs because a surplus of money competes for the same quantity of goods, driving prices upward. Consequently, inflation undermines the purchasing power of individuals, posing significant challenges for those with fixed incomes and little to no assets. These individuals often find it increasingly difficult to meet their monthly expenses or make progress toward financial stability.

Tomorrow's Future:

The actions of Jesus confronting the money lenders highlights the critical need for integrity and accountability in today’s economic affairs. It calls for holding leaders accountable for ethical governance and prudent fiscal management. Both major political parties contribute to today's economic challenges, underscoring the need for bipartisan solutions rooted in transparency, fairness, and the pursuit of the common good.

Conclusion: As we commemorate Easter and its themes of renewal and hope, we must integrate principles of justice and compassion into our economic policies. This demands a steadfast commitment to transparency, fairness, and prioritizing the welfare of all citizens, not just a select few at the top. By learning from history and applying these lessons to contemporary challenges, we can strive for economic landscapes characterized by integrity, compassion, and shared prosperity.

Happy Easter to All.