Usury and Cascading Cross Defaults

Federal Reserve Chairman Greenspan introduced the term cascading cross-defaults.  The idea was should the failing system not be bailed out, rack and ruin would follow.  But we should know better.

The scene is after the Babylonian captivity, Ataxerxes has given Nehemiah leave to rebuild Jerusalem.  Reasonably enough, the peoples around Jerusalem are not pleased with this, and not unlike today, the Jews were half-armed and half-working.

Given these challenges and the wonderful opportunity at hand, what is the toughest problem Nehemiah faces?  Usury.  Nehemiah Chapter Five:

¹ And there was a great cry of the people and of their wives against their brethren the Jews.

² For there were that said, We, our sons, and our daughters, are many: therefore we take up corn for them, that we may eat, and live.

³ Some also there were that said, We have mortgaged our lands, vineyards, and houses, that we might buy corn, because of the dearth.

⁴ There were also that said, We have borrowed money for the king's tribute, and that upon our lands and vineyards.

⁵ Yet now our flesh is as the flesh of our brethren, our children as their children: and, lo, we bring into bondage our sons and our daughters to be servants, and some of our daughters are brought unto bondage already: neither is it in our power to redeem them; for other men have our lands and vineyards.

⁶ And I was very angry when I heard their cry and these words.

⁷ Then I consulted with myself, and I rebuked the nobles, and the rulers, and said unto them, Ye exact usury, every one of his brother. And I set a great assembly against them.

⁸ And I said unto them, We after our ability have redeemed our brethren the Jews, which were sold unto the heathen; and will ye even sell your brethren? or shall they be sold unto us? Then held they their peace, and found nothing to answer.

⁹ Also I said, It is not good that ye do: ought ye not to walk in the fear of our God because of the reproach of the heathen our enemies?

¹⁰ I likewise, and my brethren, and my servants, might exact of them money and corn: I pray you, let us leave off this usury.

¹¹ Restore, I pray you, to them, even this day, their lands, their vineyards, their oliveyards, and their houses, also the hundredth part of the money, and of the corn, the wine, and the oil, that ye exact of them.

¹² Then said they, We will restore them, and will require nothing of them; so will we do as thou sayest. Then I called the priests, and took an oath of them, that they should do according to this promise.

And where is the damage worse?  Jew on Jew exploitation.  That people sell their own down the river should be a given in all circumstances.  Jew v Jew, Christian v Christian, Moslem v Moselm, Irish v Irish...

So what is the solution?  General default.  Those who oppress lose only their power to oppress, and the oppressed regain their freedom.  The world does not end.

And what is the sanction for those who refuse to give up their usury?  Ostracization. Necessary and sufficient.  If you attempt to enforce usurious contracts, you'll starve to death.

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