The Ethics of contributing to a Run on the Banks

[steve-in-kville]

Living within one's means is a good thing. More people should try it.

There are many more who could (easily) do this, if only they would.
Madison Avenue is an effective siren.

Over the past three years, seeing and witnessing the politics behind the alleged food "shortages" regarding the pandemic, I have resisted going into panic mode, even though it appeared that all hope was lost.

I don't intend to make this political, but it involves aliens and the subterranean lizard people

[Josh]

As I read the news the last 4 days, I wondered if it is ethical for Christian to join a run on the banks. First of all it helps the bank to collapse. Secondly, it is taking money ahead of others, knowing that by doing so, others may not get their money.

Seems like a Christian who does so, should be willing to share what money he withdrawls with those who didn't get any.

I understand that everyone as SVP is now supposed to get their money, but what about situations where not everyone gets some as often happens elsewhere and in the US past?

Christians should hold “all things in common”, as the apostles and first converts in Acts did, and always be ready to help another person in need.

[Josh]

You planning to buy a house for cash? A 20% down payment on a $500,000 home is just $100,000.

In any event, if you have that much cash and are saving to pay for a home in cash, put it in a CD then, or a couple of them. 12 month CDs are currently paying about 4.75%. And you can't cash out in a bank run anyway. So your $250,000 locked into a 12 month CD will earn $11,875.

The point of my comment is that only people with single accounts that are massively larger than $250,000 need even concern themselves with bank runs anyway. For the rest of us mortals it is not much of a concern. Our money is safe anyway.

Ken, CDs can be withdrawn anytime - just subject to early withdrawal penalties. During a bank failure, deposits in a CD are not protected over the FDIC limit (although the government said last weekend they might start protecting 100% of deposits; it looks like we will soon have unregulated banking).

[Josh]

You planning to buy a house for cash?

Living within one's means is a good thing. More people should try it.

I bought some land with a humble house on it cash.

Currently, I regret not getting a gigantic mortgage at 2.5% on a 30 year and getting a lot more land and a much nicer house with a second trailer on it.

[Biblical Anabaptist]

You planning to buy a house for cash?

Living within one's means is a good thing. More people should try it.

25% of houses sold are sold for cash. Of course, this includes loans from "Uncle Joe" as well as well-heeled investors.

[Ernie]

You planning to buy a house for cash?

No, we will likely need to borrow some.

Living within one's means is a good thing. More people should try it.
I certainly agree.

[ken_sylvania]

The bigger question is whether it is "Christian" to have more than $250,000 of cash sitting in some bank.

Even most wealthy people don't have that much cash sitting around. The maybe own a home, have some investments in their 401(k) or IRA, maybe have some investments in stocks or bonds (or more likely stock or bond mutual funds), etc. But few people have a quarter of a million dollars sitting around in cash in bank account.

If tomorrow's payroll is going to be more than $250,000 then it seems to me it would be one's Christian duty to have more than $250,000 of cash in bank.

[Ernie]

Banks will collapse, and runs will happen regardless of what I do or don’t do.

This metality that many people have about ecology, helping the poor, preaching the gospel to those who have not heard, etc. "Whatever I do is not going to really matter in the big scheme of things so I might as well..."
Rather than looking at the part they play or could play in it.

I don’t think so. If it’s all about helping people, you are better equipped to help people with the cash you pull out, then you are just losing the cash.
Taking your own cash out of a failing bank, is not at all immoral, and leaving your cash in and losing it in a bank failure is not virtuous. I think this scenario is reaching too far into the ether, and trying to create a moral connection where there just isn’t one. Depositors have zero moral obligation to prop up failing banks. Banks have an obligation to keep the money safe, and give depositors back their money.

This is even different than buying toilet paper in a shortage. The money is already yours, the toilet paper is not.

Maybe being in business is unethical, because it is taking work from someone else; maybe having a job is unethical on similar grounds. Why do we work? For money. If it is ethical to work for money, it is also ethical to be paid the money. And it’s ethical to take money that is owed to you, whether from a job, or from where you’ve stored it in a bank.

If a customer is going bankrupt, but you are one of the last ones to be paid in full before he files, there is nothing wrong with being paid what was owed to you. You have no ethical obligation to refuse payment, and try to help the other creditors. You can if you want to. But there’s not an obligation to do so.

What if you were in a country where there was just enough food but no extra. Suddenly people start making a run on the grocery stores. Would you participate?

What if you were in a country where there was not enough food. People are standing in line to get food. Would you buy as much as possible knowing that some people at the end of the line might not get any?

Are these senarios different because you do not already own the food? You say you could share the money with others if the bank is going to fail and that seems logical. But it was the run on the bank that caused the bank to fail in the first place. I guess that is the issue I am pondering...

Josh believes the church should have all things in common.

Is there such a thing as a community having all things in common, both believers and non believers? Do we have community responsibility apart from church brotherhood responsibility?

During Covid, we went for toilet paper when there was a run on toilet paper. We generally stock more than we need for one week anyhow, so I would be glad to share with my neighbor if he had need. I just didn't want to be without any, for obvious reasons.
However, I have questioned whether I should have stocked more than usual, knowing that some would likely go without. If it happened again, I would likely order the large commercial rolls online or at a local business, rather than contribute to the run on regular toilet paper. Something about the "I got here first so I get what I want," doesn't seem to sit well with me.

As far as we know Jesus did not have any money in savings, which is why he instructed Peter to get money from a fish.

But Jesus did benefit from those who did keep money in savings. And Judas did carry a bag. Did Jesus want him to carry a bag, or should the money have been given away immediately?

Would Jesus urged his disciples to help make a run on a bank? Would he have done so himself if he had money in a bank?



Feel free to answer whatever questions you wish.

[ken_sylvania]

This metality that many people have about ecology, helping the poor, preaching the gospel to those who have not heard, etc. "Whatever I do is not going to really matter in the big scheme of things so I might as well..."
Rather than looking at the part they play or could play in it.

I don’t think so. If it’s all about helping people, you are better equipped to help people with the cash you pull out, then you are just losing the cash.
Taking your own cash out of a failing bank, is not at all immoral, and leaving your cash in and losing it in a bank failure is not virtuous. I think this scenario is reaching too far into the ether, and trying to create a moral connection where there just isn’t one. Depositors have zero moral obligation to prop up failing banks. Banks have an obligation to keep the money safe, and give depositors back their money.

This is even different than buying toilet paper in a shortage. The money is already yours, the toilet paper is not.

Maybe being in business is unethical, because it is taking work from someone else; maybe having a job is unethical on similar grounds. Why do we work? For money. If it is ethical to work for money, it is also ethical to be paid the money. And it’s ethical to take money that is owed to you, whether from a job, or from where you’ve stored it in a bank.

If a customer is going bankrupt, but you are one of the last ones to be paid in full before he files, there is nothing wrong with being paid what was owed to you. You have no ethical obligation to refuse payment, and try to help the other creditors. You can if you want to. But there’s not an obligation to do so.

What if you were in a country where there was just enough food but no extra. Suddenly people start making a run on the grocery stores. Would you participate?

What if you were in a country where there was not enough food. People are standing in line to get food. Would you buy as much as possible knowing that some people at the end of the line might not get any?

Are these senarios different because you do not already own the food? You say you could share the money with others if the bank is going to fail and that seems logical. But it was the run on the bank that caused the bank to fail in the first place. I guess that is the issue I am pondering...

Josh believes the church should have all things in common.

Is there such a thing as a community having all things in common, both believers and non believers? Do we have community responsibility apart from church brotherhood responsibility?

During Covid, we went for toilet paper when there was a run on toilet paper. We generally stock more than we need for one week anyhow, so I would be glad to share with my neighbor if he had need. I just didn't want to be without any, for obvious reasons.
However, I have questioned whether I should have stocked more than usual, knowing that some would likely go without. If it happened again, I would likely order the large commercial rolls online or at a local business, rather than contribute to the run on regular toilet paper. Something about the "I got here first so I get what I want," doesn't seem to sit well with me.

As far as we know Jesus did not have any money in savings, which is why he instructed Peter to get money from a fish.

But Jesus did benefit from those who did keep money in savings. And Judas did carry a bag. Did Jesus want him to carry a bag, or should the money have been given away immediately?

Would Jesus urged his disciples to help make a run on a bank? Would he have done so himself if he had money in a bank?



Feel free to answer whatever questions you wish.

I'm not so sure that it is normally bank runs that cause banks to fail - I think more often failures at the banks are what cause the bank runs.

I think that if it is good and right to have money in a personal bank account to start with, then it's good and right to pull that money out in case of a bank run.

[ohio jones]

What if you were in a country where there was just enough food but no extra. Suddenly people start making a run on the grocery stores. Would you participate?

What if you were in a country where there was not enough food. People are standing in line to get food. Would you buy as much as possible knowing that some people at the end of the line might not get any?

Are these senarios different because you do not already own the food? You say you could share the money with others if the bank is going to fail and that seems logical. But it was the run on the bank that caused the bank to fail in the first place. I guess that is the issue I am pondering...

The dynamics involved in food distribution and money supply are not entirely comparable. The immediate consequences of doing without are also quite different. In this case it appears that the depositors will be made whole. If there's no food, though, someone will be left without.

If a bank falls in a forest and nobody loses their money ...