The only way out of the current financial crises

Real productivity and growth only come about through hard work and toil
Rabbi Levi Brackman

This week has been historic. Two of Wall Street's largest investment banks, Merrill Lynch and Lehman Brothers, no longer exist and the largest corporate bankruptcy in history was narrowly avoided when the Federal Reserve stepped in to bail out AIG. Unfortunately the current crisis was inevitable and the on and off boom and bust of the last fifteen years has been as unhealthy for society as it was unsustainable.

People in the West have become used to prosperity without having to work hard for it. People were buying homes they could not afford and then selling them a few years later for a massive profit. Or they would take equity out of their vastly appreciating homes. All this easy money would then be used to buy new cars, expensive holidays and luxury goods.

Everyone was getting rich from appreciating home values financed by a mad mortgage schemes which was paying investors and brokers crazy amounts of money to make insane loans to unqualified people. It finally seemed like a free lunch really was available.

Anyone who has read the Torah knows that this is not the way it works. The poet in the Proverbs (14:23) said, “In every toil there will be profit, but a word of the lips is only for loss.” The Psalmist wrote (128:2),”If you eat the toil of your hands, you are praiseworthy, and it is good for you.”

The lesson is clear; the only way to reach the blessing of sustained success is through hard work. So when a book that tells us that we can get rich by only working five hours a week becomes a bestseller it is time to worry. Ultimately “man is born to toil" (Job 5:7) and without hard work we cannot succeed.

Replace entitlement mentality

The only time the ancient Israelites got something for nothing was when they were in the desert, after they were emancipated from Egypt three and a half thousand years ago, and they received bread from heaven known as Manna. When they were told that they would have to enter the Land of Israel they resisted because they wanted to continue living a life devoid of hard work.

As a punishment, some say for not wanting to involve themselves in hard mundane labor, they had to wander in the dessert for an additional forty years. This allowed the entire generation that held that faulty laidback, lazy mindset to die. It was the following generation that had learned that pivotal lesson that was able to enter the Land of Israel.

Over the last couple of decades Americans have become used to high living standards in exchange for relatively little work. People became complacent and lazy. Money was something that they expected to get rather than something they had to work hard for. An entitlement mentality became pervasive. This was clearly unsustainable and had to change. Why should there be jobs that Americans refuse to do? Since when is hard work humiliating? The opposite has always been true. The Talmud calls easy money “bread of humiliation” and deems hard work respectable.

The government can continue to deal with the symptoms of this crisis by bailing out companies that they deem too big to fail and by putting together multibillion dollar funds to buy toxic mortgage backed assets from banks and insurance companies. But the problem will return.

Ultimately real and sustained productivity and growth only come about through hard work and toil. Given the entitlement and lazy mentality that pervades, it is not surprising that the market has not had any persistent growth over the last eight years. In fact in January 2000 the market was worth more than it is today.

The economy will only start to really grow when the entitlement mentality is replaced with a hard work ethic. And we can’t afford to wait for a generation for this to happen—by then it may well be too late. Unfortunately judging by the populism being espoused by both presidential candidates we may have no choice.

Rabbi Levi Brackman is the author of "Jewish Wisdom for Business Success"