Chapter 36: Bailouts

Christian Economics: Teacher’s Edition
It is as I told Pharaoh; God has shown to Pharaoh what he is about to do. There will come seven years of great plenty throughout all the land of Egypt, but after them there will arise seven years of famine, and all the plenty will be forgotten in the land of Egypt. The famine will consume the land, and the plenty will be unknown in the land by reason of the famine that will follow, for it will be very severe. And the doubling of Pharaoh’s dream means that the thing is fixed by God, and God will shortly bring it about. Now therefore let Pharaoh select a discerning and wise man, and set him over the land of Egypt. Let Pharaoh proceed to appoint overseers over the land and take one-fifth of the produce of the land of Egypt during the seven plentiful years. And let them gather all the food of these good years that are coming and store up grain under the authority of Pharaoh for food in the cities, and let them keep it. That food shall be a reserve for the land against the seven years of famine that are to occur in the land of Egypt, so that the land may not perish through the famine’ (Genesis 41:28 – 36).
AnalysisA bailout is a government program that transfers wealth from the government to an organization that has suffered a major setback. This text describes a bailout. But it was like no other bailout in history. It was a bailout of the entire nation. It was paid for by taxing the nation’s farmers. But since most Egyptians were farmers, this was not a bailout of a special-interest group at the expense of the taxpayers. It was a bailout of the whole nation.
There was a warning about the need for this bailout. First, there was a prediction of a series of events over a 14-year period. Then there was a plan to implement it. From the point of view of the masses, this was a bailout in advance. Joseph did not recommend that Pharaoh announce this prophecy to government officials. He did not tell them to tell the masses: ‘You’re on your own.’ He possessed unique information. He believed it. He was given a plan by Joseph. This was central planning by the state.
The bailout was not a free lunch. The masses had to pay for food with money. Pharaoh kept the money. In year two, the people’s money was gone.

This post was published at Gary North on July 14, 2017.