Looking for steady earnings

An underlying principle, or perhaps unwritten rule, of the stock market is that companies can and will continue to grow and produce more earnings. Sure a company may invest in infrastructure and post no earnings for a while, but if you want the stock price to soar, you need steady earnings.

The need to post impressive earnings quarter after quarter is more important now that many investors may own stock in a company for only a few days or even a few hours. An investor may play the stock market to swell his or her portfolio, without any interest in truly investing in a company.

This desire to invest in companies that will bring quick return on the investment creates a market-driven culture in which a company is only strong as its next quarterly earnings statement. It should not be surprising that corporations, like the now infamous Enron, want to cook the books so that meager returns are made to look like impressive profits.

Corporate heads are given a mandate to make the company perform well. Long-term interests of the company can suffer as CEOs fulfill this desire to wring out the most profit possible. You can’t get sentimental about the employees. The needs of the shareholders outweigh the needs of any individual worker, or even a few thousand workers. Lay off as many workers as the balance sheet demands to cut costs and increase profit.

What might a seemingly antiquated text like the Bible have to say about this frenzied desire for the perfect annual report? I think an interesting bit of teaching from the Old Testament offers a different perspective.

“When you reap the harvest of your land, do not reap to the very edges of the field or gather the gleanings of your harvest. Do not go over your vineyard a second time or pick the grapes that have fallen. Leave them for the poor and alien. I am the Lord your God” (Leviticus 19:9-10).

This bit of law is, of course, directed to an agricultural economy in which the poor have direct access to the fields, but the principle is instructive. Those in need could glean the leavings of the harvest and subsist off what the landowners left. It became a sign that you were a good person if you were intentionally sloppy in your harvesting so that the poor would be able to gather food in your fields.

The Old Testament book of Ruth tells the story of a foreigner coming to live in Israel, living off what she could gather for herself and her Israeli mother-in-law, Naomi. Ruth found that Naomi’s kinsman Boaz instructed his harvesters to leave something behind for the poor as they harvested. When Boaz noticed Ruth gleaning in his fields, he instructed his harvesters to leave even more grain behind than usual.

The story has a happy ending. Boaz marries Ruth and the poor woman from Moab’s future is secure once more. The book ends by telling us that Ruth was the great grandmother of Israel’s King David.

Notice what an important story this is for Israel. What if Boaz had not followed the teaching of Leviticus, teaching his harvesters to leave behind some grain? The unmarried foreigner Ruth would have had nowhere to turn for food. Israel’s greatest King would never have been born.

The story of Ruth held up the teaching from Leviticus. Those who are blessed with plenty should not wring out every last ounce of earnings, for to do so comes at the expense of the poor.

I know that the market-driven economy is very different from the agricultural economy of ancient Israel. However, I think this principle still applies. When we try to wring out every drop of profit, it will come at the expense of the least in society.

Corporate lay offs never seem to apply to the top brass in any company. Those large and ever increasing salaries are held sacred when it comes to searching for ways to trim costs. Instead, the people with the greatest need are the most vulnerable. It was so in an agricultural economy and remains so today.

            If profit is the greatest good, then corporations will find ways to eke out more profit. But this cannot go on forever. There is a limit to the growth as the economic growth comes at the expense of someone.

History has taught us that no great society can long stand when the rich get richer while the poor get poorer. The judgment against those who maximize profit without regard for the poor is hard-wired into the way the world works.

            Unbridled competition among companies is supposed to create the best economic system. Nice theory, but it doesn’t hold water if corporations never take into account the hidden cost to society.

We are reaping the harvest to the very edges of the field. One day we will have to pay the price.

(The Rev. Frank Logue is Pastor of King of Peace Episcopal Church in Kingsland.)       

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