Dave Ramsey and Rachel Held Evans

Rachel Held Evans noted that Dave Ramsey gets some things wrong about poverty. On my lights she’s partially right about where he’s wrong. She accused him twice in the article of the false cause fallacy. 

One need not be a student of logic to observe that Corley and Ramsey have confused correlation with causation here by suggesting that these habits make people rich or poor…

 

“This list simply says your choices cause results,” he said, again committing the false cause fallacy. “You reap what you sow.”

 

Now, Evans probably isn’t a student of logic, if her interpretation of Ramsey is correct, he is committing that fallacy. When she quotes him (the bold above) Dave pretty much admits that he sees pure causation there. Incidentally though, causation does imply correlation. That is what statisticians are often looking for. A meta-analysis or a simple thought experiment might show that it is logically possible (which Evans admits) for a person’s bad habits to make them poor. Because it is logically possible and is anecdotally true, it is understandable and perhaps somewhat wise for Ramsey to point that out. Sometimes the best we can do is say, “a large percent of smokers die of awful cancer than non-smokers rarely get…please don’t smoke (I picked this as an obvious example).” 

Nevertheless, Ramsey needs to imbibe more of the truth that sometimes, “Pro_13:23  The fallow ground of the poor would yield much food, but it is swept away through injustice.” Also, Ecclesiastes is clear that good things do not always come to those who work for them.

My biggest beef with Ramsey, though, has always been that the statistics he often provides people with are stats based upon what rich people who cheat to stay rich do. Note what Gary North (who though many do not like him, has a PhD. in Economics) points out that Dave bases many of his claims upon the book The Millionaire Next Door:

What’s wrong with this rosy picture? This: the book describes self-made rich men, and almost all of them made it by starting a business. What’s more, most of them declared bankruptcy once. Some did it repeatedly. They lived in terms of debt. They stiffed their investors, their bankers, and their relatives. Starting a business is risky. They passed to others as much of this risk as they could.

In the book, we learn that 85% of them had started businesses. To start a business, you must adopt one or more of these options to fund it: (1) borrow money from friends and relatives; (2) borrow money from a bank; (3) borrow money from customers (e.g., cash up front for a subscription); (4) put up your own money for a cash-only business (exceedingly rare the first time you start one); sell shares in your firm (even more rare). Once the business is profitable, you borrow money more to grow it. This is “the millionaire mind.” the authors’ title for their other book.

So, though Dave Ramsey, in the basics, can give really good advice. I’d say that he also has a tendency to uncritically use sources (which I suppose I could be accused of quoting Gary North). But, basing one’s economic paradigm off of people who declared bankruptcy (which Dave himself did) just seems unwise. The ultimate payoff of this criticism though is that Ramsey has made a fortune selling advice about how to get out of debt as a comeback from filing bankruptcy himself. That doesn’t make him a scam artist, it might actually lend credence to his advice. He cornered the market on a desperate need and started acquiring wealth (which raises its own problem…charging desperately poor people to help them get less poor might be suspicious…but it might also encourage them to follow through with their commitment to Dave’s program). 

But, back to Evans, she noted that she thinks that Dave Ramsey does not address the systemic issues that lead to poverty:

And throughout Scripture, people of faith are called not simply to donate to charity, but to address such systemic injustices in substantive ways.

The 17-year-old girl who lives in a depressed neighborhood zoned for a failing school system who probably won’t graduate because her grades are suffering because she has to work part-time to help support her family needs more than a few audio books to turn things around.

People are poor for a lot of reasons, and choice is certainly a factor, but categorically blaming poverty on lack of faith or lack of initiative is not only uninformed, it’s unbiblical.

The implication, again, is that Ramsey doesn’t do these things. I don’t know. He started a group called The Share it Foundation that exists to spread financial literacy. Hopefully that is meant to address those things. 

I also wanted to share some of my thoughts on Evans’ accusation that Ramsey teaches the prosperity gospel:

“There is a direct correlation,” he concludes, “between your habits, choices and character in Christ and your propensity to build wealth.”

For Christians, Ramsey’s perceived “direct correlation” between faith and wealth should be more troubling than his other confused correlations, for it flirts with what Christians refer to as the prosperity gospel, the teaching that God rewards faithfulness with wealth.

Ramsey’s particular brand of prosperity gospel elevates the American dream as God’s reward for America’s faithfulness, the spoils of which are readily available to anyone who works hard enough to receive them.

I don’t buy that. Claiming that Christian character correlates with an increase in material prosperity (which it historically has) it not claiming that faithfulness is rewarded with wealth. Evans made a big leap there. Paul gives advice that is meant to help people stay out of financial trouble, “Those who steal should not steal, but should work with their hands to give to those who have need (Ephesians 4:22).” Paul tells people to over come greed, to not be busy bodies, to work quietly, etc. Jesus does demand radical frugality and mercy to the poor, but Paul applies those sayings to the rich by admonishing them to share (1 Timothy 6:3-10). Paul warns against seeing Christianity as a way to get rich, but he also notes that Christian character (which includes contentment) leads to great gain. Now, Paul surely means the gain of life with God, but I don’t think he’s being ironic. I think he is saying that being godly really will lead to gain if you refuse to be greedy. 

God does not bless people with money; God blesses people with the good and perfect gift of God’s presence, which is available to rich and poor alike.

And that’s good news.

 

That is good news, but teaching people that getting out of debt often (but not always) requires a certain kind of character is not the prosperity gospel. It is wise Christian casuistry and has been for centuries.