Can You Guess Why James Lileks and Gates of Vienna Are Alike? Sure You Can...

Well, when it comes to Sharia finance, neither of them have a fuckin' clue. That's one reason.

And neither seem to understand the value of fact-checking. That's another.

Not that a couple of details like those would stop either of them from spouting on the subject, mind you.

From the noted counterjihadist Baron Bodissey's Sharia Financing in Minneapolis? at Gates of Vienna:

Thanks to the alertness of James Lileks, we now know that Sharia finance - loans made without interest, as prescribed by Islamic law - is being officially promoted by the mayor of Minneapolis.

And as the Baron goes on to note, Lileks is outraged:

Unless no-interest business loans are available to religious believers whose doctrines do not forbid interest — not to mention anarchists — this would seem to be Flamingly Unconstitutional, to use the legal term. Does one have to prove one holds this particular religious belief? Would they bring in someone to test you? It seems absurd to expect the government to validate your piety to make sure you qualify for benefits.

And since Lileks is outraged, Herr Baron decides he'd better get outraged as well:

Sharia-based finance is rapidly gaining ground in the United States. The most effective means to combat it is to denounce it vigorously, loudly, and repeatedly as blatantly unconstitutional.

It's pretty clear from what both Lileks and Baron Bodissey have written that they are assuming that Sharia financing equates to "no cost" financing. They both assume that "no interest" financing means that Muslims will have the use of these city monies free of charge. And, just to make sure we understand the situation, they both clearly assume that such "no interest, no cost" financing will provide an unfair (or "unconstitutional", as they both so charmingly assert) competitive advantage to the business interests of The Muslim Menace™.

There's only one problem with this: They're both dead wrong.

Had either James Lileks or Baron Bodissey googled "Sharia finance" and spent, say, twenty minutes reading several of the many links provided on page one, our intrepid journalist and our equally intrepid counterjihadist would have discovered that "no interest" Sharia finance does not equate to "no cost" non-Sharia finance, and that both of them were completely, totally and embarrassingly wrong in their respective hyperventilations. But as we all know, saving the world from The Muslim Menace™ can really eat into your free time if you let it, so sometimes something has to give… In this case, as in most, what actually does give is any semblance to factual accuracy.

I now understand why Lileks was so desperate to avoid returning to reporting news for a living.

Here are the facts:

Islamic law requires three elements to be present in any financial contract to qualify as Sharia-compliant:

1) All parties share in the profits and losses associated with the transaction,
2) Investors in the transaction cannot charge interest, and
3) Uncertainty (returns determined by possible future outcomes) is prohibited in the terms of the contract.

(Other elements, such as prohibited investments (haram) and form/elements of Sharia-compliant contracts need not be addressed here.)

The key to understanding Sharia financing is this: Muslims believe that money, in and of itself, has no value. All value derives from trading, and the risk associated with trading. Therefore, making money from money is prohibited because it is viewed as being a risk-free transaction with unearned reward. So, for any transaction to meet the requirements of Sharia financing, it must be structured in a way that risk and reward are fairly shared by all parties to the contract. Thus, where the Western investor would receive interest income, the Muslim investor would receive a stated portion of the profit or loss. Where the Western borrower would pay interest, the Muslim would pay a stated portion of the profits (if any) of the transaction.

The bottom line is this: When the mayor of Minneapolis stated that the city would make available "alternative financing loans with no interest to business owners whose religious beliefs restrict them from receiving traditional interest-based financing", what he was not saying was the Muslim business owners would receive "no cost" loans. What he was saying is that they would be receiving traditional Islamic financing where profit-sharing is substituted for the paying of interest. Not that either Lileks or the Baron would know this, but what the city will most likely offering is a Murabaha contract, which Westerners usually consider to be a form of cost-plus financing, through a third-party agent.

In any event, it's clear that neither James Lileks, professional journalist, nor Baron Bodissey, fearless counterjihadist (whatever the fuck that is) could be bothered with getting their facts straight before wailing the wail of impending doom before the sinister forces of The Muslim Menace™. Then again, as neither Lileks nor the Baron have any grounding in Sharia law, banking systems or international finance, it's completely understandable that they'd fuck this story up from top to bottom. After all, these are men who are far more interested in stoking the wellsprings of their own paranoia than actually coming to an understanding what actually does, or does not, constitute a credible threat to either themselves or us.

In other words, they're Pudknockers. And that's the primary reason why these two are alike…

An Aside: I find it amazing that someone (the Baron) who co-authors a blog on the apolcalyptic threat that is Islam doesn't have the faintest idea of what constitutes Islamic finance. Makes you wonder just how much he knows about anything else connected with Islam, doesn't it? And I don't know about you, but knowing he couldn't tell Sharia finance from the South of France doesn't exactly inspire any confidence in moi that he's gonna get The Muslim Menace™ under control any time soon, either.

Another Aside: Two test questions: Anyone want to guess how many U.S. companies doing business abroad are using Sharia-compliant financial instruments on a routine basis? Anyone want to guess how long many of these companies have been using said instruments? If your answers aren't "thousands" and "decades", you just flunked the test. So by all means, get all flustered about the threat of Sharia finance...

A Note To My Friends At GulfCoastPundit: I see I have several folks claiming my assertion that the Sharia financing offered by the City of Minneapolis isn't "no cost" is just an example of me running my mouth. Sorry, kids, but Dennis - unlike Lileks and the Baron - actually does his fucking homework. Here is a link to the City of Minneapolis web site page that explains the Sharia finance program in detail. It is "low cost", not "no cost", and mirrors the City of Minneapolis' non-Sharia 2% Revolving Loan funding that is available to dhimmis. Remember this: What I'm interested in is facts, so before you accuse me of not doing my homework, make sure you've done yours. I smoked Michelle Malkin's, Charles Johnson's, Markos Moulitsas', Duncan Black's, Josh Marshall's and Ed Morrissey's asses over Dubai Ports World... I'll be more than happy to smoke yours over this.

Yet Another Aside: I brings a tear to my eye to note, with relief, that my old pal James Wolcott has linked to me one more time. It's been so, so long. I'd come to the conclusion he'd tossed me aside for another bad-tempered, foul-mouthed ex-neo-con...

Another In A Series Of Asides: AM I THE ONLY PERSON IN THE BLOGOSPHERE WHO UNDERSTANDS THE CONCEPT OF FACT-CHECKING?

I see one of Gates of Vienna's dimwit commenters has come up with a truly substantive criticism of ol' Dennis, and that one of the commenters at Gulf Coast Pundit has picked it up and repeated it as if it were gospel. Here it is:

I haven't looked at Dennis the Unpleasant's blog for a while, but I recall him gloating that his numerous muslim Somali clents know him as 'Mr. Green' on account of the large number of greenbucks that the Peasant manages to extract from the US government and other agencies on their behalf.

IOW a really principled individual.

Dumb motherfuckers.

Here's what I actually wrote:

I’ve even acquired a nickname: I’m “Mr. Green”, because I’m the guy who writes the checks...

The link to my post is here. It's worth noting that nowhere in that post, or any other, do I claim to be helping the Somalis acquire funding. There's a reason for that: I don't do grant-writing. Never have. Never will. All of the funding the Somali Community Assocation had during my association with them (Federal, Franklin County and City of Columbus) was in place prior to my hiring.

What I was talking about, and what is abundantly clear in my post, is that I physically prepared their checks... their payroll checks. That's why I was "Mr. Green". So what we have here is some guy who doesn't like what I've written about Lileks and the Baron deciding to damn me for something he half-remembered (incorrectly) I wrote, and another guy who didn't like what I wrote about Lileks and the Baron picking it up and repeating it. Without checking. Without verifying. Good job, both of you... It's just about what I would have expected from a couple of dumb motherfuckers: Failing to fact-check your criticism of someone checking facts to prove you don't know what you're talking about. Guess you showed me.

Comments

[Mike C.]

Completely and totally out of my field of expertise (such as it is), but even I knew that Sharia-compliant lending and banking was one of those "for profit deals." This isn't rocket science. Nobody funded those impressive bank buildings in Dubai just as a hobby.

[Flyby Reader]

"he couldn't tell Sharia finance from the South of France . . ."

Heh. Lines like that are just one reason I keep coming back here . . .

[2BrixShy]

Well written, well researched, outstanding conclusions reached. What in Hades' name are you doing with a blog?

Had a question... does the Sharia loan agreement spell out how "profit" and "loss" are to be derived in the venture that the loan is for? Not asking to be snotty, just wanting to expand the understanding. Thinking that as an accountant, you'd have this one nailed down.

Too bad about Lileks though... always thought he was fairly vigilant with his research, but we ain't talking obscure movies hideous food or matchbooks here. Live and learn, I suppose.

[Dennis The Peasant]

2Brix-

Two of the required elements of a Sharia-compliant financial contract are that the contract explicitly state the amount of profit or loss assigned to each party of the contract, as well as exactly how profit or loss will be measured. In practice, it isn't all that uncommon for the contract language on the subject of profit/loss measurement to be very, very detailed.

[2BrixShy]

Cool... sounds like they're just as cutthroat in business (if not moreso) than us greedy decadunces in the West- they just go about their bidness differently.

Thanks for the update.

[Tim Worstall]

And for the history geeks: Sharia finance isn't a million miles away from the way that the Catholic Church thought that such contracts should read back in the medieval ages. "Usury" to us now means excessive interest. To them then it meant any. (Which is one reason the Jews were the bankers....and that was a reason for a good many of the pogroms. Often easier to kill your banker rather than pay back the loan.)
The sort of contracts that St. Thomas Aquinas thought fair and appropriate would, possibly with very minor changes, be Sharia compliant.

[Tim Worstall]

Of course, Aquinas could be a bit of a dipstick (money does indeed have a time value) but here's some Wikipedia:
http://en.wikipedia.org/wiki/Thought_of_Thomas_Aquinas_Part_I

"The issue was never as clear as the stance Aquinas took would indicate. From Pope Gregory IX (written about 1241, when Aquinas was 16 years old): "He who loans a sum of money to one sailing or going to market, since he has assumed upon himself a risk, is not to be considered a usurer who will receive something beyond his lot. He also who gives ten solidi (a monetary unit), so that at another time just as many measures of grain, wine and oil may be paid back to him, and although these are worth more at the present time, it is probably doubtful whether at the time of payment, they will be worth more or less, for this reason, should not be considered a usurer. By reason of this doubt he is also excused, who sells clothing, grain, wine, oil, or other wares so that as a set time he receives for them more than they are worth at that time, if however, he had not intended so to sell them at the time of the contract." (See Denzinger, p.178). In other words, if the lender of the money "assumed the risk" ("assumpsit" in Latin), along with the borrower, it was not usury.

A century earlier, in the Second Lateran Council, (Second Council of the Lateran), under the aegis of Pope Innocent II (1139) called the practice of loaning money "detestable and shameful... insatiable rapacity of money lenders, forbidden both by divine and human laws throughout the Old and New Testament, we condemn, and separate from the ecclesiastical consolation..." (Denzinger p.148-149).

The Council of Vienne (1311-1312) under Pope Clement V declared: "If anyone shall fall into that error, so that he obstinately presumes to declare that it is not a sin to exercise usury, we decree that he must be punished as a heretic." (Denzinger p.189). The distinction between usury and putting money out while "assuming the risk" was not mentioned. However, it could be argued that any time one assumed the risk, it was not considered usury."

Not a huge difference between that and Sharia Law. Not hugely surprising either, as both are (so I'm told) based on Aristotle.

So, Dennis, when are you founding this fact based intertubes thing and when you do, may I join?

[Dymphna]

Merry Christmas, Mr. Peasant.

And may your new year be filled with more pleasant tasks than having to read Gates of Vienna.

It does get old, doesn't it?

[Dymphna]

Oh, I forgot -- if you just put up our blog name with no link, why I'd never know you were over here gnashing your teeth.

When I see your URL in Sitementer, I figure you've gone into vitriol mode again, so my curiosity bids me check out your latest vitriol.

I rather like this one. In fact, I think it deserves a post.

It is good when we and our readers can be educated out of our ignorance and since you seem to want to do that here for *your* readers, I figure, why not share the wealth?

Blessings and abundance in the coming year.
__________

Your commenter's history lesson re usury is a good one. The Catholic Church conveniently changed the rules re usury when they had to finance the crusades. If memory serves, it was Urban II who gave his ecclesiastic blessing on the change.

However, I disagree that the pogroms were necessarily connected. They didn't need an excuse to start killing the Jews; they simply did it.

Makes one want to be reassured that one's nation is never designated as "The Chosen People."

[SallyVee]

I see you're in a very Christmas-y mood today Dennis. There's quite a bit of sass under the babushka. Enjoyed reading your comments even tho I don't know a dang thing about financing, Sharia or otherwise. What is the precise meaning of Pudknocker?

[Dennis The Peasant]

To All-

It's Christmas 365 fuckin' days a year here at Dennis the Peasant.

SallyVee-

To quote Pancho Barnes in the movie The Right Stuff: "We got two categories of pilots around here. We got your prime pilots that get all the hot planes, and we got your pud-knockers who dream about getting the hot planes."

Dymphna-

This isn't about starting a pissing match. It's about the Baron failing to the rather minimal amount of research to make sure he was factually correct in his assertions on the subject. You spent weeks damning Charles Johnson for failing to get his facts straight, right? So why shouldn't those who read your site (including me) hold you to the same standard you use to measure others?

I linked to your site for a specific reason. I knew you'd see the incoming hits and check out why they were coming. I wanted to see if you guys had the integrity to admit your error and correct your post. If you're going to write a post about anything, why not just do one correcting the post you've already got up? Forget about me, isn't accuracy what your readership deserves? Or is it a one-way street?

[ech]

If you read Lileks' post, he's not against Sharia Banking per se, just that it is only available to those whose religion prohibit paying interest. That's what's Flamingly Unconstitutional.

[Marinetbryant]

First time commenter on a second visit. You are funny as all get out and write pretty good, too.

I think the main point is Islam getting a foot in the door in order to do whatever wudu those folks have in mind. If you are doing business in the ME it would be reasonable to do it their way, sharia(?). But you do business here, well....Of course, if one is in the multi-culti, surrender at all costs crowd I can see why they would accept this idea.

Just curious, why the head wrap? If it's heritage or culture I might get one since being caucasoid and Christian I can't have a culture or heritage.

Keep up the good work, though. I do enjoy your sight, in a masochist kind of way. That's a joke son, I say, that's a joke.

Tom

[Ernest T Bass]

So government should bend over backward to accommodate religious dogma? Wow. That's one heck of an about face. Where's the separation of church and state mob?

This is just more multi-culti hypocrisy and stupidity.

[Dennis The Peasant]

ech-

If you follow the link I provided to the City of Minneapolis web site page that explains the program, you will find that the Sharia-compliant funding is available to both Muslims and non-Muslims. Per the City of Minneapolis:

"The Alternative Financing Program is available to Muslims and non-Muslims alike."

Which you, James Lileks or Baron Bodissey would have known if you, James or the Baron had bothered to actually read the information provided by the City of Minneapolis about the program...

Ernest-

Why wouldn't a government entity strive to be as helpful and accommodating as possible to the largest number of its citizens as possible? Given that the program is open to all, irrespective of religious affiliation, I fail to see how this qualifies as "hypocrisy and stupidity". Then again, I'm a dhimmi...

[Peter vE]

So government should bend over backward to accommodate religious dogma? Wow. That's one heck of an about face. Where's the separation of church and state mob?

Not to get too pedantic, but perhaps you could point out where in the post DtP advocates government bending over to accommodate religious dogma? This post is part of Mr. Peasant's long running battle against fact free blog posts, especially by the "newest media". Perhaps you have confused this blog with Mike's place.

[lowandslow]

Where's your tongue lashing for Mayor Rybak? After all it was his 2008 Budget address the specifically stated "alternative financing loans with no interest to business owners whose religious beliefs restrict them from receiving traditional interest-based financing."
I guess it was Lileks and GoV mistake to assume the Mayor meant "kinda sorta no interest loans".

[Dennis The Peasant]

lowandslow-

I'd be the last person on Earth to argue that the speech wasn't misleading.

However, the bottom line here is that James Lileks is, in theory, a "professional" journalist. What he's supposed to do, as a matter of professional due diligence, is fact check the information he is provided. Especially when he's preparing to accuse the mayor of subverting the constituion. Right?

As for the Baron... Well, isn't he supposed to be one of those "guys in pajamas" sitting around fact-checking the shit out of MSM folks like James Lileks?

The mistake wasn't what Lileks and the Baron assumed; the mistake was that they failed to test their assumptions for factual accuracy.

[Mike C.]

Mr. D.

Now, don't get all huffy at the GCP discussion. After all, it caused you to post a fuller explanation, which is appreciated. Some at GCP happen to like reading your posts. Some don't (or at least with limited exceptions, and I'm sure you can guess what those are.)

In any case, I thought your post and follow-up were good.

[Dennis The Peasant]

Mike C.-

Actually I was just flat-out cranky yesterday morning. It happens. I appreciate you linking me from there, and I've never seen anyone be near as mean as I sometimes get... Like I say, yesterday I was just a cranky boy.

[Mike C.]

Heh. Try to avoid that second bowl of Urinated Cranky Flakes at breakfast. Doesn't work for me, though.

[markg8]

Unless your religion demands it most people seeking a loan don't want to take on business partners. It'd be my guess Muslims are the only ones willing to meet Sharia conditions. With that in mind it'd be interesting to see how many non Muslims actually apply for Sharia financing in this program.

As for Dennis getting all huffy imo that's when he's at his best. Take away his cranky flakes
and he's just another blogger.

[Seafarious]

Sharia finance is a good full employment plan for the Learned Elders of Islam; they get a nice flat in London, or Brussels, or...Minneapolis, and the chance to order around a bunch of ignorant kaffirim.

Sharia finance has a long list of industries it is not allowed to be in..alcohol, pork, gambling, and of course anything to do with Occupied Zion.

I don't think the restrictions are really exercised yet, but when a sufficient amount of gov't cash flow is tied into Sharia...they will be.

[jan]

Three questions

1) Why is any governmental entity in the US altering its Standard Operating Procedure in order to placate a religious belief? This seems to me to be against the spirit, if not the letter, of the separation of church and state (of course, that isn't recognized in Islam either.

2) Why are taxpayers subsidizing loans to a population that is likely to include a very high percentage of immigrants? We are all told that immigrants are an economic boon (although repeated studies have found miniscule to no benefit of immigration to receiving populations) but here we have a government subsidizing businesses that are likely to be competitors of native-born Americans. The free market this aint.

3) How exactly is the city supposed to take on the risk of an enterprise? This seems to be, well, risky.

[empty]

Why is any governmental entity in the US altering its Standard Operating Procedure in order to placate a religious belief? This seems to me to be against the spirit, if not the letter, of the separation of church and state (of course, that isn't recognized in Islam either.

As I get ready to take my Christmas Break I was wondering the very same thing. Perhaps this from above explains it?

Why wouldn't a government entity strive to be as helpful and accommodating as possible to the largest number of its citizens as possible?