That’s a shame, as I often find him entertaining and witty. Alas, we do not entertain him. Rather, we seem to raise his blood pressure to the stratosphere.
What follows has been redacted in keeping with our PG-13 code for visiting homeschoolers. Other than the several fallacies of debate he resorts to in his effort to make his point, this is entertaining and, in its own way, educational.
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 [freaking] 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 MenaceTM.
There’s only one problem with this: They’re both dead wrong. [whew! at least they’re just “dead wrong”….beats being really dead --D]
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 heck that is) couldn’t be bothered to get their facts straight before wailing the wail of impending doom before the sinister forces of The Muslim Menace(tm). 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 [mess] 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…[oh, I don’t know…I think that both the Baron and Mr. Lileks have a certain je ne sais quoi --D]
An Aside: I find it amazing that someone (the Baron) who co-authors a blog on the apolcalyptic [sic] 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(tm) under control any time soon, either. [oh dear. The Baron has been to the South of France, but he’s never taken out a sharia loan so we can’t really compare here. Perhaps he would find the two so similar as to be unable to choose one. On the other hand, he would be happy to do some landscapes in the former; I doubt the latter lends itself to painterly composition. However, given our ignorance, perhaps Mr. Peasant is correct in his comparison, though this common fallacy - an appeal to ridicule - does weaken his argument a bit --D ]
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 [freaking] 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 a**es over Dubai Ports World… I’ll be more than happy to smoke yours over this.[one of Mr. Peasant’s admirable qualities is his across-the-spectrum spanking of us ignoramuses. He’s definitely an equal opportunity “a** smoker,” whatever that is. No doubt it’s less harmful than smoking, say, cigarettes. He certainly appears to derive the same satisfaction from his past-time of a**-smoking as my brother-in-law does from tobacco --D]
I’m sure you are thankful for this lesson in finance. Mr. Peasant is an accountant, I believe. And despite appearances to the contrary, he is capable of real wit. In fact, back in the days when I was on the Watcher’s Council, I nominated one of his posts in the non-Council group. I thought he was every bit as funny as P.G. Wodehouse, but he says this is not the case.
Ah, well, chacun a son goût…I’m afraid my fond regard for Mr. Peasant is unrequited. Sigh….
In the spirit of the season, please drop by Mr. Peasant's hovel and share some eggnog with him.