Those were my initial thoughts anyways. Here were the thoughts to follow:
First, it seems to me that it is Jesus who is choosing the words to use when he quotes Hosea. Notice that in Matt. 12:7 he uses the same wording. To me that suggests that Jesus specifically quoted Hosea 6 this way on multiple occasions to rebuke those who were scrupulously self-righteous rather than being full of compassion. If Jesus had said something different ("loyalty" perhaps) it wouldn't have fit both contexts as well. Unless Matthew is fabricating the settings in which Jesus finds himself, we should conclude that Jesus actually said what he was reported as saying. His word "compassion" fits well.
Also, as it turns out, NASBue translates the word in Hos. 6:6 "loyalty," when actually it's the Hebrew word hesed (almost always translated lovingkindness by the NASB). That explained a lot. Not that hesed is equivalent with with compassion/mercy, but it seems a whole lot closer than loyalty. Wouldn't you agree?
Lovingkindness = compassion/mercy (sort of, yeah)
Loyalty = compassion/mercy (what in the world?)
See the difference?
Also, the word hesed yields the needed flexibility to gain the proper understanding of Hosea's statement. Understand that Hosea was specifically addressing the apostate nation of Israel. Sure, they still had Sabbaths and sacrificial setups, but let's face it, God was right, they had forgotten him and gone astray. All this was attested to by the fact that they were full of idolatry and bloodshed. So Hosea relays God's message "I desire lovingkindness and not sacrifice." This may seem like a cop-out, but I really do think that this is better because his meaning is flexible and twofold.
He is in effect saying, "I desire real love and faithfulness from you toward me, not just outward sacrifices." And! He is also saying, "I desire love from you toward your countrymen that you've been murdering, not just outward sacrifices."
They are both there, but the first one seems explicit and the second implicit. I think because in general the statement is referring their love and obedience to God, the NASBue used "loyalty." The problem is, that cuts off the second implied meaning, which is clearly stated elsewhere in the book using the same words. Hosea 4:1-2...
1Listen to the word of the LORD, O sons of Israel,So the double meaning is, when God says he wants hesed, he means he wants it toward him and toward man. That's why Jesus validly quotes from it to apply it to the Pharisees. Though they thought they were obedient to God (and they weren't), they were definitely failing to have this kind of love and mercy toward their fellow man, in the same way the apostate Israelites failed to render love to God and fellow man. They had the outer shell of sacrifice and rituals but had lost true heart obedience.
For the LORD has a case against the inhabitants of the land,
Because there is no faithfulness or kindness (same word, hesed)
Or knowledge of God in the land.
2There is swearing, deception, murder, stealing and adultery
They employ violence, so that bloodshed follows bloodshed.
So when Jesus quotes Hosea 6 to the Pharisees he does right. Just like in Hosea's day, they were ignorant of what really matters and needed to show more lovingkindness, and even more tightly defined, mercy.
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May we like Christ and his apostles show love and regard for all men, no matter how sin sick they may be.