“as we returned from work, we saw three gallows… The SS [guards] seemed more preoccupied, more worried, than usual. To hang a child in front of thousands of onlookers was not a small matter. The head of the camp read the verdict. All eyes were on the child. He was pale, almost calm, but he was biting his lips as he stood in the shadow of the gallows… ‘Where is merciful God, where is He?’ someone behind me was asking. At the signal, the three chairs were tipped over… Then came the march past the victims. The two men were no longer alive… The child, too light, was still breathing… And so he remained for more than half an hour, lingering between life and death… Behind me, I heard the same man asking: ‘For God’s sake, where is God?’ And from within me, I heard a voice answer; ‘Where is He? This is where – hanging here from this gallows…’” — From a book entitled “Night” by Elie Wiesel
Where is God when a child is shot in Newtown or hung in Auschwitz or killed in an American drone air strike or for that matter dies of cancer? I don’t know. There is no answer.
Talk of God giving humans free will and thus allowing us to face the consequences of our choices solves nothing. If the creator could intervene personally when it came to the magic tricks in the Bible like making the sun stand still for a day in a battle, he could have done something about that child gasping out his young life. He didn’t. Theology that tries to paper this horrible fact over with explanations about why there is evil is nothing but nervous blather
Source: Frank Schaeffer: Where Is God When We’re in Pain? – Red Letter Christians.
I must admit that I don’t put much credence in the Old Testament being anything close to totally true and inerrant. To do so would mean that I would have to degrade my feelings about God. The above quote is the perfect example of this fact especially the words “If the creator could intervene personally when it came to the magic tricks in the Bible like making the sun stand still for a day in a battle, he could have done something about that child gasping out his young life.” As the author says any explanation of this difference is blather.
In the Old Testament stories God seemed to intervene in the most trivial of events. Making massive walls crumble with a trumpeter’s breath is a good example. Why would God do that and then allow so much tragedy to happen later? I don’t know the answer to that question. I can only rationalize it that all the evil the world has known makes God just as sad as any of us.
As mentioned above I know that the idea that God gave man free will and then turned the world over to him is not very comforting but to me that is the reality. God being omnipotent he could intervene in these tragic situations but what would we learn from that? We would learn that God is there to bail us out if we get in too deep. We would learn that we don’t need to take responsibility for anything as God would always fix our screw-ups. I know some of my Christian brothers believe that is what he does for some. But why some and not others? These sort of thoughts are still very unsettling for me as a follower of Jesus. At this point in my life I just can’t fathom the answers….
RedLetterLiving 
This is the eternal question that a true believer must ask. To throw out a cliché, like “God is in control of everything” seems to say that He not only allowed that child to die, but planned it ahead of time. That God is not a god that is totally love.
My circle of Christian friends say the Old Testament is just a picture of what is to come, while the New Testament reveals God’s true intention. While that sounds reasonable, it doesn’t explain how a God of love could both allow and cause all the mass murder and mayhem that takes place in the OT.
Personally, I view much of the Old Testament as a collection of broad brush stories meant to convey a point or teach a lesson, rather than being a literal record of actual events. That doesn’t affect my believe in God at all. It is just man’s attempt to explain the unexplainable.
Which brings me back to your original question. The answer is…I can’t explain it or understand it.
I don’t think anyone can really explain it either. All those theologians who say they have an answer are simply guessing/rationalizing like the rest of us.
Sometimes, no often times, I wish we could separate the Old Testament from the New. I can more easily sell Jesus and his ministry without the OT attached. I think I go a little further than you do with the OT. I believe it is, for the most part, myths and folklore passed down through the Jewish history. They might teach us lessons, but can’t we find lessons in just about everything that is written?
I know that the OT is supposed to point the way to Jesus. That may be true but in numerous personal readings of it there has never been an obvious link to me. Yeah, if we look hard enough, we can find an isolated verse or two here and there but that is about all…