New Facebook group on debt relief and credit reform
Topic: Political and economic
Several past posts have dealt with debt relief and credit reform as necessary parts of economic recovery.  I have now started a Facebook group to promote these concepts.  It is called Debt Relief and Real Credit Reform to Stimulate the Economy (click on the line to go there).  I will also continue to discuss the same issue here, from time to time, though likely in a more philosophical or theoretical way than in the Facebook group.

Economic recovery and the Church: The bigger picture
Topic: Political and economic

I'm beginning to see a picture that is bigger than the one I set forth eight and a half years ago in my Warning Against Idolatry. 

It is clear now that we have walked off the edge of the cliff economically, just as I predicted in 2000, and are now falling.

It is also clear that we have an activist President who wants to do some pretty radical things politically about the economic crash.  It is also obvious, for reasons I've explained in earlier blog posts, that for reasons of justice the President should be allowed to do many of the radical things he is attampting.

However, the bigger picture is this: The government's best efforts will not solve our economic collapse.  The government's best efforts will not prevent massive homelessness and privation.  Social unrest and violence will occur.  The only solution to the problem is found in the Church, the Body of Christ, which brings God's power to earth.

The government will do its best, but ultimately God must provide, through His Church.  It will be the Church thatshows sacrificial love and demonstrates the solution.

The problem is that the Church will not be able to do this in its present, divided state.  I'm not talking now about denominational divisions, or about the need for oranizational mergers.  I'm talking about divisiveness in the Church.  I'm talking about partisanship--the habits of building our own personal or organizational following by attacking someone else and of building the loyalty of our followers by preaching fear of identified human enemies.  This  is expected in the world.  It should not be found in the Church.

If we want to see the solution to our current problems developed by the Church, we need to abandon these traditional methods of building a loyal following and work together.  We are, as Paul reminded us several times, followers of Christ, not of human leaders.  Our loyalty is to be to Him.

I am now going to suggest something quite radical.  Our abandonment of the traditional divisive methods must be complete.  We must not limit ourselves to merely not seeking to demonize other Christians as often.  Instead, we must cease to demonize any human--Christian or unbeliever--in order to build our following.  This includes political leaders.  It also includes militant unbelievers and radical followers of other faiths who lash out against Christ, or against Christians, in their ignorance.  We must consistently resist the urge to make these humans (for whom Christ died!) into the enemy.  Though they attack, we must not.  Christ has called us to live differently, trusting Him.  This is the only way to unity in the Church, and hence the only solution to our current problems.

One application of this involves the political focus of this blog:  I've heard many of my Christian friends demonizing the President.  They tell each other he is leading us into disaster, and urge me to join them in fighting against him.  Because of his political and economic ideas, he is to them the enemy. But he is also our duly elected national leader.  If the Church is to find the unity necessary to provide the solution to our national problem, it needs to get behind the President.  As I have written on this blog before, we need to support him.  We need to support him, not demonize him and wast effort and create division fighting him as if he were the enemy.  He is not the enemy, and if the Church were to solidly get behind him, first in prayer and then in action (remember that he is calling for volunteer action on a large scale!), he could be a large part of the solution.  But it won't happen while we are putting so much effort into fighting him!    

 

 

Followership?
Topic: F unAQs

All of our lives, we ordinary people are expected to be loyal followers, who tamely do as we're told and don't entertain our own ideas, and nothing more.  We are expected to leave the real decisions to a few recognized "leaders," and to instinctively recognize that we will never be "leaders." Yet we pay good money for courses on "leadership,"  and promotion within the ranks of the followers often depends on how much we know about being a leader, even though we will never be one.

What I have never seen is a course on "followership!" 

April fools!

 

Why the Presdient's recovery approach makes better sense
Topic: Political and economic

I hosted an official event supporting the President's budget today, but nobody else came.  I'm not going to be very effective canvassing on my own.  So, instead I'll do something I do better--I'll write about it.

President Obama's recovery approach, which includes his very large budget, may not be perfect, but it makes much better sense in terms of economic theory than his predecessor's approach did.

When faced with the imminent collapse of the finanacial markets--which should have come as no surprise (I predicted collapse eight and a half years ago, while Bill Clinton was still President, and others have made similar predictions in the interim)--former President Bush responded by hastily pushing through a "bailout" plan.  He simply created a huge amount of money, mostly out of nothing, and gave it to the very financial firms that had created the mess in the first place, with very few strings attached.  He assumed that, once these firms had averted disaster, they would promptly use the funds to make credit available to support capital investment and job creation in the United States.

President Bush's bailout plan contained some rather obvious and serious flaws.  It assumed that the firms were interested in supporting Capital investiment in the United States, where the last 40 years of U.S. history show that they are mostly interested in capital investment in Mexico, China, India or some other place where labor is cheap.  It assumed that the firms were interested in job creation anywhere, when they are only interested in their own profits.  Jobs will be created, or destroyed, based on where a good labor pool is most easily and cheaply exploited.  It assumed that the firms would show some restraint in using the funds to line the pockets of their control groups (when, as we all know now, they do not know how to show any restraint in this area).  And, finally, it assumed that the firms bailed out would start to realease the funds to U.S. industry relatively promptly, rather than sit on them to use them as a weapon against us later.

This final point is important.  Most of the Bush bailout funds seem simply to have disappeared.  This doesn't mean that they no longer exist.  It means that they are being held unused.  Since they were created out of nothing, if the funds were released all at once, they could create a disastrous inflation.    More particularly, if they were released suddenly through foreign or multinational firms to buy critical commodities--e.g., food or oil--away from the U.S. for foreign use, hyperinflation with shortages and even famine could be produced artificially in the U.S. very suddenly.  The threat to our government is, in fact, starkly clear.  If the U.S. government now departs too far from doing exactly what our multinational owners want done, former President Bush's bailout money will be dumped suddenly, destroying the U.S. economy, starving millions of Americans just to make the point that we are all now foreign property, and then buying outright whatever is left at fire sale prices.  

President Obama's recovery plan and budget represent a theoretically more sane approach.  Yes, he is also creating a lot of new money to fund the first few years.  But he is not just giving that money to the rich and trusting that they will use it for the country's benefit.  Instead, he is spending it on a lot of specific things, many of which represent capital investment in the traditional sense (building infrastructure) and most of which directly create jobs.  The fact that the money is being spent on goods and services, most of them not in direct competition with consumer goods, will lessen the short-term inflationary impact of the new spending. The capital investments in infrastructure will increase productivity, again reducing the inflationary impact of adding a lot of new money to the system.   The President is also right to be focusing a major part of his effort on infrastructure changes to increase productivity in the healthcare sector, which has become a major weight on the economy, and on education.  

Will the President's efforts succeed?  It's hard to tell.  The problems are really very severe.  He also has the continuing threat of ambush by President Bush's vanishing bailout funds to contend with--a mtter which is, unfortunately, mostly out of his control.  

But his plan makes sense, and he deserves a chance to make it work, for all our sakes.

I support what he is doing.     

 

The genaeology of the stubborn mule
Topic: F unAQs

If you're as stubborn as an old mule, remember:

The mule is half ass. 

Up or Out as a slogan for national healthcare policy
Topic: Pure Satire

The military, law firms, and other competitive organizations have long had as a slogan describing one of their key personnel policies the phrase "Up or Out."  This means, of course, that for people at the bottom and middle ranks of the organization, it isn't enough to simply be competent at the job you're doing.  You have to be more than competent, make the right political connections, and GET THAT NEXT PROMOTION.  Those who don't move UP the organization fast enough--to the next rank, to the next management level, or to partner--are OUT, even though they do their current job very well.

 However, as an aging baby boomer who is stuck in a job I do very well, but with no way to move UP, I'm beginning to believe that UP OR OUT has been made the slogan of the healthcare delivery system for my generation.  Since I haven't been ablen to move UP in my profession (for reasons described elsewhere), I am being priced out of the healthcare delivery system.  If I had made all of the moves UP that others in my law school class of 27 years ago have made, I'd be able to afford the extortionate health insurance premiums I must pay (since I'm now an older worker with health problems), and I'd be able to save the amount of my $2,500/$5,000 annual deductible on top of paying premiums.  (Or, possibly, I'd be in a larger firm, corporate law office or government agency that has cheaper coverage with lower deductibles?)  But because I have failed to move UP as I was supposed to, I am now expected to tamely move OUT--out of this life, that is.  Economic "responsibility" is going to force me to ration myself out of some necessary appointments and prescriptions within the next few months, so that I'll have income to pay for some deductibles I already owe, so obviously I'm supposed to get OUT of this life, since I can no longer afford it!

"UP OR OUT," appears to be the slogan of the current employment-based health care delivery system.  It looks like the President's reforms may not get here in time to help me.

 

 

Adam Smith, the invisible hand, and the deification of greed
Topic: Political and economic

Modern free market economic theory places the collective greed of the people in the place of God.  This can be demonstrated by the development of Adam Smith's "invisible hand" metaphor, from his original use of it to its use by modern economic and political theorists.

In his book An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith argued that free trade among nations, unhindered by protective duties, in the long run promotes the wealth of all of the trading parners.  In explaining why it is better for society to leave goods and capital free to flow wherever the profits are greatest, Smith explained that, although each individual trader will bargain with only his own profit in view, in the aggregate such trade will flow as if "led by an invisible hand" to increase the common wealth:

As every individual, therefore, endeavors as much he can both to employ his capital in the support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labors to render the annual revenue of the society as great as he can. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good. It is an affectation, indeed, not very common among merchants, and very few words need be employed in dissuading them from it.

Smith was raised in the Church of Scotland.  Indeed, Smith almost entered the clergy before rejecting Christian doctrine in favor of Deism.  In Smith's day, the Church of Scotland was strictly Calvinistic. The Calvinist form of Christianity incorporates a strongly deterministic philosophy. Smith's upbringing, thus, taught the existence of an "invisible hand" that keeps all the forces of nature and of history in motion and determines their course--the Hand of God.  I note that this is not unique to Christianity.  Islam and historical Judaism also teach that the hand of God moves the events of the world; these three religions simply disagree over the nature of that God, how he interacts with humans, and whether he has a Son.  But, returning to my subject, at least with regard to international trade, Smith kept his Calvinistic determinism while discarding the notion of a personal God.  He retained an "invisible hand" moving economic events.  He simply identified that "invisible hand" as the impersonal force of the collective greed of those engaging in trade rather than the Hand of a personal God.  This is exactly the kind of substitution that would be expected of a Deist.

Theorists subsequent to Smith have extended his concept, and his metaphor, to encompas all economic activity.  The modern version of the theory of the "invisible hand" might be stated something like this:  "if each consumer is allowed to choose freely what to buy and each producer is allowed to choose freely what to sell and how to produce it, the market will settle on a product distribution and prices that are beneficial to all the individual members of a community, and hence to the community as a whole, guided as if by an invisible hand."  Or, stated in the terms of utilitarian ethics, the effect of collective greed, of the need to make a profit off of each other, if left to itself will result in the greatest possible social good.   Thus, theories building on Smith also deify greed, by making it both the impersonal force that determines all economic outcomes and the true source of all good (at least in economic terms).  

There is, however, one large problem with this theory.  It replaces a good God with an impersonal force that is the collectivization of a motive that is a moral evil.  We may think that it is morally good, or at least okay, for us and our friends to be greedy.  But nearly everyone condemns strangers when they greedily exploit others.  And everyone we know, I think, condemns people who greedily exploit us. When greed is turned against us, we instinctively recognize it to be evil.    Thus, those who adhere to the "invisible hand" concept believe that a large enough aggregation of evil motives usually has a good result.  Colect enough evil together and it becomes good (and a suitable replacement for God, at that).

This is simply inconsistent. 

*******

I would also point out that it is unscriptural.  The Bible contains many reproofs for nations that could be applied to the modern United States and the modern western world.  (None of them were actually originally spoken about the U.S.A.; I said only that, based on their subject matter, they could have appropriately been spoken about us).  The intereting thing is that they all have as one of their primary concerns the way we treat each other.  They condemn both greed and oppression; they do not praise either one.  See my lengthy collection of these passages at Prophecies for America (I posted it 5 years ago).  Paul actually called greed "idolatry."  (Colossians 3:5).  It sounds like he had Adam Smith in mind!

Where in the Bible is a corporate "free market" commanded
Topic: Where in the Bible

My next fundamental disturbing question of political economics is where does the Bible prescribe a corporate "free market?"

That is, where does the Bible teach that government must leave corporations free to do whatever the market allows?

This question must be raised because, whenever someone in government proposes any major restrictions on what a class of corporations may do, or talks of changing to a method of providing or distributing anything that doesn't depend on corporations competing in a market to make the largest possible profit for their shareholders, Christian conservatives tend to scream about improperly interfering with the "free market."  They tend to imply that any such interference is ungodly and blasphemous.  The best current examples of this are health care reform and the President's plan to keep some control over what corporate recipients of economic stimulus money do with that money (instead of simply giving them money to do whatever they want to do with it, the "free market" approach to a subsidy!).  

 Now I have been an utra-conservative in the past, and I am well aware that, among conservatives, the term "free market" is a buzzword--an emotionally charged term that has been carefully conditioned to draw a knee-jerk response and has largely lost its original denotational meaning.  (Thus, it is somewhat similar to the term "freedom of choice" among liberals, a term which no longer refers to freedom to choose careers, or friends, or food, or clothing styles... I explain the use of buzzwords much more fully in my entry on the Buzzword Fallacy, elsewhere).  Any attempt to limit corporate greed is immediately labeled as a threat to the American "free market" system, a system which it is usully implied God Himself endorses.  Therefore, for the government to enact, or for me to support, the anathematized change (whatever it is) would be a grave sin.

Leaving aside for a later entry the question whether any of the "free markets" we are urged to protect at all costs are really free (I don't see any evidence that they are, they are simply regulated for the benefit of those corporations that presently dominate them), I now raise the question where God has said that corporations must be left free.

I suspect that some one will attempt to answer this question by directing my attention to Jesus' parable of the workers in Matthew 20:1-16.  In attempting to explain his statement that "the last will be first, and the first last" in the Kingdom of heaven, Jesus told a story about a rich landowner who needed workers for his vineyard.  So he went to the marketplace, and hired workers throughout the day.  Each of the workers agreed with him individually to work that day for a denarius.  At the end of the day, the landowner brought the workers who had been hired last, and had worked only one hour, in first and paid them each a denarius.  He then brought in those who had been hired just before them, and paid each a denarius.  When those who had been hired first, and had worked the whole day, came in, he also paid them a denarius, as agreed.  These workers who had worked the whole day expected to be paid more, and grumbled about it.  I have heard preachers use the fictional landowner's answer to these workers' complaint as an argument that all markets must be left free.  The landowner said:  "Didn't you agree to work for a denarius?  Take your pay and go.  I want to give the man who was hired last the same as I gave you.  Don't I have the right to do what I want with my own money? Or are you envious because I am generous?"  Matthew 20:13-15.  The italicized language is taken as a statement that the rich must always be left free to do whatever they want with their own money.

However, that is not what Jesus was saying at all.  He was saying that, because God  is generous, he will ultimately richly reward all who labor in his Kingdom--those who came to him with only a little time left equally with those who have walked with Him a long time.  For all who walk with Him, His reward will be exactly what he promised. Our eternal rewards depend on His generosity.   The passage has nothing to do with the prerogatives of wealth in the world--it simply assumed the existence of one of those prerogatives, with which Jesus' listeners would have been very familiar, to make a point about God's generosity and fidelity to His promise, and our equality before Him.

Two other things need to be noted about the Matthew 20 passage.  First, Jesus' never answered the fictional landowner's rhetorical question, "Don't I have the right to do what I want with my own money?"  He left the listener to answer it the way any wealthy person of that day would have answered it ("yes").   That unstated, rhetorical answer can't be taken as God's command for all time.

Second, the fictional landowner in the parable was a real human being--and a real human being who had decided to be generous, at that.  He was not a corporation, a fictional person who exists only for legal purposes on paper.  In fact, corporate executives generally would not understand themselves to be free to perform the act of generosity that Jesus' fictional landowner did.  If a corporation had agreed with the first set of workers that they were to work a 12-hour day for a denarius, it would undoubtedly have paid the last set of workers, who worked only one hour, only one-twelfth of a denarius.  Any other approach would overvalue the labor used, reduce the corporation's profits, and therefore be a breach of the corporation's fiduciary duty to its stockholders!

As I have written previously, I do post responses.  If you can point to anyplace the Bible supports the corporate "free market" concept, send a comment and I will post it.

 

 

 

Where in the Bible does it teach the sanctity of the business corporation?
Topic: Where in the Bible

I will begin my series on "Where in the Bible" does it teach various aspects of modern Conservative political doctrine with this intriguing question:

Where in the Bible does it teach the sanctity of the modern business corporation?

Indeed,

Where does the Bible speak of corporations at all?

The genius of the modern business corporation as an economic tool consists of three elements--

 

1) a corporation has an exsitence, albeit a fictional existence (in the sense of a legal fiction), beyond the existence of the mortal human beings who belong to it, and can thus be used to accumulate wealth beyond a human lifetime;

2) the human members of the corporate entity have a loyalty and a fiduciary duty to serve the profit of the fictional entity itself, not to themselves or to any other mortal human; and

3) the modern business corporation is a "limited liability" entity in whcih its owners (the usually faceless "stockholders") are liable to lose only the amounts they have freely chosen to invest and not the amount of any other damage the entity may do to third parties.  All of these elements are important if corporations are to accumulate capital and continue growing and producing more.  Or, at least, this is what traditional economic theory says:  the Industrial Revolution, and the rise of our modern and prosperous economy, depended upon the legal invention of stable "limited liability" corporate entities that continued to grow over several generations.

But what I want to know is where the Bible either prescribes or encourges any of the three essential elements of a modern business corporation.  it seems to me that any the first and second elements, if unmodified, are invitations to idolatry, and that all three, if left unchecked, invite greedy exploitation of people for the profit of  faceless machines.

Organizing an economy around fictional entities to which the legal system ascribes at least two attributes of divinity--immortality and the right to the  worship (unquestioned loyalty) of men--pretty plainly can lead to idolatry.  Moreover, the fact that the people who belong to a corporate machine are generally conceived as having a first duty to the profits of that machine, ahead of any duty to mere mortal humans (such as compassion, mercy, or ethical obligations), plainly invites greedy exploitation and ethical abuses--such as, indeed, we have been seeing with increasing numbers and intensity of late.

However, the element of a modern business corporation which makes the other two really dangerous, if given too much legal protection, is limited liability.  When you combine immortal legal entities that exist only for their own profit, with human members doing the actual work who are not allowed to act on compassion or ethical impulses in the face of the demands of the immortal entities to which they belong, and you add to that control by major stockholders and officers who know that they cannot lose anything more than they have voluntarily contributed, no matter how badly their deceisions mess up the lives of their employees or innocent (and totally unimportant!) third parties, you have a real recipe for oppression.  It's virtually guaranteed.  And it has been happening.  It is breaking out in the news all over.

But when anyone talks about changing this part of the system, even a little, people start waiving their Bibles and calling the person calling for change a "godless atheist Communist."

What I want to know is where in the Bible it prescribes that business corporations should be permitted to exist with minimum regulation.

I invite comments on this question (and will publish any I receive, so long as they refrain from profane language and character attacks on real, living people).     

"Adverse Selection" Well Explains My Recent Experience With Health Insurance

Terry Du Bose recently posted the following letter from a third person, who used to SELL health insurance, on the USA.CAN listserv (USACAN@groups.barackobama.com).  It describes a practice called "adverse selection" which provides a rather good explanation of my last 13 years of experience with health insurance (even in an small-employer-sponsored group), and which also demonstrates rather nicely why government intervention in this far-from-free market is required just to restrain the evil side of greed:

Terry,

If we are going to help President Obama get the support he needs for health care we must make our intentions known and voices heard. I do know a little about health care from the insurance side. I owned an insurance agency in Austin , Texas for many years and finally walked away from a very good six figure income because I could not stomach it any more. After I got into the business and saw how corrupt it was, I thought I could make a difference. No way were, they to entrenched in the hip pockets of our congressmen.

There are a number of items I could address about the health insurance industry, but in an effort to keep this interesting let me hit on just a few high points. Most people believe that if they purchase a health insurance policy they are covered for life. That is partially true. There is a term in the health insurance industry call "Adverse Selection". In a nut shell here is what it means. You purchase a health insurance policy. Internally the insurance company assigns you to a group. An example of the group could be all policies sold in that year, or all policies in Texas , or all policies in you zip code prefix.  As people in the group get older and have more health problems the expense goes up and possibly profits go down. The insurance company offers a new policy with different coverage and lower premiums to the group. The only way you can qualify for the new coverage with lower premiums is with underwriting approval. The company moves the healthy clients over to the new group and leaves the sick with cancer, stroke, diabetes, heart problems, etc. in the old group. The insurance company will now increase the premiums on the sick group as much and as often as the law and insurance contract will allow. The goal is to make it so expensive that the insured's can not afford the coverage and will have to terminate their coverage usually through non payment of premium. Now we have a group of financially devastated sick people who will probably loose their homes and become a burden on the tax payers. Yes, it is legal and for profits.

Did you know the Health Insurance industry spent one hundred million dollars on Lobbyist when Bill Clinton was elected to office to fight his health care policies? The health care industry had three lobbyists for every congressman in D.C.  The health care industry gave George W. Bush about nine hundred thousand dollars to make sure universal health care would not have a chance.

Did you know that Ford, Chrysler, and GM have over one million retirees that they are paying for their health insurance? The Japanese owned plants in the USA only has around 300 retirees that they cover their health insurance. There is no wonder why the American auto industry can not compete with the foreign auto makers.

The insurance industry determines the quality of health care that we receive, not the doctor. This needs to change. I am now a Real Estate Agent and a while back I was holding an open house. I caught what appeared to be a real estate prospect in the bathroom stealing medication from the medicine cabinet. No they were not looking for amphetamines or barbiturates; they were looking for antibiotics for a sick child. They could not afford see a doctor.

We need health care reform now. We can not depend on our congressmen for they sold their souls long ago. It is up to us and our new President of the United States of America , OBAMA.

Mr. DuBose's informant only fails to mention two things: 1) Congress hasn't changed that much; a majority of both houses are still the same people the insurance industry owned only two years ago. 2) President Obama himself was a Senator a year ago. Therefore, he chances of real CHANGE seem minimal, but I support the proposed changes.