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!    

 

 

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.     

 

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!