The American Myth and Its God

Stanley Fish, university professor and NY TIMES editorial columnist in his 3 May 2009 piece, Think Again, offers comment on British critic Terry Eagleton’s new book, “Reason, Faith and Revolution.”    While Fish and Eagleton offer much food for thought, I want to draw attention to and comment on one of Fish’s paragraphs:

…  “The coming kingdom of God, a condition of justice, fellowship, and self-fulfillment far beyond anything that might normally be considered possible or even desirable in the more well-heeled quarters of Oxford and Washington.” Such a condition would not be desirable in Oxford and Washington because, according to Eagleton, the inhabitants of those places are complacently in bondage to the false idols of wealth, power and progress. That is, they feel little of the tragedy and pain of the human condition, but instead “adopt some bright-eyed superstition such as the dream of untrammeled human progress” and put their baseless “trust in the efficacy of a spot of social engineering here and a dose of liberal enlightenment there.”

Oxford and Washington are metaphors for academia (the infallible brainchild and savior of the Enlightenment ideology) and modern political power (for Washington and the U.S. are the progeny of  Enlightenment values).  Eagleton has Oxford and Washington both thralls of “the false idols of wealth, power and progress.”  

That is worth pausing to think about.   For we might ask what is wrong with wealth, power and progress?  Aren’t these in fact the greatest, most virtuous goods which modern Western and particularly American society have spawned?

Eagleton sees them as being false idols and superstitions.  

Just think about the recent world wide economic collapse.    The world’s economy was growing at this unprecedented pace, and the world’s financiers and American politicians were so awed by the growth that they could see it as nothing but human  progress and the triumph of American values.  It was our god/idol which was worshipped by all the powers that be, but who were blind to the fact that it all was a bubble, not founded upon anything solid or real but based in the economics of capitalist psychology.   It felt so good, who cared if it was a delusion?  

It was indeed an intoxicating vision which caused many to become drunk on its seemingly endless powers.  It did turn out to be a false god who could not deliver on its promises.  Read Revelations 18 about Babylon where merchants grew rich on the wealth of her wantonness but whose wealth was lost in one hour as no one buys her cargo anymore.  How quickly we forget when we ignore the Scriptures.  We have been warned but just can’t believe it  would be us and our generation who would be decieved by wealth!   Shouldn’t our much vaunted human progress have saved us from self deception?

It could not resist false Idol of  limitless and infinite wealth expanding and growing throughout the universe.  It was unbridled human progress – trickle down economic wealth was finally dripping down to the lowest levels of society from the ever expanding but vacuous balloon.   Wealth. Power. Progress.  The Trinitarian gods of American idealism and ideologues.

But it was a false god, an idol which had forgotten the Genesis mythology of the Fall of humanity, Eden’s clever but deceiving serpent, and the existence of evil in the world.  It was an American paradise, retelling the Genesis story by exorising any mention of a serpent and totally trusting in American ingenuity to complete what Adam and Eve failed to do:  fill the earth and subdue it and have dominion over it.

Genesis – that great myth telling us about why life on earth is not paradise – turns out to be a truth about America and Americans as well.   Who’d have guessed?

(In the Lucas Cranach painting that is not John Chapman offering us a tempting but delicious apple!  America’s mythology about itself as paradise excludes the serpent, but in so doing proves the truthfulness of Genesis 3).   America very much belongs to the same earth as the rest of the nations of the world.

Madison: Banks, Political Parties and Interpreting the Constitution

I have continued to slowly peruse the WRITINGS of James Madison.  I am now reading what he wrote in his retirement (1817-1836).  Three thoughts I found interesting.

1) Considering the current economic crisis and the role banks played in it, it is interesting to read Madison’s wisdom regarding banks:

“Banks, in their accommodations to prudent borrowers … have acquired so many friends, that if it were desirable to abolish them entirely & everywhere, the attempt would be hopeless.  But the more impossible or unadvisable it may be to abolish them, the more necessary it is to guard agst the evils resulting from their number, and agst the abuses incident to the ordinary constitution of them.  These abuses may be diminished by a variety of particular regulations. …  The greatest, certainly the most offensive abuses of Banks proceed from the opportunities and interests of the Directors.”

Madison’s proposal for correcting the abuses of bank directors is regulating the banks and their directors.   Madison reports that one “incautious” bank director told him that though he didn’t receive a salary from the bank, because he had access to bank money and business he easily made “$5000″ per year  through taking advantage of his position as a director (in terms of 2009  that would be about $220,000 or a little over 4 times the average household income).    Simply by manipulating the bank and taking advantage of their position, the directors could realize sizeable windfalls with which to line their pockets.    Nothing new under the sun in the banking industry.

2) Regarding political parties and the free press, Madison felt political parties are a natural outcome of what we would label “free democracies.” He recognizes that party spirit has its own “noxious” and divisive risks including “dangerous schisms” and “violence, especially in the ascendant party.” He felt there were built into the constitutional system some safe guards which would prevent the nation from becoming undone – namely a strict adherence to the terms of the constitution. He was not convinced about a suggestion made by Henry Lee that the press itself could have a “remedial power” “over the spirit of party.” Political parties are inevitable, but he was skeptical that a fair and balanced press could correct the excesses of partisanship.

3) He offers an interesting view on the interpretation of the Constitution – that interpretation which he felt so key to keeping the nation together. He ultimately argues that what is essential is to know not the literal words of the Constitution (for words change meaning over time) but to know the intent of the framers of the Constitution. While that might have seemed reasonable while he and other fathers of the country were still alive, he may have underestimated how hard it is 200 years later to discern the intentions of the members of the Constitutional Congress. He wrote:

“…I entirely concur with the propriety of resorting to the sense in which the Constitution was accepted and ratified by the nation.  In that sense alone it is the legitimate Constitution.  And if that be not the guide in expounding it, there can be no security for a consistent and stable, more than for a faithful exercise of its power.  If the meaning of the text be sought in the changeable meaning of the words composing it, it is evident that the shape and attributes of the Government must partake of the changes to which the words and phrases of all living languages are constantly subject.  What a metamorphosis would be produced in the code of the law if all its ancient phraseology were to be taken in its modern sense.  And that the language of our Constitution is already undergoing interpretations unknown to its founders, will I believe appear to all unbiased Enquirers into the history of its origin and adoption.”   

His interpretative principle, his hermeneutic, for the Constitution is that we must know what the framers intended, rather than relying on interpreting the literal words.  That hermeneutic is itself problematic  - just consider Jefferson’s “We hold these truths to be self-evident, that all men are created equal…” from the Declaration of Independence.  Jefferson did not consider women, slaves or native Americans to be “men” so his truth did not apply to them.  We hold to his literal words, but have changed/expanded/qualified their meaning.  Madison’s hermeneutic has its limits.  Like for Madison we apply the Constitution to “all,” it’s only that our “all” is much more inclusive than his.

The Economic Collapse: It was the software’s fault!

As I’ve continued to listen to stories about the economic collapse, I have as I commented before come across numerous stories in which one group of professionals or one political party blames another group or party for the global economic disaster.  Listening to National Public Radio the other day I heard the story of Michal Osinski, a software developer and his own confession that the softeware he helped develop to make complex financial transactions simpler to accomplish helped smooth the way for the complex banking-lending-real estate-Wall Street crisis to occur. 

His story was intriguing as I had not heard anyone blame computers or the Internet for the collapse, but sure as could be, the economic fiasco probably could not have occurred without the software and Internet to make easy incredibly complex global investments.

Osinski tells his story in the 29 March 2009 issue of the NEW YORK MAGAZINE: My Manhatten Project: How I Helped Build the Bomb That Blew Up Wall Street.    His admission for some responsibility in the mess (though he accepts limited liability) reads in part:

I wrote the software that turned mortgages into bonds. … The packaging of heterogeneous home mortgages into uniform securities that can be accurately priced and exchanged has been singled out by many critics as one of the root causes of the mess we’re in. I don’t completely disagree. But in my view, and of course I’m inescapably biased, there’s nothing inherently flawed about securitization. Done correctly and conservatively, it increases the efficiency with which banks can loan money and tailor risks to the needs of investors. Once upon a time, this seemed like a very good idea, and it might well again, provided banks don’t resume writing mortgages to people who can’t afford them. Here’s one thing that’s definitely true: The software proved to be more sophisticated than the people who used it, and that has caused the whole world a lot of problems.

The first collateralized mortgage obligation, or CMO, was created in 1983 by First Boston and Salomon Brothers, but it would be years before computer technology advanced sufficiently to allow the practice to become widespread. Massive databases were required to track every mortgage in the country. You needed models to create the intricate network of bonds based on the homeowners’ payments, models to predict prepayment rates, and models to predict defaults. You needed the Internet to sail these bonds back and forth across the world, massaging their content to fit an investor’s needs at a moment’s notice. Add to all this the complacency, greed, entitlement, and callous stupidity that characterized banks in post-2001 America, and you have a recipe for disaster.

His article makes for an interesting read.  The Wall Street world appears to be as personally and financially excessive and obscene as many Americans suspect it must be.  In Osinski’s description he encounters traders in a fashion pissing away profits.  You’ll have to read his article to know what I mean.

The world of computers is based in “garbage in, garbage out” mechanics.  There was nothing wrong with the software.  What was being done by these economic decisions makers (who were also making millions of dollars) produces the massive amounts of toxic assets which have been dumped on America and the world.   Osinski writes that some of the abuses and problems can be easily corrected and that much of what was going on was good capitalism.  But then there is that simple fact that we live in a fallen world, a world of sin which infects humanity and not machines.  Osinski calls it human “complacency, greed, entitlement, and callous stupidity.”   The modern world ever doubts and denounces Christian ideas of morality whose foundation is based in an understanding of human sinfulness.  Yet time and again we are confronted by human sinfulness on a massive scale. We’ve seen this before in wars, but also in previous financial crises as Osinski writes:

At Lehman, I began a thirteen-year effort to streamline the process of securitizing home mortgages, as well as other forms of debt. That was 1988, around the time of the savings-and-loan crisis. Remember that one? Lenders had gone nuts with, what else, real estate, and as they went bust, the government was stepping into the breach. Mortgage securitization was the answer.

Folly and sinfulness in one person are dangerous, damaging and deadly.  On a massive scale their effects are exponentially greater.  Despite those facts, modern humans think Christianity has nothing to say to the world.  Yet a simple dose of Christian teaching easily forewarns all of humanity about fallen humanity, original sin, the need for repentance and for that prophetic voice that warns about the ‘profitic’ love of money. 

But those who desire to be rich fall into temptation, into a snare, into many senseless and harmful desires that  plunge people into ruin and destruction. For the love of money is a root of all kinds of evils. It is through this craving that some have wandered away from the faith and pierced themselves with many pangs.”  (1 Timothy 6:9-10)

The End of Excess Not the End of the World

I enjoy reading in general, but really enjoy it when I read something I really appreciate.  Kurt Anderson’s article in the  6 April 2009 edition of TIME magazine, The End of Excess: Is this Crisis Good for America?, I found particularly enjoyable.   I liked the style and the content, the seriousness and the humor, the wonderful use of metaphors and imagery,  besides which there are so many lines worth quoting.   Anderson’s look at America’s economy compares the last quarter century’s years of self destructive and unsustainable economic behavior to an addiction.  He proposes the formation of a “Bubbleholics Anonymous” to get us back on the right track.  BA would have a three-step program:

• Admit that we are powerless over addiction to easy money and cheap fossil fuel and living large – that our lives had become unmanageable.
• Believe that we can, individually and collectively, restore ourselves to sanity and normal living.
• Make a searching and fearless moral inventory of ourselves and be entirely ready to remove our defects of character.

A call to repentance for sure, but Anderson also says: “The new America must be about financial temperance not abstinence.”  The solution is not in excess in the opposite extreme but in moderation, something Americans have forgotten about in the last 30 years.

Anderson sees the excess as having begun with the Reagan era.   Back then, I favored a balanced budget, but many conservative Republicans kept telling me a balanced budget was neither necessary nor a good thing.   Reaganomics claimed debt was a good thing to keep the economy growing which a balanced budget would not do.   Now, in the midst of economic collapse I read that a balanced budget is the wrong thing, we need to increase the national debt and to keep spending to get the economy going.   The economy goes up and down but a balanced budget is never in vogue – so how can we ever have limited government?

Anderson cites some statistics reviewing the past 25 years:

From 1980 to 2007, the median price of a new American home quadrupled; meanwhile the median household income has been on a steady decline for about 10 years.   

The Dow Jones industrial average soared from 803 in 1982 to 14,165 in 2007.

Americans spent ever increasing amounts of their disposable income to service their debts – climbing 35% in this time period.  In 1982, Americans saved 11% of their disposable income, by 2007 it was less than 1%.   But who cared as Americans saw their 401(k)s and their homes ballooning in value? 

Meanwhile in this same time period adult Americans became on the average 20 pounds heavier today than their same age counterparts of 30 years ago.

Anderson notes each of the decades since the 1960’s have been given a name, and he asks what should the 00’s be called – the aughts?  Considering his statistics, probably they should become known as the “ought nots.”  We turned the decade into decadence. 

The past thirty years became a time of entitlement thinking in America.   And while conservatives fault liberals for fostering this thinking (socialism!), the reality is prosperous Americans embraced entitlement thinking themselves:  excess of every kind was an entitlement – they were entitled to spend as much as they want, to earn as much as they want, to waste as much as they want, to create as much waste as they want.   These were entitlements – bigger cars and bigger debts and riskier investments.   No one cared how their excesses impacted anyone else.  Think about Eve in the garden eyeing the forbidden fruit. “So when the woman saw that the tree was good for food, and that it was a delight to the eyes, and that the tree was to be desired to make one wise, she took of its fruit and ate, and she also gave some to her husband who was with her, and he ate” (Genesis 3:6).   It all looked good to her and for her; she forgot only that everything she did affected everyone else around her in addition to her relationship with Adam and God.  That is the same entitlement thinking that has led to destructive, greedy and self centered entitlement thinking in America.

Some today fear that our current effort to correct the excesses of the past 30 years is the imposition of big government and socialism on America.   They claim the proposed policies are a rejection of living by personal responsibility.  But where was that personal responsibility in the age of excess which led to the collapse of the economy?   So many embraced soaring profits, skyrocketing housing prices, investment bubbles and unprecedented investment gains as entitlements.     How many politicians and financial professionals truly advocated personal responsibility and have come forward and taken responsibility for the economic collapse and their role in it?   Now when accountability is proposed, none want to be accountable and take personal responsibility for what happened.  The time of excess has ended.  Will we be wise enough to embrace moderation as the norm for economic policy and recovery?

Anderson remains optimistic:  “This is the end of the world as we’ve known it.  But it isn’t the end of the world.“  He sees an America that does many things incredibly well, and though the new world order which is emerging will be different, Americans are adaptable and entrepreneurial.   If we sober up and don’t return to our entitlement thinking, we will have a saner society.

Plenty of Blame to Share: Few Takers

I am going to offer a suggestion which I think might help the U.S. work through the economic crisis which grips our country and the world today.  That I think I have an idea for the economy which I think can be part of the solution to the crisis will no doubt amaze the readers of this blog since I have confessed openly that I know nothing about economics, and I have done nothing but puzzle over what is happening and how it happens (a webpage where you can learn about economic terms and theory:  http://vimeo.com/2606496).

I am going to speak from the point of view of my strength – being an Orthodox Christian priest, so I am not going to entangle myself in economic theory.

Here goes:

We Orthodox are in the middle of Great Lent.  There is a prayer we say throughout Lent which I think could help all of the politicians, economists, bankers, lenders, financers, federal regulators, brokers, and capitalists deal with the crisis.  I’ll paraphrase the one line from the prayer which is essential here (and you don’t have to even believe in any kind of deity to say this part of the prayer):

“Grant me to see my own sins and not to judge the other.”

For though I have heard countless people say regarding the financial meltdown that there is plenty of blame to go around, I have not heard many (any?) of the players in the crisis accept that blame.  There have been incredibly few “mia culpas” for all of the blame that is being thrown around.  Plenty of blame, but no one courageous and honest enough to own it.

So my solution is this:

Republicans look only at the ways that Republicans have contributed to the mess we are in.  Then clean up your house.

Democrats look only at the ways that Democrats have contributed to the mess we are in.  Then clean up your house.

Congress do the same.  Federal agencies too.  Wall Street also. Bankers, lenders and brokers the same.  Economists and borrowers too.

For the remaining time of Lent, let no one point the accusing finger of blame at anyone outside their own house.   Let each group responsible for this mess finally and honestly accept the blame for what they did to contribute to the economic collapse.  Stop covering your own butts, stop trying to make everyone else look bad, stop blaming and accusing and start owning up to your share of the blame.  Then you will be able to correct the faults in your own house and you will contribute positively to the recovery.   Take the painful step of confessing how your political party, your organization, your profession was responsible for the economic collapse.

That’s about the only way we are going to end Washington gridlock and Wall Street greed.

[Editorial Note:  I just heard this on NPR this evening.    President Obama said, "Washington is all in a tizzy and everybody is pointing fingers at each other and saying it's their fault, the Democrats' fault, the Republicans' fault. Listen, I'll take responsibility. I'm the President."    It's a start!  He also said he didn't create the mess, but acknowledged it's now his job to deal with it.    A little lame - it's easy to accept blame when you don't really think you are part of the problem.  He was part of the Senate though.  What blame will he be willing to accept from that role?]

Back to Basics: If it Seems to Good to Be True, It Is

“a $1.2 trillion subprime-mortgage market, a $62 trillion unregulated, nontransparent credit-default-swap market, $50 billion private-equity buyouts of cyclical companies, hedge funds going public-seem, on their face, to be irrational, silly nonstarters.”  (Daniel Gross)

The worldwide economic collapse is just too big to ignore, even though I can’t begin to explain it.   I look at the above quote from Daniel Gross, author of DUMB MONEY: HOW OUR GREATEST FINANCIAL MINDS BANKRUPTED THE NATION and though he is writing in English, outside of understanding he is talking about an unimaginable amount of money, I don’t really know what the terms he uses mean.   Even less do I understand how the economic meltdown occurred, seemingly overnight. 

Gross in his 9 March 2009 NEWSWEEK article “Reining In Bubbles So They Won’t Pop” (an adaptation from his book) says part of the problem was (is?) that

too many elements of our financial system and money culture were procyclical. Which is to say that built-in features of our economic operating system-government policy, private companies, the media, popular culture-functioned as accelerators rather than brakes. Once a hot money trend gets going, everybody wants in.

In other words our economy was geared for plunging into and inflating every economic bubble that should appear.  Who is to blame for this?  Gross writes:

There’s plenty of blame to go around: poor regulation, eight years of a failed Republican economic philosophy, Wall Street-friendly Democrats who helped stymie reform, misguided bipartisan efforts to promote home ownership, Wall Street greed, corrupt CEOs, a botched rescue effort, painfully fallible central bankers.

The result of these economic policies?

The implosion of the dumb money economy-housing, insurance, real estate, the auto industry-has erased much of the economic progress of the decade. By the end of 2008, stocks had fallen back to where they were in 1997.

So what should we have learned through this economic collapse?

There is nothing acceptable about what happened. This crisis was not a random, once-in-a-lifetime thing that fell out of the sky. It was a manmade product that turned out to be immensely toxic and damaging. And we’ll be paying for the cleanup for a long time. We can and should get angry. We should also get smarter.

Warren Buffett in the same issue of NEWSWEEK (“Our Country Has Faced Far Worse Travails”) also thinks we need to get smarter about the economy and he cites many of the same problems as Daniel Gross did to explain the economic crisis. Buffett also offers a little painful lesson about what he admits is a needed strong and swift government response to the crisis.  We are going to get smarter, but this is what we are about to learn:

Economic medicine that was previously meted out by the cupful has recently been dispensed by the barrel. These once-unthinkable dosages will almost certainly bring on unwelcome after-effects. Their precise nature is anyone’s guess, though one likely consequence is an onslaught of inflation. Moreover, major industries have become dependent on Federal assistance, and they will be followed by cities and states bearing mind boggling requests. Weaning these entities from the public teat will be a political challenge. They won’t leave willingly.

Buffet does offer one piece of very down to earth advice as a lesson learned:

Home purchases should involve an honest-to-God down payment of at least 10 percent and monthly payments that can be comfortably handled by the borrower’s income. That income should be carefully verified. Putting people into homes, though a desirable goal, shouldn’t be our country’s primary objective. Keeping them in their homes should be the ambition.

Buffett’s own company, Berkshire Hathaway, has followed his advice, and apparently is doing  better than many other companies.  I don’t know how many times I’ve heard the warning about get rich quick scams: “If it seems too good to be true, it invariably is.”  Too bad those who were leading us into financial disaster had the pyramid scheme attitude: “if it seems too good to be true, put all your money into that bubble.”

The Mythical Camel and the Real Straw Which Broke His Back

Pundits and talking heads are filling the airwaves with their analyses of the proposed stimulus package.  Lots of criticisms being offered, and no wonder – the stimulus package is huge thus offering a big target for critics.  There is plenty to criticize.   Besides, the daily talking heads have a massive amount of airtime to fill and so they babble on hoping to stimulate the troubled minds of their faithful just as the politicians hope the stimulus package will spark the troubled economy.

The critics seem to be short on specific predictions and details for what alternative should be followed.   When all you have to do is criticize, the job is not too hard, especially whan the target to be criticized is so massive.  For life if it teaches us anything enforces the lesson that something is sure to go wrong.  So it doesn’t take a whole lot of smarts to predict that something will go wrong.  Besides, when the inevitable happens, no matter what the wrong is, the critics can always say, “I told you so.” 

What would be far more helpful to us would be for the critics to state exactly what they think will happen and when it will occur if the proposed stimulus package is enacted.  Such comments as “too big”, “not enough”, “too fast”, “not soon enough” are really not helpful at all.   What would be more helpful is people taking their economic theories (opinions, ideologies, whatever), and spelling out in specific detail what they think will go wrong, when and why.   With such specifics, we could actually learn something about how these different pundits’ ideas actually work.    We might learn which economic theories and ideologies successfully predict the future.   Thus if someone says, if you do that you will create inflation but deflation happens, that person would not be able to say, “see I told you your plan wouldn’t work” because even though the taken action didn’t produce the desired result, neither did it produce the critically predicted result. 

It isn’t helpful enough to say a plan won’t work, or that it is a bad idea.  Let the political pundits give us the specific predictions of what they think will happen if the proposed stimulus in inacted.  Then we can measure the words of these talking heads against reality, and they won’t be considered wise for predicting “things will go badly” which is no prediction at all; specifically spell out what the negative effects are going to be, otherwise your criticism are more empty on specifics than the plan itself.

Maybe slightly more helpful is pointing to an example of what a stimulus did or didn’t do.   This you can find in Martin Fackler’s 5 Feburary 2009 NY TIMES article Japan’s Big Works Stimulus is a Lesson.   There at least we can see how big time spending impacted Japan’s economy or failed to do so. 

Steven Pearlstein in a 6 February WASHINGTON POST article, “Wanted: Personal Economic Trainers.  Apply at Capitol“, makes the suggesting that we use the stimulus money to hire personal economic trainers for each congressman and senator in order that they learn how an economy really works so that they can make sensible comments and decent decisions based in economic realities and not in their personal opinions or ideologies.   If economic stimulus means increased spending, then he argues government spending is shown to be much more effective than tax cuts for stimulating economic growth.

Part of the problem for me in dealing with the economic crisis is that I do not understand economics.  That is why I read articles like Stephen Gandel’s “Why Your Bank is Broke” (TIME magazine, 9 February 2009).   It has very colorful charts showing how many tens of billions of dollars less the biggest banks are worth after having received the billions of dollars in TARP funds from the government.    The basic reason banks are broke is something like this:  You want to borrow $10 from me.  I only have $1 to my name.  I lend you $10 anyway. ….  Wait a minute you say, how could you lend $10 if you only have $1 to begin with?   That apparently is the lure of capitalism – capital produces more capital, at least on paper.   Banks came to rely not on their deposits and holdings but on supposed profits and money from their investors.   In other words I take $9.50  from friends who trust that I am going to make them money with the $9.50 they gave me.  I lend $10 to you.  My friends get paid back only if I make money on what they entrusted to me.  But if you cannot pay back the $10, those who invested in me lose their money and I now have $.50  left and am stuck holding a $10 IOU that is worthless.   It’s possible that everyone – borrower, lender and investor all end up being losers.   That is as far as I can tell what happened to our economy.  Banks were lending not what they owned but other people’s money (investor’s money), which works as long as those people don’t ever ask for their investments back or as long as the borrowers keep making payments on the loan.  It is a giant pyramid or Ponzi scheme which was being played by more players than just Madoff.   Some want to put all the blame for this on questionable loans that were made to first time unqualified borrowers (see my The Party in which Democrats and Republicans Reveled).   But there is a much bigger picture to the banking scheme of which these questionable home loans were just a part.  They may have been the straw that broke the camel’s back, but that camel was loaded down with an unsustainable system which for a period of time was so incredibly profitable for some as to be addictive to the many.  Breathing this intoxicating air of seemingly unlimited profits, the entire banking system gleefully threw the expanding home loan business onto the top of the pile which the poor camel was carrying.  And great was the fall thereof, or what was realized was the camel didn’t really exist so there was nothing to carry the load.

U.S. Stimulus Package: Imminence vs. Importance

President Obama met with Republican congressmen and senators yesterday in what some see as an unusual move, yet is totally consistent with his claims that he is trying to do something different in Washington.

Yes he can, in all probability get a stimulus package passed through both houses on Capitol Hill without the support of Republicans.  The reality of the economic crisis facing America and the world is that what would best serve the interest of our country is that we have decent buy in from both major political parties.   Why do I think this is important?

There is no guarantee that whatever is attempted is going to work, have a positive impact on the crisis, be successful in attaining its goals.  Unfortunately, there is no agreement among economists or politicians as to what might work nor on what the negative impact of whatever is attempted might be.  (see the NPR.org article on Keynesian economics and the great unknowns)   Many feel there is a narrow window open to try to prevent an even worse economic scenario from unfolding, but the opinions about all these things are based in ideology more than in verifiable fact.  Additionally, in economics there is probably some truth to the notion that like with many bodily ills, even if a person does nothing, the illness often eventually gets better ‘on its own.’  So the question is:  will the proposed “cure” be less harmful to the patient than the illness itself?   Or as I’ve learned about dealing with chronic illness: there no cure to the problem;  all we can do is to try to manage the problem and learn to cope with its effects.

Because there are no guarantees as to what might work, thus greater bi-partisan buy in on the stimulus package means greater chance that more of the politicians will take ownership of  and responsibility for the solution (they already own the problem).    This means if the “recovery” gets shaky at points or falter, the politicians will work together to shore up the solution, rather than all stepping back and watching the whole thing collapse in a passive aggressive I-told-you-so mode.   The stimulus package is huge and so has lots of opportunities for critics to step up and engage in endless political guerrilla warfare against the effort.   To allow the stimulus package to be a Democratic solution is to put 40-45% of the electorate and congress in opposition to the effort, whereas this is truly a time for everyone to work together for the common good and general welfare.  Neither Obama nor the nation need or would benefit by having 45% of the people taking shots at the plan or finding chinks in the armor.   Rather he and the nation would be much better off if the Republicans saw whatever armor the stimulus plan offers to protect the nation as protecting them as well rather than being something they are endeavoring to weaken.

A bigger portion of the burden for finding compromise and cooperation and bipartisanship is going to fall on the Democratic majority.  For they will be tempted to use their majority status to ignore Republican concerns.  But if President Obama is serious about bringing change to Washington, then he is going to have to stand up to his own party to bring about the needed change.   In a NY TIMES article from 27 January 2009 the usual way of doing business in Washington is made clear to Obama:

While he is relatively new to Washington, having served less than one term in the Senate, many Democrats who have served longer harbor rancor from past years when Republicans ran Congress and, with George W. Bush in the White House, excluded Democrats from lawmaking.

If change is going to come to Washington and partisan gridlock is going to end, the Democrats are going to have to end it by forgetting the past and dealing with the present problem and situation in order to set the course for the future.  President Obama is the one who is going to have to lead the Democrats out of this past and into the future – not by forgetting Republican fiscal concerns (which surely are valid – we are proposing a huge solution which we are asking Americans in the future to pay for) but by forgetting how things were done in the recent past by those in power. To lift a phrase from St. Paul:  “one thing I do, forgetting what lies behind and straining forward to what lies ahead, I press on toward the goal for the prize”  (Philippians 3:13-14).  We will see whether the Democrats place the nation ahead of politics.

A last aside – in coming up with an economic solution, all politicians would do well to remember what got us into our current situation.  1)  American short-sightedness: we have been addicted to short term gains, profits and financial growth.  Let us not lose sight of what is important by focusing completely on what is imminent.  2)  While many politicians and economists are calling for lenders to again begin lending generously, remember a good deal of what caused the economic collapse was the pushing of generous lending to get more people into pyramid scheme of economic growth.  How can the very thing which triggered the economic collapse possibly be part of the proposed solution?  Mostly because of what I mentioned in #1.

States Starving for Cash Look to be Fed

As the economic recession continues to loom large, state governments in the U.S. are also lining up hoping the federal government is going to bail them out of their own economic crises.  Logically, it seems to me anyway, there are two opposing desires in the U.S. that cannot be reconciled:  the desire to have no taxes on the one hand, and on the other, the desire to have a government which can solve all problems (mostly by tossing money at them).   American state governments got into the cut taxes mode, apparently thinking cutting taxes is always the way to stimulate growth.  However, at a time when taxes are pretty low, the growth has not only stopped but the economy has contracted and now the governments have large financial outlays with no way to pay for them.  Cutting taxes even further can neither stimulate the growth nor pay for all the commitments.

I saw in the paper the other day that state governments have gotten in line asking the federal government for a bailout, and the total of requests from the states is about 1 trillion dollars.   Whatever happened to fiscal conservatism?   No state government,  even conservative ones, is willing to wait for prosperity to trickle down – they want the federal floodgates opened and opened immediately.    Belt tightening is apparently never politically acceptable in America.  And we are either an extremely short-sighted people and have forgotten that what we do today will have to be paid for tomorrow, or we are a forever hopeful people trusting that massive federal spending is the answer to a shrinking economy (and every other national or international problem).    We do print “In God We Trust” on the dollar, but is it God or the dollar we really trust to bail us out of our financial difficulties?   It is as if we hope the federal government’s printing “In God We Trust” billions of times will simultaneously influence God like the prayers of a righteous person.   If we print “In God we Trust” often enough, maybe even God will believe we do and so bless America.    That surely would be a lot easier than actually having to change our indebting spending habits and money loving ways.   Jesus may have taugt you cannot love God and mammon, but Americans seem willing to try to prove Him wrong.

Money is a good servant, but a bad master.   So, no matter how the economic crisis turns out, who will we be serving in the end?  Who are we trying to serve right now?

In any case, the crises of the state governments forcing them to ask the federal government for a bail out caused me to think of this headline -   STATES STARVING FOR CASH LOOK TO BE FED.

Our nation recently implemented all kinds of welfare reform to kick a host of “freeloaders” off of the public dole.  Now it is the banks, lenders, the auto industry, and the states themselves who have lined up for the hand outs.  American ethics are such that we are more comfortable with this kind of welfare, even if it is millionaires and the upper class who benefit most from it.   Giving to the poor is giving with no hope of getting someting in return – meaning no benefit to the economy (Is the economy really the god in whom we trust?).

Maybe we will learn some valuable lessons from the current economic crisis.   Maybe we will take a serious look at health insurance and think about a plan that can benefit everyone (the uninsured and medical providers).  Maybe we will look at our dependency on oil and consider a use  tax that will raise money to find other/better sources of energy.  Maybe we will rethink our spending habits, reliance on debt, selfishness, greed, sense of entitlement, wastefulness, lack of concern for the common good, and self-centeredness.  

This all of course assumes we are willing to look into the abyss of the recession as somehow reflecting the true depth of our souls to see if we can find a way to become better people as a result of the crisis we are in.   The recession says something about us as a nation – our values and priorities and character and heart.   What lessons will we learn about ourselves and our relationships to one another and to the world?

Christmas and These Troubled Times

While the Christmas season often brings us hope through the news of God’s good will toward all people, this year we are also facing an economically threatening time.   We certainly believe God acted in the past to accomplish His plan for the salvation of the world, but do we have faith in God even in tour current troubled times?  

 ”Chrysostom would be quick to admit that our present situation in the world must also be interpreted in light of God’s ultimate goal and end for human history.  The present must be viewed in light of the end, and premature opinions as to the goodness of providence must be delayed until history itself reaches the conclusion God has set for it.  Because only the end of history will finally clarify God’s actions in history, our present interpretive stance must be one of patience and humility. … Chrysostom comments, ‘that our present knowledge is grossly deficient and that complete knowledge is reserved for the age to come.  Only a very small amount has been given to us at the present time.” (Christopher Hall quoted in ANCIENT & POSTMODERN CHRISTIANITY: PALEO-ORTHODOXY IN THE 21^ST CENTURY)