August 27, 2011

Catch the Irony?

I served a mission for the Mormon Church in Tokyo, Japan.  While I don't share many of the fundamental beliefs of its membership anymore, I consider my missionary service as one of the finest things I've ever done.  But here's a tiny example of what I find disturbing about the work and what it does to the young men and women who provide the selfless service. 

One of the lessons we taught to investigators of the church was a doctrine referred to as the Plan of Salvation.  According to Mormon theology, we came to earth after living as spirits in God's presence and did so for two important reasons: 1) to gain a body and 2) to have the memory of the pre-existence taken from us so that we could learn to live by faith.  Regarding the second purpose, we were quick to say that faith was not a perfect knowledge, but something akin to belief.  However, no sooner would we teach this than my companion would invariably say (because I refused to make such a statement) that he knew these things were true

Do you see the irony?  So few Christians do.  For the most part they acknowledge the need for faith--even agree that faith has more to do with uncertainty than perfect knowledge--but then they fill their lives with dogma.  Saying one has faith in the Bible is entirely different than forcing one's reality to conform to the Bible's teachings.  Yet, that's what many Christians do when rejecting science in favor of scripture.  Remember how pious church leaders forced Galileo to do the same and turned back the clock on the human understanding of the solar system?  Recall also that a variety of evil acts have been perpetuated--slavery, for example--by using scripture to support them. 

In my opinion, faith should be the thing we cling to until the truth of a matter is made evident.  Now, of that I can bear testimony.

The Result of Income Disparity

What do the Arab Spring, the riots in London and the Great Recession have in common?  At first blush they seem to lack any commonality, but they’re all the result, in part, of the growing gulf between the rich and poor.  This is most obvious with respect to the civil unrest in many Arab nations, where the middle class has grown increasingly disgruntled over the massive wealth acquired by national leaders and their cronies.  While the rich have gotten richer, unemployment has gripped much of the region.  In country after country, popular uprisings have been the result. 

Perhaps less obvious is the effect of income disparity in the UK.  Despite the assertions of many, the recent riots in London can’t be explained away as just the acts of criminals and hoodlums.  Rather, they represent class warfare, clear and simple, as Clifford Stott, a social psychologist at the University of Liverpool has explained.  Britain—according to data provided by the OECD—fares worse than nearly every other developed country in the world in terms of income inequality.  Unemployment among its young people has skyrocketed and recent government budget cuts have hurt the disadvantaged most.  The violence was simply an outgrowth of people’s frustrations. 

The Great Recession, too, according to a recent IMF study, is rooted in the same development.  The study, in fact, implicates income disparity as the cause of the Great Depression as well.  Speaking of both historical developments, Time Magazine’s Rana Foroohar recently said:

As the poor and middle classes were squeezed, they tried to cope by borrowing to maintain their standard of living.  The rich, in turn, got richer by lending and looked for more places to invest, bidding up securities that eventually exploded in everyone’s face.

In short, the shrinking of the middle class wasn’t just a symptom of today's economic malaise, but a crucial factor in its occurrence.  Therefore, government budget cuts, in combination with the retention of Bush-era tax reductions to corporations and the rich, will exacerbate the underlying cause of the recession.  Until the financial security of the middle class improves and spurs consumption, the policy will only encourage the rich to continue hoarding cash and create no significant increases in employment.  

Which might result in an American Spring.

August 18, 2011

Our Culture of Acquisition

The influence of Judaism on Christianity is so complete that followers of the two religions have more in common with each other than with anything Jesus taught.  It doesn’t occur to most mainstream Christians that the Savior’s ministry was meant to override much of the Mosaic Law and the behaviors it engendered.  Rather, they embrace the Levitical standard as an absolute, and that—as I’ve said elsewhere in this blog—causes them to profess a faith that is far more Judeo than Christian.  The impact is particularly evident in their views about material wealth. 

Before I go on, I want to acknowledge my own personal fault in this regard.  While I see a broad gulf between the ways the Old and the New Testaments view acquisitiveness, that’s not to say I live Christ’s teachings.  At best, I’m a hypocrite, who has neither the courage nor the fortitude to live the gospel as Jesus intended.  I can only wish I was good enough to do so.  Nevertheless, there is such a clear difference between Christ’s teachings and the way most of His followers live that even a sinner like me can see it. 

How do Jesus and Moses part ways on the topic of wealth?

Let’s take the Old Testament first.  Genesis begins with the creation of the world, after which God gives Adam and Eve—and by extension, their posterity—dominion over all the earth.  That’s quite a haul!  And all they have to do is refrain from eating the fruit of a specific tree.  Later God promises Abraham that his seed will number as the stars and that he’ll inherit a Promised Land “flowing with milk and honey.”  It’s a promise that Abraham is so desperate to receive that he attempts to sacrifice his own son, Isaac, to insure its fulfillment.  God subsequently commands the children of Abraham to take the Promised Land from a people who were already living there, and no one sees any impropriety in it.  When Jehovah and Satan wager on the result of tempting a good man, Job’s righteousness is rewarded with flocks of sheep, children and other material rewards.  These are just a few of the morality tales contained in the Old Testament that influence a culture and worldview in ways that recognize the acquisition of wealth as blessings from God. 

Contrast this with the gospel.  Christ said, for example, that it was nearly impossible for a rich man to enter into heaven.  He encouraged His followers to sell what they had and give to the poor—to “take no thought of the morrow,” but to “seek first the kingdom of God.”  In this way He asked His followers to pursue spiritual, rather than earthly, rewards and to share in each other’s burdens.  His gospel—until it was corrupted by a politically ambitious orthodoxy—encouraged believers to share all things in common. 

Now, I ask you: Which of these two worldviews is consistent with Christian culture today?

August 11, 2011

The Tea Party and the Voice of the People

I understand what the Tea Party wants.  I grew up in a place (the Kenai Peninsula of Alaska) that was populated by self-reliant homesteaders and commercial fishermen, who moved clear the hell that far north because they wanted to get away from rules and regulations.  I’m a creature of that upbringing.  The idea that big government needs to stay out of my business resonates with me, too. 

But I’ve seen what happens when people are left without regulatory boundaries.  There’s a place on the Kenai River that was once one of the prettiest spots on a waterway that defies superlatives for beauty.  Then a homesteader said to hell with Big Brother and filled in the wetlands bordering one side of it, built up the bank and put in a dock, all of which led to the destruction of a salmon spawning bed and erosion problems that continue to this day.  Despite what libertarians think, government is the best way to monitor and police societies for the public good.  It’s also the best way to pool collective resources for the benefit of all people. 

Regarding this latter point, the Tea Party is clearly working against public opinion and the voice of the majority.  In poll after poll, it’s been shown that Americans want tax loopholes closed, so that corporations and the rich will be made to pay their fair share into the community chest we all dip into.  That collective pool of capital benefits all of us when we go to school, mail a package, drink a cup of clean water, drive a car, and engage in a lot of other activities that we conduct safely and take completely for granted. 

Here are just a few of the poll results I mentioned.

USA Today/Gallup—August 4-7
·    66% favor increasing income tax rates for upper-income Americans
·    60% favor increasing tax revenues by making major changes to the current federal tax code

CNN/ORC—August 5-7
·    63% say we should increase taxes on businesses and higher-income Americans
·    62% believe the terms of the budget ceiling agreement benefits the rich at the expense of the poor and middle class

CBS News/New York Times—August 2-3
·    63% say taxes should be increased for households earning $250,000 a year or more
·    On the question of who do you blame more for the difficulties in reaching an agreement on the debt ceiling, 47% blamed Republicans and 29% blamed Democrats

Clearly, the Tea Party is working against public opinion and catering to a fringe element that doesn’t respect the social contracts that government is meant to maintain.  The bigger shame is that a majority of that fringe considers itself to be conservative Christian.  They might be conservative, but they cannot claim to be followers of Jesus, who during His earthly sojourn, asked us to put our neighbors’ interests on an equal footing to our own.  The economics of His gospel is that we share each others’ burdens and rejoice together.  The Tea Party would rather we were left to our own devices. 

August 8, 2011

Just Another Bad Trading Day? I Think Not

Do you see the picture at the left?  It comes from a Tea Party rally.  A young girl is holding a poster that her parents have apparently foisted onto her.  It says:

How will I pay for this?

It's a good question.  In fact, how will that child pay for anything when she grows up?  Over the last two trading days, over 10% of the value of the S&P 500 has evaporated.  If she's lucky enough to have a college savings plan, it's not worth as much today.  The same is true of her parent's 401K.

Let's put this in perspective.  In just two days, the wealth that's been lost to you and me in the form of shares in S&P 500 companies sitting in our various investment accounts is nearly 40% of what congress finally agreed to cut from the nation's budget OVER THE NEXT TEN YEARS. 

Now, here is what has my head on the verge of exploding.  Yes, I'm riled about the economic policies that allowed this country to fund two wars and a new prescription drug benefit without a commensurate increase in taxes, but that's not it.  Sure, I'm fed up with the gridlock that has put our nation on a course for an ever deepening malaise, but that's not it either. 

What's got me hopping mad is that several Tea Party leaders have been telling the president and the head of the Fed and various economists that they have to tell the truth and quit scaring Americans with their talk of financial calamity.  But aren't we there already?  Ignoring informed opinion and saying there isn't anything to worry about won't make our problems go away.  In fact, it's moronic and irresponsible.  At this point, I'm sure things have gotten bad enough that many of those S&P 500 companies can now see the wisdom of paying a few percentage points more in taxes, if they can just get the value of their former market capitalization back.

What the Tea Party is doing is to help the rich save more of the cash they're hording, while a trillion dollars of the nation's wealth vanishes.  It's kind of like Nero fiddling away even as his nation burns. 

August 7, 2011

Common Sense and Elitism

There is a faction of people in this country who wield considerable political influence that seem to react with skepticism to all ideas supported by science and academia.  They justify their positions by using two phrases that cunningly disguise dangerous prejudices as noble attributes.  Those two terms are: 1) common sense and 2) elitism.  While the former is deemed to be good and the latter bad, the labels are used in ways to depict educated people as harboring ulterior motives that run counter to the interests of others and that those without book learning have an instinctive gut-level understanding of what is right.

To many people of this faction, all the truth and knowledge they need is contained in the Bible.  To them I ask the following two questions:
1.   Which version of truth and knowledge are you referring to?  Does it include the injunction not to kill, or does it allow the killing and displacing of others because God told Israel to take the Promised Land?  Does it require adulterers to be stoned, or does it demand forgiveness?  Does it give us complete dominion over the earth, or ask us to nourish and replenish it?  Does it teach us that we’re obligated to love only our friends, or that we must love everyone?  The reason I ask is because all of the above can be justified by reference to Biblical verse.
2.   Do you recognize the value of any knowledge not contained in the Bible?  If not, perhaps you should discard your television (and with it Sean Hannity’s daily drivel on Faux News).  After all, the Bible says nothing about quantum mechanics, which is the scientific basis for television.  Neither does it speak of democracy, DNA, combustion engines, penicillin, a Constitution that addresses civil rights and any of a range of value-producing concepts and technologies.

The point I hope to make is that suspicion and rejection of learning occurs at our peril and it occurs with increasing frequency.  If history teaches us anything, it’s that truth is far more complicated than anyone can grasp at first blush.  Understanding takes time and effort.  What initially appears obvious is rarely a full story.  Take, for example, the idea that parallel lines never intersect.  If that common sense notion hadn’t been overturned after thousands of years of universal acceptance, the non-Euclidean geometries allowing for curved space would never have been developed.  By extension, the ultimate elitist, Einstein, wouldn’t have uncovered the physical relationships behind his General Theory of Relativity. 

Today there are other disciplines even less understood by lay people than what is generally known about physics.  One is evolution (which most fundamental Christians assume to be fallacious and therefore never crack open a book to study)—another is the workings of capital markets.  The latter I know something about, so let me make a point about it.  The idea—which Tea Party loyalists espouse—that the US can default on its debt without dire global consequences is moronic.  Anyone with capital markets experience understands that the effects of regulatory and governmental decisions often result in problematic and unanticipated consequences on market liquidity.  Making funding less available in an already wounded economy would be devastating.  If there has been one thing the Fed and economists have consistently misunderstood it’s the consequences of too much, or too little, liquidity in capital markets. 

When government and Wall Street leaders confer, it shouldn’t be taken as evidence of collusion at the expense of common people.  During WW II, when it occurred to subject matter experts that the power of the atom could be harnessed to produce a powerful weapon, did government leaders gather a room of couch potatoes to consider next steps?  Of course not.  To determine the best course of action, many of the greatest physicists of the day were assembled and that led to the Manhattan Project.  In the same way, the fact that government leaders elicit the opinions of Wall Street executives should be deemed a necessary part of any carefully reasoned due diligence process. 

The same can be said about a number of important issues that our world and country face.  When Michele Bachmann says—despite considerable scientific evidence to the contrary—that the heightened level of carbon dioxide in our atmosphere is a harmless “natural byproduct of nature,” we have to assume her common sense is little more than unreasoned stupidity and that the elitists, backed by scientific research and analysis, know better.

August 5, 2011

The S&P Downgrade

Well, it happened.  What many analysts had thought was a fait accompli finally materialized and the US lost its AAA S&P rating.  It fell by not one, but two notches. 

I have a couple of reactions to the downgrade.  First, wow! S&P has really remediated its own credibility if we're paying attention to what it says.  If I remember right, the company was assuring us that the CDO debt that defaulted and led to our mortgage debacle was bullet proof.  What happened in the interim?  Did S&P's credit analysts go to night school?

My second reaction is one of extreme disgust.  This action costs us in several ways:
  • Whatever exposure we have to Treasury debt (T-bills, notes and bonds) will lose value when trading begins on Monday.  I've mentioned this before, but if you own any portion of a bond fund--which most of us do--you'll take a loss.
  • The cost to fund our federal debt has risen.  By how much?  It's not clear, but even if it rises by only a handful of basis points, the increase will be burdensome.  Remember, at our current debt levels, a one basis point (1/10,000) rise in rates will result in a $140 million increase in the cost of funding our debt.  That could build several nice schools. 
  • Since all dollar denominated debt is indexed off of Treasury securities, our personal financial obligations will begin to reset at higher rates, too.  That includes mortgages, credit cards, car loans and other kinds of personal debt. 
  • The cost of corporate debt will also increase, which will invariably get passed on to consumers.  Not only that, but the rise will affect new investment, which will have negative implications on job growth.
Who do we have to thank?  A lot of people, but George W. Bush and his cronies are at the top of the list.  His tax cuts and Iraqi invasion--not to mention his increase in prescription benefits that were never paid for--have hurt everybody.  Isn't it clear that we need to roll back his tax cuts, demand the corporate sector to pay its fair share and reduce our military expenditures?

The 401K Cost of Gridlock

By now you know that major stock indices around the world showed significant losses yesterday.  The reason?  The inability of our leaders to come to agreement on how to balance our country's budget.  That was enough to worry our creditors, which resulted in what I hope to be only temporary contagion. 

Let's put a price tag on the gridlock.  For example, the S&P index fell by 4% yesterday.  That loss, which might sound inconsequential, amounted to nearly $410 billion in lost market capitalization.  That effect will be seen in your pension funds, Taft Hartley plans, mutual funds and other investments. 

And that only considers the nation's exposure to the 500 stock issuing companies that comprise the S&P index.  The total financial losses, including real estate, the value of privately held companies, bonds and other assets, was probably double the S&P loss alone.  Is this extraordinary?  Not at all.  I once heard an economist say that the loss in shareholder wealth that occurred during the mortgage debacle--which, by the way, was caused at least in part by the Fed's incredibly short-sighted monetary policy--was $7 trillion.  That doesn't even include equity losses on real estate.

Here's something to think about: While our national leaders kibbitz, we've already lost hundreds of billions of dollars in personal wealth.  Calculate the impact on your 401K yesterday and see if it gets your blood boiling.

August 4, 2011

Thank You, Christian Leaders!

In a nation where most people claim to be Christian, here is a short list of actions that voters in this country have allowed our government to pursue in direct contradiction to Christ’s teachings:
·   After UN weapons inspectors said they could uncover no evidence of WMDs in Iraq, we invaded the country anyway.  The cost of that effort—over and above the already bloated military spending we incur during peacetime—is nearly $800 billion and incalculable in lost lives.  How does that amount to peace-making?
·   Those who invoke God’s name the most (led by people like Michelle Bachmann and Sarah Palin) are working the hardest at dismantling our best shot at giving all our neighbors adequate healthcare.  Didn’t Jesus want us to administer to all the sick, not just those who could afford insurance? 
·   The same people working to dismantle advances in healthcare are, at the same time, doing their best to roll back other safety nets designed for the most disadvantaged in our country: the young, the old and the impoverished.  While they cut expenditures for public welfare and schools, they fight against any attempt to reduce military spending and insist upon tax reductions and other benefits that go primarily to the rich and corporations. Is that the kind of compassion Christ wanted us to exhibit?
·   Regarding military spending, the government says it devotes nearly 20% of its budget to defense—a staggering number in and of itself—but a gross misrepresentation that doesn’t include funds to pay for the military portions of other budgets, the costs of the war on terror, military pensions and other related expenses.  Our actual defense-related expenditures are arguably closer to 50% of our yearly federal budget.  Where did Jesus say He wanted His disciples to police the rest of the world?  Rather, I recall a time when He told Peter to put down his sword. 
·   The first thing we cut out of state budgets are expenditures to schools.  In doing so we jeopardize our country’s future.  Why do we do it?  Perhaps it’s because children don’t vote and therefore don’t count.  But Christ said, “Suffer little children to come unto me,” and in this way, spoke of their value and our obligation to protect and sustain them. 
Perhaps Moses would think well of our country, but I think Christ would be ashamed.

August 1, 2011

The Search Continues

Drawing its timelessness encapsulated
As from an apothecary’s jar,
The Word stretched me beyond horizons
To give me a sense of God.

For what of Godliness
Unless it be unfettered, unchained,
Free of horizons constraining mortal men?

Its good news changed this mortal’s course,
(Having swallowed, but being swallowed in return)
And hearing Him, who was more than philosopher, say,
“Know the truth,” I have searched.

But the search continues,
For somewhere, unbound and never resting,
The father to my soul urges onward,
To walk the path free of mortal constraints,
To be like Him,
Unfettered and unchained.