This Should Go Without Saying...

....but Christians really shouldn't turn to the Huffington Post to inform their faith. Exhibit A is a post yesterday from a Christopher Cocca with the provocative and yet inexplicable title "Bernie Sanders Is the Most Christian Candidate in History". Apparently Mr. Cocca is a fan of Bernie and has dubbed him the most Christian candidate, not in this election year mind you but for all time. That is a pretty bold pronouncement but as you might expect I have a couple of issues with his assertion.

There are two problems here, one that is huge and the other that is pretty significant.

The first problem of course is that one cannot be "the most Christian cadidate EVER!" if one is not a Christian. That seems pretty self-evident but apparently in this day and age even the most obvious and common sense notions need to be reinterpreted on a daily basis. Senator Sanders is, as I understand, a Jew and not only Jewish but a non-practicing, secular Jew who is Jewish by ethnicity, not faith. As such he seems pretty vague on the notion of God in general and to the best of my knowledge has never proclaimed Jesus as Lord. The Bible is clear on this, if you don't declare Jesus you deny Him and anyone who denies Him has no part in eternal life. Jesus said:

So everyone who acknowledges me before men, I also will acknowledge before my Father who is in heaven, but whoever denies me before men, I also will deny before my Father who is in heaven. (Matthew 10:32-33)

That is a pretty unnuanced statement but that is kinda how Jesus rolled. If you do not say Jesus is Lord, if you have not been born again, you are not and cannot be a Christian and if someone is not a Christian in any sense of the word, it follows that one cannot be "the most Christian candidate EVER!" if one is not a Christian. One person on social media commented that Bernie is the "nicest" candidate in the race and that makes him Christian, which is totally ridiculous theologically and to be blunt whenever I see Bernie he seems mostly angry, wagging his finger at those who have a nickle more than the next guy, engaging is class warfare and racial pandering (White people don't know what it means to be poor!). 

The second problem is the definition Mr. Cocca has for what makes one Christian and what Christianity teaches. Let's look at some of his statements....

Yes, I do believe that health care is a human right. Yes, I do believe that gainful education is a basic human right. We are not granted these rights from "The Market," or from our navigation of it. These are birthrights.

OK. Why exactly now, in 2016, are these "basic human rights"? Who declared them as such? More importantly what does the Bible have to say on these issues? The answer to that question is "nothing at all". Zero. Zilch. Now a progressive might retort "Oh yeah, well the Bible doesn't say anything about abortion or gay marriage!" That is technically true but the Bible also doesn't talk about shooting someone with a gun but that doesn't make it less sinful. The Bible does speak at length about willfully murdering another human being, which is what abortion is at its most basic definition. Also with "gay marriage", while the Bible doesn't say anything about "gay marriage" by name, it does define marriage as being between a man and woman for life and it also declares unequivocally that homosexual behavior is a grievous sin. Regardless, what Mr. Cocca is apparently talking about is not merely health care and education but those being provided by the government and paid for by coercion.

He then launches into a rambling and incoherent tirade about why Matthew 6:26-34 is an economic treatise which is anti-capitalism and free markets. Read it for yourself, it is equal parts progressive bogeyman pseudo-economic mumbo jumbo and leftist religious talk dressed up as Christianity. What follows that is the most off the wall "interpretation" of the Genesis account you will ever read. It is pretty clear that Mr. Cocca is skeptical about the Genesis account but apparently the Garden was a socialist paradise until Adam and Eve turned to capitalism and ate the fruit, eating more than "Enough". As an aside it is pretty funny that Mr. Cocca randomly capitalizes words like "Enough" and "Secondary Marketplace". After this rambling trip through the fever swamps of progressive economic theology. Mr. Cocca ends with this:

In this election, don't be so surprised that the person most in keeping with the prophetic vision of Jesus is a so-called secular Jew. Bernie Sanders is standing with the ancient Hebrew prophets and in the tradition of our Lord, Jesus the marginalized Jew, but, unlike some other populist candidates, he's not running a campaign of identity politics. As a Christian, I cannot judge the hearts of others claiming to also follow Christ, but am also taught that the faithful will be known by their fruits. Bernie Sanders may be a secular Jew by the standards of the media or by other modern indentifiers, but he may just also be the most Christian person running for president, maybe ever.

Notice that Mr. Cocca identifies Jesus not as God but as "the marginalized Jew". Is that the primary definition of Jesus or even in the top ten? Also note that while he claims to not be able to judge the hearts of other candidates, candidates who openly profess their faith in Christ, he does seem able to judge the heart of a cultural unbelieving Jew. If that seems a little inconsistent to you, don't adjust your TV because it is.

Blogs like this are the result of unmooring Christianity as a faith community from rigorous and robust exegesis of the primary means God has communicated with His people, namely through His written Word. It is a sign of how Biblically illiterate we are as a people that articles like this get serious consideration. Bottom line, socialism is not a Christian economic system. Neither is capitalism or Marxism or Libertarianism. These are all secular attempts by society to form an economic system that provides structure to human interaction. Trying to fuse Christianity and socialism is bound to fail because the Bible simply doesn't call on Christians to use the coercive power of the state to take from some who have earned money to give to others who have not. Bernie Sanders is not the most Christian candidate ever. He is not even a Christian. Likewise his economic policies are not Christian and they are incredibly dangerous and naive.

In this election let's try to avoid compounding the circus we already have with bad theology and for Pete's sake stay away from  the Huffington Post.

Replacing Individualism With Collectivism Is Not The Answer

I posted an article on Facebook by John Piper where he responds to the question: How Should Christians Think About Socialism?. Piper admits up front that he is not an expert on politics or economics but does a pretty decent job of explaining why socialism is not compatible with Christianity. His money quote is below:

In other words, Socialism borrows the compassionate aims of Christianity in meeting people’s needs while rejecting the Christian expectation that this compassion not be coerced or forced. Socialism, therefore, gets its attractiveness at certain points in history where people are drawn to the entitlements that Socialism brings, and where people are ignorant or forgetful of the coercion and the force required to implement it — and whether or not that coercion might, in fact, backfire and result in greater poverty or drab uniformity or, worse, the abuse of the coercion as we saw in the murderous states like USSR and Cambodia.

I got a little pushback on social media regarding this brief message by Piper so I wanted to expand my thoughts here. Economics is an area where I think much of the church tends to think with the mind of their old man and where we tend to ignore what Scripture teaches about not just money but also the nature of fallen man.

I don't see Piper making an equivalence between "democratic socialism" and the totalitarian regimes he mentioned, in fact he specifically says that those two examples are the result of extreme abuse of the coercive power of the state. Piper is responding to the notion that the church should enlist the aid of Caesar to force people to be "charitable" toward one another. That notion is directly in contrast to what the Kingdom stance of the Bible teaches about the free and cheerful sharing with anyone in the church who has need. We are pretty awful at this, there are plenty of circumstances even within local churches where one family is living a very comfortable life with an excess of resources and the family in the next pew is having a hard time paying the mortgage or electric bill. The church should react to the Kingdom denying injustice on display with a Kingdom practice of sharing with those in need rather than washing our hands of the poor among us and tossing them at Caesar's feet.

The forces of collectivism and envy gave this world National Socialism, communism, Stalinism and all other forms of oppressive collectivism. Those same impulses are alive and well today and people like Bernie Sanders and others within the church are misguidedly seeking to reform Constantinianism with a collectivist twist. Electing Bernie Sanders would not inevitably lead to a Soviet style economic system in America but it certainly demonstrates a counter-Kingdom collectivist mindset..

There are some people in American religious circles who respond to an individualistic, westernized faith by proposing a liberal or progressive westernized faith. Neither is the correct response. What is needed is an otherworldly community of faith that takes into account the impact on economic behavior exhibited in a secular society full of unregenerate people. We cannot and should not expect people who are unregenerate to act like people who are born-again and that includes their economic behavior. What we should expect is for the church to respond to the needs of others, especially for "the household of faith", i.e. the church ( Galatians 6:10 ), like people who are regenerate and see economics through the lens of the Kingdom. We ought to joyfully and cheerfully give to our brothers and sisters in need. As Piper rightly points out:

In other words, there is built into the Christian faith an inner impulse by the Holy Spirit through the gospel to make sacrifices so that others have their needs met. And there is no such impulse built into human nature or the human heart apart from God’s grace.

If you missed that he is rightly saying that the impulse to sacrifice for others is not part of the human nature. That doesn't mean that unbelieving and falsely believing people don't sacrifice, certainly lots of people who are not Christians contribute in various ways to the needs of others and cultic false groups like the mormons do a lot of charitable works but those are motivated by societal pressure rather than anything inherent in themselves (for the most part).

The main problem with socialism as well as with communism, capitalism, etc. is that they are worldly systems of economics and as such are inadequate to faithfully represent the Kingdom. That doesn't mean that there is no difference between these systems, I can't imagine any rational person would draw an equivalence between the totalitarian regimes past and present and American style capitalism, so these issues do matter. However as I said no earthly system is a sufficient substitute for the Kingdom community we see modeled in Scripture.

Christians should think first of the needs of others after providing for the needs (and not the whims) of their own family. That this message is not getting out is not cause for the church to turn to collectivism but should cause the church to a critical self-examination. What do the budgets of most churches sat about where the priority of those who attend said churches? Too often they reflect a deeply self-interested mindset, in some ways  the same mindset that fuels collectivism. If your generosity stops at the end of your church driveway then you are doing it wrong. 

Dan Edelen has some good thoughts on this topic as well.

Why Income Inequality Is The New Climate Change

For many years the farce known alternatively as "global warming" and then "climate change" was the favorite bogeyman of the left, the ill that had to be defeated to preserve life on earth. Just as the right always has a new foreign enemy that threatens our very existence and "American way of life", the left requires a domestic enemy to combat with endless rules, regulations and of course taxes to keep the bureaucracy employed.  By most measures the climate change farce is dying out. There have been enough cold winters and enough demonstrably bad and politically driven "research" to make most people outside of a few urban enclaves pretty much laugh off the whole thing, the recent encyclical by Jorge Bergoglio notwithstanding (and largely ignored by most Roman Catholics anyway). While "climate change" is still out there siphoning off resources to groups that are "fighting" against it, whatever "it" is, the latest bogeyman is "income inequality" and for the same reason, it sounds bad and it can (and does) mean anything so it provides great cover for any sort of new rule or regulation.

Income inequality is just like climate change for the simple reason that both are vague and they both defy definition such that they are incredibly useful tools for rhetoric. The climate is always changing, it never stays the same. I saw just the other day ominous warnings of a mini-ice age coming in the next decade or so, which seems weird because I though the earth was warming? Huh. Likewise income is always unequal, even in paradisiacal settings like North Korea and the Soviet Union there were those who had more than others. If you think that the dictators of Cuba, North Korea, etc. live in the same manner as the peasants, you are naive or nuts or both. The "problem" of "income inequality" is impossible to solve, thus it can be used as cover for just about any policy someone wants to push and how can you be against it? After all, who wants to be labeled as being in favor of "income inequality"?!

This is going to be a huge issue in the 2016 election. Presumptive Democrat nominee Hillary "Pay to play" Clinton is already banging the drum on this issue in her frantic attempt to squelch the rising distaste of Democrat primary voters who are giving Bernie Sanders a serious look. Of course no one has any specifics but you can be sure that whoever the nominee is, promising to act on income inequality will be at the top of their platform. It will be an effective tactic because the average American registered voter can't think much beyond their next Facebook status update and is likewise clueless about economics.

It is easy to complain about income inequality as long as you don't have to think about it very much. "How terrible that the CEO of company X makes 150 times more than the entry level worker! That is unfair!". Is it really? Perhaps wages are set by a system where the more responsibility a job has, the more experience and education it requires and subsequently the more scarce the pool of applicants for a job, the more a job does (and should) pay.  Let me walk through this notion. This is going to be a little long but stay with me.

For example. Jobs that pay $10/hour and under can be done by virtually anyone. I mean just about any functional teen-ager or adult can assemble a Big Mac or stock Cap'n Crunch on the shelf at Wal-Mart. Because anyone can do it and it requires essentially no skill other than showing up to work, it shouldn't pay much. No, it seriously shouldn't. That doesn't mean people don't work hard at their job, it just means that anyone can do it so it has little value and besides anyone who works hard at one of those jobs won't stay in that wage level for long. When you get to jobs making $10-$20, you are talking lower level supervisory jobs and some less skilled manufacturing. It is harder to do and requires more talent and experience. The pool of people to fill these jobs is smaller and the work is more demanding. Thus it pays more. $20-$30/ hour and you are in more professional office and medical careers, these require not just experience and talent but also investment in education. $30/hour and up, where I used to be a few years ago, requires substantial work, lots of experience, lots of talent (usually) and education. The job I did was very specialized, you couldn't take someone off the street and have them do it without first investing a lot of years in training them. It took me a long time to get to that pay scale and the job I was in absolutely was worth more than triple what someone who worked in an entry level service industry job. If I wasn't getting paid a lot more, I would not have put up with long hours (with no overtime pay), extensive travel, lots of stress, always being available to clients, etc. When you get much above that scale you are talking executive level leadership and professionals (accountants, doctors, lawyers), people who have a rare blend of talent and education. For example, I used to work for a couple of international financial services firms. They had assets under management in the hundreds of billions of dollars, in an extremely regulated industry with a complex organization that required someone who could manage a firm with tens of thousands of employees. I have met a tiny handful of people in my entire career who were even in the conversation for a job like that. People who are that driven and that skilled are a tiny minority of the population. I would say that I am a pretty smart guy and a better than decent communicator. I would never put myself in charge of an organization of even 25 people, much less 25,000. The vast majority of the population does not possess the basic intellectual capacity to even begin to run a company like Wal-Mart or Ford or Chase. The guy who runs Chase, Jamie Dimon, (and I used to work for Chase) seems like a pompous jerk but he can do a job that only a small number of people in the entire world are even capable of contemplating. Should be get paid as much as he does? I don't know, that is between him and the shareholders of Chase. Should someone who is at the top of a company with a quarter-million employees and revenue of close to $100,000,000,000 make 100 times what a teller does? How about 1000 times? It is silly to ask because I am pretty sure that not a single teller at Chase has the skill, drive and talent to run the company. As a bank manager for Chase I certainly didn't. I made a nice salary running a branch with 10-12 employees. Dimon runs an organization with a quarter of a million employees. I cannot even fathom the complexity of that and neither can you. Heck, Wal-Mart has over 2 million employees. I would think the CEO deserves a lot more than the stocker in Spokane, Washington. So yeah it is easy to get all outraged over "income inequality" and "pay disparity" but when you stop and think about it, it isn't quite so cut and dried. The fact of the matter is that we need people who are able and willing to do very hard, very high stress jobs and they should get paid more, a lot more, than someone with no skills and little experience. Making $250,000 a year is a lot of money but would Jamie Dimon run J.P. Morgan Chase for that amount? Not on your life. You might think you would but a) you probably couldn't run Chase for more than 15 minutes and b) if you could (or I could)  we wouldn't do it for $250,000 a year either.

As far as "what to do about it?", who says we can or should? What I make in my work is what people are willing to pay me for what I am willing to do. I have voluntarily cut my own pay by changing professions by more than half for the sake of my health. I have a lot of skills and experience but I am not using them fully in what I do now so I don't expect someone to pay me what I used to make. Besides, what someone else makes is none of my business. Not even a little bit and it isn't yours. If LeBron James or Taylor Swift or Jamie Dimon makes millions of dollars a year, how is that my business? Why do I have a say in how much they should be allowed to make or how much they should be allowed to keep? I don't buy tickets or merchandise for the NBA, I sure as heck don't spend money on Taylor Swift songs and I don't bank at Chase nor am I a shareholder. Like Paul says in 1 Thessalonians 4:11, to paraphrase, just go about your life and mind your own beeswax.

A lot of people in the church get up in arms about this but I think that outrage is misplaced. Greed is a sin but nowhere in Scripture do we see a mandate to go to Caesar and seek to have him use his sword to confiscate from some to give to others. God is indeed angry at greed but He will also deal out the judgment (for a graphic example see Luke 16:19-31). If someone in the church is in need, the church should help them out rather than going to Caesar. It is not loving, charitable, dare I say not Christian, to take from some by force and give to others. Someone who claims to be a peacemaker when it comes to going to war but has no problem with coercing some people to give to others doesn't really understand what being a peacemaker is all about.

At the end of the day, you should make what an employer feels your work is worth to that organization. If you think you deserve more, do something about it. The best way to combat "income inequality" is to free up capital for investment which in turn creates jobs and thereby increases competition for workers who will then make more money. The dirty little secret behind the calls for "income equality" is that most of the people chattering about it are millionaires already and have created their own tax shelters to hide their wealth. Meanwhile the suckers in the middle-class will end up paying high prices while their wages stay put, meaning that the ones who are going to really suffer are the most productive members of our society. It might just be that is the whole point of this exercise in the first place.

Why worry about things that don't matter?

Time for a little pushback.

I have been thinking more about the whole flap over Duck Dynasty and the implications for the church. I often find that once the initial furor dies down it is helpful to think through the issues when the "heat of battle" is not quite so hot. I used to be pretty fervent about the culture wars and while it may not seem like it, especially if we are friends on Facebook or you follow me on Twitter, but I don't care nearly as much as I used to about politics and economics. There is not a "Christian" system of worldly governance or economics and our mission transcends and supersedes those sorts of concerns. Winning the culture wars wouldn't make a single new disciple of Christ (see Eric Carpenter's post on this topic, What If Conservatives Actually Won The Culture War?). I also believe in a God who is sovereign over all things, from the smallest detail to the rebirth of a sinner dead in their trespasses. That raises a question in my mind and certainly others: why care at all about these apparently irrelevant issues like economics and politics?

I care, probably more than I should, because believe it or not I care about people, even people I don't know and who aren't even born yet. Ideas and policies have consequences. I believe as firmly as I believe anything outside of the Gospel that some ideas are harmful to people, ideas like institutionalizing children, policies like the creation of a state replacement for family and especially fathers, notions like unborn children being reduced to an dehumanizing term like "choice". Not every transgression amounts to persecution but just because it isn't persecution doesn't mean it is irrelevant.

All things being equal, a society with a free exchange of ideas is better than one without. A society with an opportunity based economic system is better than one with a false outcome based system. A nation where children are not murdered in the womb is better than one where they are. A nation that incentivizes and protects marriage with a mother and father is better than one that waters down marital relationships to an unlimited number of permutations that all demand equal recognition no matter how harmful they are. A peaceful nation state that restrains her own powers both domestically and abroad is a freer and better neighbor than one that treats all of her citizens as potential criminals and interferes over and over in conflicts that are none of her business. I believe that a people who individually, voluntarily and collectively work together to aid the poor, the widow and the orphan is preferable to one that confiscates from some to give to others and where individuals subcontract mercy work to the state or the religious institution. I believe it is profoundly immoral to bankrupt future generations with an enormous debt burden because of the greed, selfishness and incompetence of past and present generations. There are lots more but you get the idea. Just because something doesn't have eternal consequences doesn't mean it ought to be ignored. Feeding a poor person or visiting a widow doesn't make one a believer but that doesn't mean it is unimportant.

Free market economics is not the Gospel (nor are income redistribution schemes). Likewise our individualistic, "I earned it, it is my money and I will do with as I want with it" attitude is cause for concern and correction in the church. Nevertheless I honestly believe that a freer society with freer markets where people have the opportunity to take risks and be rewarded for enterprise and initiative is better for all people than a centrally controlled economy. The economic history of the world bears this out.

Here is the point I am trying to make. I can believe the above positions and even advocate for them at the same time I serve God and proclaim His Son. Granted there needs to be a prioritization because my calling as an ambassador of the King trumps every other concern. The Gospel proclamation is our highest and only eternally relevant task. Free markets are not the Gospel. Traditional marriage is not the Gospel. Even protecting unborn children is not the Gospel. That doesn't make them irrelevant or value neutral. All across the political spectrum, left and right equally, the church has tried to link the Gospel with their political cause but that error and abuse doesn't lead to a shoulder shrugging attitude of "who cares?". Because I care about people I care about issues that make their lives better or make their lives worse.

So please don't dismiss as petty any issue or position that is not directly Gospel related. Not everyone, or even very many people, will respond to the Gospel's offer of unmerited favor that forgives sins. That reality doesn't mean that we sit in our Kingdom bunkers and watch the world collapse in misery and despair. Nor does the opposite hold true, as some seem to suggest, that winning political victories and achieving cultural dominance is our most pressing concern. In this area, as in so many others, balance is of the utmost importance.

A Quick Economics Lesson

(When I say economics please note that there is a difference between economics and what economists teach/believe. I think most economists haven't a clue what happens in the real world, kind of like professional theologians who never get away from campus except to attend theological seminars)

So anyway a couple of weeks ago the predictably left wing Huffington Post ran a hit piece on Wal-Mart because, GASP!, the CEO of Wal-Mart has a much larger pension plan as part of his executive compensation package than the average cashier/greeter/shelf stocker that works for Wal-Mart. Oh the humanity! Something must be done! I say...

SO WHAT?

I know Wal-Mart is the easy to revile target du jour. It is the unattainable prize for unions and their bought and paid for political friends. Being the single largest private employer in the country means that unionizing Wal-Mart would singlehandedly help reverse the decades long decline in union membership so the labor movement has been fanatically obsessed over Wal-Mart for a very long time. Railing against Wal-Mart is made even better because there is a subtle elitism from those who are refined and shop at fancier stores, sneering and snickering at the great unwashed hoi polloi that shop at Wal-Mart because a few of them wear lycra pants and tube tops while shopping. Chortle! What a bunch of rubes! If we can control our sneering for a moment, can we think about this?

The CEO of Wal-Mart heads a multi-national goliath with around 9000 locations, the #1 largest company in the Fortune 500 with almost $500,000,000,000 in revenue. In case you missed it, that is half a trillion dollars in revenue. It is one of the, if not the, most complex business entities in the world. What exactly would you say is an appropriate pension ratio compared to the average Wal-Mart worker, a worker that has no supervisory or P&L responsibility even at the department level in a single store and presumably has minimal experience and education? Working in the retirement plan industry for as long as I have I can guarantee you that the reason the average 401(k) balance at Wal-Mart is around $18,000 is that there are an awful lot of people who don't save anything in their retirement plans and coming up with an average when a lot of your input is a zero lowers the entire average. That is true at almost any company and especially organizations with a large number of lower income, part-time and second-wage workers like retailers. Companies spend a lot of time and effort to try to get people to participate, often selecting their retirement plan provider based in large part on their experience in education employees. Not everyone can afford to save in their 401(k), I get that, but the out of context ratio is a red herring.

Really what does it matter to you or me how much the CEO of Wal-Mart gets in his pension compared to the "average" Wal-Mart worker?  In fact what does it matter to the average worker at Wal-Mart? It really is an issue between the board of directors, selected by the shareholders of Wal-Mart, and the person who occupies the proverbial corner office. They have decided that he is worth that sort of compensation package. I know that being perpetually aggrieved over this "injustice" or that "outrage" is something of a badge of honor among a subset of the population, the same population that likes to mock the stereotypical low brow customer of Wal-Mart stores, but as a private employer Wal-Mart is free to offer various compensation packages to people for various jobs. If the average Wal-Mart worker thinks he or she deserves a higher wage or better compensation package, they should apply for other jobs and see if that is true. You only deserve whatever wage you can negotiate based on your skills and experience. If you like working at Wal-Mart and want to make more, Wal-Mart has all sorts of benefits to help you. As their website notes, "About 75% of our store management teams began as hourly associates, and they earn between $50,000 and $170,000 a year" and " Every year, we promote 170,000 people to jobs with more responsibility and higher pay". THAT is how Wal-Mart workers make more money, by working hard and taking advantage of opportunities to advance yourself, opportunities open to every employee, not by demanding an arbitrary raise for no reason other than someone thinks they should make more.

A lot of this chatter surrounds the idea of a "living wage", an arbitrary level of income that someone decided everyone needs to make. We are treated with the regular spectacle of the Left pushing for an ever inflated minimum wage, a policy that basically amounts to bribing voters with other people's money. The latest proposal demands a Federal minimum wage of $10.10. Why stop there? Why not $20/hour? Or $30?! Probably because the people who are pushing for this know that it would cause dramatic, immediate inflation. By increasing it incrementally, a buck or two here and there, the inflationary pressure is spread out. It is still there but it is not as obvious. The net results is that within a short time the minimum wage worker is still not better off in terms of purchasing power but they are made to feel better about themselves and of course show up at the ballot box to vote for the party that "cares about working class Americans:.

Let me be blunt. No one "deserves" a living wage, whatever that means. You don't "deserve" something just because you "want" something, although that is a tough sell in our society. Saying that an entire population of workers in a myriad of industries, with radically different skills and experience, living in a wide range of cities, towns and rural locations deserves an arbitrarily determined rate of pay might make for good political theater but it doesn't make a lot of sense in the real world. Many jobs are called "entry level" because that is what they are, jobs for lower skilled employees with correspondingly less experience. Employers are dying for workers with skills, skills that just about any American can get for relatively low cost and in a short time at a community college. Every place I have ever worked promoted from within so if you work hard, you move up. That is how it has always been, at least in my lifetime/, but now people want to skip the "work hard" and "gain skills/experience" part and go right to the "make more money" stage.

Kudos to Wal-Mart for attracting top executive talent and compensating them for the unimaginably difficult and complex jobs they perform. Again, if the average Wal-Mart worker is thinks they are getting a raw deal they should take their resume to the marketplace and see what employers think. Or they should take steps to advance themselves. There is no reason an 18 year old Wal-Mart worker making minimum wage can't go to college on Wal-Mart's dime and rise through the ranks to be the CEO. It takes time, it takes patience and it takes hard work but aren't those all things we are supposed to respect in America?

The Family Economic Unit

I wrote a few weeks ago about the subject of debt and trying to avoid/get out of debt. In the meanwhile I have been thinking a lot about the economics of the home and family and how that relates to debt and financial stability. As I look at the world around me I see very little praiseworthy from an economic standpoint. The rich grow richer and more power too them I guess. The poor and the dependent class grow larger every year thanks to a mediocre economy and incentives that generationalize poverty and dependence. More and more families have two wage earners and yet those same families are barely making ends meet. I want something different than the rat race and debt/consumption model for my family. That requires a different look at how we approach economics at family level.

There are two main factors in the economy of a household, income and expenses. The expenses side is fairly self-explanatory, spend less and make do with less. Live more simply. That is easier said than done in our culture that worships the new, the better, the upgrade and the update while consumption is king and debt is always available. But we really can do with less, for example see John Mureiko's recent post More With Less: Clothing to look at just one area where we think we need more than we really do. We are a pretty frugal family in some ways, no smartphones, no cable/satellite TV, we don't go on expensive vacations (or vacations at all!) or buy lots of gadgets or clothes. We don't eat out a ton other than breakfast at the local greasy spoon for my wife and I and the occasional pizza. We don't throw a lot of food away because we feed it to our pig in return for bacon. We have a modest sized mortgage and one small car payment. So we are pretty bare-bones in a lot of ways compared to other families.

That doesn't mean we can't do more. We are looking at our livestock because that has gotten a bit out of control, we have too many horses that eat too much hay and do little in return. We are trying to be smarter about our meal planning, more basic food stuffs to make meals from rather than pre-packaged foods. We are being a bit more picky about driving our Amish neighbors around to make sure that we are get fairly compensated for time, gas and wear & tear.

The other side of the equation is income. We are an anomaly in modern America, a large family with a single bread winner. That is who we are and how we have rolled since 1995 when I graduated from college. I am not sure that is going to keep working. So we have to decide what to do in place of that model and in doing so take an inventory of our family. While we have is some extra space and we have lots of potential labor. With four able bodied adults in the home and plenty of other kids old enough to help we are looking at how we can leverage that to diversify our economic structure. That looks a little light this....

- Multiple income streams

As it stands right now, we are a single income family. We have been since the day I graduated from college and we like that. We are old fashioned perhaps but we think that the family is best served when one of the parents, usually mom, is home more or less full time to manage the household. For us that has always meant that I go to a job somewhere and my wife stays home. That has worked for almost twenty years although it has been very trying for us financially for much of that time. It was especially critical when we had a non-stop procession of babies and very small children in the home. Now our children are getting older, our youngest is almost six and soon we will have 5 of our 8 aged 13 or older. That doesn't mean they don't need attention, just not as much of stuff like feeding and diapering which in theory frees up a lot of time. So we are giving serious thought to how the income end of the equation can change without compromising our core belief structure about having mom at home.

What we would like to see are multiple income streams. We have a somewhat unusual opportunity in that we live among one of the largest populations of Amish in the country and we have very good relations with many of them. This means that we can leverage those contacts to drive them places they cannot readily reach with a buggy, get into business ventures including one we are looking at very seriously and also a bartering economy where we trade their expertise for our technology like cars.

- The home as the economic center for the family

Alongside the multiple income streams, we would like to see the home become the economic focal point of the family. Rather than our home being the place we all go forth from to jobs/schools and then come back to for the purpose of eating and sleeping, we would love to see the home be where we work and where we live. That is how humanity worked for a very long time and I don't think modern "progress" has a whole lot going for it, far more so than the model of families scattering to the winds to chase "education" and jobs leaving families splintered and professional caregivers to take care of young children and elderly parents. Our next door neighbor is a hog farmer, his dad lives on the corner of his property and helps him with the farming still, and does so alongside his grandsons.

- An eye toward the future

Far too often in America adulthood means the kids striking off on their own to make their way in the world and this also often means moving away leading to fragmented families. Little wonder that families don't care for parents when they grow older and so many families put their children in day care. Our future hopefully is one where our kids are participating in the economy of the home and stay near us so that we can help care for their children and in turn can rely on them for assistance as we get older.

Also, what will the economy look like in the future?

Like it or not the United States is headed for a single payer health insurance system. While I think that is a horrible idea it is happening whether we like it or not. Having a job that provides insurance might not be a major concern. Also with a family economy it should be less important to have a million dollars socked away in your 401k. I think these and other factors are going to make the traditional employment model obsolete

That is just a rough plan to start.

We would like to get more property as we are kind of tight on land right now. One project we are exploring pretty seriously would require a new building and that would eat up the last bit of land we have that is vacant on our current property. So if we can get established with a decent income supplemented by jobs by myself and my older kids our next task would be expanding with more property, something that is pretty expensive with high crop prices and a ton of land hungry Amish to compete with! Really our goal is becoming more clear in my eyes and that is important. I really want to get out of the office/cubicle world and spend more time working alongside my family for a whole bunch of reasons and I think we are taking a few of the right steps along that path. You are welcome to follow along as we seek a new path!

The two pronged attack by liberalism

First, we had a panic induced piece of legislation pushed through that dramatically increased the size of the government. Labeled a “stimulus” bill, the reality is that what the bill contained was mostly pork, social welfare spending and income redistribution policies. Very little in the bill will create jobs and even less of it will lead to long term economic growth. That is the first wave.

Now we are seeing the other hand, a panic about the size of the deficit that is being created in large part by the giant spending bill that Obama just signed! That is the insidious genius of Obama, that he gets people in a panic to fix the mess he just made worse! What is the solution of the Obama White House to reduce the deficit? Cutting spending? Of course not!

Mr. Geithner said that the proposed budget will reduce deficits in part by "restoring fairness to the tax code." That will be accomplished by taxing the gains of Wall Street fund managers at ordinary income rates, instead of lower capital gains rates.

In Washington speak, “restoring fairness to the tax code” means big tax increases, but as pointed out before even taxing every taxable penny of “the rich” who already pay the lion’s share of taxes will not do the trick. It goes without saying that between the giant deficit spending bills Obama has pushed through in the first two months of his administration and the looming unfunded mandates of Medicare and Social Security, the only way to pull it off is going to be deeper and wide tax increases, some directly on your income and others indirectly or more subtly in gas taxes and the carbon emission “cap and trade” scheme that will pass enormous costs on to business and eventually consumers. Nothing like crippling a seriously damaged economy by punishing success, investment, innovation and risk taking,

Rest assured that we will keep hearing the refrain of this mess being Bush’s fault, but it is instructive to note that since Obama has taken office and especially since he announced this ludicrous $4,000,000,000,000 budget, the stock markets have plummeted to lows we haven’t seen since 1997. At some point, even an apathetic public is going to have to see beyond the media spin and realize that Obama is bent on driving this country into economic ruin and a mirror image of the failed Western European social welfare state.

But he started it!

Obama gets, er goes on the, offensive!

After getting hammered in the media for weeks over the massive "stimulus" package, President Obama finally started firing back. For such a brilliant guy, he and his team have spent weeks getting beat up over this ridiculous pork package and now with public support plummeting they decide to look around and see that their mandate is crashing down. The economy still stinks, more layoffs happen every day and there is no end in sight. Rather than sound Presidential and exhibiting leadership, he frankly sounds like a petulant teenager who is being told he cannot have the keys to the car on Saturday night.

In what was the most pointedly partisan speech of his young presidency, Obama rejected Republican arguments that massive spending in the $819 billion stimulus bill that passed the House should be replaced by a new round of massive tax cuts.

“I welcome this debate, but we are not going to get relief by turning back to the same policies that for the last eight years doubled the national debt and threw our economy into a tailspin,” said President Obama – sounding more like Candidate Obama than at any time since he took the oath of office less than a month ago.

Obama, speaking to about 200 House Democrats at their annual retreat at the Kingsmill Resort and Spa, dismissed Republican attacks against the massive spending in the stimulus.

"What do you think a stimulus is?" Obama asked incredulously. "It’s spending — that's the whole point! Seriously.”

"Seriously" Is he fourteen? I wonder if he rolled his eyes and sighed? He is right about one thing, it is spending all right but that doesn't make it stimulus. Especially when you spend money on stuff that won't go into effect for two years or on just outrageous pork and political paybacks like hundreds of millions on STD research. More on the Obama "rationale" to drive a nation deep in debt even further into debt...

“When you start hearing arguments, on the cable chatter, just understand a couple of things,” he said. “No. 1, when they say, ‘Well, why are we spending $800 billion [when] we’ve got this huge deficit?’ – first of all, I found this deficit when I showed up, No. 1.

“I found this national debt, doubled, wrapped in a big bow waiting for me as I stepped into the Oval Office.”

This is Obama "going on the offensive"? The only this offensive here is how naive and pompous the President of the United State is. I guess since we already have a huge deficit it makes it OK to spend even further. Ever caught your kids fighting and the one says "He started it!" as if that makes it OK? That is what this argument amounts to. We were already in a huge deficit when I got here, so you cannot criticize me for deficit spending. Well think again. If he expects the wounded GOP to walk in lockstep with the same policies that got them booted, he is in for a rude shock. You would think he would know better, having been an instructor at a law school as he so often reminds us, but being "bi-partisan" doesn't mean he dictates and the Republicans meekly go along with what he says.

Mr. Obama you knew what you were signing on for and governing is different than campaigning. You managed to convince millions of Americans to elect you in spite of your lack of substantive plans and your complete lack of experience. Now you are President, so it is incumbent upon you to govern, not to pout when people don't walk in lockstep. Being a candidate is easy. Being a President is a lot harder.

Seriously.

Death by savings

Oh dear, now it looks like people saving money and being more frugal is actually hurting the economy! The title of an article in the Wall Street Journal bears out this awful truth…

Hard-Hit Families Finally Start Saving, Aggravating Nation's Economic Woes

BOISE, Idaho -- Rick and Noreen Capp recently reduced their credit-card debt, opened a savings account and stopped taking their two children to restaurants. Jessica and Alan Muir have started buying children's clothes at steep markdowns, splitting bulk-food purchases with other families and gathering their firewood instead of buying it for $200 a cord.

As layoffs and store closures grip Boise, these two local families hope their newfound frugality will see them through the economic downturn. But this same thriftiness, embraced by families across the U.S., is also a major reason the downturn may not soon end. Americans, fresh off a decadeslong buying spree, are finally saving more and spending less -- just as the economy needs their dollars the most.

Usually, frugality is good for individuals and for the economy. Savings serve as a reservoir of capital that can be used to finance investment, which helps raise a nation's standard of living. But in a recession, increased saving -- or its flip side, decreased spending -- can exacerbate the economy's woes. It's what economists call the "paradox of thrift."

U.S. household debt, which has been growing steadily since the Federal Reserve began tracking it in 1952, declined for the first time in the third quarter of 2008. In the same quarter, U.S. consumer spending growth declined for the first time in 17 years.

I really don’t think that excessive savings is the problem. The real culprit is that our economy is built in many ways on smoke and mirrors, and has been for a long time.

We are working with two big issues in the economy from my vantage point, keeping in mind that while I have worked in financial services and banking for a long time and have a rudimentary knowledge of economics garnered in college, I am not an economist. The two sides of the coin are inflated wages and debt based consumption.

Wages

One issue is that wages are artificially inflated by minimum wage hikes, which does little to help the lowest paid workers and drags workers with modest pay rates down. If you are making $10/hour and the minimum wages goes from $5.45 to $9.50, your pay hasn’t changed but now you are getting paid just slightly more than someone in a minimum wage job. That makes your job less valuable in comparison. On the other end, paying people more than the market rate for the lowest skilled jobs causes prices to go up. If you have to pay more for workers at McDonald’s, then you respond by raising the price of a Big Mac. The minimum wage worker gets more dollars in his paycheck, but those dollars don’t buy more than they did before and now the higher costs are passed on to everyone else. Wages must be market driven, each job has in inherent value and tinkering with that value by the government doesn’t change the fact that an electrical engineer should make substantially more than a cart collector at Wal-Mart. Payroll is not an unlimited pie, it is a expense line item and if it increases, something else must change to compensate.

Another issue, one that I have been complaining about for some time, are labor unions. For decades, unions have collectively bargained progressively higher and higher wages and more expensive benefits. That seemed fine 40 years ago when the manufacturing sector in America was strong and the Big Three car companies had virtually no competition domestically. We made our own cars, we bought our own cars. But today we have wages that are skewed compared to their actual value. Autoworkers have salary and benefit packages that are enormous compared to not just other blue-collar jobs but even some very specialized, highly technical jobs. The legacy costs for the UAW mean that an unreasonable percentage of the cost of a new car being manufactured goes to pay the benefits of a former employee who hasn’t worked at GM or Ford for years, or even decades. It is not just the UAW. Union represented employees in all sorts of industries have artificially inflated wages for service employees, unskilled workers and all manner of job categories.

The final culprit in wages, at the risk of being labeled a misogynist or Neanderthal or chauvinist (which doesn’t really bother me), is that a huge chunk of the workforce are married women with children. The workforce has a substantial number of employees or potential employees that are unemployed that really don’t need to be in the workforce. Married women with children work for a variety of reasons, few of which quite frankly are valid, and while they work, they store their kids in expensive daycare until they are old enough to go to free daycare, i.e. the public school system. Even then they are getting home before the parents in many cases, requiring some sort of afterschool care or the kids staying home day after day unsupervised.

So we have a whole service industry based on caring for children that could be cared for by one of their parents, which in turn causes upward pressure on wages and benefits so that these parents can afford daycare. The daycare/child-care industry is a whole business predicated on the model of delivering a service that people could and really should do for themselves. It would be like every family in America paying for a chauffeur, chef and maid. Sure I can drive myself to work, but why should I when I can pay someone else to do it? On the other hand, the increased number of consumers serves to drive demand which drives up prices. So women who work “because they have to in order to make ends meet” have unwittingly made making ends meet harder because they have inflated demand and wages. I have always argued that for most middle-class wage earners it makes very little economic sense to have the spouse working when you factor in daycare costs and increased taxes, as well as ancillary costs that are harder to gauge, things like eating more expensive prepared foods and eating out because who wants to work 45-50 hours a week and then come home and make dinner? The Four Horsemen of socialism, feminism, consumerism and secularism have conspired to convince families that they need two incomes to buy the things they MUST have, that public schools and day care actually are positive sources of socialization and that a woman who is “just a housewife” is repressed. The end result is two-income families, and while the children suffer, the family is not ahead any and the workforce is flooded with extra workers. The only beneficiaries are daycare providers and the Federal government that benefits from increased tax revenue and in turn subsidizes daycare to make it even more compelling for women to become wage earners while the institutions care for their children, thus fulfilling the socialist agenda of state control at an ever earlier age.

Debt

The flipside of the problem is debt. The infrastructure of this country is built on debt. Plain and simple. Not 100% of it of course, but much of it. Virtually no one buys houses or cars in cash. That is not in and of itself a huge problem but the ease with which people could get credit, even if they had shaky credit to begin with or way too much debt already, also served to inflate prices. Take cars for example. The number of people driving relatively new cars is crazy, but when you can get credit at will and stretch auto loans out for 84 months, it is going to encourage people to buy new and expensive cars. Hummers, SUVs, nice sedans, all brand new off the lot, fill parking lots, roads and garages. Prices skyrocket because people want these new cars and banks were willing to finance that desire. In the old days, young men looked at the latest muscle car and dreamed about saving up and buying one some day. Today, at least until recently, a 20 year old guy with minimal credit and a paycheck could drive out of the dealership with a brand new Mustang convertible.

Even housing, normally one of the few sound places to incur debt, has been a major culprit in our economic downturn. No money down loans that gave people little incentive to save to buy a house and put people into mortgages who were not really ready for them, adjustable rate mortgages that kept payments low for the first 3-5 years, interest only loans that also kept payments down in the hope that house values would appreciate and even loans where you could make such small payments that your principal balance would actually go up each month. All of these loan vehicles conspired to skew the housing market along with government programs designed to incent or punish banks into making loans to people they normally wouldn’t, in houses they normally wouldn’t and with terms they normally wouldn’t offer. Banks have become progressively more and more production based, so balance sheet and income statement growth is less important than product pushing to hit goals. So what if a loan goes bad, I already got paid for it and there is no downside for me if it goes bad? With all of this, it is little wonder we are in a housing crisis as housing sales plummet, home values decline every month and foreclosures make up almost half of housing sales.

But credit cards are the big culprit and the next big crisis about to hit the economy.

Many people used the inflated “value” of their home to take out a home equity line of credit, and in doing so lowered the rate on their debt but also transferred debt that was unsecured into debt collateralized by their home. This led to high-interest debt with no tax advantages being transferred into tax favored, lower interest debt but it also had two unintended consequences. First, people went right back out and used their unsecured credit card debt to purchase goods and services, basically using the appraised value of their house to fuel spending in the economy and second, they increased the total debt load against their house which is now working against them when trying to sell their home that is plummeting in value.

Drive around any urban or suburban area and look at all of the strip malls, shopping centers, big box stores. Look at our old hometown of Petoskey, Michigan where a brand new Lowes was built next to the Home Depot and where they are planning on building a Meijer supercenter to go along with the Wal-Mart super center, K-Mart and three traditional grocery stores. All in a town of 6000 permanent residents and all driven by consumer spending utilizing credit card debt. Many of the Bed, Bath and Beyond stores, Barnes & Noble bookstores, Best Buy electronic stores were built in response to consumer demand that is funded by money that consumer don’t have and likely never will have. It used to be that if you got in over your head in credit card debt, you could refinance it with your house that inexorably increased in value. But with housing prices plummeting, foreclosures making up almost half of the home sales, job losses, etc. that option is off the table and families are looking around at the bills and realizing that they will never be able to service the existing debt month to month, much less pay the debt off. For many people, the options are narrowed down to the point that they are walking away from houses, turning in cars and declaring bankruptcy because their income cannot pay for the debt.

We are in trouble economically, not because of a few bad quarters or some extra foreclosures in the last six months but because the foundations of our economy are rotten at the core. Despite the plan of Barack Obama to spend us into prosperity with trillion dollar deficits, that will not solve the underlying sickness in our economy. Until wages get under control and back to market driven levels and until the credit crisis burns out, the economy will struggle. The only upside is that it seems that based on this report in the WSJ and other reports showing spending is coming under control and women are leaving the workforce. It took decades of false affluence to get us into this mess, and it is going to take a long time and a lot of pain to get us out, but if we don’t we will inexorably slide further into socialism as Americans become more and more dependent on the government to care for them.

Government logic

Remember last year? It has been a couple of days already, so I can understand if you have forgotten. Many people apparently already have. Remember when prices for gasoline in most places were well over $4/gallon and in places like the People's Republic of California prices were over $5? I recall filling my truck when it was empty would be $85-90 and our monster 15 passenger van would be over $100. But that has been months ago, so it is ancient history now. I can fill my Silverado for under $40, so out of sight is out of mind. Our driving habits have changed as a nation though, people bought a bunch of fuel efficient cars and have curtailed driving as much as possible.

Well since people are driving less and buying less gas, guess what? That means that Uncle Sam is sucking up less of our money in gasoline taxes. I guess the Federal Government will just have to spend less money...uh, no. If consumption goes down on something we get tax revenue from, the solution must be to raise taxes on that commodity (which drives down consumption, which requires higher taxes, and so on and so on...). From the Associated Press...

Motorists' habits spur call for tax increases

WASHINGTON – Motorists are driving less and buying less gasoline, which means fuel taxes aren't raising enough money to keep pace with the cost of road, bridge and transit programs.

That has the federal commission that oversees financing for transportation talking about increasing the federal fuel tax.

A 50 percent increase in gasoline and diesel fuel taxes is being urged by the commission to finance highway construction and repair until the government devises another way for motorists to pay for using public roads.

The National Commission on Surface Transportation Infrastructure Financing, a 15-member panel created by Congress, is the second group in a year to call for increasing the current 18.4 cents a gallon federal tax on gasoline and the 24.4 cents a gallon tax on diesel. State fuel taxes vary from state to state.

In a report expected in late January, members of the infrastructure financing commission say they will urge Congress to raise the gas tax by 10 cents a gallon and the diesel tax by 12 cents to 15 cents a gallon. At the same time, the commission will recommend tying the fuel tax rates to inflation.

The commission will also recommend that states raise their fuel taxes and make greater use of toll roads and fees for rush-hour driving.

Ladies and gentlemen, your federal government at work!

Isn't driving less and consuming less fossil fuels supposed to be the goal, isn't it supposed to be a good thing? You know, global warming and all. Ooops. When people drive less and use less fuel, the government has lower revenue and people keep that money in their pockets. We can't have that, how can we expect people to make sound decision with their own money? The fact that we are even having this conversation six months removed from crippling gas prices exposes just how myopic we are. If it doesn't hit my wallet in a way I can feel right now, it doesn't matter to me.

Once again, when the government tinkers in the free market it always spirals out of control because when an organization that is inherently inefficient is injected it a market that thrives on efficiency, something is going to break. What is really troubling is that so many people have completely forgotten the higher gas prices. Few people are calling for increased domestic exploration, drilling and refining. We are vulnerable to the same extreme price swings in gasoline but because today I don't pay as much for gas, yesterday is irrelevant to me. We should be drilling NOW, exploring NOW, building new refineries NOW, building more nuclear plant NOW while prices are low. If Obama is bound and determined to spend upwards of a trillion dollars of money we don't have for "stimulus", at least spend it on domestic energy production, something that will create tons of real jobs now and in the future, and will go a long way toward energy independence. Instead we will wait until the next spike in gas prices and people will cry and our benevolent government will step in with price controls and the march to socialism will continue unabated. It is a short walk from price controls to wage controls.

Rest assured if they get their way and bump gas taxes up by 50%, no one will be calling to repeal that increase when gas prices go back up, which they certainly will do. Once that increase is in place and those expected revenues are budgeted for spending, it will be impossible to reverse that increase. Gas prices are a ticking time bomb. The damage done to the economy with prices where they were is enormous. Let's hope that this insane idea of increasing gas taxes fades away like one of it's old school proponents, Paul Tsongas aka Paul "Taxongas".

Megachurches need a bailout too!

The Wall Street Journal ran an article today on the rising number of defaults and foreclosures in churches.

During this holiday season of hard times, not even houses of God have been spared. Some lenders believe more churches than ever have fallen behind on loans or defaulted this year. Some churches, and at least one company that specialized in church lending, have filed for bankruptcy. Church giving is down as much as 15% in some places, pastors and lenders report.

The financial problems are crimping a church building boom that began in the 1990s, when megachurches multiplied, turning many houses of worship into suburban social centers complete with bookstores, gyms and coffee bars. Lenders say mortgage applications are down, while some commercial lenders no longer see churches as a safe investment.

And therein we see the problem. Two things jump out at me. First, if churches are running their budget in such a way that a 15% drop in giving is putting them into receivership, that indicates that they are spending way too much money and not being terrible smart about their finances. Second, the reason these churches are in such trouble is that they are carrying way too much debt in an effort to keep up with the market. Church A has a kewl espresso bar, so we need one. Church B has a phat youth entertainment complex, so we need one. Thus we have these huge edifices with multi-million dollar mortgages that require a high level of cash flow every week to service their debt and pay the salaries and benefits of their staff. Bigger buildings=bigger budgets=more attendees=more paid staff=a need for more and more giving. Quite frankly simple Gospel preaching and teaching probably isn't going to generate enough interest to pay the mortgage, staff, utilities, etc so you are in a position to try to do something different to draw in people to put money in the plate.

Not every church is in this pickle. I would have guessed that most mid- and small- sized congregations worship in older buildings that are paid for, and the numbers provided by the WSJ bear that out...

Churches were long considered good credit risks, lenders say. Weekly collections tend to be steady, even during recessions, and churches feel a moral tug to pay debts. Most of the nation's 335,000 churches carry little or no mortgage debt, and are based in buildings that were paid off long ago.

But some churches, especially those not affiliated with major denominations, borrowed briskly to build or expand in recent years. Spending on construction of houses of worship rose to $6.2 billion in 2007 from $3.8 billion in 1997, according to the U.S. Census. Now, churches are seeing congregants lose jobs and savings.

The 125-year-old Mount Calvary Missionary Baptist Church, of Jacksonville, Fla., borrowed about $2.6 million in 2002 to add a new education wing, reflecting pool and tower. In addition, the church's 1,200 members pledged $1 million to the building campaign, but two-thirds of that money was never actually donated, according to the church's pastor, the Rev. John Allen Newman.

A quarter of the congregants soon stopped attending church, says Mr. Newman, so weekly collections started to dwindle. He and the church leaders cut staff and electricity use to save costs, but in January, facing a foreclosure judgment of $3.3 million, the church filed for bankruptcy protection. Mr. Newman says the church hopes to settle its debts and emerge from bankruptcy proceedings in the coming months.

I would suggest that with a few exceptions you are more likely to hear the Gospel preached in a small church without a mortgage than you are in a huge church with a $5 million note. Where in Acts 2:42 do we see the church spending $2.6 million on an education wing, a tower and a reflecting pool? The church mentioned, Mt. Calvary Baptist, went into bankruptcy proceedings after defaulting on a $3.3 million note. From a former banker standpoint, what do you do with a multi-million church facility that you suddenly own? It is pretty hard to shed those assets. It is hard enough to resell a foreclosed house, much less a multi-million dollar church in an environment where nobody is lending millions of dollars to buy a church. When you need to service a $3 million debt, you need a ton of money in giving every week and it goes without saying that many of those giving are not Christians in these huge churches, so when the times get tough they go find their entertainment somewhere else and the church (and the bank) are left with a mortgage that cannot be paid.

When you begin running and marketing your church like a corporation you are inevitably going to have the same problems as corporations: competition, market cycles, constant restructuring. If you want to be a CEO, you go to business school and work your way up the corporate ladder, but that is not the model of ministry we see in the New Testament. We have lost sight of the purpose of the church and in doing so have become indistinguishable for the world we are trying to evangelize.

Hurry up and do something!

No matter what the cost!

I have worked, and currently am, in the retirement plan industry. It is a highly specialized business with lots of arcane rules and confusing terminology, replete with acronyms that no one outside of the business recognizes. It is full of huge players, like my former employer Fidelity Investments, The Principal Financial and the Vanguard Group, who oversees 401(k) plans with hundreds of billions invested. It has tons of other players: banks, giant insurance companies, small firms that handle small plans called TPA or Third Party Administrators (which is the kind of place I work now). We all work and compete in the market for retirement plan assets. That competition has forced all sorts of innovations which have benefitted plan participants. That is the good news.

Now the bad news. It is not news for anyone who is investing that the market correction has led to some dramatically reduced balances in their investments, and for most Americans the bulk of their investment money is in their employer sponsored defined contribution plan, a.k.a. their 401(k) plan (That is something of a misnomer, 401(k) is a section of the tax code but it is the most common designation for the defined contribution retirement plans). Because people are freaking out about their balances, there are calls for the gubmint to "do something!" (Note that these people were not calling in years when there were huge gains in the market. Funny how that works...) There are few things more dangerous than the public demanding that something be done about something and politicians and academics running to the rescue.

The Wall Street Journal ran an article on "How to Fix 401(k)s" . It is instructive. Some of the proposals and concerns make sense. Some are stupid. Some are flat out scary. Some of the good ideas: Automatic enrollment. More annuity options for life-long income. More fee disclosures. Default investments so young savers are not investing in money market funds. There are plenty of common sense improvements that can be made. There are also plenty of really bad ideas.

There are many people arguing that we should scrap the whole thing and turn it over to the government, because everyone knows how efficient the government is!

Still others call for the government to do even more, by guaranteeing a modest level of return on these accounts. "The financial crisis has driven home the point that people can't be exposed to these kinds of market fluctuations," says Boston College's Prof. Munnell. "Even if the market bounces back, people who sold at the bottom will have been harmed. All of us approaching retirement have been harmed emotionally in a way that is unnecessary, demoralizing, and inappropriate in a country as rich as this one."

Well certainly it is the role of Uncle Same to ensure we aren't harmed emotionally in a demoralizing way because of the return on our 401(k) statements! What kind of nonsense is that? The kind of nonsense you get from a college professor with a state sponsored pension that is probably underfunded by billions of dollars. More incredibly dumb statements...

Teresa Ghilarducci, a professor of economics at New York's New School for Social Research, argues that the government is far better equipped than most individuals to bear the risks associated with investing in the stock market. Her government-sponsored Guaranteed Retirement Accounts would provide a guaranteed rate of return of 3%, on top of inflation. Because that number is tied to the economy's long-term growth rate, "it doesn't present a big risk for the government," Prof. Ghilarducci contends.

Well here is the problem with that logic. The government is not self-funded, it is funded by individual taxpayers, i.e. you and me. You would think that we would have learned from the mistakes of the Social Security system, i.e. that the government is not really far better equipped to provide stable retirements for individuals. Ultimately why is it the role, the responsibility, the right of the Federal government to get involved in the savings of individual Americans?

Are there changes that need to be made? Sure. Things like automatic enrollment and automatic increases are a good start. Does the system that provides a vehicle savings in a convenient, tax-advantaged way need to be trashed in favor of a bloated government guarantee that no one can realistically think will not lead to higher taxes? Absolutely not.

It is always scary when you allow people with a political motivation to start tinkering with the private sector, especially when they promise to enrich you with your own money.

President-elect Obama, save us!

Obama banking on large-scale public works project

CHICAGO – President-elect Barack Obama said Saturday he wants to revive the economy through a job-creating public works plan on a scale unseen since the building program of the interstate highway system in the 1950s.

He offered no price estimate for the grand plan, how the money might be divided or the effect on the country's financial health at a time of burgeoning deficits.

The ideas were outlined in the weekly radio address the day after the government reported that employers cut 533,000 jobs in November, the most in 34 years. They are part of a vision for a massive economy recovery plan Obama wants Congress to pass and have waiting on his desk when he takes office Jan. 20.

The president-elect's address never once used the word "spend," relying instead on "invest" or "investments," and pledging wise stewardship of taxpayer money in upgrading roads and schools, and making public buildings more energy-efficient.

"We won't just throw money at the problem," Obama said. "We'll measure progress by the reforms we make and the results we achieve — by the jobs we create, by the energy we save, by whether America is more competitive in the world."

Obama said his plan would employ millions of people by "making the single largest new investment in our national infrastructure since the creation of the federal highway system in the 1950s." He said state officials would lose the federal dollars if they did not quickly use the money to repair highways and bridges.

The problem with this whole concept is that an enormous investment like this needs money, money that has to come from somewhere. We already are running an enormous national debt. We don't have billions of dollars sitting around unused. In order to fund this enormous "investment" (i.e. spending) plan, the Prez-elect is either going to have to raise taxes or issue a bunch of new debt. It sounds lovely, we are going to "create" a million new jobs but to do that means taking money that could have been invested elsewhere which will cost jobs. All this will do is to shift more power to the Feds, which I assume is the goal for the Anointed One anyway.

Be careful of pie in the sky, it is often made out of crow.

There are two kind of companies in America...

There is a great editorial in the Wall Street Journal on how the hated Big Three automakers, creators of evil, gas guzzling, greenhouse gas spewing SUVs, THE symbol of the horrible environmental record of America has become the sweetheart of the Left. From Nationalizing Detroit...

In the Washington mind, there are two kinds of private companies. There are successful if "greedy" corporations, which can always afford to pay more taxes and tolerate more regulation. And then there are the corporate supplicants that need a handout. As the Detroit auto makers are proving, you can go from being the first to the second in the blink of an election.

Truer words have never been spoken! The same D.C. busybodies who have spent countless hours and dollars regulating the auto industry and empowering the labor unions now is turning to the taxpayers and telling us we have to fix a broken industry, an industry broken in large part by the government and the unions who now want us to save the same jobs they have priced out of competitiveness.

For decades, Congress has never had a second thought as it imposed tighter emissions standards on GM, Ford and Chrysler, denouncing them for making evil SUVs. Yet now that the companies are bleeding cash, and may be heading for bankruptcy, suddenly the shrinking Big Three are the latest candidates for a taxpayer bailout. One $25 billion loan facility has already been signed into law, and Senator Debbie Stabenow (D., Mich.) wants another $25 billion, this time with no strings attached.
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A bailout might avoid any near-term bankruptcy filing, but it won't address Detroit's fundamental problems of making cars that Americans won't buy and labor contracts that are too rich and inflexible to make them competitive. As Paul Ingrassia notes nearby, Detroit's costs are far too high for their market share. While GM has spent billions of dollars on labor buyouts in recent years, they are still forced by federal mileage standards to churn out small cars that make little or no profit at plants organized by the United Auto Workers.

We ought to let GM and Ford declare bankruptcy, tear up their union contracts and dealership deals and start over as smaller, leaner and more competitive companies. Instead, under the benevolent leadership of Washington liberals and the capitulation of the now limp-wristed Bush administration the taxpayers will dump untold billions into a failed system, a bailout that will prolong the death throes but cannot fix the problem. Hey, sounds a lot like the way we treat public education!

Is the age of prosperity over?

That is the argument from Arthur Laffer, famous in economics and political circles for the "Laffer Curve". His argument in the Wall Street Journal is that we have come to the end of the age of prosperity, an age that has lasted for decades and is really all many people my age have known. It has given us material wealth unimaginable by most generations of American, and along with that a sense of entitlement and discontent also unimaginable. We never have enough. We desire the latest, the newest. I know this all too well (as I eagerly await my ESV Study Bible, as if I don't have enough study Bibles). The article carries the title: The Age of Prosperity Is Over with the subtitle: This administration and Congress will be remembered like Herbert Hoover. That is not intended as a compliment. Here is an excerpt:

If you don't believe me, just watch how Congress and Barney Frank run the banks. If you thought they did a bad job running the post office, Amtrak, Fannie Mae, Freddie Mac and the military, just wait till you see what they'll do with Wall Street.

Some 14 months ago, the projected deficit for the 2008 fiscal year was about 0.6% of GDP. With the $170 billion stimulus package last March, the add-ons to housing and agriculture bills, and the slowdown in tax receipts, the deficit for 2008 actually came in at 3.2% of GDP, with the 2009 deficit projected at 3.8% of GDP. And this is just the beginning.

The net national debt in 2001 was at a 20-year low of about 35% of GDP, and today it stands at 50% of GDP. But this 50% number makes no allowance for anything resulting from the over $5.2 trillion guarantee of Fannie Mae and Freddie Mac assets, or the $700 billion Troubled Assets Relief Program (TARP). Nor does the 50% number include any of the asset swaps done by the Federal Reserve when they bailed out Bear Stearns, AIG and others.

But the government isn't finished. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid -- and yes, even Fed Chairman Ben Bernanke -- are preparing for a new $300 billion stimulus package in the next Congress. Each of these actions separately increases the tax burden on the economy and does nothing to encourage economic growth. Giving more money to people when they fail and taking more money away from people when they work doesn't increase work. And the stock market knows it.

The stock market is forward looking, reflecting the current value of future expected after-tax profits. An improving economy carries with it the prospects of enhanced profitability as well as higher employment, higher wages, more productivity and more output. Just look at the era beginning with President Reagan's tax cuts, Paul Volcker's sound money, and all the other pro-growth, supply-side policies.

Bill Clinton and Alan Greenspan added their efforts to strengthen what had begun under President Reagan. President Clinton signed into law welfare reform, so people actually have to look for a job before being eligible for welfare. He ended the "retirement test" for Social Security benefits (a huge tax cut for elderly workers), pushed the North American Free Trade Agreement through Congress against his union supporters and many of his own party members, signed the largest capital gains tax cut ever (which exempted owner-occupied homes from capital gains taxes), and finally reduced government spending as a share of GDP by an amazing three percentage points (more than the next four best presidents combined). The stock market loved Mr. Clinton as it had loved Reagan, and for good reasons.

The stock market is obviously no fan of second-term George W. Bush, Nancy Pelosi, Harry Reid, Ben Bernanke, Barack Obama or John McCain, and again for good reasons.

These issues aren't Republican or Democrat, left or right, liberal or conservative. They are simply economics, and wish as you might, bad economics will sink any economy no matter how much they believe this time things are different. They aren't.

A stinging indictment. Was Bill Clinton, gulp!, a better President that George W. Bush? Not a better person, a better President? For all of his well-meaning attempts, President Bush has abandoned any pretence of being a conservative fiscally and in an unholy partnership with the Left has saddled us with an enormous debt and soon will have saddled us with the most liberal President in my lifetime.

Our age of prosperity is over. And believe it or not, that is probably the best thing that could happen to the church. Barack Obama may be good for the Gospel, not because he is a godly man because he certainly is not, but because as our self-reliance in our own culture war and our affluence wanes, we are left with nowhere and no one to turn to but God. I predict that if Obama wins, our culture will suffer like never before but our God will show His glory in salvation, in changed hearts like few of us have seen in our lifetime. Pray God will send us revival and send us repentance.

Look who had their hands in the cookie jar!

Great little video from Fox News that cuts through much of the inane hype and gets to the dirty truth of the financial crisis: our friends in the Democrat party have as much blood on their hands as anyone else out there. Because of the artificiall demand created in part by Fannie and Freddie, there was an ever increasing market for subprime loans. If there was no market for sub-prime mortgages to be sold at a profit, mortgage originators would have stopped writing those mortgages.

The lesson here is not that we need more government oversight, but instead that when the government gets involved in the free market, it ends up messing up the demand-risk equation and creates a market where none should have existed. What is really scary is that the Bush administration, directly ignoring obvious conservative principles, is going to take over private banks. Where does it end?




What is outrageous is the way that Dems are getting off Scot free even though they have controlled congress in recent years. Chris Dodd? Chuck Schumer? Barney Frank? Even the Messiah, Barack Obama, took money from Fannie and Freddie? I am aghast at the idea! That must just be more Fox News right-wing bias showing through!

Unfortunately, the media is so in the tank for Obama that the truth of his and others Dems complicity in this mess has been thoroughly hidden. A state trooper in Alaska who used a taser on a kid gets rightly fired? All over the news! The Anointed One shown to be nothing more than a Chicago Democrat, with shaky credentials, outrageous associations and hands a lot dirtier than the media would have you believe? Nary a word.

Between the fraudulent voters rounded up by Obama’s henchmen at ACORN and the non-stop glowing coverage of Obama, coupled with a gross selfishness on the part of Americans, you can put this election to bed. Obama is going to win going away and his cronies in the Congress are already planning on multi-billion dollar income redistribution plans. Wait until the same people who ran Fannie Mae and Freddie Mac start running private banks and bailing out consumers, companies and even states.

(Hat Tip: Paul Edwards)

It's the end of the world as we know it

Not feeling grim enough yet? We are pretty focused on the U.S. economy here in America, obviously, but things are very interconnected in the world financial systems and they trauma is global. No one seems to know what to do, and that is dangerous because when the pressure is on to DO SOMETHING, it almost always ends up being wrong (i.e. the $700 billion bailout). There is a very insightful article by Niall Ferguson in Time Magazine called The End of Prosperity? and it is pretty sobering stuff. Here is a sample:

The U.S. — not to mention Western Europe — is in the grip of a downward spiral that financial experts call deleveraging. Having accumulated debts beyond what's sustainable, households and financial institutions are being forced to reduce them. The pressure to do so results from a decline in the price of the assets they bought with the money they borrowed. It's a vicious feedback loop. When families and banks tip into bankruptcy, more assets get dumped on the market, driving prices down further and necessitating more deleveraging. This process now has so much momentum that even $700 billion in taxpayers' money may not suffice to stop it.

In the case of households, debt rose from about 50% of GDP in 1980 to a peak of 100% in 2006. In other words, households now owe as much as the entire U.S. economy can produce in a year. Much of the increase in debt was used to invest in real estate. The result was a bubble; at its peak, average U.S. house prices were rising at 20% a year. Then — as bubbles always do — it burst. The S&P Case-Shiller index of house prices in 20 cities has been falling since February 2007. And the decline is accelerating. In June prices were down 16% compared with a year earlier. In some cities — like Phoenix and Miami — they have fallen by as much as a third from their peaks. The U.S. real estate market hasn't faced anything like this since the Depression. And the pain is not over. Credit Suisse predicts that 13% of U.S. homeowners with mortgages could end up losing their homes.

Banks and other financial institutions are in an even worse position: their debts are accumulating even faster. By 2007 the financial sector's debt was equivalent to 116% of GDP, compared with a mere 21% in 1980. And the assets the banks loaded up on have fallen even further in value than the average home — by as much as 55% in the case of BBB-rated mortgage-backed securities.

To date, U.S. banks have admitted to $334 billion in losses and write-downs, and the final total will almost certainly be much higher. To compensate, they have managed to raise $235 billion in new capital. The trouble is that the net loss of $99 billion implies that they will need to shrink their balance sheets by 10 times that figure — almost a trillion dollars — to maintain a constant ratio between their assets and capital. That suggests a drastic reduction of credit, since a bank's assets are its loans. Fewer loans mean tighter business conditions on Main Street. Your local car dealer won't be able to get the credit he needs to maintain his inventory of automobiles. To survive, he'll have to lay off some of his employees. Expect higher unemployment nationwide.

Anyone who doubts that the U.S. is heading for recession is living in denial. On an annualized basis, real retail sales and industrial production are both declining. Unemployment is already at its highest level in five years. The question is whether we're headed for a short, relatively mild recession like that of 2001 — or a latter-day version of what the world went through in the 1930s: Depression 2.0.

Is that sobering enough for you? We are drowning in a sea of debt, and there isn't an easy way out of it. Ferguson actually knows what he is talking about as a recognized expert on economic history, unlike many of the talking heads on CNN, Fox and even CNBC.

What is even more troubling is the very real chance that the world governments will band together and DO SOMETHING that will further cement the global nature of not just financial systems but governments. Spurred on by the International Monetary Fund and other international groups, look for a call for greater consolidation of economic governing bodies. I am all for free trade in the global marketplace, but I am not in favor of foreign nations, many of whom envy and hate the U.S., making policy decisions that are binding on the U.S. Nor am I enraptured with the likely other results, a massive set of new regulations that will further cripple our ability to compete economically. I am pretty much at the when Obama, instead of if Obama, becomes president mindset at this point and you know given his voting record that we are looking at bigger government on a scale we haven't seen since the New Deal and the War on Poverty. Once government gets involved in something, it is virtually impossible to extricate ourselves, and massive government interference has already led to America going from the economic engine of the world to teetering on the brink of total economic collapse and ruin.

Be afraid. Be very afraid.