Spiritual wickedness in high places

“Jesus said unto him, If thou wilt be perfect, go and sell that thou hast, and give to the poor, and thou shalt have treasure in heaven: and come and follow me.” Matt 19:21

I’ve had some comments lately that I’m spending too much time on looking backward and not enough time looking forward, so I thought I would spend a little time responding.

First, if you read the title of this blog, it is about a progressive point of view.

In other words, I support what the current administration is doing and want it to succeed. I believe that there is a role for government to play. I believe that success can’t come at the expense of another, in other words it can’t be a zero-sum game. It has to be an expanding-pie game. We individually succeed when we collectively succeed. I also believe that the best economic growth comes when those who have the least gain the most.

The best long-term hope for that sort of transformation for the poor comes from education. As I’ve posted before, a college degree virtually erases any economic disadvantage the parents of that graduate may have experienced. The problem is that a child’s educational success is intimately tied to where they live and the ability of their parents to be involved in their education. When those parents are struggling to keep food on the table and a roof over their heads, they aren’t often able to be as involved as the need to be.

So how does government help?

Since it is not a level playing field for all members of our society, I believe those who have enjoyed success have responsibility to help those who are struggling. Government does this through a tax policy by taxing people according to their ability to pay.

Some people are poor because they were born to poor parents and never had an opportunity to escape. Some are poor because they are physically or mentally challenged and simply can’t support themselves. Some are poor because they have made bad choices, turned to crime, or became addicted to drugs.

Jesus didn’t distinguish. He said that we give to all poor people because they are our brothers. Jesus was a “needs-based” healer. He didn’t ask how you came to be in need. He didn’t withhold his help from those who were in need because of the bad choices they made. He only asked if you were ready to be healed.

So if we follow the Bible, the next question is how do we use the money to help the poor, because they’re ready!

Well the Bible is helpful here too. We have to make sure that they have something to eat, clothes to wear, and a safe place to sleep. We also are obligated to help them escape from poverty by teaching them how to support themselves.

So how does that translate to today?

A lot of the stimulus package is going to the poor and working poor. Hopefully that will translate into the immediate needs of food, clothing, and shelter. Many economists have said that the fastest way to get money into the economy is to give it to poor people because they will spend it. The challenge with the current package is going to be getting into the hands of those who need it fast enough.

We need more jobs and the stimulus package is designed to do that too, though the majority of the construction jobs are short term. The real transformative jobs will come as energy and healthcare reforms kick in. Something as simple as reversing the stem cell research ban is going to spark our economy here in Michigan with high paying research jobs. Those jobs will allow graduates from our top universities to stay in the state, buy homes, and start businesses and families. It’s this sort of progress on a local and regional level that helps us as a country to climb back out of the hole that we have dug for ourselves.

Finally, we need good schools. That was cut out of the stimulus package, but the current administration has that on their agenda as well.

This is a challenging time, but it is also a time a great promise. What I find interesting is the same people who criticize the Obama administration for too little change on the political front, are apoplectic over the sweeping social and economic changes and the pace with which he is implemeting them. In fact, he isn’t making any of this stuff up. He is doing a great job of keeping the promises that he made to those who elected him.

“Our holy and our beautiful house, where our fathers praised thee, is burned up with fire: and all our pleasant things are laid waste.” Isa 64:11

A number of people in print and on the Internet seem to be in denial about the November election. They seem to feel that if they continue bringing up the same old issues, the American people will somehow change their minds.

Here’s a message to those unhappy 30%.

We get it. You don’t like the current President and you are going to continue to accuse him of killing everything from babies to capitalism. If you are determined to hold your breath until things change, I hope that shade of blue looks good on you.

For everyone else, we’ve got a big problem that is going to require big changes.

Capitalism is broken and the only viable solution is for the government to spend money to get it going again. It may be tough medicine for those who have this ideological view that capitalism is the cure for all evils. The reality is that this is a time when government has to take the lead. It doesn’t matter whether you call it socialism or not. All that matters is getting our capitalist engine started again, because right now it is broken down by the side of the road.

This is not something that can be fixed with tax breaks alone. That’s because tax breaks only help those who have taxable income. They do no good for the person who is out of a job. They do no good for the company that is losing money. In fact one of the better things we can do is to give poor people more money because they are the ones most likely to spend it right away.

This is also not something that increased productivity can fix. The problem is not a lack of productivity. The problem is excess capacity. We have resources in the form of people and infrastructure that are not being used because there isn’t enough demand.

This is also not something that will fix itself. If we do nothing, it will get much worse before it gets better. That’s because we are already in a downward spiral where we are shedding jobs and eroding asset value. Both loses constrict what the economy needs to grow – credit.

Credit is tight because the banks don’t really know what their outstanding loans are worth because they don’t know what the assets backing those loans are worth. What they do know is that every month, the value of those assets DECREASES. So they are holding on for dear life to the cash they have because they are concerned about their own survival.

Every contraction throws more people out of work. Those folks run out of cash, are underwater on their mortgages, and have to declare bankruptcy. Unsold houses put more downward pressure on the real estate market and banks take the hit in terms of defaulted loans and houses they can’t sell.

The government (local, state, and federal) have to spend money quickly and massively to create demand across all sectors of the economy, get people back to work, and stop the deflationary spiral. If we can do that wisely, that’s a plus. But even if we spend foolishly, the sooner those dollars get into the economy the better.

As long as the money stays in this country, it will do good. It is best if it directly creates jobs, but even if some of it ends up in banks or paying down debt, it’s good. This is a massive amount of money. The challenge is going to be spending it fast enough.

The numbers can be challenging for some to comprehend, but in the context of a $1T spend, a $100M expenditure is .0001%. In other words, as bizarre as it sounds, it is not worth arguing about – yet that is what some would want us to do. Republicans want to delay this bill to because of $150M for endangered honeybees (which is a problem), $50M for the arts, $198 million to keep a broken promise to Filipino WWII vets, $15B for college scholarships, and $700M to buy fuel efficient government cars from US car makers. If you add up all of it, it is less than 2% of the total.

This is insanity.

Our home is on fire. Now is not the time to argue about how much water it’s going to take to put out the fire. Now is the time to open the hydrant wide and point the hose in the general direction of the fire. The water will do the rest.

“Now when Jesus heard these things, he said unto him, Yet lackest thou one thing: sell all that thou hast, and distribute unto the poor, and thou shalt have treasure in heaven: and come, follow me.” Luke 18:22

In the last gasp of a desperate campaign, Senator McCain and Governor Palin have decided that their best strategy is to frighten the American voter by labeling their opponent a socialist. This was the result of a sound bite from a conversation that Senator Obama had with the now famous Joe Wurzelbacher. Joe asked Senator Obama to defend his plan to repeal the Bush tax cuts for the top tier of wage earners while preserving those cuts for the rest of the population. As part of that discussion Senator Obama said that he believed that taxing the wealthy who have seen their income grow over the last eight years in order to provide a break for everyone else who have seen their income shrink over the same period of time, is good economic policy. He use the phrase “spread the wealth around”. That has become the touchstone for this attack.

I think that there are a couple of ways to respond to this claim.

The first is to take Joe the Plumber head on. He appears to object to the concept of a progressive tax system – the more you make the more you get taxed. The usual conservative objection to a progressive tax system is that it punishes success, and as a result, discourages the effort to be successful. Using that logic, the Bush administration aggressively cut the tax rates of the most successful. Their expectation was that this would encourage the wealthy to make more of the sort of investments that made them successful in the first place which will result in growing the economy for everyone else. The problem is that it doesn’t work.

The facts support a much different picture. Democratic administrations where policies favor the middle class have historically done better for both the middle class and the wealthy than Republican administrations. This has held true for the past 80 years.

Economists explain this by pointing out that a robust middle class is the best driver of our economy. When the middle class is doing well, everyone does well. I heard it expressed by CEO Victor Hammel, “I would rather pay a little higher tax on a higher profit than a lower tax rate on lower profits.”

The second is to dive into this claim of socialism.

First a quick definition. Socialism is the opposite of capitalism. In a socialist society there is no private ownership. The government owns everything presumably for the benefit of the people. It’s that last part that gets people confused because Socialists talk a lot about the equitable distribution of wealth.

The McCain campaign has been tossing the word socialism around much in the same way that the Bush administration turned liberal into a dirty word. What bothers me about it is that it is hypocritical and cynical.

It is cynical because the Bush tax cut plan is set to expire on January 1, 2009 anyway. So how does refusing to renew a tax cut, that didn’t have the desired result anyway, somehow suddenly become a socialist act? Those tax cuts were scheduled to expire BECAUSE so many people (including John McCain) were skeptical of their promised effect. Even if this weren’t an election year, I suspect that the Bush administration would have had a difficult time getting them renewed.

What is hypocritical is that we HAVE in fact taken a huge step toward socialism with the various financial bailout plans which both John McCain and Barack Obama voted for. In this case the government has in effect nationalized portions of the financial system (any maybe soon the auto companies) for the benefit of the people.

Finally a moral argument.

No less an authority than Jesus suggested that one our our two great responsibilities was to love our brother. The love he proposed was not just a philosophical concept. He proposed a practical redistribution of wealth from those who had it to those who needed it. He said that this benefited, not only the receiver, but also the giver. Part of the benefit to the giver was the realization that wealth if anything was an impediment to salvation. A prime example was the rich man Jesus spoke of in the quote at the top of this post. When faced with the choice of salvation or wealth, he chose wealth. I wonder what those who are calling Senator Obama a socialist would do today if they were given the same choice by Jesus.  I hope they would chose more wisely than than the wealthy man.