Change = Stepping on the Gas

Much has been made about Obama's call back to a NYT journalist concerning a question about being labeled "socialist" to which he responded:

"I did think it might be useful to point out that it wasn’t under me that we started buying a bunch of shares of banks. It wasn’t on my watch. And it wasn’t on my watch that we passed a massive new entitlement -– the prescription drug plan -- without a source of funding."

He did say during the campaign that "when you spread the wealth around, it's good for everybody." But, that withstanding, the Cato blog concedes that he has a point:

Not to defend Obama’s unprecedented increase on government spending or plans to involve the government in almost every area of our lives…but he does have a point. As I pointed out in Leviathan on the Right, the Bush administration’s brand of big-government conservatism was, at the very least, the greatest expansion of government from Lyndon Johnson to, well, Barack Obama.

This was well noted by conservative Phil Klien back in 2007:

In a sense, President Bush has already paved the road for a figure with Obama's skills to reassert liberalism. Under Bush, the size of government has increased at a faster rate than during any administration since Lyndon Johnson's, and it has given us the monstrosities of the Medicare prescription drug benefit and No Child Left Behind. Rhetorically, Bush gave away the store by touting "compassionate conservatism "and notoriously uttering, "When somebody hurts, government has got to move." Considering that this all came from somebody identified as a conservative president, Republicans are left with little leverage to argue against Obama's "slight change in priorities."

Which is why I voted on principles of smaller, more local government, or threw my vote away, depending on how you look at it.

Obama continued his quote above by stating that his administration has "actually been operating in a way that has been entirely consistent with free-market principles..."

Very interesting.

Quote of the Day

They go on in strange paradox, decided only to be undecided, resolved to be irresolute, adamant for drift, solid for fluidity, all-powerful to be impotent…Owing to past neglect, in the face of the plainest warnings, we have entered upon a period of danger. The era of procrastination, of half measures, of soothing and baffling expedience of delays, is coming to its close. In its place we are entering a period of consequences …We cannot avoid this period, we are in it now…

- Winston Churchill November 12, 1936

Christians and Murder: Bonhoeffer

The comments section of another post veered off topic, so I am starting a separate thread as it deserves some attention. The question is how the Bible defines the Christian's role in government, and the potential limits for action.

I admit I am conflicted. I have a large Anabaptist streak in me that says we should be in the world doing the work of God, but not a part of the world's system at all. Yet, another large part of me feels strongly that we are called to be Christ in every part of this world, including government, and must affect change wherever possible.

In my mind the Bible does not lay out a clear answer. The New Testament was written at a time when Christians had no voice, so I see the scriptures advice to obey existing authority as first and foremost an act of preservation. Because the Bible is timeless and speaks also to us, we forget that the NT letters sought to address the timely and specific concerns of the early churches. There are also numerous examples, From Moses to Daniel to Paul, of men acting in resistance to authority.

The varied interpretations give us everything from Mennonites to Dietrich Bonhoeffer, who worked as a double-agent in Nazi Germany and tried to murder Hitler. As quoted in this article, Bonhoeffer's book Ethics provides a summary for his argument:

Responsible action is how Christians act in accordance with the will of God.

The demand for responsible action - that is, acting in accordance with God's will - is one that no Christian can ignore.

Christians are, therefore, faced with a dilemma: when assaulted by evil, they must oppose it through direct action. They have no other option. Any failure to act is simply to condone evil.

My fundamental belief is that God would have Christians put their hope for a changed world in Christ, not in any man or government of men. I also believe that we are all given freedom, but by freely submitting to Christ, God can empower the actions of his followers when they do His will. To me, that leaves room for both Mennonites and Bonhoeffers.

Music and Politics

Who says they don't mix?



Thank you AVM.

Crazy Day

Headache, traffic, police, work, it's been one of those days that everyone loves to complain about, but no one wants to hear about. As time goes by, the probability of me actually doing linkapalooza 2 on Austrian Economics grows slimmer by the day, but I found this article in Canada's Financial Post which is a good primer on Austrian economics, and the lens through which Austrian economists view the current financial situation. Nuggets include:

While there isn’t perfect unanimity on this, it is widely acknowledged that a significant part, if not the root, of our difficulties originated with the low-interest-rate policy implemented by the Alan Greenspan-led Fed in 2001-2005. This generated a housing boom, which was further stoked by the financial engineering of Wall Street in securitizing mortgages, by obliging bond rating agencies in evaluating these securities and by portfolio managers eagerly willing to buy them, hungry for extra returns in a low interest rate environment.

For a video illustration on the above, please see:


The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Back to the FP article:

Austrian economists hold that downturns are the inevitable aftermath of loose monetary policy, thus opposing explanations typically heard prior to the current crisis that attributed recessions to price shocks, underconsumption or central bank tightening of monetary policy.

As the Austrian tradition points out, the dilemma with easy money is that the central bank sets rates below that which the market would naturally set. The natural rate reflects people’s willingness to trade present for future satisfactions. When the actual rate is established under this, entrepreneurs and firms are issued a false signal that people are willing to defer more consumption into the future than they really are. As a result, excess investments in capital goods industries, such as housing, are made on the expectation that these will pay off in the long-run. The boom ends when monetary conditions are tightened back to natural levels or the passage of time makes clear that the demand was never really there to sustain the investments made. At this point, a crisis takes place in which capital investments get liquidated and resources are shifted such that the economy’s productive capacity more appropriately reflects people’s time preferences.

A negative savings rate, a private debt the size of GDP, and mounting foreclosures and bankruptcies certainly were part of the wake up call that long-term consumer demand was not sustainable.

Still, the Austrians argue that the liquidation process must be allowed to proceed, since any government intervention to mitigate the necessary adjustments will end up sustaining the very pattern of production that caused the crisis in the first place. This was the error that Greenspan committed in dramatically lowering interest rates in 2001, which allowed excess investment in future goods to persist, as resources merely shifted from one capital goods industry to another, from the technology and Internet sectors to housing. No such switch is in the offing now, so any further government intervention is apt to prolong the economic slowdown.

This is the unpopular aspect of Austrian economics, especially among the government must act and government can solve everything folk, like Paul Krugman.

Cool Catholic Word: Subsidiarity

If I were to adopt a political label, it would not be a political party, but a concept called subsidiarity. The roots of subsidiarity reach back to the early Christian church, but are equally applicable in secular societies (Side note: As a Protestant, I have been growing a deeper appreciation for historical Catholic thought, as for 1500 years it was the Church). Thanks to the blog Insight Scoop, I found the following excerpt from Pope Benedict XVI's encyclical, Deus Caritas Est:

The State which would provide everything, absorbing everything into itself, would ultimately become a mere bureaucracy incapable of guaranteeing the very thing which the suffering person—every person—needs: namely, loving personal concern. We do not need a State which regulates and controls everything, but a State which, in accordance with the principle of subsidiarity, generously acknowledges and supports initiatives arising from the different social forces and combines spontaneity with closeness to those in need. The Church is one of those living forces: she is alive with the love enkindled by the Spirit of Christ. This love does not simply offer people material help, but refreshment and care for their souls, something which often is even more necessary than material support. In the end, the claim that just social structures would make works of charity superfluous masks a materialist conception of man: the mistaken notion that man can live “by bread alone” (Mt 4:4; cf. Dt 8:3)—a conviction that demeans man and ultimately disregards all that is specifically human. (par 28)

This address my comment in response to the post about Godless countries - It's not as much whether God exists, but whether God is relevant. Who needs God when government can provide? My rhetorical answer, of course, is everyone.

Back to subsidiarity, The Inside Scoop provides the following excerpts from the Compendium of the Social Doctrine of the Church that explains the moral framework:

The necessity of defending and promoting the original expressions of social life is emphasized by the Church in the Encyclical Quadragesimo Anno, in which the principle of subsidiarity is indicated as a most important principle of “social philosophy”. “Just as it is gravely wrong to take from individuals what they can accomplish by their own initiative and industry and give it to the community, so also it is an injustice and at the same time a grave evil and disturbance of right order to assign to a greater and higher association what lesser and subordinate organizations can do. For every social activity ought of its very nature to furnish help to the members of the body social, and never destroy and absorb them”.

On the basis of this principle, all societies of a superior order must adopt attitudes of help (“subsidium”) — therefore of support, promotion, development — with respect to lower-order societies. In this way, intermediate social entities can properly perform the functions that fall to them without being required to hand them over unjustly to other social entities of a higher level, by which they would end up being absorbed and substituted, in the end seeing themselves denied their dignity and essential place.

Subsidiarity, understood in the positive sense as economic, institutional or juridical assistance offered to lesser social entities, entails a corresponding series of negative implications that require the State to refrain from anything that would de facto restrict the existential space of the smaller essential cells of society. Their initiative, freedom and responsibility must not be supplanted. (par 186)

And:

The principle of subsidiarity is opposed to certain forms of centralization, bureaucratization, and welfare assistance and to the unjustified and excessive presence of the State in public mechanisms. “By intervening directly and depriving society of its responsibility, the Social Assistance State leads to a loss of human energies and an inordinate increase of public agencies, which are dominated more by bureaucratic ways of thinking than by concern for serving their clients, and which are accompanied by an enormous increase in spending”. An absent or insufficient recognition of private initiative — in economic matters also — and the failure to recognize its public function, contribute to the undermining of the principle of subsidiarity, as monopolies do as well. (par 187)

This resonates deeply with me, especially during these times. Wilhelm Röpke, another Protestant, incorporated much Catholic thought into his writings, and subsidiarity is one of the principles he so loved about Switzerland's history and encouraged the world to adopt post-WWII.

Another article linked in The Inside Scoop is "More Government, Less God: What the Obama Revolution Means for Religion in America," written by W. Bradford Wilcox for the Public Discourse site. It not only discusses the possible implications of a hard left social agenda, it does so in the context of the same countries, Sweden and Denmark, covered in the "Godlessness is Great" article. A very interesting read.

Pulse on Obama

Much is being written about the big-name moderates, Brooks and Buckley, reversing their previous support of Obama just a month or so into his presidency. The conservative media is already seeing the hope of change in 2010, and even the mainstream media is binging to wonder about Obama's support from moderates. To be honest, I really don't don't know what makes these guys, or most people, moderate. Best I can tell, moderate means willing to try a little of everything to see what works. This sounds appealing, but a little poison can cause a lot of problems.

I'll stick to the policy, and leave the politics to others. I am more interested by the reaction to Obama's plan to reduce the tax benefits to charitable deductions. According to the Robert Frank of the Wall Street Journal, Government is the new charity, albeit coerced:

In the past decade, more and more government functions have been privatized, leaving the private sector and rich individuals to solve broader social ills. Whether this worked well or not is hard to measure.

But as the rich got richer, and Bill Gates and Warren Buffett paved the way for more giving, wealthy philanthropists took on more of what used to be government functions, from health care and education to medical research.

Democrats want to tilt the balance back to government. As Robert Reich told the Chronicle of Philanthropy: “Is the good that will be done through health-care reform greater than the good that would have been done with the charitable projects of the wealthy people [who might decrease their gifts]?” he asked, implying that the answer is yes.

Hmm, I would bet on no, myself, but time will tell, I suppose. Regardless, I stand along Mr. Frank as holding the outdated notion that philanthropy is (and should be) voluntary.

The Washington Times story on the same subject raises a few more questions in my mind:

Mr. Obama is counting on that provision to raise $179.8 billion over 10 years.

...

Roberton Williams, senior fellow at the Tax Policy Center, said it's impossible to calculate the exact effects of all the tax changes, but said the overall result is clear - less philanthropic giving.

"This will lead people to give less to charities if they behave the way they've behaved in the past," he said. "We've already seen a drop in giving as a result of the economic collapse. On top of that, this will just reduce the amount of giving."

Asked about that, Office of Management and Budget Director Peter Orszag said Mr. Obama took care of that by giving charities government money to make up part of the difference.

Rep. Paul D. Ryan, Wisconsin Republican, describes "the good, the bad and the ugly" of President Obama's 2010 budget plan Thursday on Capitol Hill. (Astrid Riecken/The Washington Times)

"Contained in the recovery act, there's $100 million to support nonprofits and charities as we get through this period of economic difficulty," he said.

The government raises $180 billion from the measure, but sets aside $100 million to make up for the difference. Oh, of course, it gets to decide which organizations win in the giveaway. Hmm...

Having posted all the quotes above, I am actually not a fan of tax incentives. If I were President, I may be tempted to get rid of both the charity and mortgage interest deductions. There are a lot of junk charities out there, just as there are a lot of junk mortgages. What would worry me, however, is removing tax incentives while simultaneously raising taxes, and in a down economy no less. Enter The Chronicle of Philanthropy:

Michael W. Peregrine, a lawyer in Chicago who advises nonprofit groups, says charities are now facing a “triple play” that could cut into their donations — the bad economy, the proposed charitable-deduction limits, and proposals by President Obama to end tax cuts for wealthy people that were introduced by President Bush.

People can not give their money to charity, regardless of the tax benefits, if they owe it to government.

How Rare are Gold and Platinum?

The size of the world supply of Gold came up in a Saturday breakfast discussion with friends, and I came across a How Stuff Works article by way of The Filter that attempts to estimated the amount of Gold and Platinum ever mined by man:

...if you could somehow gather every scrap of gold that man has ever mined into one place, you could only build about one-third of the Washington Monument...

and Platinum?

...all of the platinum in the entire world would easily fit in the average home.

Economists differ widely in their view of government's proper role in determining the supply, demand, and intrinsic value of money. Many libertarians hold the gold standard and abolition of fractional reserve banking practices as ideals. Ideals they may be, but fanciful ones that have no real hope of coming to pass. Still, discussion on currency and government intervention is critically important, as it has played a part in the decline or collapse of many societies, including Rome, Germany's Weimar Republic, and Zimbabwe. History seems to suggest that one of the greatest threats to a state's survival is an unchecked central power with the ability to devalue its currency. If true, the recent actions of the Federal Reserve and policies enacted under both the Bush and Obama administrations should be of deep concern.

Brown Paper and White Chalk: GK Chesterton

Months ago I made a list of authors that I wanted to commit to reading. On that list was GK Chesterton, who is seen by many as a sort of Catholic C.S. Lewis. Like Lewis, he wrote in numerous genres and on many subjects. Perhaps his most famous work is The Man Who Was Thursday, a crime drama heavy in Christian allegory. Among his more famous quotes is the following on political parties:

The whole modern world has divided itself into Conservatives and Progressives. The business of Progressives is to go on making mistakes. The business of the Conservatives is to prevent the mistakes from being corrected.

So, while I have yet to read The Man Who Was Thursday, I was delighted to find an excerpt from his essay A Piece of Chalk in my inbox this morning. I highly recommend reading the Pakistan Daily Times excerpt, which in six short paragraphs shows Chesterton using art, imagery, and wit to arrive at the following summary statement:

Virtue is not the absence of vices or the avoidance of moral dangers; virtue is a vivid and separate thing, like pain or a particular smell. Mercy does not mean not being cruel, or sparing people revenge or punishment; it means a plain and positive thing like the sun, which one has either seen or not seen.

Practical Wisdom

I started off my morning listening to the video below while clearing out my e-mail from the hundreds of junk e-mails that pile up every weekend. It is Barry Schwartz presenting at the recent TED2009 conference on virtue and practical wisdom:



Opening with an example of hospital janitors, Schwartz does a great job bringing to life Aristotle's definition that practical wisdom equals moral will with moral skill. He states that without wisdom, brilliance is not enough, and that brilliance without wisdom leads to more problems. He discuss the limits and failures of our current mindset that rules and/or incentives can improve society, and how they actually serve as catalysts for a continued downward spiral. While covering business, health care, and government, Schwartz gives special attention to education. I found the video well worth the time.