Monday, September 29, 2008

Financial Bailout defeat in Congress - A Cowardly Lack of Leadership

For many years, I refused to delve into politics or economics for that matter as I did not want such issues to alienate people from the message of the Kingdom. Times have changed and the need for voices is urgent. Such voices are not coming from congress.

In a move that is pure politics, house members on both sides of the aisle ignored reality and listened to the panic of their constituents. Such caving to public outcry is not leadership.

David Brooks says it well, in his Nihilist Revolt editorial in the NYT:

They (congress) have failed utterly and catastrophically to project any sense of authority, to give the world any reason to believe that this country is being governed.

showed the world how much they detest their own leaders and the collected expertise of the Treasury and Fed. They did the momentarily popular thing.

What we need in this situation is authority.

The American century was created by American leadership, which is scarcer than credit just about now.

What has happened is "chickens coming home to roost". The republicans and some liberal democrats have such disdain for government that they refuse to lead with government action. The following are elements of this total inability to lead:
1. Ideology. We have seen the fruit of ideology in the Bush administration. Ideology is the stubborn adherence to ideals without regard to the changes in situations and circumstances. This is not a time for conservative ideals. What is needed is pragmatism and nuance.
2. Politics. When acting in a crisis one must let the facts and our reason guide us and public opinion must be ignored. Such political expediency transcends party affiliation. Such are our times.
3. Anti-intellectualism: As I listen to the naysayers of government action, I am appalled by the lack of depth and both presidential candidates are not helping the discussion. Where is Robert Rubin? Where is Robert Reich? We need students of history to solve difficult problems like those we face today. In the dialogue, there is no substance. Such depth what really amounts to wisdom is the product of a life of strenuous study of policy and governance. Unfortunately, the public no longer trusts intellectuals so they place "one of our own" in office. That's fine if there is no need to solve a difficult problem. Now the chickens have come home to roost.

We must question ourselves as to whether this is the first major blow to the head of American leadership in the world. It is time we begin placing in leadership both in the church and the state leaders who are equipped intellectually to look the facts in the face and take pragmatic and effectual action.


Wednesday, September 24, 2008

Understanding N.T. Wright - Tools for the Task – Part 2 - Critical Realism part 1

In my first post, Tools for the Task part 1, I discussed N.T. Wright overarching goal or his life work. N.T. Wright has embarked upon what he calls the Third Quest. Wright’s quest is to, in light of the abundance of extra-biblical evidence concerning 1st Century Judaism, develop a historically grounded hypothesis about how Christianity developed. A key quote for N.T. Wright, having reflected upon the first two quests for the historical Jesus is “when all was said and done, they dug a well and found at the bottom a reflection of themselves.” Wright is saying that these theologians used methodologies which were not critical enough and their conclusions ended up being a reflection of their own preconceived worldviews. What happened in the 20th century quests for the historical Jesus is that the theologians did not utilize the proper historian’s “Tools for the Task”. The result is the pop culture misconceptions about Christian origins which I wrote about in Part 1 of this series.

The First Tool for the Task – Critical Realism
Defining Critical
In our family, I often ask my older children the question, “What is the worst thing a person can be?” The answer they usually give is, “A compliant thinker”. Next I ask, “And what is the opposite of a compliant thinker?” The answer they give, “A critical thinker”. In my mind, one of the great enemies in the 21st Century is anti-intellectualism. To use our intellect and to be lifelong learners, we must understand what it means to be a critical thinker.

A critical thinker is a person who is constantly pursuing a revision of two perspectives: first, the perspective given to us and, second, our own perspective. In other words, a true critical thinker is constantly aware of how his own preconceptions and the preconceptions of others undermine learning and getting the process of getting closer and closer to reality. This critical approach is the first tool for the task which is the critical side of critical realism. To be critical means being constantly aware of the role that perspective plays in the telling and listening of any and all truth claims. Being critical is in many ways the foundation of the scientific method. We are constantly seeking to re-evaluate and therefore improve our understanding of reality by questioning and challenging both our own understanding and the accepted wisdom. We ask ourselves, “Is there another perspective which can help me see things clearly? What is the tellers stance? What is my stance?" We are always aware that, as subjects, both the teller of the truth and the hearer of the truth participates in the knowing process. Therefore, as learners we must use certain tools to be enable us to be skillful critics of both ourselves and the accepted wisdom in order to be active and skillful critical thinkers. To be a critical thinker, one must be both arrogant enough to question the accepted dogma and humble enough to critique one’s own preconceptions.

So that is the critical part of “Critical realism”. The next term to understand is the term "realism”. I will discuss this term in the next post. As we proceed, with other terms which N.T. Wright spends considerable time defining including, “worldview”, “theology”, “story”, “hypothesis and verification”, we will come to see how incredibly helpful these tools are to understanding both the biblical texts and the origins of Christianity.

Friday, September 19, 2008

Week Round Up - Financial Crisis

This week I for the first time got a little passionate about policy. In these posts,
1. The Depression in the Financial Markets – The Solution is Wage Inflation via Tax Policy
2. More on the Financial Crisis
My approach is to actually look at the root of the financial problems. Look beyond deregulation and the need for more liquidity to why are people defaulting on their mortgages.

What the government has done is protect money market mutual funds which is absolutely essential to assure that these safe havens are sustained. These are funds that many companies use to hold cash that ultimately is needed to make payroll. But this is only an emergency measure. The root causes are not yet being deeply and honestly discussed.

Here is a fact -

The pricier loans in the jumbo category racked up delinquency rates that are more than triple what they were just a year ago, and those overdue payment statistics may quadruple before the end of 2008. - Sept 2, 2008

Jumbo prime mortgages are foreclosing. The definition of a jumbo is a loan that is beyond the limits for Fannie Mae and Freddie Mac (which is $417,000). The real reason the mortgages that are failing are jumbos is because jumbo loans are needed to buy houses in the market since the housing boom of 2002-2006. But nonetheless, the people failing these types of mortgages are prime borrowers.

Also what is happening is that due to inflation MANY people are forced to take out HELOCs to pay the bills. This puts the first mortgage at risk. All this comes back to wages and inflation.

Everyone normally looks at the "the mortgage crisis" but seemingly ignores at least one side of the mortgage problem: low wages with respect to inflation and the middle class squeeze. Everyone seems to think the only problem with the low value of mortgage backed securities is the sub-prime problem, but this is not the source. These fire-priced mortgages that Lehman owned were not sub-prime but "alt-A" and "prime Jumbos". What happened is that these specific types of securities were being downgraded from the "AAA" rating. This downgrade forces money market mutual funds to sell as these funds are required to only hold "AAA" assets.

Why are alt-A graded loans failing? An alt-A is really a loan to a person with a credit score of 580-680 (below 580 is sub-prime)? It has to be because these people's wages didn't grow as expected in a normal cycle. The current statistics are worse than normal. Folks, this has to be wages.

I still hold to wages and inflation being at the root of the problem. The thing to look out for in the policy of a given candidate is what policies will be put in place to deal with the following:
1. Out-sourcing
2. Middle class tax cuts
3. Alternative ways to incentivize wage growth


Thursday, September 18, 2008

More on the Financial Crisis

This is my second political posts in two days...If you haven;t read the first post read it here:
The Root Cause of the Financial Depression

This second post is my editorializing on today's freakonomics post in the NYT.

Why did Freddie and Fanny fail:
Update; WaMu is up for sale today. WaMu is the biggest savings and loan in America

From the NYT: Diamond and Kashyap on the Recent Financial Upheavals

Fannie and Freddie were weakly supervised and strayed from the core mission. They began using their subsidized financing to buy mortgage-backed securities which were backed by pools of mortgages that did not meet their usual standards. Over the last year, it became clear that their thin capital was not enough to cover the losses on these subprime mortgages.

Why did Lehman fail:
…Why did the financing dry up? For months, short-sellers were convinced that Lehman’s real-estate losses were bigger than it had acknowledged. As more bad news about the real estate market emerged, including the losses at Freddie Mac and Fannie Mae, this view spread….Lehman’s costs of borrowing rose and its share price fell. With an impending downgrade to its credit rating looming, legal restrictions were going to prevent certain firms from continuing to lend to Lehman.

Again can you say housing….It all goes back to people trying to turn sub-prime mortgages and Lehman and Fannie and Freddie and everyone else sports fans are caught holding the bag. Why did this happen? Because in Bush’s first term, it was politically expedient to push home ownership especially in light of the opportunity due to de-regulation.

How about A.I.G.
Here it is…
A.I.G. had to raise money because it had written $57 billion of insurance contracts whose payouts depended on the losses incurred on subprime real-estate related investments. While its core insurance businesses and other subsidiaries (such as its large aircraft-leasing operation) were doing fine, these contracts, called credit default swaps (C.D.S.’s), were hemorrhaging.

Why did this housing market problem happen?
People took too much risk and believed that something had changed in housing and therefore prices would never go down. This was a really stupid idea based in wishful thinking. The only way we could have believed this was that when all these sub-prime variable mortgage loans came due there would be INFINITE DEMAND for houses. But instead, there was a glut of houses and very little demand. Why so little demand? Low wages.

So why did people choose to believe what amounts to self-deception?
Greed and because de-regulation allowed them to do it. To do what, to put all of us at risk for the big bucks.

So this is my point about why it makes no sense in my mind for Christians to believe in republican free-market ideology. We as Christians know that the world is driven by greed and the will to power. So why are we against regulating greed and power in the markets. Because Christians have been duped by right wing politics that bundled together right to life issues and right wing economic dogma.

So why did we fall for this trap? It is because of our anti-intellectualism and our lack of thoughtful dialogue in our own communities about politics and other such issues. There is no room for discussion because there is such a huge social cost for not heeding the party line. Trust me. I know.


Tuesday, September 16, 2008

The Depression in the Financial Markets – The Solution is Wage Inflation via Tax Policy

My annual political post...

From the very beginning, I was against the Bush tax cuts. Back then, I refused to enter the fray of politics as a pastor, so I kept my mouth shut except around the dinner table. The reason I was against the Bush tax cuts is that I do not believe in the ideology of supply side economics in the information age. There is too much access to market data, and, therefore, businesses do not invest in growth without strong demand data. Due to the access to data, the 21st century is a demand driven economic world. What is needed today is a balanced approach which supports business and also supports the consumer. Immediately, we need a pendulum swing toward support for the consumer. The crisis we are in today is 100% the result of a lack of money in the hands of the consumer caused by relative wage deflation. Let me explain.

In our current financial crisis, the problem is that the financial markets are getting tight. Insurance and mortgage companies like AIG are having trouble getting credit to make and insure loans. The result is we have a bottleneck in the financial system. The cause of this bottleneck is because AIG and others cannot put up enough collateral for the loans they need. Why all of a sudden are the big financial institutions unable to put up enough collateral? It is because the only real paper of value that they hold is “mortgage backed securities”. It ain’t called real estate for nothing. As we all are so very aware, people are defaulting on mortgages. Therefore, mortgage backed securities are not great collateral. It all comes down to the housing market.

Well, who pays mortgages? Well, people do. The middle class pays mortgages, and the only way to slow down the bleeding in the housing market is to increase the cash in the hands of the middle class. Currently, the middle class is experiencing the big squeeze. In simple terms, us middle class folk will rent before we will starve. We will default on our mortgage and rent before we will stave our children. Thus, the middle class home owner numbers are shrinking, and the lower middle class renters numbers are exploding. This is the big American economic nightmare. The answer to this housing/mortgage problem is not a stimulus plan. The money is not in the coffers of the government. Excluding the sub-prime side of the mortgage crisis, the problem is wealth inequality and relative wage deflation.

The actual big money that is needed to bail the system out is in the hands of employers in the form of business profits. Sorry sports fans but the real root cause of this problem is two-fold. First, it is an ideological drive to support supply side economic policy (i.e. republicanism) and its big policy application, the Bush tax cuts. The fact is the trickle-down didn’t trickle down in the global economy of the 21st Century. Greed got the best of us this time.

The answer is simple – tax policy. What must happen is the government must make a tax policy which gives tax credits to businesses for wage increases. If a company shows an increase in wages to employees, then they get a tax credit. Otherwise, they get a big fat tax increase on profit. This problem we are in is a serious housing crisis that only employers can solve and employers will only solve this problem by raising wages when the government forces their hand. The only question is how hard the government should push.

The bottom line is it all comes down to demand and, specifically, demand for MORTGAGES. The only way to drive demand for mortgages is to increase the wages of the middle class. The only people who can increase the wages of the middle class are employers and the only way this can happen is TAX POLICY.

Jesus is the Christ - The Promise That We Will Never Thirst

All the Promises are Yes and Amen in Christ
Jesus the Christ Promises that His disciples will Never Thirst

We have so far established that the Gospel is the proclamation that “Jesus is the Christ”. Next, we need to understand the extent of the change we can expect as a result this new reality that Jesus is the Christ, the Lord of heaven and earth. Life as human beings know it and as we experience life has changed profoundly. In this section, I intend to elaborate upon the scope of this new life we can experience. Looking at human existence and at the 21st Century church, we might think that certainly not every thing has changed. Life is certainly not “heaven on earth” for every Christian. Also, many preachers in the church take advantage of people by promising blessings from the Gospel that are not actually promised. Nonetheless, my aim is to show that at the most important aspect of human experience a great change has taken place which effects our experience of life quite profoundly and to such a positive extent that our testimony will be that we have found the key to life and happiness. So let’s look at what aspect of human experience that has changed now that Jesus is the Christ and that he is Lord of both heaven and earth.

An overview of the Promises that Jesus makes to those who place their faith in Him
To understand the transformation of life which Jesus brings it makes sense to look first at the promises Jesus Himself made to those who place their faith in Him as the Christ.

Let’s begin with an over view of the gospel of John.
In John 4, Jesus, speaking to a Samaritan woman says,
“If you knew the gift of God and who it is who says to you ‘give Me a drink’, you would have asked Him, and He would have given you living water…whoever drinks of the water that I give him will never thirst”.

Picking up the metaphor of water in chapter 7, Jesus says,
“If anyone is thirsty, let him come to me and drink. He who believes in Me, as the scriptures said, ‘from his innermost being shall flow rivers of living water.”

John the author explains in the next verse saying,
“This He spoke of the Spirit, whom those who believed in Him were to receive”.

Here Jesus is bolding making Messianic claims by saying that the promises of a time of refreshing and restoration had arrived in Himself and that the promise of a river of living water would come to all who put their faith in Him as the Christ. So what does this promise of “never thirsting” and having from our innermost being flowing a river of living water.

First, what does it mean that whoever drinks of the water that I give him will never thirst.
First, this promise is a reference to the believer’s experience. To thirst and to have that thirst quenched with spring water is the analogy Jesus uses to describe the blessings that He brings to those who believe in Him. Consider a man lost and without water for a day or two. He hears from a fellow traveler that there is a spring about five miles due west. The man points the way to the spring. The direction is clear and the man gives a few land marks to follow. Our thirsty man starts in this direction. He goes over the hill and sees in the distance a pool of water. He begins to pick up his pace and begins to feel hopeful. With the water about twenty feet in front of him, he smiles in relief. Everything is going to be alright. He sits at the pool of water and begins to drink. He can feel the satisfaction of his body. He splashes his face. He rests and spends a few hours drinking deeply. This is a picture of the Christian life. Christianity is not about hoping to one day drink but Jesus says He will send His spirit and we will actually drink to our satisfaction and this experience of satisfaction will flow from us and satisfy others. We not only will drink from the well of blessing that Christ brings to us but we will be a source of this blessing to others.

Often Christianity is seen as a journey to heaven or a life of hope but in Jesus’ promise Christianity is not a life of hope or a life of hoping to one day drink the living water but is a life of actual drinking. Jesus gives us water and we drink it. This point is essential to understand. The experience of faith is not the experience of hope that helps one endure. This would be to describe the Spirit like a map directing one on a journey to water and life as the journey, but this is not the metaphor Jesus gives. Jesus says that we will actually drink the water. The promise of Jesus the Christ is that whoever is thirsty “let him come to me AND DRINK”. The life of the disciple is not essentially one of being inspired and encouraged to continue in the journey but to regularly arrive at an experience of drinking. This speaks of a spiritual experience of actual conscious connection with the Spirit of God which results in satisfaction and restoration.

The analogy of the man in the desert actually can be contrasted with the Christian walk in that the desert traveler’s level of desperation is not experienced by the disciple of Jesus as shown by the saying “never thirst”. The disciple is never so distant from the Spirit as to have his dryness be described as thirst. Personally, I do not know if in the physical sense I have ever actually experienced thirst. I have certainly had an experience where I desired to be satisfied by water but never in a situation where I was desperate for water. I have all my life lived in a home or was near running water. All I have ever had to do was to make a short walk and I could satisfy my thirst. Never have I been in a situation where I was at a loss as to where I could get water to satisfy my thirst. So too with the disciple, who has learned how to follow Jesus or as we shall see learned how to follow the teachings of Jesus. The disciple is a person who has learned how to get to and how to drink spiritually.

To explain this essential point I must jump ahead a little. In the next section, I will discuss mankind’s true problem as a lack of ability to live beautifully and morally. The root of this inability is a lack of conscious contact with our Father in heaven. Our emotional make-up “under the sun”, in a state of separation from conscious awareness of God according to the truth, is to lack what it takes emotionally and psychologically to love in every circumstance. The difference between the disciple and natural person is how we respond to conflict. The disciple who has deep in his or her emotional make-up an awareness of God’s love has the power to turn the other cheek and forgive and love his enemy from the heart. The power to live beautifully and morally and filled with unconditional love is conscious experience of God in the moment of conflict.

For example, I met just the other day a man who drank himself to sleep every night. He was filled with self-loathing that he could not drive from his consciousness without the aid of serious self-medication. This man is experiencing desperate thirst. He is filled with 10,000 various forms of fear and anger. His need is discipleship. Discipleship is the process where through obedience to the spiritual ways of Jesus our perspective on life becomes immersed in the presence of the grace and love of God. This new awareness of God empowers us to live a life satisfied by God alone, and, having learned this way, we are equipped to give to others a cup of water to quench their thirst.

This ability to satisfy one’s spiritual need like a person drinking water is not an ability all Christians possess. This ability is the outcome of the process of discipleship. Many Christians who have never been discipled are as spiritually dissatisfied and live lives just as dysfunctional as anyone. More on this later.

So this first saying of Jesus reveals that Jesus promised us that we would experience a life of satisfaction which He calls “never thirsting”. This is a promise which few have faith to believe but the fact is Jesus said it and to believe in Jesus is to believe Jesus. If we remain thirsting then the problem is a lack of understanding of the dicipleship process in our life. We lack the training on how to go about the process of drinking. The answer is not to lessen the promise but to acept the challenge to become a student of Jesus and enter into the promises of the Christ.