Episodes
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Americans are moving from restrictive economies in California and New York to free economies in Texas and Florida, much like the Israelites escaped captivity in Egypt.
Let’s Vote!
I had five grandkids in the van recently, and we were trying to decide which park to visit. One of the ten-year-olds suggested energetically, “Let’s vote!” Where did an American ten-year-old get the idea that she had the power to determine the market? Well, FROM the market. And, that’s what people moving from one state to another are proving, they have the power to vote about where they live. People are voting with their feet, as they move from one state to another, as explained in a recent WSJ article titled, “The Great Blue to Red State Migration Continues.”
I discussed some of this topic in podcast #131 titled Abraham and Wealth Migration. And, the great economist Arthur Laffer explains state differences in his book, The Wealth of States.
The WSJ explains in their article that in the category “Migration to other states,” the loss leader was California which lost the most residents to other states, about 340,000, and New York, about 220,000. Texas gained almost 475,000 and Florida gained just under 375,000.
Quoting the WSJ article now, “You don’t need artificial intelligence to spot what the losing states have in common: High taxes, burdensome business regulation, and inflated energy and housing prices. Those states also have higher than average unemployment as a result of businesses moving out of state.”
The WSJ article quotes a chapter from the Old Testament, “A big problem for Democratic-run states is that their affluent residents are leading the EXODUS, and they pay the majority of income tax that supports their expansive welfare programs. This is a major reason California’s tax revenue over the last five months has come in $24.5 billion below projections despite a rebounding stock market.” Hmmm, kind of reminds you of the scene from the old movie The Ten Commandments, where the Israelites are leaving Egyptian bondage. And, in an economic sense, the folks leaving those states were in economic bondage.
You may have heard that Benjamin Franklin’s choice for the great seal of the US was those same Israelites fleeing Egypt, just as Americans are now fleeing California and New York. It’s a little difficult to read the image, but it reads “Rebellion to Tyrants is Obedience to God.” The image shows the Israelites being pursued by Pharoh’s army.
People are moving to the Red States, and Moses parted the Red Sea… goodness, there are too many parallels that can’t be overlooked. In the Holy Land, I’ve heard the phrase “From the Med to the Red,” so we should expect a political cartoon soon, with Moses holding up his staff and parting “Red” and “Blue” seas, or the red and blue states.
Freedom
In my classroom at Dallas Baptist University, I have often crossed my arms and stated, “The Intersection of Christianity & Economics is freedom.” It’s such an important concept, that it’s the first of the ten Biblical Commandments of Economics that I found with Sergiy Saydometov, while writing the book Biblical Economic Policy. Well, that’s what we’re witnessing in the migration between states.
You don’t have to survey the estimated eight million people who illegally crossed the Southern border of the US in the last three years. They are seeking freedom. Gee, I wonder how many have crossed the border the opposite way?
Quoting the WSJ article again, “Democratic Governors such as California’s Gavin Newsom portray right-leaning states as benighted and undemocratic. But then how do they explain why so many of their states' residents are moving there?”
People vote with their feet.
The End Game
Where does this all end? A good case study might be Yugoslavia, which after the fall of communism, split into six constituent republics. Each group has their own country. That’s the way the US was designed, with states’ rights. -
There are Ten Reasons for Hope in the New Year
I often explain that as an economist, I’m a pessimist, but as a Christian, I have hope. Hope is endemic to the Christian spirit and idea. We believe God is at work, even when the US debt clock shows that each individual’s share of the $34 trillion in national debt has increased from $85,000 to $100,000 in just the last three years. Think about it: Each of your children and grandchildren owes $100,000 in national debt.
Still, there is hope. Here are some economic hopes we can have for 2024.
The Omniscient God
From seeing God as a small g to God with a big G
God IS sovereign, so He can do whatever He wants, without our help, but He chooses to allow us to join Him in his great work. I explained this concept in my last economics lesson of the semester at Dallas Baptist University because it helps us understand HOW MUCH humans should do. That’s the whole ballgame in macroeconomics: How active should monetary and fiscal policy be? For an atheist, it’s easy: Since they don’t believe there IS a God, humans have to do everything, but for Christians, or really, anyone who believes in a greater being, we have decisions to make about how active fiscal and monetary policy should be. It’s pretty easy to see that Christians should hope for less active fiscal and monetary policies in 2024.
Accepting responsibility
When GK Chesterton was asked, “What’s wrong with the United Kingdom?” He answered, “Me.” Increasingly, people believe that there’s nothing wrong with individuals, and what’s wrong in society. That’s why liberal college professors train their students to be activists. Their objective is to change the regulatory systems of society. Well, THEY are wrong. What IS wrong is the fallen nature of individuals, not societal structure. If folks start to see that the problem is based on the fallen nature, 2024 would be a better year.
A Free Economic System
From Karl Marx to Adam Smith
Adam Smith explained a free-market capitalist system, where both producers and consumers could benefit in the same exchange. Karl Marx countered it with a system that calls for the oppressed to rise up and throw off their oppressors. Guess what happens next? Another revolution, followed by guess what? Another revolution. Marxism is a system of continual battles because they can always find oppressed groups. It never ends in peace. I asked my students just last week, “Do they still make you read Animal Farm in high school?” Most heads nodded. There’s a lot of Marxist thinking in the world today: People who support Hamas against Israel have been duped into believing that the smaller, weaker group is always oppressed.
From socialism to free-market capitalism
A Christian Economist favors a middle position, typically somewhere near the free-market end of the spectrum, where there is enough freedom to exchange goods fairly, but where government has the role of maintaining competition, and preventing monopolies. Socialism always produces monopolies that serve the supplier at the expense of the demander. It’s not even a debatable subject.
From spending to saving
Brazil went through a period of sustained high inflation between about 1980 and the year 2000. During high inflationary cycles, it’s not wise to save, because your money becomes worth less, the longer you hold it. This period created a culture of spending and not saving, which is still obvious in Brazil today. The US is moving that way. Before the covid pandemic, in 2019, the US saving rate was about 7%. It’s now half that, about 3.5% and total consumer credit card debt crossed the $1 trillion threshold last month. I don’t have time to unpack all the various reasons for this, but one of them is inflation, and the other is a moral hazard. The government bailed out many folks during the pandemic, and now people assume the government will take care of them. So, why save? -
The market will take care of the woke problem in higher education, as consumers choose Christian colleges over corrupt state institutions. John Ellis wrote a fire-breathing editorial in the Wall Street Journal titled Higher Ed Has Become a Threat to America. Subtitled Our corrupt, radical universities feed every scourge from censorship and crime to antisemitism. He’s mostly right. But his prescription is wrong. As with most problems in a free society, the market will take care of the problem. The Council for Christian Colleges & UniversitiesThere is an alternative form of education that Mr. Ellis overlooks: Christian Higher Education. 150 members of the Council for Christian Colleges and Universities suffer from almost none of the maladies Mr. Ellis points out in his scathing article.He writes, “Every one of these degradations can be traced wholly or in large part to a single source: the corruption of higher education by radical political activists.” Okay, let’s see. I have been on the faculty at Dallas Baptist University for thirty years, so I will speak for my university, and safely assume that applies to most of the other 150 CCCU members. There are no radical political activists on our campus. Never have been. Unless you count the very conservative Young Americans for Freedom, who recently hosted a speech by retired Lt. Colonel Allen West. There’s also the Pro-Life Patriots organization. On President’s Day, their Facebook page invited students to “Join us, this Presidents’ Day as we remember some of the most Pro-Life presidents in history!” The announcement was accompanied by photos of both Presidents Bush, President Reagan, and President Trump. Biblical JusticeEllis again, “Children’s test scores have plummeted because college education departments train teachers to prioritize “social justice” over education.” Nope, not at our university nor at just about any of the other CCCU members. We like to study “Biblical justice.” A phrase you might hear in a classroom is “There is neither Jew nor Greek, there is neither slave nor free, there is neither male nor female; for you are all one in Christ Jesus.”Mr. Ellis complains, “Censorship started with one-party campuses shutting down conservative voices.” That’s never happened at DBU. Recently, we have hosted former CIA and State Department head Mike Pompeo, former President George W. Bush, former Secretary of Defense General Jim Mattis, and Kristen and Keith Getty. That last couple writes and performs Christian praise songs. Recently we also hosted retired Army General David Petraeus. We’ve never had a protestor, and we don’t expect to have one this week. Our students think, and don’t allow their feelings to control their lives. I unpack more on that topic in podcast #97 titled Thinking vs Feeling. During speeches, our students show respect for competing ideas, they don’t shout them down, or demand the speaker be ushered off campus. They treat guest speakers as guests, as they do all campus visitors. Be Fruitful and MultiplyEllis again: “The drive to separate children from their parents begins in longstanding campus contempt for the suburban home and nuclear family.” It’s the total opposite at our university. Dennis Prager spoke in chapel, then hosted his national radio program from our campus, with some students visiting him in the studio. He cited an article about three women featured in a recent Atlantic Magazine article, who stated they would not have children because of climate change. Mr. Prager asked our students how many of them wanted to get married. In the small sample in the studio, all of them raised their hands, and having children was beyond question: of course, they planned to get married and have children.Opining about the border crises, Ellis states, “Open borders reflect pro-globalism and anti-nation state sentiment among radical professors.” Of the approximately 4500 students at DBU,
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December is Christian Month. It starts with Thanksgiving and ends with Christmas: the most celebrated holiday event in human history.
December is Christian Month. It was not officially declared by any governmental entity. It doesn’t have to be. Just look around. It starts with Thanksgiving and ends with Christmas, the most celebrated holiday event in human history. Gift-giving, Christmas trees, lights, Santa Claus, office parties, and family gatherings are all part of Christian Month. Deloitte’s holiday retail sales analysis says consumers will spend $1,652 each on Christmas.
I made this observation while attending the CEO Summit at Liberty University recently. Independent reporter Lara Logan was complaining that every other group had their month. There is gay pride month, Hispanic Heritage Month, and Native American heritage month. She accusingly asked, “Why isn’t there a Christian month?” It was a formal presentation, so it was inappropriate for me to shout out, “December!” but December is quite obviously a Christian Month.
Black Friday
Black Friday got its name from the day when retailers went from red to black in profit terms. Without Christian Month, they wouldn’t make a profit. This year, shoppers spent $9.8 billion, an increase of 7.5% from last year. Cyber Monday was shaping up to be a giant Christmas gift to retailers; 63% of Americans shop online for Christmas gifts.
By the time Christmas arrives, each American will spend just north of $700 on gifts alone. We give gifts because the wise men brought gifts to celebrate God’s gift to mankind: Jesus, the God-man.
Gifts
They brought gifts of gold, frankincense, and myrrh. Gold because he was a King, Frankincense was used by the Jewish High Priest in the temple, and myrrh is an embalming spice, which foreshadows His death on a cross.
Some people complain that Christmas starts too early but Halloween is not too early for me to celebrate the birth of my savior. People complain that Christmas has become too commercial, but that’s only if you let it. Others will celebrate however they wish. For me and my family, the reason for the season is the birth of Jesus: It’s a Christian month.
If baby Jesus was laid in a manger during Christian month, it was probably made of stone. Wood was scarce in first-century Israel, so farmers would take a large stone, and carve it into a dish shape that would hold water for their cattle and sheep. Jesus was likely laid in a stone enclosure, but he didn’t stay there long. His father took him out and cared for him, and his mother nursed him.
Why December?
Just under half of Americans start shopping for Christmas in October. That seems pretty early, but it helps spread out the shopping blitz as the holiday gets closer.
If the shepherds were out with their sheep when Jesus was born, it was probably September or October, when sheep were allowed to graze on a harvested field to eat the remaining straw and fertilize for the upcoming planting season. Christians moved the date to December 25 - Christian month - to put it exactly nine months after Easter, which was celebrated on March 25. That would mean Jesus was conceived and crucified on the same day of the month, the 25th.
Another reason for Christmas to be during the Christian month was to supplant the pagan festival of Saturnalia. Pope Julius made that change to coincide Christmas with the Roman celebration of the solstice on December 25 in the year 336. Pagans who lived in the northern hemisphere saw the sun slipping lower in the sky, and they believed they had to make a sacrifice to the gods, so the sun would return to warm them. There is pretty good evidence that the prehistoric druids, who lived in the British islands, celebrated the end of the year at a wood henge before they moved to a stone henge to celebrate the new year. Only faint evidence of the wood henge remains, but the stone henge still stands.
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Economics in 2023: we should not expect perfection on this side of heaven.
Many people leave the church because they find that their fellow congregants are not perfect. We also hear complaints about the capitalist economy not perfectly serving everyone’s needs. The answer to both of these complaints is found at the root of the problem of all mankind: There is no perfection.
Church
A friend in a Bible study recently mentioned that folks won’t attend church because, in the past, the church had harmed them in some way. About 150 years ago, my Southern Baptist predecessors claimed that the Bible endorsed slavery and used the scripture from Ephesians 6:5 stating, “Slaves obey your earthly masters.”
Avoiding the church because the fallen people there have made mistakes is a sophomoric excuse. Tell me, what organizational entity will NOT hurt you? The Federal government, state government, county, city? The Rotarians, the Lions, even the Optimists will hurt you. The Salvation Army will hurt you. I wrote a series of three podcasts recently about 1) how fiscal policy harms the poor 2) how green policies impoverish the poor and 3) tax policy and the poor. I have not heard about anyone leaving the United States because they were harmed by those policies.
People who leave the church because they were harmed have a very twisted understanding of the church and the gospel. There is no doctrine of perfection in the bible. As a matter of fact, the Christian doctrine is very clear about its imperfection. Romans 3:23 reads, “All have sinned and fallen short of the glory of God.” The church has been described more as a hospital for wounded folks, not a museum for perfect people.
I’m trying to imagine someone moving to the Dallas area and buying season tickets for the Cowboys. At halftime, we find him at the ticket counter demanding a refund. “The receiver dropped the ball. I didn’t pay to see mistakes!” What did you expect? In the same way, I’m astounded at people who are hurt by the church and exclaim, “They’re not perfect!” Where did this idea of perfection come from?
Seeing that we’re in the Christmas season, maybe we have an answer: we believe Jesus was perfect. As you and I travel through our lives, it’s kind of hard to understand, but that IS what we, as Christians believe. Jesus was perfect, but each of the other 117 billion people, before and since, are NOT perfect.
Our pastor actually admitted from the pulpit, “Come join our church. We will hurt you.”
Forgiveness
Here’s what Christians should be good at: Forgiveness. We believe in it. My consulting partner and I were asked to lead a “kumbaya” session of sorts with our local city council members and school board members. They are the two most powerful bodies in our community, and the mayor thought it would be a good idea, to get them all in the same room, and say good things about one another and it went well. When we asked for closing statements from the Mayor and the School Superintendent, the Super said succinctly, “We need to learn how to forgive.” That came out of nowhere. What did she mean? Where did she get that? Well, thinking about it later, it occurred to me that our community was still suffering some lingering racial strife from the George Floyd killing. That’s what she meant, and she was right.
Where does this model of forgiveness come from? Well, Jesus died for your sins, because there is no free lunch, someone had to pay. Jesus paid for you and me, so we have been forgiven. That’s why when the question was asked in Matthew 18:22 “How many times should I forgive?” The answer was “seventy times seven.”
A society without forgiveness is a pretty ugly place to be, and that’s what’s happening in the post-modernity stage of United States society.
When I used to do a lot of management seminars, I would often mention that every organization has to have some kind of a forgiveness system, although I didn’t use that term. -
Adam and Eve ate the apple because they wanted to be God. That desire has not gone away, and recently, we are seeing even more evidence of it.Our society is moving from “God to Government” and the implications don’t look great. WorldviewChristian Worldview to secular worldviewThe Christian Worldview says God created a perfect world, fallen humans have messed it up, and we find redemption through Jesus Christ. Support for abortion provides ample evidence that many people don’t believe humans are created by God; I will cite many examples of the denial of the fallen nature in the next few statements. If we’re not fallen, who needs a savior for redemption?Fallen to not fallenThe defund the police movement was based in the assumption that humans are not fallen. If you just leave them alone, peace will break out. This is not a theoretical belief system. It’s been proven over and over again, that if you reduce punishments, crime increases, as it is in America today.From serving God to being “god”In the book The Rise & Triumph of the Modern Self Carl Trueman explains why people believe they are “A woman trapped in a man’s body,” or the opposite. The supposition is objectively false, but the concept of expressive individualism has led folks to believe they can do it. Maybe it’s the best evidence for the departure from the Christian Worldview, because people don’t believe they were created by God, so they can create themselves. Frightening. EconomicsSupply side to demand sideKeynesians believe that during an economic downturn, the economy should be stimulated by shifting the demand curve out. The measure of that effort is called the Philips curve, and it has been shown to work in the short run, but not in the long run. In the long run, you end up with employment returning to its natural rate, but with the added debt that was accumulated to shift the demand curve. When shown this, John Maynard Keynes agreed, and responded, “In the long run, we’re all dead.” What a selfish thing to say. In about twenty years, I might be dead, but my Dallas Baptist University sophomores will be in the middle of their careers, struggling to pay off the debt our country has accumulated. I’ve told them many times, that they will look back on the years from 2019-2023 and ask why the national debt moved from $20 to $30 trillion in just four years.Free market capitalism to socialismThis is the most dangerous movement in economics. The title “Free Market Capitalism” reveals its intent in the title, because it calls for free exchange of goods and services. Socialism is based in power, where producers and consumers are coerced to exchange goods in a way the government wants them to.From private investment to government crowding outTo help my sophomores at Dallas Baptist University do well on their weekly quiz, I ask if we should smoke cigarettes. The obvious answer is “no.” “So we should nix cigs!” is exclaim, which helps them remember the equation for Gross Domestic Product: Y = C + I + G + NX. In the last quarterly GDP report, Consumption and Government Spending were up. Investment was down. That means we have a good short-term economy, but a bad long-term economy, because there is not enough investment being made. GovernanceBiden’s Sphere Sovereignty to Economic humanismBiden’s Sphere Sovereignty is the title of my podcast #111. I caught him admitting that government could not solve some specific problem, so I took the opportunity to make it the title of a podcast. Economic Humanism is the title of my podcast #21, which explains how humans think they can do just about anything. After eating the apple, Adam and Eve found it didn’t work that way.US Revolution to the French RevolutionIn his book Last Call for Liberty, Os Guinness explains the difference in the US revolution, which defended religious freedom, and the French revolution, which deposed religion.
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The Pilgrims tried socialism and it failed. Then private property led to so much prosperity that they hosted the first Thanksgiving.
If you have enough to eat this Thanksgiving, you should be thankful for the private property system that produced the food. We live in the most prosperous, fruitful time in human history. Let’s take a brief look at how we got here.
In October of 1621, Plymouth Colony governor William Bradford called a three-day festival, inviting the ninety Indians to join the 50 Pilgrims. This feast, which included times of thanks to God as well as athletic competitions and food and fellowship, is commonly celebrated as the first Thanksgiving festival in America. So, if you celebrate it with football games and food with your neighbors, you are re-enacting this cherished Christian tradition, but who were these Pilgrims, and how did they get here?
Fight or Flight
That’s the basic idea from psychology that our minds are built to either change ideas we disagree with, or run from them. It’s a pretty big discussion among Christians in the United States today. Or, at least, it SHOULD be. I delve into the question in podcast #72 titled Two Worlds. Being in the world, but not of the world is becoming more difficult in post modernity.
The Pilgrims response was flight, as explained by David Barton at WallBuilders: The Pilgrims are well known today for their association with the first Thanksgiving festival. The Pilgrims were Separatists — a set of Protestants who felt that they would be unable to reform the Church of England and therefore they chose “flight” over “fight.” They went to Holland and then eventually to America. But the other group who came later, were Puritans. They were “fighters” who believed they could reform the Church of England. It turned out that they were wrong, and following severe persecution, some 20,000 followed the Pilgrims to America.
The Pilgrims had obtained a land grant for Virginia and set sail in the Mayflower on September 6, 1620. But after a rough ocean crossing, they landed 200 miles north of Virginia in what became known as Massachusetts. On November 11, 1620, they finally dropped anchor and came ashore.
Grateful or Entitled
Of the hundreds of books and articles I’ve read and the hundreds of speeches I’ve heard, the one that makes the most impact on today’s subject is a little five-minute video by Dennis Prager, titled The Key to Unhappiness. He says there are two groups of people: Those who are grateful and those who are entitled. The grateful will always be happy, the entitled will never be happy. And here’s the strange part: Dennis is a Jew, who does not believe Jesus died for him. Think about it: A Jew is telling a Christian that HE should be grateful. Kinda backward, isn’t it? I’m the one who should be telling HIM to be grateful.
Jesus had to die for your sins because there’s no such thing as a free lunch. Somebody had to pay. And it wasn’t you. That’s why Christians are grateful, and why we celebrate Thanksgiving. We have a lot to be grateful for.
You’re welcome to feel sorry for atheists during this season. They have no one to be grateful TO. I don’t know how you can be grateful FOR, without being grateful TO. Oh, then the non-believer has to suffer through Christmas, and not celebrate the birth of Christ. You know, for all we complain about the difficulty of being a Christian, this time of year, it’s quite a blessing.
Our grandkids sometimes tell each other, “You get what you get, and you don’t throw a fit.” Actually, that’s a pretty good Christian economic philosophy. Be happy for what you have. After all, being happy is not having what you want, it’s wanting what you have.
In our book Biblical Economic Policy, Sergiy Saydometov and I mention this concept as one of the Ten Commandments of Economics, which we borrowed from the list by Moses. It’s #4 for us, and it’s called “Don’t Covet.”
If you Don’t Work -
Trade with China makes Americans richer, but China is likely using the profits from their exports to build a military that the US will fight someday.
In the 19th century, if a sailor got too drunk in a port city, he might wake up the next day on a ship steaming toward Shanghai. The noun became a verb, and he had been “Shanghaied,” but in the current US-China trade relationship, who is getting Shanghaied?
Trade with China makes us richer, but they might be using those profits to build a military that we will fight someday. I’ve often said, you won’t find a one-armed economist because we will always say, “On the other hand.” Trade with China reflects this conflict. Trade makes us richer, but it also makes China richer. What do we do?
I think it would be difficult to find a scripture that encouraged market discrimination against a people group, just because they are from another country. That’s where Christianity and Economics support each other. They BOTH call for open markets and trade, among all people groups and all countries.
Trade is Good
Of course, trade is good. The entire Adam Smith economic legacy might be neatly tied up in a two-step process: First, increase production via specialization, then trade your surplus.
Trade is Good is one of the Ten Commandments of Economics that I found with my co-author Sergiy Saydometov, when we wrote the book titled Biblical Economic Policy.
If we didn’t trade, we would be very poor. I’m pretty good at giving economics lectures and writing, I’m an average farmer, a lousy tailor, and even a worse auto mechanic. I couldn’t make a car if my life depended on it. Instead, I specialize in writing and speaking, and I trade for food, clothes, and cars. That little economic system works at the national level too. This is still Adam Smith territory: he noticed that the French were better at making wine, but the Scots were better at making Whiskey. That’s why some wines, like Champagne and Bordeaux, are named for the region where they are made. I’ll presume you know why they call it “Scotch Whiskey.”
In the first nine months of this year, China exported to us $210 billion more in goods than we exported to them. That’s the FRONT part of the equation that they explain to you on CNN and Fox News. The back part of the equation is a little more complex, so you only find that in the Wall Street Journal and The Economist. That’s where you find this Chinese businessman holding a million US dollars and trying to exchange it for something. He ends up buying a shopping mall in Cincinnati, or a wheat farm in Kansas because that’s where the US dollar is honored. That back side of the equation is where you hear people complain “The Chinese will own the US someday.” That’s chicken little economics. I heard the same thing about the Japanese in the 1990’s. If the Chinese buy $210 billion worth of real estate in the US every year, there really is not even an ESTIMATE of how long it would take them to own a meaningful percentage of US assets. Recently, there have been reports that they are buying land near military installations. That’s concerning.
Trading Avoids War
There’s something called the Golden Arches theory of Conflict Prevention that goes something like this “No two countries that both have a McDonald's have ever fought a war against each other.” It was first proposed by Thomas Friedman in a New York Times column, then became part of his book titled The Lexus and the Olive Tree, which I read years ago. Maybe it was disproven by the UK’s struggle with Argentina over the Falklands, and the current Russian war on Ukraine, but the concept is still valid. Trading avoids war.
Part of the reason that Imperial Japan attacked the US was because the US stopped trading oil and steel with them. OK, the US had good reason. They were responding to Japan’s atrocious treatment of the Chinese, just across the Japanese border. That’s interesting to think about: My podcast today, -
School Choice: The rich already have the choice to send their children to any school they want. The poor should have the same choice.
The rich should have a choice that the poor do not have. Really?! Think about it: The rich already HAVE school choice; they can send their kids to any expensive school they choose, but poor kids don’t have that choice. Shouldn’t we give them that choice?
We live in Texas, where our legislature is trying to decide what to do about school vouchers. To a Christian Economist, this is pretty simple. As an economist, I think people should have the freedom to send their children to a school of their choice. As a Christian, it certainly seems like a person should be free to choose Christian education over secular education. So who disagrees with that? People who want power.
They want power, not only over your decision but over the dollars you pay in taxes. First, they forcefully extract tax dollars from you, then when you want to direct the use of those dollars, they want to spend them on two monopoly providers. More on that in a minute.
The Poor Will Always Be With You
Jesus said that, because He knew we would not be able to keep the Biblical commandments to run a Biblical Economy. The school voucher issue is simply another example of it. People should be as free as possible to choose religious education over secular education. If people were better educated, production would increase, and our country would be richer. The productivity equation, after all, is what determines a country’s wealth.
“Know the truth, and the truth shall make you free.” That’s from John 8:32, and it follows after a pretty interesting scripture as well. The preceding verse reads, “If you hold to my teaching, you are really my disciples.” Oh, so teaching is pretty important to Jesus. So it’s through LEARNING that we find the truth. I don’t have the time today to deal with the philosophy of one truth or multiple truths, but don’t miss the point: The scripture clearly says THE truth shall make you free, the not truths, plural.
In podcast #163 Who Owns Education?), I quoted Oprah Winfrey saying, “Education is the key to unlocking the world, a passport to freedom.” Okay, so we’ve determined that people should have the freedom about how to unlock this key to freedom. I’ve often said, the intersection of Christianity and Economics is freedom. I guess that’s poignantly true in this podcast.
Monopolies
There are two monopolies at work here:
The first one is quite obvious. Public schools don’t like to compete with private schools. They’re happiest when they have a monopoly on education in your town.
I’m an academic, and one of the basic ideas is that no one knows it all. That’s why most academics study at various universities and then join the faculty at another university where they didn’t study. I’ve attended ten universities.
But why? Why didn’t I get all my education at the same place? Because, no one and nothing, not even a University, has all the answers. You have to study broadly to gain different views of the world.
When I started teaching Economics, I would teach Macro one semester, then Micro the next. My friend and co-author Sergiy Saydometov did the same thing. But that meant they either had two classes with me and none with Sergiy, or the opposite. But then, I camped on Macro, and he camped on Micro, specifically so that our students at Dallas Baptist University were forced to hear economic views from two different angles. That’s how you build a market for information.
In contrast to the previously cited market where the intellectual capital of various people is poured in, the fallen nature always wants to reduce that market to a monopoly, and that’s what we have in lots of public education today.
The school superintendent who complains about resources being moved from their monopoly to a competitive environment is wearing shoes that were bought in a competitive environment... -
The US Federal Government's annual expenses are $1.9 trillion more than its revenues. That's a violation of the eighth commandment, and it is economically unsustainable.
You will be poorer every day, for the rest of your life, because the Biden administration has increased the national debt in the last three years. That’s the message I gave my sophomores at Dallas Baptist University recently. Going back a little further, the Wall Street Journal reports this week that Federal debt held by the public mushroomed from less than $5 trillion in mid-2007 to more than $21 trillion in 2020.
Sorry for being the bearer of bad news. They never liked prophets in the Old Testament either. Or, as I often say, “I’m just the boy at the edge of the crowd shouting, “The Emperor has no clothes!” I’m not responsible for who feels naked as a result.
I arrived early to lead some Certified Public Accountants through a management seminar in Pittsburg in the winter of 1998. Trying to start a conversation with stereotypically reserved accountants was difficult. Reading the local newspaper, I asked, “How did the Pittsburg Penguins of the National Hockey League manage to go bankrupt?” There was no answer. I waded in again, “How did an NHL team go broke?” Finally, one of the participants answered, “Expenses exceeded revenues in the long term.” At the time, I was a columnist for a publication called Sports Business Journal. My column the next week was titled, “When expenses exceed revenues in the long term.”
The Eighth Commandment & National Debt
Expenses are exceeding revenues in America today. This is unsustainable. According to the US debt clock, this year the federal government will have $4.4 trillion in revenue and spend $6.3 trillion You can’t continue to spend 30% more than you take in. I don’t care if it’s your personal checkbook, your business, your church, or the federal government. Consuming without paying for it is stealing, and it violates the eighth commandment.
So why do we continue to do it? When President Bill Clinton was asked why he had sexual relations with an intern, he flatly, answered, “Because I could.” And, that’s why the Federal government continues to spend more than they receive. Here’s how Investopedia explains it: “The nature of debts changed after the Great Depression and the rise of Keynesian economics. The extent to which British economist John Maynard Keynes influenced government spending in the 20th century can hardly be overstated. While both the Hoover and Roosevelt administrations extended public works projects and experimented with fiscal deficits in the face of the Great Depression, it was Keynes who provided the macroeconomic justification for running large budget deficits to stimulate aggregate demand and fight recessions.”
Danielle Lacalle at the Epoch Times has this to say in a recent article titled The US Deficit Road to Ruin, “According to the U.S. Treasury, year-end data from September show that the deficit for the full year 2023 was $1.7 trillion, $320 billion higher than the prior year's deficit.” This is going in the wrong direction.
On the Wrong Side of the Laffer Curve
The Biden administration increased taxes, but revenues declined. That means we’re on the back side of the Laffer Curve. Arthur Laffer’s simple curve shows a starting point on the bottom left of the graph, where a tax rate of zero produces zero revenue. At the bottom right, a tax rate of 100% produces zero revenue. So, logically, there has to be a hump in the curve. Christina Romer was the Chief Economic advisor to President Barack Obama. She determined the hump was at 33%. That means tax rates above 33% reduce revenue to the Treasury.
When the Trump administration reduced taxes, revenue to the Treasury increased, proving we were on the back side of the Laffer Curve in 2017. Apparently, we still are.
Mr. Lacalle again, “There simply is no excuse. -
Scarcity thinkers tell us we are running out of resources. But Christians believe our "Made in the image of God creativity" will continue to find new ways of preserving resources.
One of my favorite questions to ask groups is to complete this sentence, “Life was better before we ran out of: _____” You’re right, there’s no answer. At least, in years of asking the question, I’ve never heard an answer. If you know of a valuable resource that we’ve run out of, please send me an email. But here’s the problem, we are continually being told that we’re running out of things.
Just one example for now: In 1976, Jimmy Carter intoned, “We have about 35 years of oil left in the world.” Oh, so we ran out in 2011?
The Coming Ice Age
In a video from 1976, frightening music plays as Leonard Nimoy speaks in a very worried tone, “There’s little doubt that someday, the ice will return.” More dramatic music plays, and he continues, “If we are unprepared for the next advance, the results could be hunger and death on a scale unprecedented in all of history. During the lifetime of our grandchildren, Arctic cold and perpetual snow could turn most of the habitable parts of our planet into a polar desert. The next ice age is on its way. At weather stations in the far north, temperatures have been dropping for 30 years. Seacoasts that used to be free of ice, are now blocked year-round. According to climatologists, within a lifetime, "we might be living in the next ice age.” Okay, let’s be simple about this. They were wrong in 1976. What makes you think the climate alarmists are right today?
Progress
“Nothing is more responsible for the good old days than a bad memory.” That’s the first line of the book Progress by Johan Norberg. The quote was attributed to Franklin Pierce Adams. Mr. Norberg goes on to write, “The truth is that the good old days were awful. The great story of our era is that we are witnessing the greatest improvement in global living standards ever to take place. Poverty, malnutrition, illiteracy, child labor, and infant mortality are falling faster than at any other time in human history.”
In my lifetime, the percentage of the world living in extreme poverty has dropped from 44% to just over 8%. On its current trajectory, it will approach zero in the next ten years.
When Karl Marx died in 1883, the average Englishman was three times richer than he was when Marx was born, in 1818.
Abundance vs Scarcity, Will We Run Out?
The magicians and entertainers Penn and Teller were playing a kind of poker game called Greatest Person in History, with pictures of great people on playing cards. Penn draws a card and pushes all his chips in on the bet because he KNEW that card would cause him to win the game. The face on the card….are you ready for this….Greatest person in history?
Let me tell one more story to keep you in suspense. Goldman Sachs came up with the idea of the BRIC countries in 2001. The countries with the greatest supply of land, labor, and capital are Brazil, Russia, India, and China. So, I started on a plan to take MBA students from Dallas Baptist University to all four. Just before we left for India the Dallas Global Alliance was hosting a speech by the Indian ambassador to the US. The Indian representative strode to the podium. He didn’t even say hello, or good morning, or it’s good to be in Dallas. The first words he spoke were, “Please join me in a moment of silence in memory of…..are you ready…this is the guy’s picture on Penn’s poker card….. His name is …..Norman Borlaug. Borlaug grew up in Cresco, Iowa, and earned a Ph.D. in Agronomy from the University of Minnesota. First, he went to Mexico and showed them a dwarf wheat that matured in half the time, so they could double their crop in one year. Then he went to India and Pakistan and did the same thing. He’s known as the man who saved a billion lives.
That’s abundance. Now for scarcity. That’s easy, -
The powerful religion of Karl Marx and of Islam leads to the powerful political system of totalitarianism, which leads to the powerful economic system of Marxism, which impoverishes its people. How we see God has a lot to do with how we see our fellow man.
Belief – Politics - Economics
When I wrote the curriculum for International Economics at Dallas Baptist University, I used this simple diagram to begin each session. Belief systems produce political systems, which produce economic systems. I know, there is a lot of interplay and it goes back and forth. But the diagram is mostly correct.
That’s why we should not be surprised that the Muslim Palestinians of Hamas have a totalitarian political system and a socialist economic system. Power begets power. All three of those systems are based on power structures.
If Israel didn't exist, the Palestinians would still live in abject poverty. That is not Israel's fault. It's a cultural thing. In most cases, the powerful top-down religion of Islam does not produce a bottom-up political system like democracy, nor an economic system like free market capitalism that enriches the poor.
What we study in social science is differences. That’s it. We want to know why there are differences in the world. Economics is a social science. So, we want to know why the Israelis make $55,000, their neighbors, the Jordanians and Lebanese make less than $13,000, and the Palestinians make under $7,000. Israelis make eight times more than their Palestinian neighbors. Why? Top-down religions like Islam identify more easily with top-down political ideas like totalitarianism, and top-down economics like Marxism.
Karl Marx and the Devil
That happens to be the title of my podcast #106. That one is based on some comments by Dr. David Jeremiah. I am struggling through a book right now titled The Devil and Karl Marx by Paul Kengor. The subtitle is “Communism’s long march of death, deception, and infiltration.” That sounds like the recent Hamas attack on Israel, doesn’t it? The book I’m currently reading is hard to read because Karl Marx was such an evil person. If you are sickened by the atrocities performed by Hamas against Israelis recently, then you won’t want to read the book. Karl Marx exercised power whenever he could. He impregnated his housemaid, who was about as close to an owned servant as you can get. Two of his daughters committed suicide. His personal life is as disordered and calamitous as the economic system he designed. He bullied people on many occasions, and very rarely worked. He lived off his partner, Friedrich Engels. Maybe I’ll explain more about his disastrous and immoral life in another podcast someday. For now, just be assured, that in his personal life and in Marxism, it’s all based on power.
At the heart of Marxism is the idea of the oppressors and the oppressed. It’s such a lousy economic system because it fails to recognize that both parties in a transaction can benefit at the same time. Milton Friedman famously said, “Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.” Well, Marxism is one of those economic fallacies. The left thinks Israel’s prosperity was caused by the Jews stealing wealth from the Palestinians. That’s not how it works.
About those oppressed and oppressors. There are about 475 million Arabs in the countries that surround Israel. Their population increased by 8.2 million last year alone. There are…. are you ready for it……just over 7 million Jews in Israel. Get it? The Arab population increase in ONE YEAR was greater than the entire Jewish population. But we’re being told that 7 million people oppress 475 million?
You see, some of this misaligned sympathy for the Palestinians is because they are portrayed as the oppressed. That’s just nonsense. They are poor because their religion produces totalitarian polit... -
American incomes are 3% more equal today than in 1947. That was the key data point from former Senator Phil Gramm’s recent speech about his new book, titled The Myth of American Inequality.
Don’t Covet
Just about every discussion that points out inequalities of outcomes is a violation of the tenth commandment against covetousness. From Thomas Picketty’s books and speeches to Black Lives Matter to President Biden: The message is always rooted in wanting what others have.
That’s why when Sergiy Saydometov and I wrote the book Biblical Economic Policy, one of the ten Biblical Commandments of Economics we found was “Don’t Covet.” It’s so pervasive in our society. As I’m recording this podcast, the Union of Auto Workers is out on strike. Guess what their major talking point is: How rich the executives are. Who barred a production worker from seeking a C-Suite job? In fact, companies typically provide tuition assistance for those who desire to move “up” within the company. If any of the automakers discriminated against a qualified executive, their competitors would snatch her up in a second, seeking competitive advantage over the others. That’s the beauty of competition. When you discriminate in a competitive environment, you hurt yourself.
The union toadies also use the phrase “fair shares.” That’s straight out of Ayn Rand’s book Atlas Shrugged. She does not use the term in a favorable way.
Quintiles
OK, anytime you talk about incomes, you have to use quintiles. That’s because the Census Bureau reports incomes in five different levels.
Here’s the raw data point that the coveters trot out: The top quintile makes 16.7 times more than the bottom quintile. But that’s before you count transfers. A transfer is money that is taken from the folks in the top quintile and given to the bottom quintile. After transfers, the ratio is 4: 1. That’s actually a very narrow difference. I mean really, what would you like it to be?
Another shocking fact from Senator Gramm, “In 2017 the bottom quintile spent TWICE what they earned. Hold it. As my friend says, “That don’t pencil out.” Where did the extra money come from? Well, people in the top quintile spent 40% less than they earned. Oh, now it makes sense. It was transferred from the rich to the poor.
The Census Bureau data does not count 100 federal transfer programs. It overlooks 2/3 of transfer income. 88% of income to the bottom quintile is not counted. Now you see why the real ratio is 4:1. There are lies, damned lies, and government statistics. Oh, Senator Gramm’s speech that I’ve been quoting was sponsored by a think tank called the Institute for Policy Innovation. It was founded by then speaker of the house Dick Armey, for the expressed purpose of producing reliable data.
The Wrong Motivations
Back to those transfers: They instigate the wrong motives in both parties. When you take money from rich folks, you motivate them to produce less. When you give money to the poor, you motivate them NOT to produce more. Production is the key driver of a nation’s wealth. The more you transfer, the poorer the nation gets. One of my favorite phrases is “Policies that Promote Production is what separates rich from poor nations.” Here’s how Winston Churchill said, “You don’t make the poor rich by making the rich poor.” The Dave Arnott extension of that is: When you make the rich poor, you make the poor, poorer.
Ronald Reagan quipped, “We fought a war on poverty, and poverty won.” The war on poverty ended up being a war on the economy. Poverty was reduced by 50% between 1945-1960. That was BEFORE the war on poverty. THEN LBJ launched the “war on poverty” and it has not changed significantly since. The poverty rate without transfers ranges from about 11-16%. When you count the transfers received by those in poverty, only 2.5% are still qualified as being in poverty. And, again, a reasonable person wants to ask: What is an accepta... -
ChatGPT leans liberal and can be deceptive, but Christians should not be afraid of it; It’s simply another machine that will cause creative destruction that makes us economically richer.
Toward the end of last semester, I wrote to my Dean in the College of Business, “I either have the best student in the history of our program, or he’s using ChatGPT to write his essay answers.” After noticing some similarities in a few students’ essays, I got something of a sense of what was written by students, and what was written by the Bot. I had asked a strategy question, and the guilty answers contained more financial information than I had asked for.
This is not a huge deal. Students have been cheating on answers since Cain said he didn’t know where his brother was. Keeping up with cheating is what we do as teachers and professors. This is simply a new technique.
It IS cheating, by the way. Passing off someone else’s work as your own is cheating. Even if the “someone” is a computer program.
There are many Biblical warnings about deception. Here’s just one from the Old Testament, and one from the New Testament. Job 15:31 “Let him not deceive himself by trusting what is worthless, for he will get nothing in return”. In 2 Timothy 3:13-14, the apostle Paul warns us, “Evil people and impostors will go from bad to worse as they deceive others and are themselves deceived. But as for you, continue in what you have learned and found to be true because you know from whom you learned it”. So, we shouldn’t be alarmed by a bot trying to change our thinking.
Assumptions
An article in the Washington Post by Gerrit De Vynck is titled “ChatGPT leans liberal, research shows.” I assume Mr. De Vynck wrote the article, and that he didn’t use AI to write it for him. Now THAT would be interesting, wouldn’t it? Asking a bot to write an article criticizing a bot? He cited a research paper that said the following, “The paper adds to a growing body of research on chatbots showing that despite their designers trying to control potential biases, the bots are infused with assumptions, beliefs, and stereotypes found in the reams of data scraped from the open internet that they are trained on.”
So, it’s “garbage in – garbage out.” All computer programs are that way. The frightening thing about this one is its apparent ability to teach itself. That’s reminiscent of the robot Hal’s response in the 1968 movie, 2001 A Space Odyssey, “Sorry Dave, ‘m afraid I can’t do that.”
But for now, let’s look back – to assumptions – not forward. The Economics textbook I use in my Macro class at Dallas Baptist University was authored by Gregory Mankiw. He has a section in an early chapter about assumptions.
As a warning about false assumptions, I tell this story. I bought this painting while waiting for the Vaporetto – that’s the water bus – in Venice, Italy. In 1609, Galileo hauled the Doge – that’s the governor of the city-state of Venice – up the 323 steps of San Marco tower to show him what he’d found in the night sky, using his newly refined telescope. It seemed to indicate that my predecessors – Catholic Priests – were wrong and that the earth was NOT the center of the solar system. Galileo was tried by my predecessors, who claimed to contain all the information in the world at the time. He tried to defend himself by saying it was only a theory, and he didn’t really believe it. Well, he spent the rest of his life under house arrest. The message was pretty clear: Don’t mess with the folks who held the power of information.
Legend has it that after his prosecution, he uttered the famous phrase, “Yet it moves.” You still hear that phrase used occasionally when someone thinks they are clearly correct after losing an argument. Maybe like a reasonable person who does the math and finds that the Inflation Reduction Act actually CAUSED inflation. But I digress.
The point is that assumptions matter. -
Our creativity comes from being made in the image of God. That creative innovation is best expressed in time-price, defined as how many hours we work to buy something. We're rich.
Would you like to pay for your breakfast and get eight free? Wanna pay only 2% of your air conditioning bill? How about paying less than 5% of the marked price for a bicycle? God has made us rich by making us creative, in His image, and according to time price, you are getting those discounts on just about everything you buy. But first: How did we get here?
Made in God’s Image
Where does creativity come from? Well, for the Christian, the answer is pretty simple: We were made in God’s image. Another way of saying it is, we were created by the creator to be creative. That explanation is well-received by my students at Dallas Baptist University. I often wonder how creative innovation is explained at secular universities. It’s the first part of what’s sometimes called the three-chapter gospel: Creation, Fall, and Redemption. We were created in the Imago Dei, or in God’s image. We are NOT gods, we’re not even little gods, but we are made in His image, and we believe that’s the source of our creativity.
The Hockey Stick of Prosperity
Humans were poor in the Old Testament and the New Testament. Very few people were rich, and those are the ones we read about Abraham, Solomon, etc. However, a substantial percentage of the population was poor. By some estimates 25% of the first century population were slaves. We used to ask “Why are people rich?” And now we ask “Why are people poor?” Because such a small percentage of the world’s population is poor. People living in abject poverty has been reduced from 44% to just over 8% in MY lifetime. That’s one of the most astounding economic statistics you will ever hear.
What changed? How did we accomplish The Great Escape, as 2013 Nobel Prize-winning economist Angus Deaton called it, in his book by that name?
Jonathan Heidt has called it “The most important diagram in human history.” Don Boudreaux at George Mason explains it as the Hockey Stick of Human Prosperity in a very convincing YouTube video. Where does the hockey stick turn up? 1776. Three things happened in the same year. There was a political revolution, a technological revolution, and an economic revolution. First, political: Americans remember it was the year of arguably the greatest political revolution in history when the United States declared its independence from Britain. Scotsman James Wilson signed both the Declaration and the Constitution. Second, the technological revolution occurred when James Watt perfected the steam engine. It was the first form of non-muscle power that could be moved to any location. Third was the economic revolution instigated by the writing of The Wealth of Nations by Adam Smith. How about this: All three of these Scotsmen: James Wilson, James Watt, and Adam Smith were at Glasgow University from 1859-1762. Think about walking into a pub and asking, “Who are those three guys?” Would you arrive late for a lecture, when it featured a panel of futurists that included James Wilson, James Watt, and Adam Smith?
Honestly, I just stumbled onto this amazing providence, and I’m not sure what to do with the information. I read a book titled How the Scots Invented the Modern World. However, it concentrated too much on the military battles and not enough on the three revolutions I was interested in.
I think there was something going on in their religion, but I don’t have the details yet. I know they had been pretty strict Calvinists, who believed that their lives were predetermined for them. But somehow, the spirit of creative innovation was alive in the mid-18th century in Scotland, and the world is richer today because of it.
Time Price
How do we measure our wealth? Sometimes in my DBU class, I have claimed that gas is cheaper for my freshmen this year, -
We can't make a perfect economic system. But we can make it better.
God is perfect, we’re not. But that doesn’t stop people from striving for perfection. So how do we design an economic system for an imperfect world? That’s the subject of today’s podcast.
There’s an article in the Wall Street Journal this week by Rachel Feintzeig titled “Try Hard, but Not That Hard.” She writes, “So many of us were raised in the gospel of hard work.” Okay, my first observation is that she called it “the gospel.” It makes a Christian Economist think about the book The Protestant Ethic and the Spirit of Capitalism by Max Weber way back in 1904.
Ms. Feintzeig’s article contains long quotes from Greg McKeown who wrote the book Essentialism: The Disciplined Pursuit of Less. Mr. McKeown suggests we aim at about an 85% success rate. Both of these authors are writing about what economists call “Opportunity Cost.” So, my sophomore students at Dallas Baptist University will study until they know the chapter pretty well, but not perfectly. Why? They know the concept of declining marginal utility, that says that each additional minute spent studying produces less than the previous minute did. So, after a few hours of study, they go play flag football or have pizza with their friends.
Facebook is the classic example of the old phrase from Voltaire, “Perfect is the enemy of good.” It features your friends and their perfect homes, vacations, children, food, etc. It is reminiscent of a guy whom Jesus encountered.
Trying to be Perfect
He was a rich young ruler who wanted to be perfect. Jesus told him, “If you want to be perfect, go, sell your possessions, and give to the poor, and you will have treasure in heaven. Then come, follow me.” In the book The Maker Versus the Takers, Jerry Bowyer explains that Jesus was talking about conversion, not entry into heaven.
We can’t be perfect. The ways we might measure perfection are different than how God measures it. We seek perfection through our accomplishments, wealth, academic degrees, and social status. Jesus tells us to forget seeking perfection, and simply love God, and love your neighbor. It seems strange to me that so many protestants seek perfection, because of two events: Jesus came to save us because He knew we couldn’t perfectly keep the law. And Martin Luther led the Reformation because Luther found he could not keep the Catholic laws. Here’s what Martin Luther had to say about perfection, “We are not what we shall be, but we are growing toward it, the process is not yet finished.” Most Christians call that “sanctification,” meaning, we are becoming closer to perfect, but we can’t gain it on this side of heaven.
We’re Fallen, and we Can’t Get Up. All have sinned and fallen short of the glory of God. The Christian Worldview says that God created a perfect world, fallen humans have messed it up, and it’s our job to redeem it, to the extent we can. We can’t make a perfect world, but we can make this broken world better. That’s our calling. So how do we design an economic system that we know is going to be implemented by fallen people?
Christian Economics
There is no perfect economic system. I get so tired of hearing people poke holes in the free-market capitalist system, but then fail to present a better alternative. There isn’t one. Of course, capitalism has its problems, as all human systems do. As Whole Foods founder John Mackey said, “Capitalism is humanity’s greatest invention.” It’s head and shoulders above its nearest competitor, socialism.
The market is so complex, even the greatest economists have not been able to define it. Adam Smith called it “The invisible hand.” That’s not a scientific answer. Invisible?! Friedrich Hayek said it was “spontaneous order.” A freshman at DBU would ask the “first cause” question, which goes something like, “Who spontained it?”
I like the answer from Jay Richards, -
Christians are called to take care of widows and orphans, because in the agrarian economy of Biblical times, those were the people who didn’t own land, so they were not capable of economically providing for themselves. In the 21st century, we as individuals can care for the less fortunate by two very different economic systems: Competition or Regulation.
Regulations are regressive, harming the poor more than the rich. They also exercise taxation without representation, and they side-step the democratic process.
University of Chicago economist Casey Mulligan has determined that the Biden administration’s rule-making has cost each American household more than $10,000, while the Trump administration’s reduction of rules saved each household $11,000. Every American household has $21,000 less in purchasing power as a result of the change from President Trump to President Biden. As President Obama noticed, “Elections have consequences.” And they matter most to the poor, who suffer a greater loss in purchasing power through regulations than the rich do. That’s because $21,000 represents a higher proportion of income to the poor, than the rich.
But wait, it gets worse: To quote Mr. Mulligan directly from his letter to the Wall Street Journal, “That would be more than $10,000 in cost for the two years of President Biden’s rule-making that I examined, and almost $11,000 in savings for four years of President Trump’s. Mr. Biden is adding regulatory costs even faster than President Obama did, while Mr. Trump reduced them.”
Opportunity Cost
The simple economics question, “Is the juice worth the squeeze?” is what finance people term “Cost-Benefit analysis.” We all make those decisions, large and small, on a daily basis. You skimmed the headline of this podcast and decided the benefit you would receive from gaining the information is greater than the cost of spending the time to listen to it. In economics, we call that “Opportunity Cost.” You can’t listen to another podcast at this moment, because you’re listening to this one.
The federal government goes through a similar analysis, performed by the Office of Management and Budget. They keep track of how many “significant regulatory actions” a President orders. That has been defined as an order that costs American taxpayers $100 million. That’s the squeeze. Now, the Biden administration wants to double it to $200 million. OMB also measures the “juice” that is produced from the order. In the past, that benefit was accrued only to Americans, but being the global citizens they are, the Biden administration says those benefits can accrue from outside the US.
President Trump wanted to “Make America Great Again,” and the Biden Administration wants to “Make the World Great Again.” The current Administration is tilting at a very large economic windmill. Justice would say that money forcefully extracted from American taxpayers should benefit Americans. If you really think money spent by taxpayers in one country should benefit those in another country, please preach that sermon in another country, and convince them to appropriate funds that benefit Americans.
No Taxation Without Representation
The phrase “No taxation without representation” first appeared in a London newspaper in 1768. As you may remember, the phrase caught on in the colonies, and caused a revolution. It raised the question as to whether the Crown had the right to tax its colonial subjects. The colonists thought it did not.
But that’s exactly what’s happening today. This is taxation without representation. Our forefathers fought a revolution over that idea. These are administrative orders that do not go through the democratic legislative process. They harm the poor - as mentioned earlier - and the young. Americans can’t vote until they are 18, but they have to pay for these regulatory costs in the form of decreased family spending power every year of their lives. -
“Supply causes demand” was the summary statement by the French economist Jean Baptiste Say. The Biden administration has supplied more than $500 million to alleviate homelessness, and demand for it went up 11%. The allotment will be quickly consumed by the Homeless Industrial Complex, who will be back at the Government feeding trough for more, faster than you can say “Dwight Eisenhower.” Why “Dwight Eisenhower?” He invented the term Military Industrial Complex, from which the term Homeless Industrial Complex gets its name. The concept of the Homeless Industrial Complex is real. As far as I can tell, the term was first used by Joel John Roberts, who authored the cheeky-titled book How to Increase Homelessness in 2004. It sprang up to monetize homeless "services" nationally and their continued funding depends on sustaining the homeless population. They are not so much interested in solutions -- there's too much money in the problem.
Nothing About Supply and Demand
The Wall Street Journal is trying to blame the homeless problem on economics, “This year’s surge reflects a host of pressures around the U.S. such as rising housing costs, and lack of affordable rental units.” Oh, that’s why crackheads consume cocaine, opioids, and Mogen David by the gallon?
Homelessness is the result, not the cause. Homelessness is largely caused by drug addiction and mental illness.
It’s not an economic problem, it’s a moral violation for the homeless who make choices to fry their brains, and for the self-interested governmental bureaucrats who make a pretty nice living in the Homeless Industrial Complex that maintains the street carnival. Somewhere around 90% of homeless people have drug and alcohol addictions, and some degree of mental illness.
In their book Extreme Leadership former Navy Seals Jocko Willink and Leif Babin, state the rather obvious, “You get the behavior you tolerate.” New York City has something called “A legal right to shelter,” which has caused its homeless population to explode.
“The U.S. Interagency Council on Homelessness, a federal agency, also blamed growing homeless counts on housing costs and shortages.” The government is wrong again. Look, homelessness is NOT an economic problem. We can do ZERO to address the homeless problem until we stop claiming an association between homelessness and lack of affordable housing. They are unrelated. Homelessness has nothing to do with the availability of affordable housing.
When shelter is supplied for many homeless people, they turn it down. Many homeless people are homeless because they don’t want to follow the rules that would be required to live in a house. If you’re thinking “that’s kinda crazy,” you would be correct. As I’ve stated, the majority of the homeless population have some kind of drug or alcohol dependence or mental illness.
Noting that the unemployment rate is at 3.6%, well below what economists call the natural rate of 5%, we should notice that jobs are plentiful in this country for anyone who shows up on time and isn't stoned.
The Capitalist Good Samaritan
Finding a man injured on the road, the Good Samaritan, as described in Luke chapter 10 uses his own oil, wine, and bandages. He puts the man on his own donkey and pays the innkeeper with his own denarii.
Socialists read the story to say: finding the man injured on the road, the Samaritan rushed into town and rounded up some Roman soldiers who went door-to-door, forcefully extracting taxes to buy public oil, wine, and bandages. They bought public donkeys and public inns. That’s not how Jesus told the story, and it’s not how we are commanded to care for the homeless. There is no room in the Good Samaritan story for the government.
Defined by What They’re NOT
Notice the title “homeless.” Interesting that these folks are identified by what they don’t have, instead of what they do have. Maybe I should start referring to the students in my class at Dal... -
During his testimony in front of the Judiciary Committee, John Durham had a powerful response to the attack on his reputation: “My concern about my reputation is with the people who I respect and my family and my Lord." Are we as a nation comfortable with our economic reputation under the current "Bidenomics"?
During a recent Congressional testimony, John Durham was accused of having a sullied reputation because of his association with President Trump. His full response is the closing statement of today’s podcast. For now, I will summarize the part that gives its name to today’s podcast, “I’m perfectly comfortable with my reputation.”
Are you comfortable with your economic reputation? How are you using your freedom to produce and distribute goods and services to your neighbors to show you love them? As I wrote in my little book Economics and the Christian Worldview, “If you love your neighbor, you will supply her with products and services she demands. If you love yourself, you will make a profit while doing so.”
Trying to make everyone happy is a fool’s errand. We all must make decisions in life that determine our economic contribution to those around us.
Lies, Damned Lies, and Bidenomics
Economist Ronald Coase said, “If you torture the data long enough, it will confess to anything.” Advisors to President Biden actually wrote a speech about how GOOD Bidenomics is. A reader of the Wall Street Journal wrote in the comments section: “Let’s go Brandenomics”
Thomas Carlyle called Economics the Dismal Science, probably in response to Robert Malthus writing in 1798, that we would run out of food and starve. He was wrong, and every Malthusian since him has been wrong, which has led to my favorite question to ask of groups: Complete the sentence, “Life was better on earth before we ran out of:” There is no answer. We’ve never run out of anything, but that does not stop current day Malthusians from trying to convince us we’re going to.
But economics is not dismal. It is powerful. It is a set of rules - I would argue - that are handed down from God. He gave us the freedom to use our mental acuity to do math and read two-dimensional graphs, so we can have the social science we call Economics. But, as I’ve often said, “There’s nothing created good by God, that some human has not used for his own cause. Freedom can be mis-used. Such is today’s Bidenomics.
One of my favorite economics writers is Greg Ip at the WSJ. He wrote recently, about President Biden, “In a memo released this week, his political strategists Anita Dunn and Mike Donilon write that Biden “faced an immediate economic crisis when he took office” in January 2021. Actually, he didn’t.” End of quote from Greg Ip.
Absolute Economic Truth
“All truth is relative” is an absolute statement. So there has to be some truth out there, let’s go find some. In the post enlightenment era, relativism has taken over. They are trying to define freedom as doing whatever you want. A person is supposedly free to say, “I’m a woman trapped in a man’s body.” And we’re supposed to not only accept it, but praise it. Carl Trueman tracks the history of that foolish claim, back to Rousseau in his very good book The Rise and Triumph of the Modern Self. I published a podcast, summarizing that idea, titled Expressive Individualism, it’s podcast #151. The simple point is this: We can’t all have our own truth, nor our own economics. There HAVE TO BE objective measures.
During a rally with union members in Philadelphia recently, President Biden said it was “time to end the trickle-down economics theory.” Yes, I suppose it is, because according to Thomas Sowell it does not exist. He offered a reward to anyone who could cite the author of the theory. He got no takers. It doesn’t exist. It’s simply a straw-man created by opponents of economic growth.
During the pandemic, I built a golf course in the pasture behind our house. -
People are living longer, and it's shaking up the world of money. A Wall Street Journal piece shows that as we age, we stack up more cash. But, with longer lives come bigger economic questions.
“You will have a long life on the earth.” This promise which accompanies the fifth commandment about honoring your father and mother is becoming more true all the time. AND, there are economic implications.
Richard McKenzie, writing in the Wall Street Journal recently, made the point that, as folks live longer, they accumulate more money. That kind of makes sense. The title of Mr. McKenzie’s article is Americans are Living Longer and Prospering, and the subtitle “Longer Lifespans are an underappreciated cause of the increase in wealth concentration” really gets under the skin of the Thomas Piketty crowd. He’s the French economist who has pointed out economic inequalities in his books The Economics of Inequality and his latest Time for Socialism. Like our current President Joe Biden, Piketty likes to complain about the concentration of wealth among a smaller population.
Certainly, you WANT people to live longer, don’t you? Who would ever be FOR shorter lifespans? The death crowd, I guess. More on that later. Oh, there is something of a statistical anomaly going on here. In 2019, lifespans became shorter, but that was probably a one-time consequence of Covid. The trend line of longer life spans is expected to continue, after the dip.
Older workers are making a greater contribution to the economy, compared to previous generations. Firms have begun to offer “grand-turnity” leave to retain grandparents in the workforce.
The Poor Are Getting Richer Through Economics
Here’s what the Socialists really dislike, and it’s where McKenzie explains that the wealth of the bottom half of the US population increased in real dollars between 1989 and 2022. He goes on to explain that the bottom half’s share of total wealth decreased from 3.8% to 3.1% during those years. You see, Christians care about the poor, not the distance between the rich and the poor. Those who care about distance are violating the tenth commandment, about avoiding covetousness. Let me repeat the first half of Mr. McKenzie’s explanation about the wealth of the bottom half increasing in real dollars. My sophomores at Dallas Baptist University know that “real” means after inflation. So, even though the current administration has thrown an inflation party that has harmed them, the poor have still managed to get richer. Christians celebrate that.
But Socialists concentrate on the second half explanation from the WSJ article, about the share of wealth of the poor declining from 3.8% to 3.1%. Mr. McKenzie notes in his article, “Sen. Bernie Sanders denounces today’s wealth-concentration as “morally obscene.” President Biden seeks to temper the growing wealth accumulation by imposing a “billionaires’ tax.”
Of course, the rich are getting richer at a faster rate. That’s just the rules of the road. If a rich guy starts with $1 million and the poor guy starts with $1 thousand, as the economy lifts all boats, it’s going to lift the big boat further. The only time I can find when the poor got rich at a faster rate than the wealthy was during the Trump administration, and that’s because his economic policies aligned with growth in the lower classes.
And, Marian Tupy and Gale Pooley point out in the book Superabundance, that, when measured by “time price” that is: How long a person has to work to buy products and services, today’s poor are getting richer all the time.
Consumer surplus
Socialists are good at demand, but terrible at supply. They start at the point where a person has money and proceed from there. They want the government to get that money, with no consideration for the supply that produced it. In economics, we call it “consumer surplus.” In a competitive environment, every time you buy something, you get richer. - Show more
