Archive for the ‘Economics’ Category

With the shrinkage of the for-profit sector, the not-for-profit sector will see a similar contraction.  Churches are one of the not-for-proft organizations that will be hit hard.  The government should take a lesson from other not-for-profits and cut back rather than trying to raise taxes and spend even more.  These cycles come, but governments seem to lack the discipline necessary to save in times of prosperity for times of decline.  Governments abhor a surplus and must spend it, much to our disadvantage.

Churches will be hit hard for a number of factors.

  1. Unemployed members.
  2. Under-employed members
  3. Lost retirement savings

All of these will reduce the offerings a church needs.  If a church is small, or comprised of a largely retired population, that crunch will be most severe.  I know of a few churches that are at risk for these very reasons.  Things were already tight financially, and now these churches are on the brink and in grave danger.

Other churches will merely contract- reducing staff and/or programming. 

On the surface, this looks to be a bad thing.  As someone who is under-employed and watching the number of churches in which I could serve shrinking, I can see it that way at times.  But overall I think it presents some great opportunities for the church at large.

  • Opportunity for mercy ministry.  There will be opportunities to take care of our own, displaying the love of God in a tangible way.  We are to take care of one another, carrying one another’s burdens.  There will also be plenty of opportunities to take care of the poor outside of the church- opening the door to sharing the hope we have in Christ.
  • Opportunity to repent of our greed, materialism and consumerism.  Many people are having to cut back on their spending and realizing much of it was superfluous and luxury rather than necessity.  Many Americans live beyond their means- as evidenced by the average consumer debt.  It is time for that to change.  Our priorites can be reshaped, refocused by the gospel in times like these.  Good financial management programs can be utilized to instruct those in and outside of the church.
  • Opportunities to reveal the greater hope we have in Christ.  Yes, this can be a time of effective evangelism as people realize they have built their house on sand instead of rock. 

So while times like these are hard, they are also opportunities for ministry.  Churches driven by the gospel will recognize this, and go for it.  Churches driven by other agendas will … be overcome and possibly close their doors.  It is in times like these when we need to trust Him who holds the present and the future, and remember that He tends to work most profoundly when it seems darkest.

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I voted for Charlie Crist reluctantly.  He opponent was even more liberal that this so-called Republican.  For some reason, he has the affections of the RNC (though perhaps this has changed with Michael Steele’s ascendency as GOP chairman today).  But Florida has suffered under his leadership.

Take this case in point-  like a good neighbor, State Farm was there.  Now they are hoping to pull out of Florida’s property insurance market after their rate hike increase was declined.  Gov. Crist’s response- “Good riddence.”

Gov. Crist must not have done his homework before making that ridiculous comment.  He is not thinking of the citizens under his  leadership.  In a tough recession, it makes no sense to kiss good jobs good-bye due to spite.

In my county alone, 1,700 people (many of them my neighbors) work at the regional office down the street from my home.  Many others are insurance agents.  People I knew are already thinking of leaving State Farm completely since they can’t bundle insurance anymore.  Agents will have to switch companies, if possible, or risk losing all their customers- and their jobs.

With job losses, their will be even more homes sitting on the market.  This will hurt those trying to sell and relocate.  Gov. Crist fails to see the ramifications of this decision.  Rather than working with State Farm to find a reasonable compromise and keep important jobs in the state, he dismisses an important part of Florida’s economy.

What Gov. Crist fails to recognize is there is also a property insurance crisis (as well as a health insurance crisis) in our state.  State Farm is not the first to find Florida a difficult place to insure homeowners.  The hurricanes earlier in the decade crippled many insurance companies.  The loser will be the homeowners who have often seen their rates double despite not making a claim.  Others have been cancelled and had to spend far more to become insured.  No big deal if you don’t have a mortgage.  Just invest the money you would have spent on insurance.  Oh, that isn’t working out well these days too.  But if you have a mortgage you must have insurance.

Rather than address any of these problems- Gov. Crist resorts to quips and spite.  Sadly, we have at least 2 more years of this ineptitude.

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One of my good friends was IMing me on Facebook the other day.  We talked about ministry and moved into a common passion- baseball.  He asked if my Sox had bought up the good players yet.  He kiddingly expressed a common sentitment- that we are the Yankees Jr.

Since the new owners took over the Red Sox have signed precisely 2 big bucks free agents: Dice-K and J.D. Drew.  They inherited Manny (Pedro came in a trade).  They have built this team on trades (only Schilling was a big dollar, big name guy at the time), prospects and under-valued free agents (Big Papi for instance).  Yes, they have re-signed a few guys.  But they have done nothing like the Yankees.  Admittedly, they may break from their pattern with Teixeira (he fits the citeria for them to break the pattern).

The Yankees are trying to out-Yankee themselves this off season.  They want to return to the playoffs and World Series dominance.  Can’t blame them for that!  And they realize that pitching is how you get there.  On this level, the offers to Sabathia and Burnett make lots of sense.  They are trying to rebuild a championship quality team- which last year’s team was NOT.  They didn’t re-sign lots of high-end contracts and they have a big revenue stream working for them.

Here’s what I don’t understand:

  • They basically pled poor by asking for more public funding for their new stadium.  Quite the mixed message.  That’s like saying you need help paying the mortgage while you continue to buy expensive toys or status symbol cars.  Are they next in line for a Federal Bailout?
  • They overpaid, grossly, for Sabathia.  The highest competing offer was about $100 million.  They went to $161 million.  I cries either desperation or Sabathia not wanting to play there except for such an outrageous deal.  He’s very good, but he’s not the best left-handed starter out there. 
  • His great girth is reason for caution for a long-term deal too.  Will he become the next Sidney Ponson, or will he be able to pitch well like David Wells?
  • More curious is his weak record in the playoffs, and particularly against the arch-rival Red Sox.  In other words, CC does great against fair-middling teams but struggles against top-tier teams.
  • They are also over-paying to keep Burnett from signing with the Braves.  He’s got great stuff, but is in his 30’s and hasn’t been healthy except in contract years (hmmmmm). 

So, the Yankees are spending money they inadvertantly claim they don’t have, at a premium when they don’t have to, for long-term deals on guys who are risky (see Kevin Brown, Jason Schmidt and Barry Zito).  The Yankees continue to make a big splash, but the waves overwhelm the other people in the pool.  They aren’t just accumulating talent (which is fine) but doing it in a reckless, gawdy fashion that disrupts the economics of baseball in a dangerous way.

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During our pastors’ meeting to discuss Nehemiah 6, Tim Rice relayed this information from a discussion with a former CFO of Publix.  It is helpful to understand a large economy, the issues that face our nation, and therefore how to wisely choose a candidate (there are NO perfect candidates, sadly).  I am not savvy enough to reproduce the diagram, so I’ll wing it.

For Profit Business => Owners, employees & dependents => Not for Profits => NFP employees & dependents => Poor, unemployed & dependents

The foundation of an economy is For Profit Business (FPB).  Those profits support the owners, employees and their dependents.  I know in this day, the idea of making profits seems barbaric. But profits are how a business stays in business and therefore support all those dependent upon them. Those businesses and people provide the funding for NFPs, both public and private.  The government is the public NFP which is funded by taxes.  The public NFPs are churches and social agencies that are funded by donations.  The more profit generated by the FPB, the more resources that are available to the NFPs. A government that wants to see revenues increase, wants to see the NFPs do well, not stifle them. It is simply increasing the pie, so the slices of the NFPs increase as well.

There is an inverse relationship between the public and private NFPs.  The more the government takes in taxes, the less that private NFPs end up receiving.  The employees and their dependents are dependent on how well the NFPs do, which is a result of how well the economy (read For Profit Business) does.  The poor and unemployed (and their dependents) rely upon the NFPs until they work for either the FPBs or NFPs.


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One of the problems with how the “financial crisis” is being handled is the false notion that their is only one solution- one which expands the government’s involvement in ways that will create a bigger government and less personal accountability.

Financial Advisor Dave Ramsey lays out a different solution, which makes sense to those of us who want smaller government (and less corruption).  In 2004, the conservatives tried to address these problems but leading “progressives” like Barney Frank told us that “there was no evidence of financial unsoundness”, and that it was a hatchet-job on a Clinton advisor.  Why trust people like Frank to fix a problem they ignored for years?  Anyway, follow the link to Dave Ramsey’s Common Sense Fix since the WordPress editor keeps messing it up.

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Ford has developed a version of the Fiesta that seats 5 and gets 65 MPG.  Yes, 65 MPG.

But you won’t see it on the streets near you, and you won’t be able to buy it- unless you live in Europe.  Why this is so is sparking some controversy.  It would seem quite odd that a struggling automaker would not offer a car for which the U.S. market seems primed.  Isn’t this the kind of car the government says we should have?  Isn’t this the kind of car I’d be interested in buying.

The reasons, as outlined in the Business Week article, reveal the problems that hamper the U.S. economy and attempts to conserve energy.  It points out how a business not only must endure its own bad decisions, but government’s bad decisions.  And we all come out the losers, at least in the short-term.

Here they are in summary form with some editorial comments by yours truly.

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I watched a fair amount of the Presidential Nominees’ Forum hosted by Saddleback Church.  I both liked it, and didn’t like it.

What I liked was that both candidates answered the same questions, and didn’t interact with each other’s answers.  They were able to stay on task and not get caught up in attacking one another.  I also liked that the audience was well prepped.  They applauded both nominees, and did not boo them.  They were respectful.  Their reactions will be reserved for the voting booth, which is great.

What I didn’t like is the notion that they were somehow trying to win the “evangelical vote”.  I don’t care if either of them can share the right terminology to explain their understanding of Jesus.  I’m not looking for them to be my pastor, but to be our President.  That has a very different set of criteria.

Both candidates playfully pandered to Rick Warren.  I have no problem with that- it helped set people at ease and it was for show.  They knew they weren’t pulling something over on people, nor were they trying to.

For me, the big differences between two candidates was the Obama certainly came across as more personable.  But McCain’s answers (whether or not you agree with him) were more clear and decisive.  Obama sounded thoughtful, but that doesn’t help me know how he’s going to lead us as a nation.  For a candidate proposing change, the notion that Edward Kennedy will be one of his most trusted advisors is shocking.  He is the ultimate insider, and stands behind some of the most messed up moments in American politics in recent memory.  Not a good move by Barak.  Nor was hemming & hawing about abortion.  Women don’t get abortions because they have inadequate healthcare or don’t know they can easily and quickly find someone to adopt the child.

I thought McCain had a better grasp of economics.  I also thought Obama doesn’t get that people don’t mind taxes for roads and schools (unless they fail).  It’s all the entitlements and earmarks that people are frustrated with and don’t want to see their taxes raised to continue.

Obama also didn’t seem balanced his view of America, or other nations.  Yes, we are FAR from perfect.  We are not the only nation to deal with racism- it is a problem in every nation in which people of different ethnicities live.  But I’d take our track record with the poor and disadvantaged than any other nations’.  Are we jailing and murdering political dissidents?  No.  Religious people?  No.  This is, by and large, a generous nation.  Think of all the humanitarian aid we provide each year- even to nations that don’t like us.  Think of the numerous people, mostly Christians, who’ve given their time and money to rebuild New Orleans and other areas devastated by Katrina.  Just one of my pet peeves- only mentioning the bad we do, and never acknowledging or downplaying the good we’ve done.  Yes, we have some really dark marks on our record, but also some good ones.

I thought the forum was helpful, mostly.  Any thoughts?

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Even the NYT gets it, finally.  Scientific studies indicate that when you consider the process of creating the biofuels, they produce more greenhouse gases than traditional fuels.  Hah!  Congress’ great hope for not drilling anywhere in the continental U.S. and ending our foreign oil dependence has a few holes in it.

“When you take this into account, most of the biofuel that people are using or planning to use would probably increase greenhouse gasses substantially,” said Timothy Searchinger, lead author of one of the studies and a researcher in environment and economics at Princeton University. “Previously there’s been an accounting error: land use change has been left out of prior analysis.”

Of course these scientists haven’t quite figured out that temperatures are dynamic, not static, and that the models just don’t fit reality.

Then there is the “unintended consequence”. 

For instance, if vegetable oil prices go up globally, as they have because of increased demand for biofuel crops, more new land is inevitably cleared as farmers in developing countries try to get in on the profits. So crops from old plantations go to Europe for biofuels, while new fields are cleared to feed people at home.

Likewise, Dr. Fargione said that the dedication of so much cropland in the United States to growing corn for bioethanol had caused indirect land use changes far away. Previously, Midwestern farmers had alternated corn with soy in their fields, one year to the next. Now many grow only corn, meaning that soy has to be grown elsewhere.

Increasingly, that elsewhere, Dr. Fargione said, is Brazil, on land that was previously forest or savanna. “Brazilian farmers are planting more of the world’s soybeans — and they’re deforesting the Amazon to do it,” he said.

Once again we run after the elaborate, seemingly attractive solution at the expense of the simplier solutions or really understanding if there really is a problem.  So, due to the radical environmentalists and global warming alarmists have tied our hands behind our backs.  As a result of their demands, we continue to export way too much oil, which drives down the dollar, increasing the price for gas, and all the things we ship using it, shift to alternative fuels further driving up the cost of grains and all other products that rely on grains … it is a vicious cycle. 

Yes, I’m sick of the stupidity.

HT: The Institute

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I heard some statistics this week.  Shocking when you hear the rhetoric coming from certain circles about how the “rich have to pay their fair share.”

The top 1% of wage earners pays 39.5% of the taxes received.  Each one of them pays taxes for 40 people.  Hmmmm, that’s not fair.  They pay more than their fair share, in my opinion.

The top 5% of wage earners (those making over $175k) pay 59.5% of the taxes.

The bottom 50% of wage earners pay only 3% of the taxes.  Is that fair?

Just heard about this book, and put it one my wish list.  It’s The Forgotten Man: a New History of the Great Depression by Amity Shlaes.  She documents the shift that took place in government and politics (big government => higher taxes; appealing to special interest groups at the expense of the regular guy) during that time.

I remember how FDR was credited with leading us out of the Great Depression when I was in high school.  In college I learned that he spent our way out, setting us up for many of the problems we find now in government, the multiplication of programs and more.  His actions probably prolonged the Depression as well.  Sometimes I wondered how he got re-elected so many times.  Even though the economy stunk far worse than in 1992, and he helped it stay that way, he did what Bush 41 couldn’t, get re-elected.

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Like me, Anthony Bradley loves U2’s music and heart for the poor and oppressed.  Like me, he believes Bono needs to study economics.  I’ve mentioned this sort of thing before regarding Bono.  Sadly, he is not alone.  Most Congressmen and Senators would benefit from an actual economics class or two because they seem utterly clueless about basic economic principles.  Yes, I was an Economics major at Boston University.

I haven’t read much in that field recently, though Thomas Sowell’s book Basic Economics intrigues me.  I may have to pick it up.  At the school where I teach church history, they use Naked Economics: Undressing the Dismal Science.  My very brief glance at the book got my interest (yes, I’m struggling to stay focused instead of plunging into the obvious fodder for fun).

Stupid rabbit trail: I once worked for a Christian organization in Boston (yes, sounds rather odd).  We were having a meeting and getting ready to pray.  Across the alley was a hotel.  At that precise moment the window shade opened to reveal a topless (at least) woman.  I’ve heard the hotel was often used by prostitutes.  I had to fight with everything within me not to burst out loud with laughter.  I was distracted from prayer, but from laughter, not lust.

Anyway…. Anthony directs us to his friend Ryan’s article on the problem(s) with the One Campaign.  It is sort of like a sin tax, indulgences or carbon offsets.  You and Oprah can feel better about your crass materialism because some of the proceeds go to a good cause.

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