Why is our economy in trouble?
Our economy is in trouble because our culture is in trouble. Our culture is in trouble because it has adopted a dramatically reduced account of the human person. It has adopted this reduced account of the person because it does not care to hear the Christian gospel which tells us that man is made for love and freedom in relationship with God and his fellow human beings. Because it does not care to hear about this love, our culture is no longer confident of the value and significance of human beings. Our economic crisis reflects a crisis of cultural confidence that reflects a crisis of faith. Man is not convinced that he has a future, and this loss of confidence has eroded his long-term perspective and stalling our economy. Let us take a look at some of the connections between gospel, culture and economy that are at the root of our economic situation…
Read on
Anglicans
There are some good new pieces over at Fulcrum, on Blessing by Ephraim Radner, two perceptive pieces by Jordan Hylden, and more commentary on Archbishop Rowan’s latest statement by Bishop Tom Wright. Who would have thought it? Occasionally we Anglicans can be calm, measured, even faithful…
Rather than let the system correct itself…
The mission (of Bernanke and Geither) is clear: to convince the world of two things at the same time… both impossible and mutually exclusive! The Chinese vigilantes must believe that the feds wonâ??t undermine the dollar… and the rest of the world must believe that they will! Inflation is necessary for recovery and growth in the US… or so everyone believes.
It was French economist Jacques Rueff who revealed the scam more than half a century ago. The whole idea of Keynesian stimulus, he explained, was to cause inflation… which would reduce the real price of labour. In a modern democracy, politics prevents wages from falling. But in a correction, if wages donâ??t fall people donâ??t get jobs. Keynesâ?? didnâ??t mention it, but the only reason his stimulus works is because it pulls the wool over the eyes of the working classes â?? reducing their wages by inflation so employers can afford to hire them again. Ergo, no inflation… no recovery in the job market. No recovery in the job market… no recovery in the economy.
But inflation will cost the Chinese plenty. And theyâ??ve let it be known they wonâ??t sit still for it. Geithner promised a â??durable recovery led by private demand.â?? In other words, it wonâ??t be government spending that pulls the US out of its slump, he told the Chinese.
Stimulus will not produce genuine prosperity. You canâ??t cure a credit-caused crisis by offering more credit; it just wonâ??t work. But rather than let the system correct itself, the feds are determined to â??do something!â?? What can they do? They can only destroy the dollar â?? or try to â?? thereby destroying the value of Chinaâ??s $1.5 trillion treasure.
Now, why private demand is going to weaken, not increaseâ?¦ As the boom of the post-war period continued, consumer spending played a larger and larger role in the economy. It averaged 64% of the GDP during most of the period, but increased to 70% in 2007. Likewise, debt service as a percentage of disposable personal income rose too â?? from less than 5% in the â??50s and â??60s to over 14% now. If, as we suspect, the trend towards more and more consumer debt has finally peaked out; consumption should have peaked out too. We should now see the percentage of the economy devoted to consumption go down… year after year… until it reaches the â??normalâ?? level. Private debt too should go down, until it is at a more â??normalâ?? level.
We calculated that, during the last 7 years of the Bubble Epoque, consumers added $1.4 trillion in debt per year. That was the spending that made the old mare go. But now what? They are now adding no debt â?? zero. In fact, they are paying off debt. This alone removed $1.4 trillion in private demand from the economy. The only thing that would cause consumer spending to go would be a substantial increase in real wages. This would allow Americans to buy more â?? while simultaneously paying down debt. But it will be a long time before real wages increase at all… let alone substantially.
Bill Bonner Daily Reckoning
Primordial
While I was born and raised in the U.S., my parents were born and raised in Egypt. Even though they were Christians (Copts), it was only natural that they would adopt an “Islamicate” worldview, that is, a worldview based on Islamic culture and society, though obviously not Islamic dogma. As a result, while I share and appreciate the Western worldview, so too am I intimately acquainted with the Islamic world’s weltanschauung.
This is a worldview typified by cynicism and stoicism: a belief that humanity is intrinsically opportunistic, selfish, and warlike; that might not only makes right, but almost should; that those in the right do not apologize or appease, but rather assert; a survival-of-the-fittest mentality; and, above all, sheer contempt for perceived weakness and equivocation, or, in Islamic parlance, emasculate behavior. Let’s call this a worldview based on “primordial politics.” Anyone who has spent time in the Islamic world or held sincere conversations with people from there — Muslim or Christian makes no difference — will know this to be true. In short, the worldview of the average person from the Islamic world is the antithesis of the postmodern, “therapeutic” worldview of the liberal West, where “feelings,” “mutual respect,” “toleration,” and the ability to “express oneself” are paramount. This is only natural: people bred in harsh environments (e.g., the vast majority of the Islamic world) are not impressed by soft or sublime words. It bears repeating that these qualities are not so much due to Islam per se; rather, they have an ancient lineage and have permeated almost every major civilization, including the West (e.g., the “neocons”). It is the postmodern, liberal worldview that is aberrant to human history, that is a dot in a long continuum of realpolitik. Living and dying in the height of our era — human lives are so short — it is easy to overlook the evanescence of this epistemology. Islamic civilization, on the other hand, whose essence is trapped in the medieval era (thanks primarily to the concept of sunna), is by far the staunchest champion of primordial politics.
Raymond Ibrahim
Outlook
Events have already forced Irish Premier Brian Cowen to carry out the harshest assault yet seen on the public services of a modern Western state. He has passed two emergency budgets to stop the deficit soaring to 15pc of GDP. They have not been enough. The expert An Bord Snip report said last week that Dublin must cut deeper, or risk a disastrous debt compound trap… Education must be cut 8pc. Scores of rural schools must close, and 6,900 teachers must go. The Garda (police), already smarting from a 7pc pay cut, may have to buy their own uniforms. Hospital visits could cost £107 a day, etc, etc. “Something has to give,” said Professor Colm McCarthy, the report’s author. “We’re borrowing €400m (£345m) a week at a penalty interest.”
No doubt Ireland has been the victim of a savagely tight monetary policy given its specific needs. But the deeper truth is that Britain, Spain, France, Germany, Italy, the US, and Japan are in varying states of fiscal ruin, and those tipping into demographic decline (unlike young Ireland) have an underlying cancer that is even more deadly. The West cannot support its gold-plated state structures from an aging workforce and depleted tax base.
As the International Monetary Fund made clear last week, Britain is lucky that markets have not yet imposed a “penalty interest” on British Gilts, given the trajectory of UK national debt – now vaulting towards 100pc of GDP – and the scandalous refusal of this Government to map out any path back to solvency.
The imperative for the debt-bloated West is to cut spending systematically for year after year, off-setting the deflationary effect with monetary stimulus. This is the only mix that can save us. My awful fear is that we will do exactly the opposite, incubating yet another crisis this autumn, to which we will respond with yet further spending. This is the road to ruin.
Ambrose Evans-Pritchard
Right and wrong – not 'norms'
According to Denis MacEoin, author of Sharia Law or ‘One Law For All’?, sharia courts operating in Britain may be handing down rulings that are inappropriate to this country because they are linked to elements in Islamic law that are seriously out of step with trends in Western legislation that derive from the values of the Enlightenment and are inherent in modern codes of human rights. Sharia rulings contain great potential for controversy and may involve acts contrary to UK legal norms and human rights legislation
Civitaspress release
Whoa! Two things are being confused here. The only grounds we may have against Sharia courts, as for anything else, is that they are wrong. Not that they are ‘inappropriate’ or ‘out of step’ but that they are wrong.
1. We can say that they are wrong when they break the law. If we think that those operating these ‘courts’ are breaking the law we may either invite the police and Crown Prosecution Servant to decide whether there seems to be a case, and then to charge these people and bring the case to court, or we may bring a civil case against them ourselves. The court may then find whether or nor they have broken the law.
2. We may use our conscience to judge whether they are wrong. We can continue to maintain that they are wrong even if no law seems to say so and even if we receive no confirmation from the courts that interpret the law. We can say publicly that they are wrong (no one may stop us from expressing this belief) and we add that they break God’s law (we may give ‘religious’ reasons for our view).
But these ‘courts’ are not wrong because they are ‘out of step’, or offend our sensibilities or because it seems possible that they may offend anyone else. We should insist on talking about right and wrong and that we can all make this distinction between legal and moral. This ‘norms-values-rights’ discourse is going to get us all into trouble.
Civitas should attempt to bring some of these cases of ‘conflicting jurisdictions’ to court. It could suggest which legislation it believes such Sharia courts break.
About Sharia itself see No to Sharia Law in Britain
Theological Economics
So at last some theology. About time this blog posted some theology, I know.
Covenant, Hope and Human Future – Theological Economics
Ah well, it took me away from shouting at the television, for a while at least. To read it in Scribd, click Mode (top left of screen), View Mode then Book Mode. You can download and leave comments. The Related Documents are not mine. For more by me, see here
The era of representative government is coming to an end
Nevertheless, both [the United Kingdom Independence Party (UKIP) and the British National Party (BNP)] stand to gain because they articulate key issues of overriding importance to the public — such as mass immigration and membership of the EU — but which the mainstream parties obdurately fail to address. These issues are fundamental to the very identity of the country and its ability to govern itself at all. Indeed, their neglect can even be said to have contributed in no small measure to the expenses scandal. This is because parliamentary democracy itself has become steadily emptied of meaning and purpose, leaving a vacuum which has been filled by corruption. For more than three decades, Parliament has become increasingly powerless. In recent years, this was the result of the Labour Government deliberately outsourcing its powers — to the Scottish Parliament and Welsh Assembliy; to quangos, management consultancies or unelected advisers; or to the courts through human rights law. But above all, the British Parliament has progressively surrendered its powers of national self-government to Europe, which has reduced the cradle of democracy to the status of little more than Westminster Regional Council.This whole process was summed up in 1998 by Peter Mandelson, who observed with menacing perspicacity that ‘the era of pure representative government is coming slowly to an end’… Paradoxically, the diminution of Britain’s place in the world has gone hand in hand with an increase in the power of the State over its own citizens. Determined to ram through its agenda for a new world order of which the EU is an important part, the Labour Government increasingly concentrated power in itself while it steadily took it away from Parliament. So there was more and more secondary legislation upon which MPs don’t have to vote, less and less time to debate important measures, and ever-tighter control by the party whips over MPs whose only career was in politics and who were, therefore, totally dependent for their livelihood upon political patronage. The outcome was an empty Commons chamber as MPs found they had less and less to do — and employed their creativity instead in filling in their expenses forms.
Melanie Phillips No wonder British MPs turned to crime
Benedict
Following St. Benedict’s example, “monasteries have, over the course of the centuries, become lively centres of dialogue, of meeting and of beneficial fusion among different peoples, brought together by the evangelical culture of peace. Through work and example, the monks were able to teach the art of peace, giving tangible form to the three elements identified by Benedict as being necessary to conserve the unity of the Spirit among mankind: the cross, which is the very law of Christ; the book, in other words culture; and the plough, which stands for work, mastery over matter and time”. The Pope continued: “Thanks to the work of monasteries, divided into the threefold daily commitment to prayer, study and work, entire peoples on the European continent have known real liberation and beneficial moral, spiritual and cultural development, being educated in a sense of continuity with the past, real activity for the common good, and openness to God and the transcendental. Let us pray that Europe may always appreciate this heritage of Christian principles and ideals which represent such an immense cultural and spiritual resource. “This is possible”, the Pope added in conclusion, “but only if we accept the constant teaching of St. Benedict: … that seeking God is man’s fundamental task. Human beings do not realise themselves fully, they cannot be truly happy, without God. … From this place where his mortal remains lie, the patron saint of Europe still invites everyone to continue his work of evangelisation and human promotion”.
Benedict on Benedict – from Vatican news
Jesse…
Everyone’s situation is different, but overal this looks like an especially treacherous bear market, made doubly difficult by the actions of the Treasury and the Fed in bankrolling malinvestment, imbalances and corrupted price discovery. When in doubt, get out. Don’t get hooked by greed. This rally ‘could’ have some legs if it becomes a determined effort to reflate the credit bubble supported by the power of the Treasury and the Fed, as we saw in 2003-6, which was a reckless and disgraceful abuse of the Fed’s economic responsibilities. We doubt they can do it again, but never underestimate the power of greed and fear over memory and prudence….
Today reminds me of the briefly sunny period in 1930-1 when most economists and public officials agreed that the Depression was already over and the economy was back on track. President Hoover dismissed a delegation of businessmen who came to Washington with ideas on stabilizing the economy with “Too late gentlemen, the slump is over.” There are few things from my childhood that I remember more vividly than grandmother’s comments regarding this false recovery. “If we knew what was coming, we would have killed ourselves.” This from as strong a person as I have ever encountered, with a faith that would break rocks. The Great Depression left an indelible mark, or more accurately scar, on her entire family, and my father’s as well. And I never heard the name “Franklin Roosevelt” from her lips without it being preceded by “God bless” followed by “he saved my family.” Not all of her children unfortunately. She said she cried so much and so often that she was never able to cry again. And she did not, even at the end.
Jesse’s Café Américain
