Dashing hope against the rocks of despair

My daughter, who recently graduated from college, and I were talking over dinner the other night about her plans for the future.  And I finally had to come clean with her that even though she's been a good kid and has worked and studied hard it's no guarantee of success in life; people don't get hired or promoted because of their qualifications but more because someone in a position of authority likes them.

As parents, most of us don't want to tell our children the sad truth about life: how unfair it really is!  (When I was a kid, my parents withheld this vital piece of information from me too.)  I guess the reason most of us do this is because we don't want to dash our children's hopes and dreams against the rocks of despair.

Despite playing by the rules, serving my country, getting an education, working hard, and trying to be a good person, I still lament over the opportunities and promotions I never got.  So what did I do wrong?  I probably rubbed the person hiring or promoting the wrong way.  In other words, they simply didn't like me.

The Great Prophet St. John the Baptizer once said, "A man can have nothing unless it's given to him from God!" (John 3:27)  And when questioning Jesus, Pontius Pilate said to Him, "Don't you know that I have it in my power to release you or to crucify you?"  Jesus replied, "You wouldn't have any power over me unless it had been given to you from God." (John 19:10,11)

Don't think that Bill Gates or Warren Buffet became fabulously wealthy on their own; God gave them their wealth.  All the powerful corporate CEOs and managers in the world, all the people who hold public office from the President or Prime Minister on down, all the rich and powerful people, and all the beautiful and talented people in the world received what they have from God.  So don't feel bad about yourself just because you never got that job or promotion you wanted.  Or don't feel cheated because you're not wealthy, beautiful, or talented.  If it was God's will for you to have those things, then you would have them.

So while it is true that life is not fair, it's also true that God is in control of things and nothing happens apart from His will.  So don't measure your success in life by the world's standards.  Becoming rich and powerful does not make you any better than anyone else in God's eyes.  Concentrate instead on discovering God's will for your life and becoming the person He wants you to be.

The Average American Family Is Poorer Than It Was 10 Years Ago

The Average American Family Is Poorer Than It Was 10 Years Ago

• Sam Frizell @Sam_Frizell
 

July 27, 2014

The typical American household is worth a third less than it was in 2003, according to a new study

The typical American household was significantly poorer in 2013than it was ten years earlier as a result of the Great Recession, a new study shows, an effect that is compounded by growing wealth inequality in the United States.

The net worth of the typical American household in 2003 was $87,992, adjusting for inflation. Ten years later, it was just $56,335, a decline of 36 percent, according to a study by theRussell Sage Foundation.

But even as the average American household’s wealth declined, the net worth of wealthy households increased substantially. The average wealth of the American household in the 95th percentile was $1,192,639 in 2003, and $1,364,834 ten years later, an increase of 14 percent.

The authors of the study said the reason for the disparity was that affluent households were able to ride the success of the surging stock market after the 2008 crash, while middle class families were severely impacted by the decreasing value of their homes.

Wealth declined for everyone in the aftermath of the Great Recession, but better-off families were able to rebound. Households at the bottom of the wealth distribution, on the other hand, lost the largest share of their wealth.

‘The American economy has experienced rising income and wealth inequality for several decades, and there is little evidence that these trends are likely to reverse in the near term,” wrote the authors of the study.

On Justice and Mercy

by Bryan Neva and Allen Laudenslager

When I was younger, if someone harmed me I wanted to see them “pay the price”. Whether that was reimbursing me for a financial loss they caused or having their feelings hurt just as badly as they hurt mine. I wanted things to be fair and even. As I got older, I found that I too had hurt many other people. Some on purpose because of some supposed hurt they did to me and others I hurt as I blundered through life making the inevitable mistakes that being human cause.

No one can go through life without getting hurt by someone else.  In fact, if we’re really honest with ourselves, all of us at sometime have—intentionally or not—hurt someone else.  It’s just human nature.  And Oh do we love to complain to our confidants when someone else hurts us.  We’ll often hear the ol’ cliché, “what goes around comes around.”  In other words, the Buddhist teaching of karma will somehow balance everything out in the end, and hopefully our enemies will be reincarnated as cockroaches!

The whole world in general is crying out for justice and fairness. But if we rightfully demand justice in the world then justice demands we also accept it for ourselves.  As Christians, we believe that all of us will be held accountable by God for the way we lived our lives (good or bad). So justice is inevitable, but mercy is not.

Consider what Jesus taught on justice and mercy (excerpts from Matthew 5 - 7):

Blessed are the merciful, for they shall obtain mercy!  You have heard that it was said to the men of old, ‘You shall not kill; and whoever kills shall be liable to judgment.’  But I say to you that every one who is angry with his brother shall be liable to judgment.  You have heard that it was said, ‘An eye for an eye and a tooth for a tooth.’  But I say to you, Do not resist one who is evil.  But if any one strikes you on the right cheek, turn to him the other also.  And if any one forces you to go one mile, go with him two miles.  Give to him who begs from you, and do not refuse him who would borrow from you.  You have heard that it was said, ‘You shall love your neighbor and hate your enemy.’  But I say to you, Love your enemies and pray for those who persecute you, so that you may be sons of your Father who is in heaven; for he makes his sun rise on the evil and on the good, and sends rain on the just and on the unjust.  For if you love those who love you, what reward have you?  Judge not, that you be not judged.  For with the judgment you pronounce you will be judged, and the measure you give will be the measure you get.  Why do you see the speck that is in your brother’s eye, but do not notice the log that is in your own eye? 

So if we want mercy from God then we must also be merciful to others. At my age, having had to go back and apologize and make amends for the mistakes I’ve made or the harm I've caused others, I much prefer mercy over justice.

ECONOMICS 101 Why the U.S. is in such an economic mess

ECONOMICS 101 Why the U.S. is in such an economic mess 

by Allen Laudenslager and Bryan Neva

How are the current economic policies working out for you?  Salaries and buying power for the vast majority of Americans have been declining for decades.   In 1972, the average hourly earnings was $20 per hour;  in 2008 it was $18 per hour (in constant 2008 dollars).  And over that same period, the cost of life’s essentials have risen a staggering 176%!  Despite the official unemployment rate of around 6%, a staggering number of Americans have dropped out of the workforce entirely.  The middle class is shrinking as more Americans than ever are receiving some sort of government assistance while at the same time corporations are recording record profits.  The rich are literally getting richer and the poor are literally getting poorer.   

We believe there are several reasons for the current economic mess the United States currently faces, but the the biggest single element is the decision makers fundamental failure to understand how the economy really works.  This lack of understanding stems from accepting some wrongheaded, common wisdom that is represented by these three adages:

1. Wealth trickles down from the top;

2. A rising tide lifts all boats;

3. Nothing happens till somebody sells something.

Far too many people who should know better (including trained economists, politicians, and most of all the pundits) have heard these economic adages for so long and so often that they have come to believe them as the gospel truth.  In fact, these statements are misstatements, if not outright perversions, of how the economy really works.  Trying to formulate economic policy while believing these falsehoods results in government policies and corporate decisions that actually make things worse and not better.  These three adages illustrate the huge gap between what many believe and the truth.  So let’s look at these one at a time:

Myth 1: Wealth trickles down from the top.

Fact 1: Wealth does not “trickle down” rather it “trickles up!”

We talk about the really rich as the 1%?  Why that number?  Because as of 2007 the top 1% owned over 33% of the wealth in America.  Moreover, the top 10% owned over 71% of the wealth.  The bottom 90% of Americans owned the remaining 29% of the wealth.  And get this, the bottom 50% of Americans owned only a measly 2.5% of the wealth in America. 

If we could magically keep inflation constant, what would happen if we confiscated every single dime of the top 10% of people and gave an equal share to everyone else?  Over the course of time the distribution of wealth would end up about the same as when we first started.  Why is that?  Because the bottom 90% of the population would actually put the bulk of that money back into circulation and the money would “trickle back up” to the corporations, banks, and eventually back into the hands of the wealthy.   See, trickle up and not trickle down!

The bottom 90% of the population that just received their windfall from the top 10% would, individually, go out and buy new cars, homes, appliances, etcetera and deposit the rest in a bank.  All this money spent would be collected by businesses and be deposited into banks or paid out in dividends to shareholders.  Banks are just resource aggregators: a place to collect all those small sums into one big pot so it can be put back out as car, home, or business loans.  At some point it gets turned into interest payments to people with large savings or as dividends to people with stocks or bonds.  And most of those rich people (that notorious top 10%) don’t spend their entire income, they store their “excess” money in stocks, bonds, and savings accounts.

By understanding that the system only works when the bottom 90% of people have money to spend, you also understand that any injection of money into the system has to be at the bottom and not the top.  Giving money to banks as low interest loans is easy for the government but ineffective in priming the economic pump.  Similarly, giving tax breaks to large corporations or the rich in hopes they’ll spend their surplus is also ineffective.  Injecting that same amount of money in smaller chunks to lots of people is very hard for the government to manage but much more effective in getting that money to circulate.

So why doesn’t the government or their trained economists recommend priming the pump at the bottom rather than the top of the well?  Because figuring out how to get the money out to the 90% and then get it back again is a big complicated job; it’s much easier to give big blocks of money to a few large corporations even though it has proven less effective.

Myth 2: A rising tide lifts all boats.

Fact 2: A rising tide can swamp any boat that’s tightly anchored to the bottom.

This one seems to make a lot of sense until you include a couple of inconvenient but essential elements.

The idea is that each of us is one of those boats floating on the surface of the economy and when the economy does well (rises) each of us floats up on that surface.  The idea is that more money circulating in the economy is the rising tide.  The rising tide also represents inflation and inflation swamps the boats.

The first mistake is not understanding that our economy is like a harbor where lots of boats congregate and boats don’t just float around loose in a harbor, they are tied tightly to the dock or tightly anchored to the bottom (otherwise they’ll drift off and collide with each other).  Either way if those ropes are too short when the tide rises those boats gets swamped!

Metaphors can be dangerous when pushed too far, so in this one what are the ropes? The ropes to the dock or to the anchor represent savings and income.  The wealthy have enough extra savings and large enough incomes that when the tide of inflation goes up they can let out more rope; the 90% who have much smaller savings and incomes get swamped.  For the top 10%, their income and savings are large enough to permit them to “let out some rope” and absorb significant price hikes while the 90% get swamped.

(In real life, a large yacht or ship actually use a heavy anchor and chain.   When the anchor is dropped, a large length of chain is also dropped to the bottom.  When the tide rises, there’s enough excess chain at the bottom to allow the yacht or ship to rise with the tide.  Smaller boats are incapable of carrying a heavy anchor and chain.  They must use a smaller anchor and a light marine rope.  Any excess rope would allow the small boat to drift in the harbor and collide with other boats.)

What this means for the bottom 90% is that their salaries must increase at least at the same rate as inflation or they must spend less, and that huge number of people spending less (because their money buys fewer things than before) slows the whole economy.

If we accept this metaphor, then the only way a rising tide lifts all boats is if salaries (that metaphorical anchor rope) go up at the same rate as the tide.  This tiny but critical adjustment to the “rising tide” theory makes all the difference but gets overlooked because it puts the responsibility squarely on the shoulders of the top 10% to ensure that the wealth gets spread around and not collected by too few people or companies.

Myth 3: Nothing happens till somebody sells something!

Fact 3: Nothing happens till somebody buys something!

While it is true that someone does have to sell something to keep production moving, a lot of product, sold to a wholesaler or on a store shelf doesn’t do much for the economy, it is a superficial viewpoint.  The fuller truth is that nothing happens until someone buys something!

You can be the best salesperson in the world but unless your potential customer has money to spend, you’ll never sell a single thing. To buy things, people must have income and income comes from two sources: interest on savings (in whatever form) and salaries. That means that people must first have large enough salaries to afford whatever you’re selling.

What happens to the economic system when food, clothing and shelter take up the majority of the 90%’s income?  Why they stop buying luxuries of course and the vast  majority of what we produce and sell are not the basics of food, clothing and shelter they are the luxuries of new cars, bigger TV and a smart phone.

Companies operate on the same basic principles as your own family.  If you don’t have enough money then you have to cut back on the “nice to have” in order to pay for the “got to have.”  Remember when a lot of American companies asked their employees to take pay freezes if not outright pay cuts?  And remember when they stopped giving automatic cost-of-living raises?  Remember when they began cutting benefits and pensions because they were losing money?

Well, employees accepted those cuts and still were some of the most productive (if not the most productive) in the world. Those cuts by the employees constituted an investment by the employee in the long-term success of the business.  Now, when many of those same companies are posting record profits, the employees have every right to expect those same companies to honor the unwritten and unenforceable social contract to return their investment.

In fact it just makes good business sense!  Since more people with money to spend means that you have more people to sell to because people with money buy stuff and people without money don’t.

By accepting the truth instead of these fatally flawed adages we can clear our vision of the economic world and use that correct vision to begin fixing our current problems and creating a system to avoid the same kinds of devastating crises in the future.

While changing these three simple beliefs won’t by themselves fix the economy correcting the decision maker’s concepts will go a long way to helping them formulate better policy.

A Parable on Farming

I’m descended from Finnish peasant farmers, so I’ve always enjoyed working in the yard, mowing the grass, and planting new flowers, shrubs, and trees.  When I lived in Virginia, the soil was dark and rich and there was always plenty of rain so my yard was always one of the most attractive in the neighborhood.  But it took a lot of work to keep my corner of the world looking pretty.  I spent on average at least ten hours a week working my 10,000 square foot property.   

When my wife and I moved to Southern California a couple of years ago, we bought a neglected, distressed property.  The grass was brown, the weeds were taking over, the trees and shrubs were overgrown, and the house needed a lot of TLC.  So we’ve been slowly trying to fix up the place as we battle ground hogs and the semi-arid climate.  It’s not easy to grow stuff here!  There’s not the dark, rich soil we had in Virginia; and there’s very little rain too, so I have to spend on average at least ten hours a week working my 1,000 square foot property!

Most of the people in Jesus’ day were farmers too.  The semi-arid, Mediterranean climate of Palestine is similar to the climate of Southern California.  It’s not easy to grow things there.  So it was no coincidence when Jesus told his listeners this parable about farming (Matthew chapter 13):

“A sower went out to sow. 
And as he sowed, some seed fell on the path,
and birds came and ate it up. 
Some fell on rocky ground, where it had little soil. 
It sprang up at once because the soil was not deep,
and when the sun rose it was scorched,
and it withered for lack of roots. 
Some seed fell among thorns, and the thorns grew up and choked it. 
But some seed fell on rich soil, and produced fruit,
a hundred or sixty or thirtyfold.”

Privately latter, Jesus told his Disciples the meaning of his parable on farming:

“Hear then the parable of the sower.
The seed sown on the path is the one
who hears the word of the kingdom without understanding it,
and the evil one comes and steals away
what was sown in his heart.
The seed sown on rocky ground
is the one who hears the word and receives it at once with joy. 
But he has no root and lasts only for a time. 
When some tribulation or persecution comes because of the word,
he immediately falls away. 
The seed sown among thorns is the one who hears the word,
but then worldly anxiety and the lure of riches choke the word
and it bears no fruit. 
But the seed sown on rich soil
is the one who hears the word and understands it,
who indeed bears fruit and yields a hundred or sixty or thirtyfold.”

Just like the previous owner of my home who neglected the property, if we neglect our hearts and souls then we too won’t grow and progress as human beings.  And it’s not easy to grow good things in our semi-arid hearts either.  We have to spend time and effort cultivating our heart’s soil and watering the plants so they’ll grow.  There’s just no substitute for time and effort in order to become a better person.