The market needs some managing
Political Pulpit
Object:
When it comes to economics, things haven't changed much for our nation or for the
presidential race since our last column. Once again, a significant number of the lectionary
texts for these months teach us to be uneasy about the circumstances and to yearn for
better options.
The statistics in my last column are still relevant, so you might want to consult them again in your sermon preparation and in other moments of meditation. From the end of World War II until the Reagan era, middle-class incomes and standards of living soared, but since the Reagan Revolution, since the 1970s, it's been the rich guys' and the entrepreneurs' turn to profit (big-time). Meanwhile, it's been down, down, down for the poor, as the gap between rich and poor has widened.
Some would say that these developments are to be expected in a free market, that they are just a necessary cycle of market dynamics. That's easy to say if you're sure of the next bonus, have a roof over your head, and have no worries about the next mortgage payment. But even if we grant that there must be winners and losers in the market, the reality is that it ain't free! Your parishioners need to know the score.
The latest expose on the rigged character of the economy is a new book by Pultizer Prize- winning journalist, David Cay Johnston, Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You with the Bill). Just a few of the tidbits from this book suffice to demonstrate that since the Reagan years the rich have gone on welfare (while Clinton and his cronies' way was to see to it that the poor got less welfare). Yes, America as a whole is better off than it was in 1980. We are twice as wealthy. When adjusted for inflation, the economy now puts out $1.70 for every dollar it put out in 1980. But since the Bush tax cuts began, 90% of the American population has received a smaller income than it did in 2000. Of those income gains in 2004 and 2005, half went to people who made over $1 million per year. For each dollar earned in 2005, 48.5 cents went to the top 10% of America's wealthiest, the highest percentage since 1929, just prior to the Depression.
How did the rich get richer? Was it through their hard work? The lobbyists have had a lot more work to do. The lobbying community has doubled in size in Washington since 1980. They do a good job mining tax loopholes. In the last presidential election cycle, I did a column (November-December 2004), which pointed out that under the Bush plan the top 1% of wage earners received 24.2% of the cuts, while those earning $43,000 to $76,000 received just 17% of the cuts. Johnston even notes that by means of diligent lobbying and legislative finesse of the congressmen who had been bought through campaign contributions, Donald Trump's company gained $89 million from a tax designated for the poor.
The list of government handouts to the rich goes on and on. Among the juiciest include how department stores like Wal-Mart have many of their stores paid for by tax increments. In other words, the sales taxes they collect never go to the government, but are used to pay the cost of the store -- more for the Sam Walton family from your tax dollars. Is this market really free?
Then there's the scam of the title insurance you pay when you buy a house. Ninety cents on every dollar of this four-figure extra cost on a house is paid to real-estate agents and the lawyers who booked your mortgage. These businesses are getting kickbacks for referring home buyers to a particular title insurance company. Personal contacts and influence-peddling among those in power, not free-market competition, earns you money in our unregulated market. Those that already have, get more.
Ever wonder why we need (and who pays for) the new professional sports stadiums in our major cities when the old ones were just built in the Carter or Nixon era? City taxes subsidize the new stadiums, to the profit of the likes of George Steinbrenner (Yankees) and George Bush (when he was president of the Texas Rangers). Wonder why urban gangs have grown? Could it be related to the tax cuts of the last two decades that have pruned weekend activities programs in public parks? Of course, Tyco, General Electric, and Honeywell corporations have received tax breaks. That would seem to more than make up for the few corporate tax burdens that pro-business advocates lament. Sounds like the government is managed in our nation -- managed to the benefit of those who have.
The Federal Reserve tries to help American business by cutting interest rates. That helps investors and the super rich. But the American who saves, gets less return from savings in the banks and pays more for gas and groceries as inflation grows. Maybe Obama's pastor, Jeremiah Wright, was correct after all in his controversial comments: This nation is run by [or at least for] a bunch of rich white people! (Reverend Wright has visited my campus, I've met him and think what Martin Marty wrote about him in The New York Times is correct -- Wright offers a message of hope in his critiques.)
Several assigned biblical texts for July and August mandate your attention of this range of issues in your preaching. The second lesson for July 6 (Romans 7:15-25a) reminds us that sin permeates our entire being, and even our political and economic structures. Sinful people structure political arrangements to suit their own or their allies' aims. America's founders taught us that because of our selfishness, political factions would be inevitable, and we must do all we could politically to stop the wealthiest and most powerful factions from dominating us all (The Federalist Papers, Nos. 10, 51). Two weeks later (July 11) the second lesson (Romans 8:12-25) offers a vision of liberation to overcome all the injustices of the system, as Paul dreams of a creation set free from bondage to decay.
A society plagued by economic policies favoring the rich hurts the middle class and the poor. The gospel lesson for July 6 (Matthew 11:16-19, 25-30) proclaims Jesus' and our concern for the weak and heavy-laden. The first lesson for August 24 (Exodus 1:8--2:10) reminds us of the harsh treatment of the Jews in slavery in Egypt, not unlike the harsh treatment the sons and daughters of slaves in America have endured. The second lesson for the following week (Romans 12:9-21) provides another angle on our economic responsibilities to each other; Paul urges hospitality and meeting the needs of others.
These texts sketch a new vision for economics. You can devote your sermons to sketching this vision. But unfortunately, the presidential candidates have not been doing that. Both McCain and his Democratic counterparts just want to tinker with the existing economic dynamics. They may differ on whether to maintain the Bush tax cuts, giving relief to mortgage holders who have gotten behind, on whether to provide emergency home heating assistance and stimulate ecologically sensitive energy sources, on how to increase health insurance coverage, and on tax policies to protect American businesses and American jobs. In the final analysis, all share a common faith in the market to work out the problems, not to make the US or state governments become major economic players through creating jobs or providing guaranteed middle-class lifestyles for all citizens through cradle-to-grave coverage and tuition-free college education for qualified students. Why not?
Programs like that, we say, would compromise the market. They lead to a managed economy; it would be disastrous for our prosperity; it's not the American way. But it's quite clear that it is already managed (to favor the rich). It is time that the management was a little different, more just, for the sake of those in need. Do we in the church have the courage to paint this picture, since our candidates for the present are not?
They do it and do it well in the western European nations -- especially in Scandinavia where there is a friendly business climate. Trade barriers are minimal, and it is easy to start new businesses. Sounds like exactly the climate in which my friend, Wes, wants to do business. In fact, Denmark and Switzerland rank only behind America on the Global Competitiveness Index. But a combination of strong labor unions and a progressive income tax, which levels off differences in wealth frees up enough money to allow for cradle-to-grave middle-class coverage for all citizens, even generous child-care and family-leave arrangements. Of course, you have to pay a price for generous benefits and union protection. Public outlays consume half the Gross National Product in these nations. Income taxes are high, especially on the rich, in view of the highly progressive tax structures. The economy is managed for the sake of the poor and middle class. The rich get soaked for the sake of the poor. But is that so bad?
Poll results show how good these economic measures are for these nations. A recent survey of national levels of happiness conducted by the United Kingdom's University of Leicester revealed that the US ranked only 23rd. The top nations (Denmark, Switzerland, Austria) all possess a managed economy. Others like Norway and Sweden still bested our nation. Nations with socialized medicine, labor protection, and provision for higher education are happier! Why wouldn't this sort of a managed economy be good for our nation?
Such equitable sharing of resources is biblical. In previous columns we've noted that the first Christians practiced it (Acts 4:32--5:11). In my last column I shared with you references to our founders' (especially Hamilton and Madison) support of such a managed economy. Reconsider those citations, and consider this quote from Thomas Jefferson, urging a managed economy:
... the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property… If for the encouragement of industry we allow it [the land] to be appropriated, we must take care that other employment be provided to those excluded from appropriation.
(Writings, pp. 841-842)
Managing the economy is indeed the American way. The founders advocated it. And we're still doing it. The issue is whether we are content to have our economy continue to be managed to benefit only the rich. It may not be possible to change the course of the election on this issue. But perhaps we could begin with our preaching to nurture the foundations of a consensus to pressure those elected in November to get the economy managed with fairness and justice. It's not a question of whether the economy should be managed. It's really a question of how it's managed.
Mark Ellingsen is a tenured associate professor on the faculty of the Interdenominational Theological Center in Atlanta and the author of hundreds of articles and thirteen books, including "When Did Jesus Become Republican? Rescuing Our Country and Our Values from the Right" (Rowman & Littlefield).
The statistics in my last column are still relevant, so you might want to consult them again in your sermon preparation and in other moments of meditation. From the end of World War II until the Reagan era, middle-class incomes and standards of living soared, but since the Reagan Revolution, since the 1970s, it's been the rich guys' and the entrepreneurs' turn to profit (big-time). Meanwhile, it's been down, down, down for the poor, as the gap between rich and poor has widened.
Some would say that these developments are to be expected in a free market, that they are just a necessary cycle of market dynamics. That's easy to say if you're sure of the next bonus, have a roof over your head, and have no worries about the next mortgage payment. But even if we grant that there must be winners and losers in the market, the reality is that it ain't free! Your parishioners need to know the score.
The latest expose on the rigged character of the economy is a new book by Pultizer Prize- winning journalist, David Cay Johnston, Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You with the Bill). Just a few of the tidbits from this book suffice to demonstrate that since the Reagan years the rich have gone on welfare (while Clinton and his cronies' way was to see to it that the poor got less welfare). Yes, America as a whole is better off than it was in 1980. We are twice as wealthy. When adjusted for inflation, the economy now puts out $1.70 for every dollar it put out in 1980. But since the Bush tax cuts began, 90% of the American population has received a smaller income than it did in 2000. Of those income gains in 2004 and 2005, half went to people who made over $1 million per year. For each dollar earned in 2005, 48.5 cents went to the top 10% of America's wealthiest, the highest percentage since 1929, just prior to the Depression.
How did the rich get richer? Was it through their hard work? The lobbyists have had a lot more work to do. The lobbying community has doubled in size in Washington since 1980. They do a good job mining tax loopholes. In the last presidential election cycle, I did a column (November-December 2004), which pointed out that under the Bush plan the top 1% of wage earners received 24.2% of the cuts, while those earning $43,000 to $76,000 received just 17% of the cuts. Johnston even notes that by means of diligent lobbying and legislative finesse of the congressmen who had been bought through campaign contributions, Donald Trump's company gained $89 million from a tax designated for the poor.
The list of government handouts to the rich goes on and on. Among the juiciest include how department stores like Wal-Mart have many of their stores paid for by tax increments. In other words, the sales taxes they collect never go to the government, but are used to pay the cost of the store -- more for the Sam Walton family from your tax dollars. Is this market really free?
Then there's the scam of the title insurance you pay when you buy a house. Ninety cents on every dollar of this four-figure extra cost on a house is paid to real-estate agents and the lawyers who booked your mortgage. These businesses are getting kickbacks for referring home buyers to a particular title insurance company. Personal contacts and influence-peddling among those in power, not free-market competition, earns you money in our unregulated market. Those that already have, get more.
Ever wonder why we need (and who pays for) the new professional sports stadiums in our major cities when the old ones were just built in the Carter or Nixon era? City taxes subsidize the new stadiums, to the profit of the likes of George Steinbrenner (Yankees) and George Bush (when he was president of the Texas Rangers). Wonder why urban gangs have grown? Could it be related to the tax cuts of the last two decades that have pruned weekend activities programs in public parks? Of course, Tyco, General Electric, and Honeywell corporations have received tax breaks. That would seem to more than make up for the few corporate tax burdens that pro-business advocates lament. Sounds like the government is managed in our nation -- managed to the benefit of those who have.
The Federal Reserve tries to help American business by cutting interest rates. That helps investors and the super rich. But the American who saves, gets less return from savings in the banks and pays more for gas and groceries as inflation grows. Maybe Obama's pastor, Jeremiah Wright, was correct after all in his controversial comments: This nation is run by [or at least for] a bunch of rich white people! (Reverend Wright has visited my campus, I've met him and think what Martin Marty wrote about him in The New York Times is correct -- Wright offers a message of hope in his critiques.)
Several assigned biblical texts for July and August mandate your attention of this range of issues in your preaching. The second lesson for July 6 (Romans 7:15-25a) reminds us that sin permeates our entire being, and even our political and economic structures. Sinful people structure political arrangements to suit their own or their allies' aims. America's founders taught us that because of our selfishness, political factions would be inevitable, and we must do all we could politically to stop the wealthiest and most powerful factions from dominating us all (The Federalist Papers, Nos. 10, 51). Two weeks later (July 11) the second lesson (Romans 8:12-25) offers a vision of liberation to overcome all the injustices of the system, as Paul dreams of a creation set free from bondage to decay.
A society plagued by economic policies favoring the rich hurts the middle class and the poor. The gospel lesson for July 6 (Matthew 11:16-19, 25-30) proclaims Jesus' and our concern for the weak and heavy-laden. The first lesson for August 24 (Exodus 1:8--2:10) reminds us of the harsh treatment of the Jews in slavery in Egypt, not unlike the harsh treatment the sons and daughters of slaves in America have endured. The second lesson for the following week (Romans 12:9-21) provides another angle on our economic responsibilities to each other; Paul urges hospitality and meeting the needs of others.
These texts sketch a new vision for economics. You can devote your sermons to sketching this vision. But unfortunately, the presidential candidates have not been doing that. Both McCain and his Democratic counterparts just want to tinker with the existing economic dynamics. They may differ on whether to maintain the Bush tax cuts, giving relief to mortgage holders who have gotten behind, on whether to provide emergency home heating assistance and stimulate ecologically sensitive energy sources, on how to increase health insurance coverage, and on tax policies to protect American businesses and American jobs. In the final analysis, all share a common faith in the market to work out the problems, not to make the US or state governments become major economic players through creating jobs or providing guaranteed middle-class lifestyles for all citizens through cradle-to-grave coverage and tuition-free college education for qualified students. Why not?
Programs like that, we say, would compromise the market. They lead to a managed economy; it would be disastrous for our prosperity; it's not the American way. But it's quite clear that it is already managed (to favor the rich). It is time that the management was a little different, more just, for the sake of those in need. Do we in the church have the courage to paint this picture, since our candidates for the present are not?
They do it and do it well in the western European nations -- especially in Scandinavia where there is a friendly business climate. Trade barriers are minimal, and it is easy to start new businesses. Sounds like exactly the climate in which my friend, Wes, wants to do business. In fact, Denmark and Switzerland rank only behind America on the Global Competitiveness Index. But a combination of strong labor unions and a progressive income tax, which levels off differences in wealth frees up enough money to allow for cradle-to-grave middle-class coverage for all citizens, even generous child-care and family-leave arrangements. Of course, you have to pay a price for generous benefits and union protection. Public outlays consume half the Gross National Product in these nations. Income taxes are high, especially on the rich, in view of the highly progressive tax structures. The economy is managed for the sake of the poor and middle class. The rich get soaked for the sake of the poor. But is that so bad?
Poll results show how good these economic measures are for these nations. A recent survey of national levels of happiness conducted by the United Kingdom's University of Leicester revealed that the US ranked only 23rd. The top nations (Denmark, Switzerland, Austria) all possess a managed economy. Others like Norway and Sweden still bested our nation. Nations with socialized medicine, labor protection, and provision for higher education are happier! Why wouldn't this sort of a managed economy be good for our nation?
Such equitable sharing of resources is biblical. In previous columns we've noted that the first Christians practiced it (Acts 4:32--5:11). In my last column I shared with you references to our founders' (especially Hamilton and Madison) support of such a managed economy. Reconsider those citations, and consider this quote from Thomas Jefferson, urging a managed economy:
... the consequences of this enormous inequality producing so much misery to the bulk of mankind, legislators cannot invent too many devices for subdividing property… If for the encouragement of industry we allow it [the land] to be appropriated, we must take care that other employment be provided to those excluded from appropriation.
(Writings, pp. 841-842)
Managing the economy is indeed the American way. The founders advocated it. And we're still doing it. The issue is whether we are content to have our economy continue to be managed to benefit only the rich. It may not be possible to change the course of the election on this issue. But perhaps we could begin with our preaching to nurture the foundations of a consensus to pressure those elected in November to get the economy managed with fairness and justice. It's not a question of whether the economy should be managed. It's really a question of how it's managed.
Mark Ellingsen is a tenured associate professor on the faculty of the Interdenominational Theological Center in Atlanta and the author of hundreds of articles and thirteen books, including "When Did Jesus Become Republican? Rescuing Our Country and Our Values from the Right" (Rowman & Littlefield).
