Friday, February 6, 2009

The Balance Sheet

In case you hadn't heard, our economy is bad. I'm not an economist, I'm a pastor. I'm not very good at math, but I do have (some) common sense. As a pastor I should (ideally) have some insight into our spiritual condition. With that in mind, I thought I'd throw out a few humble observations I'm making about our economy these days.

First off: how bad is it? This morning we learned that the "official" unemployment rate is now 7.6%. I use scare quotes here because I understand that unemployment is actually worse than that. If you look at the Bureau of Labor statistics there are more than 7.6% who are looking for a job; you have the folks who've been so unsuccessful at finding a job we just stopped counting them (called "discouraged workers") and you have the folks who work part-time but still don't have sufficient income to live on (called "marginally attached workers"). Those numbers put unemployment much closer to 14%-- almost double the "official" numbers you probably saw on the news today. I know this is the case, because I'm one of the other 6.3%. I have a little part time work and some odd jobs to help out, but on our income we can contribute near zero to our savings and I've even been forced to defer my student loan payments for the time being. Times are tough.

Why? The housing crisis was a big reason. The value of our houses was artificially inflated, and we borrowed against it to buy stuff. We were told that real estate is a great investment, that the value of your house will nearly always climb. Here's where my common sense kicked in-- is it really possible for home prices to always keep going up? What happens when all the people who can afford a house have one? What happens when all those new condos and developements get finished and there are more of them than people with the income for mortgage payments (see above)? Our resources are not limitless. It was a lie we chose to believe. Now we're paying the price... not in a deflated home value. But in jobs.

Here's where else my common sense took me: where do we work anymore? What does our post-industrial economy produce? A small fraction of us make food, most of it is imported. Most of our goods are imported too, produced in squalid conditions for low wages. Most of us who work don't actually create or produce things-- we just kind of shuffle them around and skim a little off the top for our selves. Isn't that what the stock market is? Isn't that what retail and consumerism does? The job sectors that are hurting the most are manufacturing. Again, we've believed a lie that our goods and materials are limitless. You can't get something from nothing, and not everyone can become rich at the expense of a smaller labor force working for less.

These are the reasons I feel some complusion to speak about the economy. This is a spiritual problem. Work is good. Its good for people to have work not simply because of the income (though that's important), but because human beings are designed to have vocation. Without meaningful work to do, we suffer existential angst. That's why I'm much more concerned about unemployment than I am about the stock market. In fact, I'd argue that an obsesion with "growth" in our stock market has adversley affected the employment situation in our country. Take a look at these companies who have never laid off a single worker. Something most of them have in common is that they are privately held--that means when times are good, profits aren't shipped off to investors, but can be reinvested into the workers (cash assets can be set aside in order to make payroll during lean times). The Hebrew Prophets in particular have much to say about how the wealthy should treat their workers. Its time for managers, owners, and wall street to see its labor force not as a liability--but as an integral asset.

But this is not simply a rant against a select few of the wealthiest among us. We all bear personal responsibility for the condition our economy is in. No one has clean hands in this mess. All of us have a responsibility to steward our resources wisely. The debt we've incurred due to our consumeristic lifestyle has hollowed out our economy. Consider this, would we have had the foreclosure crisis if we took a lesson from the Amish? It turns out that the mortgage banker who serves the Amish of Lancaster County, PA has never lost money on a loan to them:

"The Amish live well within their means — no splurging on iPods or HDTVs, no dinners out that they really can't afford... This old-fashioned system works. In this year of financial crisis, of storied old banks collapsing in hours, Hometowne Heritage [the local community bank] has had its best year ever."
The Amish know a thing or two about following the radical gospel of Christ. I'd be surprised if they're wrong on this one.

If we can avoid a total catastrophe of unemployment, perhaps there is a silver lining to this recession. For decades the American savings rate has plundged, to the point of a rate of zero last year. In just the few months since all our idols of mammon started falling, its jumped up to 3.6%. Of course, that makes retailers upset because its less money buying their junk. But in the long run, it might make us a more healthy and sustainable society.

As I said, I'm not an economist, so I can concede there are some of these things are a bit beyond me. I don't know what (if anything) the government can do to help. Some things in the stimulus plan I like, others I don't. But ultimately this is a problem of values: do we understand our place in the world? That our resources are NOT limitless? Do we consider that the health and welfare of our neighbor is directly related to our own health and welfare?

What does all that look like? Maybe Mr. Berry of Kentucky knows.

1 comment:

Ingrid said...

Well spoken, sir. "Shuffling around and skimming a little off the top" . . . pretty much. Considering where Econom-ism has gotten us it's just as well that you are not an econom-ist. It is really a religion more than math or science. Economics is not based on empirical observation or meaningingful quantitative accounting of anything, much less qualitative. It starts with ideologies and then comes up with formulae that work within the theory. When the formulae stop working they get tweaked to cover up the holes in the theory. And as you have pointed out, its gospel promises are wearing pretty thin right now.