Category Archives: economics

Hmm, Correlation or Causation?…and why I care

From the WSJ

But the data from the Bureau of Labor Statistics show that, in 2010, the year ObamaCare passed, full-time employment grew at an average monthly rate of 114,000 while part-time employment dropped an average of 6,000 a month. So far this year, as ObamaCare is being implemented, full-time employment has grown at an average monthly rate of 21,700 while part-time employment has increased an average of 93,000 a month.

Now one can fairly ask why a church website would point something like this out. It could be: 1) I’m just a religious right nutjob that has confused the GOP for the gospel, 2) I hate poor people and don’t understand the prophetic call to the poor, the fatherless, the widow and the alien in our midst, 3) I’m a religious masochist pining for the days when nobody had healthcare and we all faced death and babies without any caring professions help because suffering focuses the mind on things eternal. Or, it could be none of those things (hint, hint).

Let me explain.
1) Occam’s razor. There is a place for the federal government. That place is according to the preamble (half sung to the Schoolhouse rock tune in my gen-x head) is: “establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare and secure the blessings of liberty”. The government’s purpose is to rule fairly applying the same law to the poor and the great (Leviticus 19:15). The government provides the framework that citizens agree to live within. And for a nation of 300 million of various peoples, languages, tribes and nations, that framework should be remarkably simple. Otherwise you get into the position where we are now that rent seeking (gaming rules and loopholes) is more profitable than actually working. The quote above highlights the reaction of businesses logically gaming a complex system, and it will get worse.

2) The law (not this specific law but the law in general) has three uses: civil or curb, moral or mirror and spiritual or rule(r). None of those purposes is salvation. When the preamble says establish justice or promote the general welfare or ensure the blessings of liberty it is poetically talking about placing a legal curb. You can jump the curb if you insist, but only heartbreak lies beyond it. The story that the American founders understood is that the curb is best placed at a minimum level allowing the maximum amount of liberty. Calvin’s Geneva and every established religion has attempted to use the government as a teaching tool erecting mirrors to show sin and often enforcing the rule(r) which is only available to those who have the Holy Spirit. That is a mistake of the tool. That is attempting to use an instrument of law (government) as an instrument of the gospel. At least Calvin and company had the correct gospel. Today we are attempting to enforce a material salvation/a material gospel through tools of the law. That can’t help but come to grief.

3) One of the greatest blessings of the modern world had been the full-time 40 hour work week. The teacher in Ecclesiastes, in the midst of all the vanity, recognizes the gift of work. “There is nothing better for a person than that he should eat and drink and find enjoyment in his toil.” (Ecclesiastes 2:24) He echoes it three times: Ecclesiastes 3:12-13 and Ecclesiastes 5:18-20 being the other two. There is an old german phrase: kinder, kuche, kirche – kids, kitchen, church. The 40 hour week had secured a balance for those most important things, Ecclesiastes’ eat, drink, toil and blessing from God. All of our misuse of the law making it easier to game the system than actually work has killed that gift. This law will enshrine a divide amongst our people that will teach a bad lesson. Notice that the teacher doesn’t distinguish work from work. Work, what is given, is a gift. The law as constructed will teach that there is good work, that which will hire you full time, and bad work, that which will only hire you for 20 hours. It will teach contrary to the truth and move the very people it wants to protect (the poor) away from the blessings of labor.

So in summary: This law increases our biggest problem that the incentives to gaming the system are currently greater than the incentives to work, especially for the smart and already rich. Going to Washington and lobbying is more profitable than producing a new product or service. This law confuses the proper role of the government creating a confusion of law and gospel. This law hurts the very people it is suppose to serve and puts us on a path to teaching very dangerous lies.

Now to hit the other side, the formal GOP has not proposed a real alternative. It should. It is possible to do this simply and with an eye to those currently excluded. Here is Dr. Ben Carson, Johns Hopkins Brain Surgeon, from earlier this year giving the outline in about 2 minutes.

Carts and Horses

Therefore do not be anxious, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ 32 For the Gentiles seek after all these things, and your heavenly Father knows that you need them all. 33 But seek first the kingdom of God and his righteousness, and all these things will be added to you. Matt 6:31 ESV

One of the great catechism questions of all time is from the Westminster Shorter, What is the chief end of man? Now you might ask what a good Lutheran is doing linking to a Reformed document. Isn’t that a form of unionism? Well, they might not have the sacraments, but they’ve got some things right when the first question asked sets you in the right direction. The answer the Westminster Divines gave to that question was: Man’s chief end is to glorify God and and enjoy him forever. The horse is seeking God. Everything else is in the cart. If all you are doing is rummaging around in the cart then you don’t go anywhere.

The quote from Jesus that I started out with was directed to peasants whose biggest problems were exactly what those questions address – How do I live in a survival sense. Jesus turned those possibly starving people from that pragmatic question to a philosophical or theological question – How should I live? If you are directed correctly on ‘How should I live’ then all these others will be added. (We might stop and take note that they might not be physically added, the desire might be subtracted. All those monks for thousands of years were not seeking God to add a Philippe Patek. Although as Rick Santorum was used to reminding people, that if you get married before having kids and stay married, graduate from high school and get a job, you don’t end up in poverty. Righteousness even in a purely legalistic sense has its rewards.) In our prosperity we are no longer desperate but we also no longer have that excuse. How do we live, what are our lives directed towards, are important questions we should answer and keep in mind.

I’m pondering this because of a couple of articles and a phrase in the Declaration of Independence. We Americans are aimed by default by that declaration toward an answer to How should I live. Jefferson’s answer is the pursuit of happiness. Even in Rick Santorum’s answer the goal or chief end of man is happiness defined as not being in poverty. If we are so aimed, if our chief end is happiness, we are rummaging around in the cart. And like a really old country song, all the gold in California, is in a bank in the middle of Beverly Hills in somebody else’s name. Happiness is elusive. It is a lousy answer to How should I live.

Here is Christina Hoff Sommers in the Atlantic responding to Facebook’s Sheryl Sandberg. Sandberg argues for women to ‘lean in’ by which she means to find true happiness double down on your work life with the goal of more female CEOs. Sommers responds,

An up-to-date manifesto on women and work should steer clear of encounter groups and boys-must-play-with dolls rhetoric. It should make room for human reality: that in the pursuit of happiness, men and women often take different paths. Gender differences can sometimes be symptoms of oppression and subordination. But in a modern society they can also be the felicitous consequences of liberated choice—of the “free to be you and me” that women have been working towards for generations.

What they are arguing over is How should I live. And both of them are directed toward the pursuit of happiness. But the deeper question is which one might allow for you to discover the horse? Could some of those women that Sandberg is telling to ‘lean in’ actually be coming to the realization that they have the cart before the horse? Whose answer allows for a deeper and more correct understanding of the good life?


This is writer P.E. Gobry
in Forbes taking a look an admission of economics professor and writer Tyler Cowen.

I would bet a goodly sum of money that if you picked at random ten tenured economists from top-20 economics departments, and asked them to list what an 18-year-old should do to increase his chances of getting high wages, none of them would say “get married and stay married”–even though the data on the marriage wage premium supports this conclusion to the same extent as it does going to college.

Read his whole article. It is too good to really summarize fully, but again we are arguing over what creates happiness defined as greater material prosperity. Gobry’s point in my words is that the economics profession is aimed at carts. Economics can tell us a whole bunch about where to find the gold in the cart – go to college, make yourself more productive – but it dismisses as correlation vs. causation problems things like Marriage and Kids. I, and Gobry, would say that marriage and family are much closer to the horse than what economists would say.

Jesus points us toward the horse. Seek first the Kingdom of God and his righteousness then all these things will be added. And here is the really tough problem. We can construct a legal society that encourages putting the horse first. Arguably that is what we had coming into the 20th century. But if we are only being virtuous because of the law that society eventually breaks because we can’t keep the law. We are natural lawbreakers. It takes the Spirit to call, gather, enlighten and sanctify in the Gospel. If you are worried about our society the correct prayer is “your kingdom come”. Seek first the Kingdom.

Parson Irresponsibility?

As the owner of three expensive diplomas on the wall, and the father of three young kids, and the holder of a job not known for its earning potential…I have to admit that I’ve basically made a bet with my kid’s future. I think this guy, Salman Khan, has to be right about the future of higher education.

Here’s what I think it could look like in five years: the learning side will be free, but if and when you want to prove what you know, and get a credential, you would go to a proctoring center [for an exam]. And that would cost something. Let’s say it costs $100 to administer that exam. I could see charging $150 for it. And then you have a $50 margin that you can reinvest on the free-learning side.

I think that is consistent with the mission. You are taking the cost of the credential down from thousands of dollars to hundreds of dollars. And the [software] system would tell them they are ready for it. So no paying tuition for community college and then dropping out, or even finishing the whole thing and saying “Oh, I’m $20,000 in debt and what did I get out of it?”

Now you are like, “Look, there is this micro-credential in basic accounting I can get for $150, and I basically know I am going to pass before I invest that money.” That would be a huge positive for the consumers of education, and it could pay the bills on the learning side.

Now if one of the ankle-biters manages to get themselves admitted to Harvard that might be a different thing. There are two transactions going on there. Harvard is aggregating the best collection of future potential it can identify and that future talent is paying for access to a very exclusive network. Do you see education in there anywhere? Not as a primary input or output. But let’s discount that possibility for now.

After those pay to play institutions, you are left with the large state credential factories. And with government budgets going boom, and every available dollar that we can tax or borrow going to be needed to pay for Social Security, Medicare and Obamacare, anything that can offer a potential order of magnitude decrease in cost and at the same time offer a data driven credential that might be more telling than a grade-inflated gender-studies degree will be too tempting for the state to keep guarding the moat. Especially as the “youth” vote is a key part of the democratic coalition. There is an epic smackdown within that coalition between the tenured professors dependent upon the old model and the kids who don’t want to start life with hundreds of thousands of debt. The kids can only pay for one entitlement and my guess is that they pay for SSI, Medicare, Obamacare.

The upshoot is that if Salman Khan is right and I avoid the Harvard bullet, the parson does not have to eat Ramen Noodles every night starting now for the next 20 years until the last darling gets that sheepskin. Parental irresponsibility or justifiable bet?

A Widow & a Scribe – Vocation and Providence

Biblical Text: Mark 12:38-44
Full Draft of Sermon

We collected the pledge cards this week. Believe it or not, that was planned before actually looking at the text. If I had looked at the texts first, I’m pretty sure I would have said, “can’t do it that week”.

There is a really crisp and clear direct application that feels just a little too easy. You could say, like Jesus did, look at the widow and go and do likewise. But to me the widow is not where most of us Americans are at. We are not that poor. We are not forced by circumstances to completely trust on the providence of God. Most Americans are more than likely in the scribal position.

So here I concentrated on scribe a little bit more trying to illuminate the vocational problems and the problems with providence. The law in both cases is clear and comes from the larger context. At the start of the larger section the text comes from Jesus answers what the most important commandments are – love the Lord your God and love your neighbor. The first is reliance upon providence and the second is carried out in our various vocations. What the scribe was doing, what we do so well, is instead of using our vocations for our neighbor, we use them to avoid or deny providence. The good news is that none of us have the vocation of messiah. That is Jesus alone. So we are still called to reliance upon providence and vocations of service to our neighbor, but when we fail Jesus is our salvation and our righteousness, because he did not fail.

On a grading note, that above paragraph is a better summary than is probably in the sermon itself. The spirit of the staircase rules this week. As I left the pulpit certain things became clearer. But the Amen had already been said.

Three Interesting Items

1) From the Economic Files, Tyler Cowen injecting a heavy word into the discussion. I think he (maybe Academic Economists in general?) might be stumbling back to a more fundamental understanding of the economy. I remember studying all these models and even building some in prior work and they all worked pretty well, until they didn’t. That didn’t work phase was usually because something big had changed, but if you are focusing on your model and that quarter or even worse that month, you didn’t empirically know what the big things was. You knew it in your gut, but everyone would say, “no, stick with the model for now.”

Trust was broken, most of all in the financial system, but like a wet spill this has soaked into many parts of the economy and polity…In one very real sense, the economy is well below potential output (though less than many people think, due to the great stagnation). In another very real sense, that gap cannot be exploited in the short run by reflationary policy. Once again, it requires a reestablishment of trust. Trust is more easily broken than repaired.

[If you want to see a prime example of the moral blindness, or the unwillingness to consider more fundamental things such as trust, take a look at the comments which take Dr. Cowen to task for using a morally laden word, trust.]

2) An emotionally tough family reflection about the results of the way we live now. This is the story that would go along with last Sunday’s sermon. This is also part of the call of the church to bind the wounds. This generation’s wounds are deep and possibly fatal.

What strikes me most powerfully about the defenders of the sexual revolution is their immovable abstraction. Always the matter is couched in terms of rights, or individual desires—what I want, what I may pursue. That this sexual laissez-faire destroys the common good, by undermining families and rotting whole neighborhoods from within, seems not to matter. Honest sociologists can give us the numbers, of children growing up without fathers or mothers, of the incidence of venereal diseases, of births out of wedlock, of delinquency and crime. I think instead of the people I have known.

3) An editor at Real Clear Religion (part of the burgeoning empire of Real Clear X sites) is thinking along the same lines as I was on the Pew Survey finding more “nones”. The biggest difference is that they don’t think that compounding effect across generations has happened, where I ended in saying that is exactly what we are seeing right now. The statistical numbers are just catching up with the reality. He ends with this.

Fischer’s take was that the Pew survey is basically reinforcing the poll results that they’d worked with a decade ago. And he offers this thought:

“One open question is when this becomes self reinforcing — when the ‘nones’ raise no-religion children, when the cultural climate changes.”

To me, the latest Pew survey brings to mind the chorus of an old union organizing song: “Which side are you on boys? Which side are you on?”

Political and religious pressure from the right is pushing folks who once would have been happy to sit in the middle to pick a side. And increasingly, the side they pick is away from religion.

What he doesn’t address is if that is a good or a bad thing. Is that a call for further gap straddling? Or is that a recognition of Jesus saying things like “I’ve not come to bring peace but a sword.” (Matt 10:34). The nature of gospel is to cause a division.

Debtors Prison: What did the prophets mean when they talked justice

When the prophets talked justice it was often in economic terms. Take a look at these: Amos 2:6-7,Amos 5:11, Amos 8:4-7, Zech 7:9-12, Micah 3:1-3, Micah 6:10-13, Ezekiel 22:12, Ezekiel 22:29, Ezekiel 45:9, Habakkuk 1:4, Isaiah 10:1-2, Jer 22:13. You can find a bunch more. The complaint of the prophets wasn’t that economic outcomes should be equalized, but that the powerful were using unfair weights, cheating the system and using their authority to extract rents that were not due to them. The charge was to apply the law fairly to all people regardless of social rank and to apply mercy to the poor. The main message was to avoid things like…this.

Three years ago, Gina Ray, who is now 31 and unemployed, was fined $179 for speeding. She failed to show up at court (she says the ticket bore the wrong date), so her license was revoked.

When she was next pulled over, she was, of course, driving without a license. By then her fees added up to more than $1,500. Unable to pay, she was handed over to a private probation company and jailed — charged an additional fee for each day behind bars.

For that driving offense, Ms. Ray has been locked up three times for a total of 40 days and owes $3,170, much of it to the probation company.

Yes, I’m sure there was some stupidity. Yes, speeding is against the law. But I’m pretty sure that even if she had shown up, she just couldn’t have paid and she would have been in the same spot. In our society driving may be a privilege, but lets be real, if you don’t drive, you probably aren’t going to work. Lots of people are hanging on by the smallest of threads day to day. Things that seem perfectly reasonable to a state senator with a stable family life to balance the budget are completely unreasonable to the people who actually get caught in the “roving taxes”. Being poor (even if your poverty is the direct result of poor decisions) does not give society the right to extract blood. According to the prophets it is society’s burden to show mercy.

Update: A second source of another story, same theme.

Wendell Berry’s NEH Jefferson Lecture

Here is the full speech. If you want to hear a prophetic voice, but put in non-religious language, read the lecture…

When people succeed in profiting on a large scale, they succeed for themselves. When they fail, they fail for many others, sometimes for us all. A large failure is worse than a small one, and this has the sound of an axiom, but how many believe it? Propriety of scale in all human undertakings is paramount, and we ignore it. We are now betting our lives on quantities that far exceed all our powers of comprehension. We believe that we have built a perhaps limitless power of comprehension into computers and other machines, but our minds remain as limited as ever. Our trust that machines can manipulate to humane effect quantities that are unintelligible and unimaginable to humans is incorrigibly strange

The Pastor’s Study – An Economics Pondering

In the mail today came the latest Christian Book Distributors (CBD) catalog. It is always interesting to see thee things: a) who the high-flying Evangelical authors are by what is on the cover and who has their own author pages, b) which translations of the Bible are taking up more space or less and c) the offerings/prices of the academic or pastor’s study section.

There is a somewhat funny to modern ears clip from (if I’m remembering correctly) CFW Walther about how a circuit counselor (monsignor or ecclesiastical hierarch who is not the bishop) should judge a pastor’s library. There are certain staples that you (should) find: Augustine, Gregory the Great’s Pastoral Rule, at least one good commentary on each of the gospels and Romans, the confessions of your denomination (for me a Book of Concord), I’m not a dogmatics person but at least one orthodox presentation of the faith, and for a Lutheran some Luther (fill in with Wesley, Aquinas, Calvin, etc for whoever your tribe likes best). These books are expensive, or at least they were. Pastors would bequeath them if they didn’t need the money or sell them when they retired. I am the inheritor of parts of two collections. (I suppose I should throw onto that list a book like The Lutheran Liturgy by Reed which gives the history and theology of worship.) I know to the average lay-person that this will sounds nuts, but those books are grist of pastoral life. You find yourself going back to them again and again.

Now to the economics. One of the investments I’ve made is the Ancient Christian Commentary on Scripture Series. It is a series of books arranged by biblical book that gives you a passage and a location to find more of what the Church Fathers had to say about every passage in the bible. This is a new updating, revising and enlargement of the what was called the catena aurea or golden chain. 29 volumes x $35ea ~ $1,015 for the complete series. I find the patristics the most useful source, and since it is new this is like buying the just released drug. The publisher needs to get back their investment and I’m one who would pay it.

Now back to CBD. Calvin’s Commentaries, and Calvin is a great and insightful commentator, 22 volumes for $150. Barth’s Church Dogmatics (I can’t read the guy, but a neo-orthodox Reformed theologian worth reading), 14 volumes for $120. Schaff’s Early Church Fathers, a monumental piece of scholarship, 38 volumes for $250. A little shorter but still a watershed, Keil & Delitzsch 10 volumes on the Old Testament for $80. (I inherited 2 volumes on Isaiah which I reference every Christmas and Lent). So why am I quoting volumes and prices? Why would anyone want dead tree editions anyway?

First the dead tree question. These are reference works. You don’t read them straight through. Much of what is in them is available online. The contents are in the public domain. So the primary advantage of digital is search, which you can get for free with many of them. But what that doesn’t give you is underlines (both yours and prior owners) or margin notes or the serendipity of opening these great authors for one thing but reading just a bit before or just a bit after. The ideal is both digital and a dead tree copy. That is why these things are still available.

Now the crux – why am I quoting these prices? Because the Reformed World has learned something. They want their ministers to have these works at hand length. These books are priced in a digital world to have both. What would I as a Lutheran minister have to pay for a similar set of Luther’s Works? 55 volumes x $35+shipping ea. or roughly $2,200. Here is Calvin’s Commentaries online for free. What would I pay for a similar digital copy of Luther’s Works? The closest I get is this (which I have the pre-cursor on CD-ROM) for $259. So Calvin – digital and dead tree – $150. Luther – $2500.

Now I’d love to be able to say that was because Luther was worth so much more. But the real answer probably has to do with copyright. The American Edition of Luther’s Works is held by Concordia Publishing House and Fortress Press. Most of the editions (the ones with the meat) were published in the late 50’s and early 60’s. The index was published in 1986. They will probably enter the public domain 95 years from date of publication if I’m reading copyright correctly. The Reformed translated and published in English their founding works earlier and hence are in the public domain. Lutherans in America hung onto German for a long time. Lutheran’s will just have to wait until 2046 to get a deal.

And that is if Paul McCain doesn’t figure out a way to put a new crimson cover on them (or is he going to be forced to blue now) and extend copyright somehow.

NPR, IRS, Mormons, Tithing & God…is there a hot point missing

Here is the link to the actual story and the radio version.

This was a great news clip. One thing that kept running through my head was that the Mormon faith in the USA is roughly 3.2 Million people. For comparison the LCMS is roughly 2.5M, Methodist 11M, Baptist 36M, Roman Catholic 57M. How does a group of people who are roughly the same size as the LCMS have such a strong influence on the culture such that two representatives were running for President and their charity is widely known even in the relatively naked public square of NPR?

From the conclusion of the piece…

They would pay a full tithe on the profit when they sold a stock. Yet, if they dumped a stock for a loss, they wouldn’t use the loss to offset and lower the income they tithed on. Unlike taxpayers, the Mormons in the study weren’t big fans of taking deductions so they could send less money to the church.

“They’re worried about being petty with God,” Dahl says.

I asked a Mormon bishop in Salt Lake City if a few more rules defining income might make tithing easier on Mormons or bring in more money for the church. He said all this soul-searching about what you owe God is kind of the point

One of the old christian faith’s practices of lent was almsgiving. That was a practice beyond the tithe. It was direct charity to the less fortunate usually. Ultimately is was a practice that spoke to a recognition of the 10,000 talents. (Matt 18:24) There are plenty of people who would look at the mormon tithe and the question of being petty with God and scream legalism or works righteousness as if they were attempting to buy salvation. Instead it might not be a bad question for lent. In light of the cross, how are we being petty with God? Maybe the LDS are a mirror to our Christian practice. What we give to God doesn’t buy us salvation, but it is a first look at how we value that grace. It is cheap, or costly?

Paragraphs to Make You Think

1) Lest anyone thinks I might have been harsh in my Ash Wednesday sermon drawing analogies with the national debt and the plague of locusts in Joel. (Joel said that God was at the front of that plague. The plague was a mirror to the spiritual state of the people. Is our debt a mirror?) You can read here and here two shocking graphs. The first reports that the per-capita debt of the US is more than the per-capita debt of Greece (as well as the rest of the other PIIGS so much in the news). The second shows the share of the US debt based on budget projections by generation. A child born today owes 1.5 million dollars the day he or she is born if that national debt was allocated. Per the US Census (Fig 3) the expected lifetime earnings of a high school graduate are only $1.2 million. In other words a high school graduate owes more in federal debt today than they can expect to make in their lifetime. (Isn’t that close to a definition of slavery?) How is this not a moral issue? A Man owed 10,000 talents…(Matt 18:24)

2) From the Washington Post and a hospital internist. Teach us Lord to number our days…Psalm 90:12

With unrealistic expectations of our ability to prolong life, with death as an unfamiliar and unnatural event, and without a realistic, tactile sense of how much a worn-out elderly patient is suffering, it’s easy for patients and families to keep insisting on more tests, more medications, more procedures.

3) Why we need Lent from Catholic Mark Shea

Here’s reality: Human beings, working together with good community organizers, and following the Wisdom of the Voters and the very best that popular piety, sound civic common sense, and the best of human wisdom have, time and again, shouted “Give us Barabbas!” and chosen to crucify the innocent Son of God. It’s what we do.

The good news is that God forgives the 10,000 talents. He has given us a lamp for learning wisdom. And while we shout Barabbas, he walked to Calvary anyway. While we were still sinners…