economics

I’ve been doing a lot of reading lately—an near-obnoxious amount, really. Quite a few of the books have just not been that interesting, but there have been a few exceptions. Here are reviews of three of the more notable books I’ve read. Each of these titles is currently on the New York Times list of bestsellers.

End the Fed

Love him or hate him, you probably have an opinion about Ron Paul. He’s a guy on the fringe, a guy who does not quite seem to fit into any camp but his own. And a time when the economy is undergoing a severe test, he is one of the few politicians who actually sounds like he knows what he is talking about when it comes to economics. Firmly rooted in the Austrian school of economics, Paul advocates pretty much the opposite of all America has done in the past few years: Where Washington has continually bailed out those corporations it deems too big to fail, he advocates allowing them to go bankrupt; where Washington remains firmly committed to fiat currency, he is eager to return to the gold standard; where Washington looks increasingly to socialize health care (and those companies that would fall apart but for federal aid) he has implicit confidence in the free market and its consequences; and where Washington continues to grant far-reaching power to the Fed, Paul advocates eliminating it altogether.

Few people understand macro-scale economics (heck, judging by the debt loads of most Americans I’d suggest that few people can wrap their minds around household economics) and fewer still understand the role of the Federal Reserve in economics and politics and the sometimes-fine line between them. Among the immensely important organizations in Washington, the Fed has one power that is unique: the ability to create money out of thin air. You do not need a graduate degree in economics to understand the magnitude, the potential ramifications, of this kind of power. When you consider that the Fed operates without any real congressional oversight, that it is protected from audits and that its leaders are appointed rather than elected, it becomes more shocking still. Ultimately, if you want to understand money in America, you need to understand the Fed. As Paul says, “It is irresponsible, ineffective, and ultimately useless to have a serious economic debate without considering fundamental issues about money and its quality, as well as the Fed’s massive role in manipulating money to our economic ruin.” Paul has spoken endlessly about the Fed for decades now and in this book he advocates his solution: get rid of it.

Paul minces few words. He says, “We need to take away the government’s money power. The banking industry needs its welfare check ended. The dollar’s soundness depends on its being untied from the machine that can make an infinite number of copies of dollars and reduce their value to zero.” Later he says, “The Federal Reserve System must be challenged. Ultimately, it needs to be eliminated. The government cannot and should not be entrusted with a monopoly on money. No single institution in society should have power this immense. In fact, I believe that freedom itself is at stake in this struggle.”

While clearly targeted at a general audience, End the Fed is stock full of “economese”—the lexicon of economics—and this may make for difficult reading for those not well-versed in such matters. I often found myself confused, reading back a few lines or pages and, on occasion, just giving up and moving on. In several areas Paul assumes just a little bit more knowledge than I’ve got. Inflation is a relatively simple concept to understand from my perspective, but when it comes to understanding its causes and effects on a national or international level, my head begins to spin. Nevertheless, I read on and largely enjoyed his arguments. He argues from three perspectives: the philosophical, the constitutional and the economic. In each case he makes a compelling case that the Fed is harming America far more than it is helping and that its very existence is contrary to the U.S. Constitution. Of course the book is inherently one-sided and one must assume that the Fed’s supporters can make arguments of their own as to why it can and should remain; they will undoubtedly also argue for increasing rather than decreasing its mandate. I must have Libertarian leanings (or perhaps just common sense leanings) because I tend to agree with Paul. There has to be a better way and one that is more consistent with American ideals. “The Federal Reserve should be abolished because it is immoral, unconstitutional, impractical, promotes bad economics, and undermines liberty. Its destructive nature makes it a tool of tyrannical government. Nothing good can come from the Federal Reserve.” At least he does not leave us wondering what he really believes.

Created in time of crisis, it is ironic that the Fed is responsible for many of the nation’s subsequent economic crises, at least according to Paul. Constantly manipulating the markets, responsible for bubbles created and bubbles burst, and forever cranking out more real and virtual greenbacks, the Fed is at the center of American economics and politics. Its power is immense, its accountability near non-existent. Should not this, alone, call for abolition or, at the very least, radical modification?

*****

Where Men Win Glory

In 2002 Pat Tillman walked away from a multi-million dollar NFL contract to join the U.S. Army. Just coming into his own after a career year as safety for the Arizona Cardinals, Tillman had all the opportunity in the world. Young, ridiculously good-looking, sporting the squarest chin in all of human history and with all sorts of people waving millions of dollars in his face, he could have taken any number of offers and set himself up for a long and comfortable life. Instead, he walked away from it all to became a soldier and, in so doing, an icon of post-9/11 patriotism. He was a reluctant hero who lost his life in a tragic friendly-fire in the mountains of Afghanistan. The events surrounding his death were quickly covered up and seemingly uncovered almost as quickly, bringing with them both horror and scandal. Already the subject of several books, Tillman appears again in Jon Krakauer’s Where Men Win Glory.

Tillman is a fascinating, multi-faceted character and one who is very difficult to pin down. Though he was no supporter of President Bush, he still felt that it was his duty as an American to answer the call to arms. Though an extraordinary athlete, he was a deep thinker and far from the stereotypical football jock. The excerpts from his journals show a man who drank hard and played hard, yet was fiercely loyal to his girlfriend (who became his wife shortly before his death) and reluctant to be the center of media attention. He read widely, thought deeply and wrestled constantly with the moral implications of what he was called on to do as a soldier. Eager to fight in Afghanistan, he was perturbed, disgusted even, by much of what he witnessed in Iraq. An atheist, Tillman’s last words mocked a comrade who, with Tillman, was pinned down with fire from their own men. This soldier, terrified and facing an imminent death, cried out to God. Tillman asked why he was acting this way and what possible good it could do him. Seconds later he died when three American bullets tore into his head. The most famous man in the Army lay dead at the hands of his friends.

His superiors reacted swiftly, muzzling the men who knew the circumstances of Tillman’s death. A friendly-fire accident would be a media catastrophe and this at a time when the war was not going well and when support for it was falling fast. Soon, however, the truth began to leak out and Tillman’s family reacted with outrage. He was again on the front pages. Subsequent investigations proved that poor leadership, poor organization and inadequate fire control had led to Tillman’s death, though some conspiracy theorists have tried to show that he was, in fact, deliberately murdered. The consequences for those involved were minor, shockingly minor, really, with most simply being removed from the Special Forces and busted back to the regular Army.

Krakauer cannot contain his utter disregard for President Bush and jumps on every opportunity to take swipes at him and at his administration. In the end there is almost nowhere he will not go, short of having George Bush light a fuse at the base of the Twin Towers. He almost makes it sound as if from the very moment of Tillman’s death that a massive conspiracy was instantly put in place, from President on down the chain of command to Tillman’s direct superior. Krakauer goes so far as to tacitly suggest that a member of the military should have told Tillman’s parents at the funeral that he had been killed in a friendly fire incident. As horrible as it is that Tillman died in a friendly-fire incident, such things are known to happen and happen today far more often than they did in the past. It is a tragic and unavoidable consequence of the fog of war. Krakauer’s outrage stems more from the cover-up, the deception and the lack of consequences for those involved.

Where Men Win Glory raises important issues about the nature of modern warfare, though it does so only between the lines and not as a core objective. Krakauer is outraged that the U.S. government covered up Tillman’s death. But are we to be surprised that the government relies on propaganda in times of war? This is as it has always been (and always will be!). The expectation today seems to be that reporters will travel with troops and provide moment-by-moment Twitter updates as to the whereabouts of troops. Deception is viewed as evil. But since when has war ever been fought under the same kind of rules that govern court rooms? The propaganda efforts in Iraq and Afghanistan are nothing when compared to the all-out campaigns during the First and Second World Wars. But that was an era of total war. War today is meant to be surgical, touching only the most guilty military targets and avoiding altogether any peripheral damage. It is a near-impossible mandate. Every time a soldier touches a trigger he must have court martials in mind. Of course there must be some kind of oversight and some kind of consequences for those who go beyond the bounds of morality. It leads me to wonder: if you cannot fight a war in which you believe in so much that you are willing to regard peripheral damage as an unfortunate, tragic even, necessity of war, is it a war worth fighting? More than ever it seems that wars are won and lost on the home front far more than in the trenches. None of this is meant to defend what happened; rather, I simply suggest that the issues are deeper than they may appear and really ought to be less surprising than they seem.

Read for its portrayal of its protagonist, Where Men Win Glory is very interesting. Tillman truly is a fascinating subject and one who is very difficult to categorize, to solve. But read as history, I would urge caution. The author seems unable to separate his outrage toward Bush from his account of what happened. There appears to be little emphasis on objectivity here. Thus the facts appear tainted by a thinly-veiled agenda that comes perilously close to the propaganda that so disgusted the author.

*****

Arguing with Idiots

I can’t deny it—I kind of like Glenn Beck. Sure you can argue that he’s just another outrageous radio windbag who will do nearly anything to fight his way to the top of the charts. That’s probably true. Yes he is annoying and occasionally obnoxious and, for all appearances, ridiculously self-assured. All true. But this does not necessarily mean that he is not correct about a lot of things. Through all the bluster I hear a lot that sounds to me like just plain common sense—the kind of sense that seems a rare commodity today. Maybe it is a sign of the times that common sense can sound radical and can be labeled as such.

In Arguing with Idiots Beck takes on small minds and big governments. In a question and answer format he answers the objections of “idiots” on a series of hot-button issues: capitalism, the second amendment, education, energy, unions, illegal immigration, the nanny state, home ownership, and economics. He also looks to the long history of progressive Presidents (focusing on Wilson and Roosevelt and showing how contemporary Presidents are little different) and offers a refresher course on the U.S. Constitution. You probably know exactly the kinds of things he stands for and the kinds of things he hates, so I will not recount them all for you. If you don’t know, just imagine what Rush Limbaugh would say and you’re on the right track.

The book is assembled in a kind of scrapbook format that features endless sidebars and callouts and cartoons and other visual distractions. There are even bits of colored text labeled “ADD Moments” woven almost right into the main body of the book. It makes for a rather distracting read and perhaps adds just a bit too much levity to what is really a series of very serious topics. Or maybe I just prefer the straight dope. Regardless, Beck does a very good job of taking a wrecking ball to countless idiotic objections to common sense solutions. From beginning to end he relies on his trademark sarcastic humor and offers plenty of moments when the reader will laugh or roll his eyes or, more likely, both.

Strangely, the book has a very, very abrupt ending. One moment you’re reading through the flow of text. The next moment you flip the page and are surprised to see that the book is over and that you are into the end notes. Just like that. Call this one of my pet peeves. Couldn’t Beck have tacked on at least a couple of pages just to wrap things up? You and I both know that he certainly didn’t run out of words.

Despite an abrupt ending and despite all the distraction, Arguing with Idiots does its job in standing up for common sense against the relentless, idiotic attacks against it. It’s quite an enjoyable read.

At a time of global economic crisis, in all of the talk of a subset of that crisis, the housing boom and bust, it is easy to lose sight of the fact that the cause of that bust is so very simple. “Behind all the esoteric securities and sophisticated financial dealings are simple, monthly mortgage payments from millions of home buyers across the country.” When the housing payments slowed or stopped, sometimes by necessity and sometimes by choice, the boom turned to a bust. Real estate markets that had seen an unparalleled explosion of growth suddenly saw a catastrophic fall. Behind all the talk of stimulus and bailouts and increasing billions and trillions of dollars is normal people unable to make their $1000 or $2000 monthly mortgage payments.

In The Housing Boom and Bust, conservative economist Thomas Sowell looks to the housing bust and asks the simple, bedrock question: Why did so many monthly mortgage payments stop coming? His answer is as simple as it is lucid. The mortgage payments stopped coming in because during the housing boom, a time where interest rates were at historic lows, mortgages had been given to people whose prospects of repaying them were, at best, very poor. While the banks deserve some of the blame, they were in fact forced to hand out risky loans by government policies that imposed arbitrary quotas set by people whose concern was far more political than economic. These people, in the name of affordable housing and under the banner of political correctness, demanded that loans be provided to people who, under normal circumstances, could not afford them. This pressure caused financial institutions to hand increasingly “creative” (read: risky) mortgages to increasingly risky (read: poor) clients. When normal times resumed and interest rates rose, so too did payments. When payments rose, they became unaffordable and millions of people simply walked away, unable or unwilling to cover the new costs. “Why pay a $500,000 mortgage on a $300,000 home?”, they reasoned. Faced with a glut of foreclosures, banks began to offer homes at fire-sale prices, driving down costs across the market. The bubble burst, the banks began to fail and the government began printing vast quantities of money to stimulate the economy and to bail out the banks. The story continues.

In just 148 pages, Sowell explains where this crisis came from and the events that caused it all to come to a head. Along the way he powerfully exposes the cause of rising housing costs and the folly of affordable housing. As he has done repeatedly elsewhere, he exposes the fallacy of racism in lending institutions, showing that much of the blame must be laid at the feet of politicians. “Politicians in Washington set out to solve a national problem that did not exist—a nationwide shortage of ‘affordable housing’—and have now left us with a problem whose existence is as undeniable as it is painful.” Of course Sowell also proposes a way out of the mess and those who know him will not be surprised to learn that he lobbies for laissez-faire, allowing the economy to sort itself out without massive government intervention.

As he looks to the government’s reaction to the crisis, Sowell’s predominant concern is that the government, led by President Obama, will follow the words of chief of staff Rahm Emanuel, who said, “You never want a serious crisis to go to waste. … it’s an opportunity to do things you could not do before.” The government has an almost unparalleled opportunity to use this crisis to “fundamentally and enduringly change the institutions of American society.” Yet the reality is that, for all their flaws, these institutions have had an incredibly successful track record over the past two centuries, this crisis notwithstanding. “What is now being proposed is to jettison all that for the sake of untried theories, because of an economic situation that has arisen in a relatively few years as a result of government interventions with a terrible track record that have led to a crisis that now provides an opportunity for more of the same—in the name of ‘change’.” As the government increases its control over the American economy it essentially buys up the freedom of its people with their own tax dollars.

In The Housing Boom a Bust Sowell provides a plain-English explanation of the economic disaster and one that anyone can read, understand and enjoy. Though the book must have been written in a hurry, it shows none of the usual marks; instead, it is well-written and well-edited. Published just a couple of months ago but dealing with today’s issues, it reads almost like a newspaper or magazine article. If you, like me, have tried and failed to understand the cause of the crisis, this is the place to begin. Sowell is a steady and trustworthy guide.

The American presidential election is almost upon us (even those of us who do not live in the United States). One of the fundamental issues in this election regards distribution of wealth. Many people have become alarmed at Obama’s statements about the redistribution of wealth. I think it is useful to provide a Christian perspective on inequality of wealth. To that end, I am posting the seventh chapter of Wayne Grudem’s book Business for the Glory of God (Used with permission of Crossway Books).

Some inequality of possessions is fundamentally good and provides many opportunities for glorifying God, but also many temptations to sin; and some extreme inequalities are wrong in themselves.

It may seem surprising to us to think that some inequalities of possessions can be good and pleasing to God. However, although there is no sin or evil in heaven, the Bible teaches that there are varying degrees of reward in heaven and various kinds of stewardship that God entrusts to different people. When we stand before Jesus to give account of our lives, he will say to one person,

“You shall have authority over ten cities,”

and to another,

“You are to be over five cities” (Luke 19:17, 19).

Therefore there will be inequalities of stewardship and responsibility in the age to come. This means that the idea of inequality of stewardship in itself is given by God and must be good.

In a similar teaching, Paul, speaking to believers, says, “For we must all appear before the judgment seat of Christ, so that each one may receive what is due for what he has done in the body, whether good or evil” (2 Cor. 5:10). This implies degrees of reward for what we have done in this life. Many other passages teach or imply degrees of reward for believers at the final judgment. Even among the angels, there are differing levels of authority and stewardship established by God, and therefore we cannot say that such a system is wrong or sinful in itself.

Inequalities are necessary in a world that requires a great variety of tasks to be done. Some tasks require stewardship of large amounts of resources (such as ownership of a steel mill or a company that manufactures airplanes), and some tasks require stewardship of small amounts of resources. And God has given some people greater abilities than others, abilities in artistic or musical skills, abilities in mathematics or science, abilities in leadership, abilities in business skills and buying and selling, and so forth. If reward for each person’s labor is given fairly and is based on the value of what that person produces, then those with larger abilities will naturally gain larger rewards. Since people are different in abilities and effort, I don’t think there could be a fair system of rewards for work unless the system had different rewards for different people. Fairness of reward requires such differences.

In fact, God has never had a goal of producing equality of possessions among people, and he will never do so. In the Year of Jubilee (Leviticus 25), agricultural land returned to its previous owner and debts were canceled, but there was no equalizing of money or jewels or cattle or sheep, and houses inside walled cities did not revert to the previous owner (v. 30).

Some people have seen an argument for equal possessions in 2 Corinthians 8, but there Paul did not say that God’s goal was equality. For example, he did not tell the wealthy Corinthians to send money to the poor Macedonians mentioned in 2 Corinthians 8:1-5, but only that they should contribute their fair share in helping the famine-stricken Christians in Jerusalem:

…as a matter of fairness your abundance at the present time should supply their need, so that their abundance may supply your need, that there may be fairness (2 Cor. 8:13- 14, ESV; the Greek word isots also means “fairness” in Col. 4:1, where it cannot mean “equality”).

Nor does the book of Acts teach some kind of “early communism” when it says that believers had all things in common. It is important to look at the passages carefully:

And all who believed were together and had all things in common. And they were selling their possessions and belongings and distributing the proceeds to all, as any had need. And day by day, attending the temple together and breaking bread in their homes, they received their food with glad and generous hearts … (Acts 2:44-46).

Now the full number of those who believed were of one heart and soul, and no one said that any of the things that belonged to him was his own, but they had everything in common. And with great power the apostles were giving their testimony to the resurrection of the Lord Jesus, and great grace was upon them all. There was not a needy person among them, for as many as were owners of lands or houses sold them and brought the proceeds of what was sold and laid it at the apostles’ feet, and it was distributed to each as any had need (Acts 4:32-35).

These texts certainly show an amazing level of trust in God, generosity, and love for one another, all as a result of a remarkable outpouring of the Holy Spirit’s power in a time of great revival. But it is a great mistake to call this “early communism,” for (1) the giving was voluntary and was not compelled by the government, and (2) people still had personal possessions, because they still met in “their homes” (Acts 2:46), and many other Christians later still owned homes, such as Mary, the mother of John Mark (Acts 12:12), Jason (Acts 17:5), Titius Justus (Acts 18:7), many Christians in Ephesus (Acts 20:20), Philip the evangelist (Acts 21:8), Mnason of Cyprus (Acts 21:16, in Jerusalem), Priscilla and Aquila in Rome (Rom. 16:5; 1 Cor. 16:19), Nympha (Col. 4:15), Philemon (Philem. 2), and other Christians in general to whom John wrote (2 John 10).

Immediately after the description of such amazing generosity in Acts 4, there is in chapter 5 the story of Ananias and Sapphira, who lied about the sale price of some land. But Peter tells them there was no need to do this:

“While it remained unsold, did it not remain your own? And after it was sold, was it not at your disposal? Why is it that you have contrived this deed in your heart? You have not lied to men but to God” (Acts 5:4).

It is significant that this story occurs immediately after the paragraph that says “they had everything in common” (Acts 4:32). It reminds us that all of that generosity in Acts 4 was voluntary and was not intended to nullify the ideas of individual ownership or inequality of possessions. When Peter says,

“While it remained unsold, did it not remain your own? And after it was sold, was it not at your disposal?”

he reaffirms the idea of private property and keeps us from the mistaken idea that the church was establishing a new requirement that Christians give up all private property, or that Christians all had to have equal possessions. Acts 5:4 guards against such misunderstandings.

Later in the New Testament, when Paul gives specific instructions to those who are wealthy, he does not tell them to give up all their possessions, but to be generous and to set their hearts on God, not on their wealth:

As for the rich in this present age, charge them not to be haughty, nor to set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy. They are to do good, to be rich in good works, to be generous and ready to share, thus storing up treasure for themselves as a good foundation for the future, so that they may take hold of that which is truly life (1 Tim. 6:17-19).

So we should not think of all inequalities of possessions as wrong, or as evil. In fact, inequalities in possessions provide many opportunities for glorifying God.

If God gives us a small stewardship with regard to material possessions or abilities and opportunities, then we can glorify him through being content in him, trusting in him for our needs, expecting reward from him, and being faithful to our commitments. In fact, those who are poor often give more sacrificially than those who are rich. Jesus saw a poor widow put a penny in the offering, and he told his disciples,

“Truly, I say to you, this poor widow has put in more than all those who are contributing to the offering box. For they all contributed out of their abundance, but she out of her poverty has put in everything she had, all she had to live on” (Mark 12:43-44).

And James tells us,

Has not God chosen those who are poor in the world to be rich in faith and heirs of the kingdom which he has promised to those who love him? (James 2:5).

Thus, the Bible does not teach a “health and wealth gospel” (at least not until heaven!). In this present age, there are inequalities of gifts and abilities, and there are also evil, oppressive systems in the world, and because of these things many of God’s most righteous people will not be rich in this life.

As for those who have large resources, they also are to be content in God and trust in him, not in their riches, and both James and Paul suggest that they face greater temptations (see 1 Tim. 6:9-10; James 2:6-7; 5:1-6). Those who are rich have more opportunities and also more obligation to give generously to the poor (1 Tim. 6:17-19) and to the work of the church (Luke 12:48; 1 Cor. 4:2; 14:12b).

Inequalities in possessions, opportunities, and abilities provide many temptations to sin. There are temptations on the part of the wealthy or those who have other kinds of large stewardships to be proud, to be selfish, to think too highly of themselves, and not to trust in God. On the other hand, those to whom God has entrusted less have temptations to coveting and jealousy and not valuing their own personal position and calling in life, to which God has called them, at least for the present time.

In addition to this, there are some extreme kinds of inequalities in possessions and opportunities that are wrong in themselves. Poverty will not exist in the age to come, and so Jesus’ statement, “the poor you always have with you” (John 12:8) is best understood to mean “always in this age.” It does not mean that poverty will last forever, even into eternity. Poverty is one of the results of living in a world affected by sin and the Fall, and by God’s curse on the productivity of the earth after Adam and Eve sinned (Gen. 3:17-19).

We should seek to help the poor and seek to overcome their poverty. John says,

If anyone has the world’s goods and sees his brother in need, yet closes his heart against him, how does God’s love abide in him? (1 John 3:17).

And when Paul went to Jerusalem to confirm the validity of his teaching in conversation with the apostles there, he found that they were in agreement, and then added,

they asked us to remember the poor, the very thing I was eager to do (Gal. 2:10; see also Matt. 25:39-40; Acts 2:45; 4:35; Rom. 12:13; 15:25-27; Eph. 4:28; Titus 3:14; Heb. 13:16).

The emphasis in the New Testament is on helping poor Christians, especially those who are near us or who come to our attention (see 1 John 3:17; Matt. 25:39-40; Rom. 15:25- 27; 2 Corinthians 8-9). But it is also right to help non- Christians who are poor and needy, as we see in the parable of the Good Samaritan who helped someone in need from a different religious background (Luke 10:25-37). We also see it in Jesus’ teaching, where he told us,

“love your enemies, and do good and lend, expecting nothing in return, and your reward will be great, and you will be sons of the Most High; for he is kind to the ungrateful and the evil” (Luke 6:35; compare also Jesus’ practice of healing all who came to him, not just those who believed in him as the Messiah).

So the New Testament emphasis on helping the poor shows us that there is an extreme kind of inequality that is not good, a point where people are in poverty and should be helped. (Just what “poverty” is will vary from society to society and will also vary over time within any one society.)

But is there an opposite extreme of having too much wealth? In contrast to many admonitions to help the poor, there is no corresponding command in the New Testament to take some wealth away from the very rich, and there is no teaching that a large amount of wealth is wrong in itself. But there are strong warnings against spending too much on oneself and living in self-indulgent luxury:

Come now, you rich, weep and howl for the miseries that are coming upon you… . Your gold and silver have corroded, and their corrosion will be evidence against you and will eat your flesh like fire. You have laid up treasure in the last days… . You have lived on the earth in luxury and in self-indulgence. You have fattened your hearts in a day of slaughter (James 5:1, 3, 5).

James does not here imply that all those who are rich are evil, for in this same passage he speaks of the fraud and murder committed by these rich people, implying that he is speaking about the rich who are wrongdoers (James 5:4, 6). Paul says that Timothy should tell “the rich in this present age” that they are “not to be haughty, nor to set their hopes on the uncertainty of riches, but on God, who richly provides us with everything to enjoy.” Paul does not say that the rich are to give away all their wealth, but that they are “to do good, to be rich in good works, to be generous and ready to share” (1 Tim. 6:17-18).

Yet James clearly warns against a kind of “luxury and self-indulgence” that is wrong, that shows little or no concern for others, and that does not take seriously the stewardship obligations that God bestows along with great wealth. It seems that those who are wealthy can too easily slip beyond a level of spending on themselves that is appropriate to their place in life and spend excessively and ostentatiously on themselves while neglecting to give generously to others.

But the distortions of something good must not cause us to think that the thing itself is evil. The evils of poverty and excessive, self-indulgent wealth must not cause us to think that God’s goal is total equality of possessions, or that all inequalities are wrong. Inequalities in abilities and opportunities and possessions will be part of our life in heaven forever, and they are in themselves good and pleasing to God, and provide many opportunities for glorifying him.

Last week I added a poll to this site and asked where you buy the majority of your books. The results really surprised me. As of this moment Amazon has a clear lead with 55% of the votes. That means that half of us buy the majority of our books from Amazon instead of the local Christian bookstore or one of the many online Christian retailers. There are almost three times more votes for online retailers as brick-and-mortar retailers. While I’ll grant that this poll is far from scientific, it does show a clear trend (and one that makes sense of the fact that so many Christian bookstores are closing their doors).

In the comments, of which there are currently 89, many people indicated that Christians should do better than Amazon—that we should go out of our way to support Christian-owned businesses (see, for example, this one or this one).

I thought this was worth thinking and talking about and would love to hear some feedback. Do you think Christians should go out of their way to support Christian-owned businesses? Is this a moral imperative? Or should Christians feel free to shop wherever is most convenient or wherever offers the best prices? What is our obligation to other Christians in such matters?

The Economic Stimulus Payment is on its way. In the coming weeks Americans will be receiving a check, courtesy of the government. Eligible people will receive up to $600 ($1,200 for married couples), and parents will receive an additional $300 for each eligible child younger than 17. This is going to be quite the windfall for many families.

John Piper recently wrote a short blog post he entitled Economic Stimulus Payment & Christ in which he encouraged Christians “to be radically creative and hedonistic” with this money. “Before the check comes dream of some person or ministry which might make much of Christ because you treasured him above your next home project. The reason God created money and enabled us to earn it is so that we could show by the way we use it that money is not our treasure, Christ is. That’s why the checks are coming. So we can make Christ look great.”

Because I live in Canada, the fifty-first state of the Union, I will not be receiving this payment. However, I did have a question about it. I began to wonder, as have others, whether Christians are in some way morally obligated to spend this money (thus stimulating the economy) or whether they can legitimately give it to one ministry or another or perhaps use it to pay down some high interest credit card debt. And that opened up a few other questions. I turned to David Kotter, whom you may know as the Executive Director of The Council on Biblical Manhood and Womanhood and a regular contributor to the CBMW Blog. Before turning to ministry and accepting his current position David taught economics and contributed to Wayne Grudem’s Business for the Glory of God (and this followed a stint as a finance manager for Ford Motor Company). He seemed an ideal candidate to answer a few questions about the intersection of theology and economics.

So I offer this primarily to my American readers (which is most of you, really) and hope it benefits you.

What is the purpose of the Economic Stimulus Package?

The Economic Stimulus Act of 2008 is primarily intended to remedy slower growth and address short-term economic uncertainties by allowing “Americans to keep more of their money to stimulate consumer spending,” according to the White House fact sheet. The assumption is that most citizens receiving a rebate check will spend it quickly on domestic goods and services. Since every purchase funds a paycheck for someone else, the hope is that the suppliers will in turn spend part of their added income on yet more products, and so on and so forth until there is a multiplied boost to the U.S. economy.

While not explicitly stated, this law also seems to be designed to give a boost to presidential and congressional approval ratings. When economic storm clouds are on the horizon in an election year, it is helpful for politicians to be able to point to something that they have done to help. Few things improve the mood of voters like receiving an check in the mail.

Is this a workable solution to an economic problem? Or is this merely a means to a very short-term rally?

Unfortunately, this stimulus plan fits the scenario of “robbing Peter to pay Paul.” A tax rebate is just the return of money that was previously taken from someone’s paycheck. While people receiving the checks may spend more, the workers who are funding the checks will certainly spend less. Even if the money is borrowed, it is borrowed from someone who won’t be spending. This offsetting effect is why Milton Friedman was fond of saying, “There’s no such thing as a free lunch.”

To use an everyday example, the price of corn has dramatically increased, and farmers have spent their growing profits on updated tractors, better hybrid seeds and other farm goods. On the other hand, people paying higher prices for food have less money to spend on other goods. The stimulus in spending in the agricultural sector is exactly offset by lower consumer spending in other parts of the economy. No free lunch here, nor with the tax rebate.

Nevertheless, there may be a small boost or short-term rally as money is taken from people who are more likely to save and given to others who are more likely to spend. According to the Internal Revenue Service, 97% of all federal income tax receipts were paid by half of the taxpayers with adjusted gross incomes above the $30,881 median in 2005. The other half of the taxpayers accounted for only 3% of tax receipts, and in fact 42 million paid no taxes or received net payments from the government in the form of funded tax credits. Under the Economic Stimulus Act, the people who paid little or no taxes will all receive maximum payments (not actually “rebates”). Higher earning taxpayers who tend to save more and pay the vast majority of income taxes will not receive a tax rebate.

In short, many people will receive a rebate from someone else’s taxes, and that makes it easier to spend more.

The government has earmarked this money specifically so Americans can pump the money back into the U.S. economy. The governments wants its citizens to spend this money and to spend it fast! Do you feel that there is a moral obligation to obey their wishes by spending this money?

The Stimulus Act does not explicitly require consumer spending with the checks, so Christians are not morally obligated to spend money quickly in order to be “subject to the governing authorities” (Romans 13:1).

But the law does rely on what the Wall Street Journal calls “The Splurge Urge.” People are more likely to spend newly found money, like an unexpected bonus or one-time tax credit, than they are to splurge with a hard-earned paycheck. For this reason, when the checks arrive Christians should avoid undue excitement and especially pray for self-control. Jesus specifically cautions, “Take care, and be on your guard against all covetousness, for one’s life does not consist in the abundance of his possessions” (Luke 12:15).

Is there a possibility that believers could negate some possible good that the government is anticipating?

Christians are sojourners and exiles in this world (1 Peter 2:11). Therefore it should not be a surprise to anyone that we do not fit into the mainstream of the national economy. Our values are fundamentally different and we are accountable to God for our financial decisions. Paying off debts and saving money is wise stewardship but not the best for the aggregate economy in the short term. Sending money from a stimulus check to a missionary overseas definitely will not boost the domestic economy in the way the government hopes, but it is still pleasing to God.

Over the long term, however, Christians generally make outstanding economic citizens who “work heartily, as for the Lord and not for men” (Colossians 3:23), subdue creation in their daily jobs, avoid lavish spending, give generously and save diligently. The overall economy would improve dramatically if everyone used the tool of money in biblical ways.

How should Christians think biblically about these economic stimulus payments?

For many Christians, they are actually being entrusted by God with the earnings of someone else. For other believers, this is simply the return of their own money and should be treated like any other financial stewardship. All of the typical considerations for wise stewardship should apply as believers give, save, and spend this money.

Hopefully, many believers are already living with a “wartime” mindset and are spending less than they earn. This stimulus check is simply more resources to be used for Kingdom work. John Piper was exactly correct in encouraging believers to use these rebate checks, and all other money of which they are stewards, to make much of Christ. Piper says,

Nobody in the world will see you spend your money on yourself and conclude that Christ is your treasure. They will assume you are just like them, no matter how loudly you thank God for this boon. It doesn’t mean you shouldn’t spend it on yourself (the way we do with most of what we earn). But everything we do can look different from the world — eat, pay utilities, fill up the car, wear clothes (even thrift store clothes). And yes, we hope (somehow) that spending on ourselves in some way contributes to our being more Christ-exalting people.

As Christian voters, we should not be fooled by fiscal maneuvers that take money from one group of people and give it to another in the name of boosting the overall economy. The economy only grows if more goods and services are produced, not when money is transferred from one person to another.

Finally, we can be grateful that economic stimulus plans are restricted to this world. The One who spoke the universe into existence and owns the cattle on a thousand hills does not need a plan to boost the domestic prosperity of heaven. Jesus Christ is the ultimate treasure whose glory will infinitely outshine any pleasure we might receive from a rebate check.