Prophetic Thoughts on the Current Economy
Mark Galli at Christianity Today does it again. He slaps us awake with some timely lessons from Amos the prophet (that’s in the Old Testament, back half… the part you skip over getting to Matthew).
Anyway… read the article.
“Crises are the ultimate in painful learning experiences. The United States cannot afford to squander this opportunity. Runaway consumption must now give way to a renewal of saving and investment. That’s the best hope for economic recovery and for America’s longer-term economic prosperity.” — Stephen S. Roach on a NY Times commentary.
These are also opportunities to learn again what it is to TRUST in the Lord. We’ve leaned on our own ingenuity for far too long. We need to heed this call to return to a trust in the Lord.
“Crises are the ultimate in painful learning experiences. The United States cannot afford to squander this opportunity. Runaway consumption must now give way to a renewal of saving and investment. That’s the best hope for economic recovery and for America’s longer-term economic prosperity.” — Stephen S. Roach on a NY Times commentary.
These are also opportunities to learn again what it is to TRUST in the Lord. We’ve leaned on our own ingenuity for far too long. We need to heed this call to return to a trust in the Lord.
Loss of social networks?
David Brooks wrote an interesting column in the NY Times this week. He made observations about the shift in the middle class because of the recession. These are his last paragraphs:
“They will suffer lifestyle reversals. Over the past decade, millions of Americans have had unprecedented access to affordable luxuries, thanks to brands like Coach, Whole Foods, Tiffany and Starbucks. These indulgences were signs of upward mobility. But these affordable luxuries will no longer be so affordable. Suddenly, the door to the land of the upscale will slam shut for millions of Americans.
The members of the formerly middle class will suffer housing reversals. The current mortgage crisis is having its most concentrated effect on people on the lowest rungs of middle-class life — people who live in fast-growing exurbs in Florida and Nevada that are now rife with foreclosures; people who just moved out of their urban neighborhoods and made it to modest, older suburbs in California and Michigan. Suddenly, the home of one’s own is gone, and it’s back to the apartment complex.
Finally, they will suffer a drop in social capital. In times of recession, people spend more time at home. But this will be the first steep recession since the revolution in household formation. Nesting amongst an extended family rich in social capital is very different from nesting in a one-person household that is isolated from family and community bonds. People in the lower middle class have much higher divorce rates and many fewer community ties. For them, cocooning is more likely to be a perilous psychological spiral.
In this recession, maybe even more than other ones, the last ones to join the middle class will be the first ones out. And it won’t only be material deprivations that bites. It will be the loss of a social identity, the loss of social networks, the loss of the little status symbols that suggest an elevated place in the social order. These reversals are bound to produce alienation and a political response. If you want to know where the next big social movements will come from, I’d say the formerly middle class.”
First of all, I think, “How can he talk about loss of social networks when we have these things like Facebook, myspace, etc.?”
Then, I think of how these places have actually diminished the ability to have face to face contact, making it tougher to communicate in some ways. There are great advantages of things like Facebook, blogs, etc. There are also disadvantages. I have found we may have more “social networks” but fewer friends. We may have 1100 “friends” on a network site, but to sit and have a conversation with someone face to face would cause many people to break out in a cold sweat.
Luckily, the recession probably won’t hit so hard that we can’t afford internet tools so we can keep right on avoiding face to face contacts!
Loss of social networks?
David Brooks wrote an interesting column in the NY Times this week. He made observations about the shift in the middle class because of the recession. These are his last paragraphs:
“They will suffer lifestyle reversals. Over the past decade, millions of Americans have had unprecedented access to affordable luxuries, thanks to brands like Coach, Whole Foods, Tiffany and Starbucks. These indulgences were signs of upward mobility. But these affordable luxuries will no longer be so affordable. Suddenly, the door to the land of the upscale will slam shut for millions of Americans.
The members of the formerly middle class will suffer housing reversals. The current mortgage crisis is having its most concentrated effect on people on the lowest rungs of middle-class life — people who live in fast-growing exurbs in Florida and Nevada that are now rife with foreclosures; people who just moved out of their urban neighborhoods and made it to modest, older suburbs in California and Michigan. Suddenly, the home of one’s own is gone, and it’s back to the apartment complex.
Finally, they will suffer a drop in social capital. In times of recession, people spend more time at home. But this will be the first steep recession since the revolution in household formation. Nesting amongst an extended family rich in social capital is very different from nesting in a one-person household that is isolated from family and community bonds. People in the lower middle class have much higher divorce rates and many fewer community ties. For them, cocooning is more likely to be a perilous psychological spiral.
In this recession, maybe even more than other ones, the last ones to join the middle class will be the first ones out. And it won’t only be material deprivations that bites. It will be the loss of a social identity, the loss of social networks, the loss of the little status symbols that suggest an elevated place in the social order. These reversals are bound to produce alienation and a political response. If you want to know where the next big social movements will come from, I’d say the formerly middle class.”
First of all, I think, “How can he talk about loss of social networks when we have these things like Facebook, myspace, etc.?”
Then, I think of how these places have actually diminished the ability to have face to face contact, making it tougher to communicate in some ways. There are great advantages of things like Facebook, blogs, etc. There are also disadvantages. I have found we may have more “social networks” but fewer friends. We may have 1100 “friends” on a network site, but to sit and have a conversation with someone face to face would cause many people to break out in a cold sweat.
Luckily, the recession probably won’t hit so hard that we can’t afford internet tools so we can keep right on avoiding face to face contacts!
Greed is Good
The quote from the movie “Wall Street” is still echoing today. It’s how we are in this mess right now. It’s all of us.
From my own city, a story of greed hits a major ministry. A huge giver with big business interests gets involved with a major ministry helping drug addicts and alcoholics. His company then asks for a loan as an investment, promising HUGE returns in interest. The ministry looks it over and goes for it. They do indeed get nice returns for quite some time. Then, it starts to dry up. The payments get delayed. Now, the big donor is under federal investigation.
The big donor should have a lot to answer for because he probably pulled the wool over the ministry’s eyes. The ministry should have a lot to answer for as well. Maybe we don’t call it “greed” that lets them think they can have huge returns on a loan, but it sure isn’t wisdom. When it all seems too good to be true…
Ministries need to learn to hold back their excitement. They also need to quit looking for only the “heavy hitters,” ESPECIALLY “heavy hitters” who want to promise a return on investment! If “heavy hitters” want to GIVE the money to them, that’s probably well and good. But when it gets to the slick talking part…look out.
Look, we all want to have HUGE returns on investment. We all want guarantees. The current economy has us shaken, and too many people are ready to put their cash in a coffee can and bury it in the back yard. We are a nation of extremes. It makes me want to say, “KNOCK IT OFF!”
Investing is good. Greed is not. Invest for the long term. Stay within your risk tolerance. Know what you are investing in. Diversify.
Get away from debt and stay away.
Give to the Lord. Don’t look for a loan to your church. Just give it. Don’t look for a “return on your investment.” Just give it.
We need wisdom and prudence in our culture again. And that includes the church.
Greed is Good
The quote from the movie “Wall Street” is still echoing today. It’s how we are in this mess right now. It’s all of us.
From my own city, a story of greed hits a major ministry. A huge giver with big business interests gets involved with a major ministry helping drug addicts and alcoholics. His company then asks for a loan as an investment, promising HUGE returns in interest. The ministry looks it over and goes for it. They do indeed get nice returns for quite some time. Then, it starts to dry up. The payments get delayed. Now, the big donor is under federal investigation.
The big donor should have a lot to answer for because he probably pulled the wool over the ministry’s eyes. The ministry should have a lot to answer for as well. Maybe we don’t call it “greed” that lets them think they can have huge returns on a loan, but it sure isn’t wisdom. When it all seems too good to be true…
Ministries need to learn to hold back their excitement. They also need to quit looking for only the “heavy hitters,” ESPECIALLY “heavy hitters” who want to promise a return on investment! If “heavy hitters” want to GIVE the money to them, that’s probably well and good. But when it gets to the slick talking part…look out.
Look, we all want to have HUGE returns on investment. We all want guarantees. The current economy has us shaken, and too many people are ready to put their cash in a coffee can and bury it in the back yard. We are a nation of extremes. It makes me want to say, “KNOCK IT OFF!”
Investing is good. Greed is not. Invest for the long term. Stay within your risk tolerance. Know what you are investing in. Diversify.
Get away from debt and stay away.
Give to the Lord. Don’t look for a loan to your church. Just give it. Don’t look for a “return on your investment.” Just give it.
We need wisdom and prudence in our culture again. And that includes the church.
More thoughts on the financial crisis…
Today the House voted DOWN the financial bailout package. It was not exactly a slam dunk for either party. The Democrats had 40% of their members vote against the package and the Republicans had over 60% vote against the bill. More on that later.
There are heated debates flowing over the meaning of all this. Clearly the markets did not like this news, as the Dow plunged 777 points (a 7% drop). Nasty stuff.
A couple of articles that gave me clarity as to why I was so nervous about the bailout:
One is from Randall Holcombe of Florida State University.
The other is from The Wall Street Journal.
There are certainly good points to be made FOR the bailout as well. Go find them for yourself.
What disturbs me so deeply is our American arrogance. I say OUR. It’s not a Republican thing or a Democrat thing. It’s not a Christian thing or a non-Christian thing. It’s all of us.
We are in this situation because of greed at all levels. It’s not just the greedy billionaires who want to make a faster million bucks. It’s Joe Taxpayer, like myself, who get caught up in wrong thinking that the housing market will always go up, so I’ll just max out my credit cards and housing equity.
The arrogance is there is NO ONE willing to step up and ask for forgiveness. What I find is everyone is willing to step up and point a finger. Republicans point fingers at Democrats. Democrats return the favor. The Church in America is not leading the way in repentance, either.
We look like a nation of fools right now. Everyone wanting to point the blame at someone else. Everyone having their hand out wanting the government to bail them out of their own greedy mistakes.
I am a greedy American and I apologize for my gross sins over the past few years. I may not be a millionaire banker or Wall Street CEO. I may not be a politician. But I am an American and I have acted as greedily as any of them. I am sorry. This is as much my fault as it is the next person’s.
God, have mercy on our nation. You are the One who is the Healer. Yet, the Healer is only effective when we will admit we are sick. Lord, our nation is sick. The Church, the unchurched… all of us. We are sick. We are full of greed and arrogance and we need your healing and forgiveness in our land.
Not my brother, not my sister, but it’s ME, O Lord… standing in the need of prayer.
More thoughts on the financial crisis…
Today the House voted DOWN the financial bailout package. It was not exactly a slam dunk for either party. The Democrats had 40% of their members vote against the package and the Republicans had over 60% vote against the bill. More on that later.
There are heated debates flowing over the meaning of all this. Clearly the markets did not like this news, as the Dow plunged 777 points (a 7% drop). Nasty stuff.
A couple of articles that gave me clarity as to why I was so nervous about the bailout:
One is from Randall Holcombe of Florida State University.
The other is from The Wall Street Journal.
There are certainly good points to be made FOR the bailout as well. Go find them for yourself.
What disturbs me so deeply is our American arrogance. I say OUR. It’s not a Republican thing or a Democrat thing. It’s not a Christian thing or a non-Christian thing. It’s all of us.
We are in this situation because of greed at all levels. It’s not just the greedy billionaires who want to make a faster million bucks. It’s Joe Taxpayer, like myself, who get caught up in wrong thinking that the housing market will always go up, so I’ll just max out my credit cards and housing equity.
The arrogance is there is NO ONE willing to step up and ask for forgiveness. What I find is everyone is willing to step up and point a finger. Republicans point fingers at Democrats. Democrats return the favor. The Church in America is not leading the way in repentance, either.
We look like a nation of fools right now. Everyone wanting to point the blame at someone else. Everyone having their hand out wanting the government to bail them out of their own greedy mistakes.
I am a greedy American and I apologize for my gross sins over the past few years. I may not be a millionaire banker or Wall Street CEO. I may not be a politician. But I am an American and I have acted as greedily as any of them. I am sorry. This is as much my fault as it is the next person’s.
God, have mercy on our nation. You are the One who is the Healer. Yet, the Healer is only effective when we will admit we are sick. Lord, our nation is sick. The Church, the unchurched… all of us. We are sick. We are full of greed and arrogance and we need your healing and forgiveness in our land.
Not my brother, not my sister, but it’s ME, O Lord… standing in the need of prayer.
Thoughts on the Economic Crisis
As a pastor and financial advisor, I find myself more glued to the current economic situation and sorting it out with all kinds of paradigms.
An article I read by some Time reporters spurred my thinking some more. They were very cutting in their analysis of the current situation. For the most part, I found them to be right.
Some observations:
First of all, how is that we are so good at making an analysis after the fact? We look at all these factors and go, “DUH!” It’s so obvious! Yet, we marched right into this mess.
Basically, the writers in the Time article blamed Wall Street firms, credit rating firms (like Moody’s), the Bush administration (of course), hedge funds, mortgage lenders, AIG, and Ronald Reagan. (Just kidding on that last one.)
As to all the other parties listed, I would say, “I agree.” Wall Street firms got greedy, just like they did with technology in the late 90′s. Just like they did with leveraged buyouts in the 80′s. Just like they did… Okay… get the picture there?
Credit ratings firms did not fully understand these silly mortgage instruments made up by mortgage companies and sold off. They did not rate them correctly in the first place, so investment banks, not checking into those silly little instruments, either, bought them up seeing a good credit rating from the likes of Moody’s. BAD MOVE!
The current proposed bailout (along with a strong refusal to bring regulation into some areas that badly needed it) is where they blame the Bush administration. Look, everyone is blaming Bush for everything. This isn’t new. They’ll try to nail him for the Kennedy assassination somehow. However, I personally do not favor the current bailout proposal and think this constant government assistance idea for major corporations will only drag down the average taxpayer a lot more than necessary.
So, if all those entities are to blame, who did they leave out?
US.
Joe Taxpayer. Josephine Taxpayer.
We who looked to leverage every last dollar of equity in our homes. We who kept accepting those silly credit card offers in the mail, then promptly racked them up to the limits. We who believed the economy could only keep going up, so we spent like it, but had no savings to back it up.
Now, we are raiding our 401k plans to live today. We WOULD take out a line of credit on the house, but our house valuations have tanked and we’ve leveraged it to the hilt already.
At every level GREED has raised its ugly head and we have patted it. We have fed it. Every level. Now, we are paying for it at every level.
We need to ask forgiveness for living outside biblical principles of money management. Then, we need to get to work to get our own households in order. And by WE, I do mean ME as well. There is a lot I’ve had to take to the Lord on this one. It’s not easy, but it’s necessary.
God, help us!
