econotheology

Really? The "Dismal Science" and the increasingly irrelevant discipline of theology?

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“Inherent right to” free banking

I was reading the Wall Street Journal this morning, as I do most mornings (ahh the benefits of underemployment). Anyhow, I was reading a short little article about Timothy Geithner correcting statements President Obama made about what banks were and weren’t allowed to do. Obama’s direct quote was, “Banks don’t have some inherent right just to, you know, get a certain amount of profit.” This was in reference to Bank of America’s decision to charge $5 to any person using their debit cards to make purchases.
First of all, I am glad that Geithner has clarified that the government will not decide how much a bank can profit. It is just my opinion, but I think it would be a scary sign of how much populist opinion could control our government. Banks and Bankers are not all bad, but they do want to make a profit. That is their job. These are not credit unions or not-for-profit banks. And, the idea that the government should impose limits on what some entity can or can’t earn is a scary draconian proposition.
Second, the thing that I find most curious about this is just how free our banking really is in this country. If you are student, you can almost certainly get free checking. If you have some kind of job with direct deposit, you don’t pay anything for banking (at least at BofA). Yes, in the US, we have to pay over draft fees. It is a slap on the wrist and a small immediate loan that the bank gives you so you don’t look like a fool at the checkout counter. What an amazing time we time we live in? We can get money, in a moment’s notice, when we don’t have any! No it’s not free, but it shouldn’t be. Now, individuals will have to pay $60 a year for a service that allows them to have at their disposal all of their money without having to go to the ATM. It can be carried in a neat little card, that fits into a wallet and can be used everywhere from restaurants, to our little town market here in Boise. I have literally bought fruit on the side of the road with a debit card. Unbelievable! And now, I am being asked to pay a little for that service. Yeah I am bummed. I don’t want to give up $60 a year. But, this is not so bad. Go with me for a moment. When I lived in France, I had to pay 7 euro/month just to bank at Societe Generale. I had never had to pay anything to bank until I went to Europe. This is the norm there. Everyone pays a little to bank.*
*On a semi-related note, everyone pays with their debit cards, never credit cards. Most people are fully aware of exactly how much money they have at a given time and spend accordingly. In 2006, less than 50% even owned real credit cards. Now, I am sure it depends on the bank, but I didn’t have overdraft protection, so my card was just declined. I had no access to money if I didn’t have it, which might be in the long run a better system.
Finally, as my insider industry source has told me, this amount is probably what was lost because of a certain addition to the Dodd-Frank bill that passed in Congress during the height of the populist outrage against banks. In the bill, banks were limited in what they could charge companies who used the service of charging at the counter. So, the companies were protected and it has come out in consumer fees. Tit for tat. It was always going to happen my source tells me. And NONE, of any of this, has anything to do with sub-prime lending, credit default swaps, or middle-men taking huge commissions on finding buyers and sellers for this CDOs, or any of the other financial innovations that helped plunge our economy into recession in 2008.
So, we pay $60 a year to use our debit cards and now our President has made it a national issue. What a crazy world we live in.

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Can you love someone and disagree with them?

I think one reason that I have come to increasingly enjoy discussing and learning about economics is that “feelings” play no role in the discussion. If you are a Chicago School Economist, you believe in the free market and limiting the role of the government intervening, let things occur as the will. If you are Keynesian, you think that in order to jump start an economy is for the government to spend money. You have your reasons for why you believe either position is the right one for the situation that the economy is in, but at the end of the day the disagreement is over an arguable position, not your feelings. The problem is the recession. Different people come up with different solutions based on their own study of economic theories. Economics is not perfect and is difficult to test because there is no real lab for economy theories to be tested in. However, the discussion does not fall into the realm of the way people feel. Moreover, it does not have to fall into ad hominem attack. “Your wrong cause your stupid.” I guess rarely is it that simple but that is what most debates feel like on the popular level. On the political level, “If you cared about the poor, you would be a democrat.” This alone is not a valid argument. On a theological level, “if you believed the Bible, you would believe that homosexuality is wrong.” Again, this is not valid argument. The premise that believing in the Bible requires that you believe homosexuality is wrong does not hold for all people.
But, whatever your view on homosexuality, why is it that we cannot disagree with someone and still love them? Why can’t you say, “I think your wrong, but that doesn’t mean I hate you.” One thing that makes theology more fascinating to me than economics is that helps shape a total view of the world. Theology can can supervene on matters of psychology as well as the marketplace. What theologians can learn from the economic, and for that matter philosophic world, is that to say someone is wrong or has an invalid argument is not say that you do not love them or care about their feelings. Just the same that you should not feel bad for telling a child that 2+2 does not equal 5 you should also not feel bad for telling someone that it is not a valid argument to say that “if a liberal tells you something it is wrong.” (Or conservative tells you something from the opposite end of the spectrum.)
In theology, we tend to come up against this stuff when dealing with people who theologically disagree with. I am living in a place that has a large population of Latter Day Saints. I have met protestant Christians here who disagree with the LDS church who are unwilling to love LDS people just because they disagree with them. They seem to think they are unworthy of any accolades just because they are theologically different in some cases.
On a broader societal level, I think that the default position, especially with religion, is rather than to say that someone is right or wrong is to say that they are all the same. Or, “that’s your opinion.” We tend to fall into a bland pluralistic view that downplays that there is any difference and falls merely into the realm of feeling. “Well I feel that Jesus is God.” Or, “I feel that the Book of Mormon is new revelation.” When in reality, to hold that the view that revelation is ongoing is arguable as right or wrong. The standard protestant position is that Scriptural revelation ended with the New Testament. It is a right or wrong position. The LDS position is necessarily anti-thetical to the Christian view. AND THAT’S OK! This does not mean that an LDS person is unlovable. This does not mean that they should be hated and shunned society. I honestly believe that the lack of true philosophical and logical education has harmed so greatly that we cannot have genuine disagreements. (This carries over into the political realm as well, but I am less concerned with that for the moment.) Most of society acts as if saying someone is wrong is a personal attack. It is not! People have conflicting and disagreeable positions. True dialogue actually happens between religions and people who have disagreements when we recognize those disagreements and do not try to gloss over them as if they don’t exist or explain them away into ridiculous untruths like all religions are just the same. They aren’t! And, this won’t help with religious conflict because most adherents of the respective faiths will not just accept this bland position that is popularized by the tolerance police.
This is where the challenge of 1 Peter 3:15 is truly felt, “Always be prepared to give an answer to everyone who asks you to give the reason for the hope that you have. But do this with gentleness and respect.” Being able to love someone and respond to them with gentleness and respect is only a challenge if you recognize a difference and then try to love, co-exist, and discuss with them the point of contention. And chances are you won’t agree when you are done giving an answer. But, in the word’s of the Weepies, “the world spins madly on.”
I am probably rambling a bit here, but it’s just some stuff I have been thinking about in my new world here in Idaho. Please keep reading and give me some comments. Maybe I just haven’t said anything controversial enough to have a comment or response. Cheers!

The Oracle of Omaha Strikes Again

As the economy continues to sputter and estimates continue to be revised, one man seems to be able to stir up the media and the web 2.0 world. That man, the “Oracle of Omaha,” “the Woodstock of Capitalism”, Warren Buffett.
Yesterday, as many of you have probably heard, Buffett’s Berkshire Hathaway will invest $5 billion in Bank of America, rising the stock of BoA nearly 25%. As the Bloomberg article relates in the previous link, this is of course not the first time Buffett has made major investments in companies and made huge returns. In the middle of the mortgage crisis, Buffett made a $5 billion investment in Goldman Sachs and made a sweet little return of $1.7 billion.
Buffett also made news in the last few weeks by his seemingly strange challenge to Congress, “Buffett said the rich are “coddled” by Congress “as if we were spotted owls or some other endangered species. While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks,” Buffett wrote in a Sunday New York Times Op-ed.” Liberals cheered everywhere on my Facebook news feed. This is one area where the Sage of St. Louis, or my dad, and Buffett part ways. But, be that as it may…
Why I am bringing this up? When is the last time in history one man has had so much power? One investment, one statement, and the world pays total attention. Of course, through history, there have been many men, and women, of power who usually assert their strength through military might, i.e. Alexander the Great, Julius Caesar, Napoleon, Hitler etc. Their have been men who have had great ideas that in the long term have changed the course of Western history, Socrates, Plato, Jesus, Muhammad, etc. But, what makes Buffett so incredible is the age that he lives in allows him to change multi billion dollar corporations in one quick moment. Some of these corporations are the very ones that in the past have been deemed “too big to fail,” for the good of the rest of the country and by relation the world. If America goes down, so does China, so does Europe and on and on. We have seen this domino effect in full force over the length of this recession (which looks like it is moving towards a double dip). Americans often pride themselves on their individualism and their belief that their actions effect only themselves. This is the way we talk about our ethics. “I am going to do what’s right for me.” Or, “I need to do what I need to do.” Granted, Buffett is in a pretty special role, and that is why I brought him up. He seems to have a unique interconnectedness to the world. But, through our decisions we have given people like him that power. We continue to be dependent on large banks and the government to provide credit for our schooling and our mortgages. Especially Americans have banked on the idea that credit is good in all cases and we are beginning to see that this might not be the best long term perspective.
This is a crucial intersection to me of theology and economics. People like Warren Buffett make decisions that will effect the entire country. I am actually somewhat comfortable with Buffett at that helm. Freakonomics has run a podcast about the way Buffett raised his children and seems to be an extremely ethical and conscientious person. Paul in the New Testament writes, “each of you should look not only into your own interests but also to the interests of others.” The whole Levitical legal code in the Hebrew Bible was given in order for them to live together and live well as a community. The 7 year jubilee and many other laws depict a community that is looking out for all people who will be effected. The problem with the American mentality is that we don’t think like a community. We think like individuals. Our perspectives are too often about instant gratification for ourselves and not up the impending disaster that will come not only to others but us too. I am not saying we are always going to act altruistically or without some self-interest. We have to act in some way with a delayed self-interest but it has to be in a larger community self-interest. What happens to us a people at large, will ultimately effect us as individuals. My dad often says, “a rising tide sinks all ships.” This delayed self-interest has to be able to think beyond what feels good at the moment, despite the difficulty that ensues. Another one of my favorite podcasts, not related to economics, is Radiolab from WNYC. They did a show about the difficulty of forcing that part of ourselves that only seeks instant fulfillment at the expense of long term health.
So what am I arguing for? Economics looks primarily at incentive. I am thankful that Warren Buffett’s incentives are to make money, but he is also concerned about the good of the community he is looking in. I am holding him up as an example, for Americans to consider how their actions although seemingly only effecting themselves have a much larger impact. And this large impact will in some cases turn back on them. I think that theology and ethics should guide the interests that Economics studies. But these interests should be long view interests. Not immediate self-gratifying ones. Thoughts? Please make a comment! I might be totally wrong.