The Christian Economist | Dave Arnott discusses Christian economics, conservative economics, and how they relate to current events.
#195 From God to Government
Adam and Eve ate the apple because they wanted to be God. That desire has not gone away, and recently, we are seeing even more evidence of it.
Our society is moving from “God to Government” and the implications don’t look great.
Christian Worldview to secular worldview
The Christian Worldview says God created a perfect world, fallen humans have messed it up, and we find redemption through Jesus Christ. Support for abortion provides ample evidence that many people don’t believe humans are created by God; I will cite many examples of the denial of the fallen nature in the next few statements. If we’re not fallen, who needs a savior for redemption?
Fallen to not fallen
The defund the police movement was based in the assumption that humans are not fallen. If you just leave them alone, peace will break out. This is not a theoretical belief system. It’s been proven over and over again, that if you reduce punishments, crime increases, as it is in America today.
From serving God to being “god”
In the book The Rise & Triumph of the Modern Self Carl Trueman explains why people believe they are “A woman trapped in a man’s body,” or the opposite. The supposition is objectively false, but the concept of expressive individualism has led folks to believe they can do it. Maybe it’s the best evidence for the departure from the Christian Worldview, because people don’t believe they were created by God, so they can create themselves. Frightening.
Supply side to demand side
Keynesians believe that during an economic downturn, the economy should be stimulated by shifting the demand curve out. The measure of that effort is called the Philips curve, and it has been shown to work in the short run, but not in the long run. In the long run, you end up with employment returning to its natural rate, but with the added debt that was accumulated to shift the demand curve. When shown this, John Maynard Keynes agreed, and responded, “In the long run, we’re all dead.” What a selfish thing to say. In about twenty years, I might be dead, but my Dallas Baptist University sophomores will be in the middle of their careers, struggling to pay off the debt our country has accumulated. I’ve told them many times, that they will look back on the years from 2019-2023 and ask why the national debt moved from $20 to $30 trillion in just four years.
Free market capitalism to socialism
This is the most dangerous movement in economics. The title “Free Market Capitalism” reveals its intent in the title, because it calls for free exchange of goods and services. Socialism is based in power, where producers and consumers are coerced to exchange goods in a way the government wants them to.
From private investment to government crowding out
To help my sophomores at Dallas Baptist University do well on their weekly quiz, I ask if we should smoke cigarettes. The obvious answer is “no.” “So we should nix cigs!” is exclaim, which helps them remember the equation for Gross Domestic Product: Y = C + I + G + NX. In the last quarterly GDP report, Consumption and Government Spending were up. Investment was down. That means we have a good short-term economy, but a bad long-term economy, because there is not enough investment being made.
Thankful for Private Property
The Pilgrims tried socialism and it failed. Then private property led to so much prosperity that they hosted the first Thanksgiving.
If you have enough to eat this Thanksgiving, you should be thankful for the private property system that produced the food. We live in the most prosperous, fruitful time in human history. Let’s take a brief look at how we got here.
In October of 1621, Plymouth Colony governor William Bradford called a three-day festival, inviting the ninety Indians to join the 50 Pilgrims. This feast, which included times of thanks to God as well as athletic competitions and food and fellowship, is commonly celebrated as the first Thanksgiving festival in America. So, if you celebrate it with football games and food with your neighbors, you are re-enacting this cherished Christian tradition, but who were these Pilgrims, and how did they get here?
Fight or Flight
That’s the basic idea from psychology that our minds are built to either change ideas we disagree with, or run from them. It’s a pretty big discussion among Christians in the United States today. Or, at least, it SHOULD be. I delve into the question in podcast #72 titled Two Worlds. Being in the world, but not of the world is becoming more difficult in post modernity.
The Pilgrims response was flight, as explained by David Barton at WallBuilders: The Pilgrims are well known today for their association with the first Thanksgiving festival. The Pilgrims were Separatists — a set of Protestants who felt that they would be unable to reform the Church of England and therefore they chose “flight” over “fight.” They went to Holland and then eventually to America. But the other group who came later, were Puritans. They were “fighters” who believed they could reform the Church of England. It turned out that they were wrong, and following severe persecution, some 20,000 followed the Pilgrims to America.
The Pilgrims had obtained a land grant for Virginia and set sail in the Mayflower on September 6, 1620. But after a rough ocean crossing, they landed 200 miles north of Virginia in what became known as Massachusetts. On November 11, 1620, they finally dropped anchor and came ashore.
Grateful or Entitled
Of the hundreds of books and articles I’ve read and the hundreds of speeches I’ve heard, the one that makes the most impact on today’s subject is a little five-minute video by Dennis Prager, titled The Key to Unhappiness. He says there are two groups of people: Those who are grateful and those who are entitled. The grateful will always be happy, the entitled will never be happy. And here’s the strange part: Dennis is a Jew, who does not believe Jesus died for him. Think about it: A Jew is telling a Christian that HE should be grateful. Kinda backward, isn’t it? I’m the one who should be telling HIM to be grateful.
Jesus had to die for your sins because there’s no such thing as a free lunch. Somebody had to pay. And it wasn’t you. That’s why Christians are grateful,
Who is Getting Shanghaied in Trade?
Trade with China makes Americans richer, but China is likely using the profits from their exports to build a military that the US will fight someday.
In the 19th century, if a sailor got too drunk in a port city, he might wake up the next day on a ship steaming toward Shanghai. The noun became a verb, and he had been “Shanghaied,” but in the current US-China trade relationship, who is getting Shanghaied?
Trade with China makes us richer, but they might be using those profits to build a military that we will fight someday. I’ve often said, you won’t find a one-armed economist because we will always say, “On the other hand.” Trade with China reflects this conflict. Trade makes us richer, but it also makes China richer. What do we do?
I think it would be difficult to find a scripture that encouraged market discrimination against a people group, just because they are from another country. That’s where Christianity and Economics support each other. They BOTH call for open markets and trade, among all people groups and all countries.
Trade is Good
Of course, trade is good. The entire Adam Smith economic legacy might be neatly tied up in a two-step process: First, increase production via specialization, then trade your surplus.
Trade is Good is one of the Ten Commandments of Economics that I found with my co-author Sergiy Saydometov, when we wrote the book titled Biblical Economic Policy.
If we didn’t trade, we would be very poor. I’m pretty good at giving economics lectures and writing, I’m an average farmer, a lousy tailor, and even a worse auto mechanic. I couldn’t make a car if my life depended on it. Instead, I specialize in writing and speaking, and I trade for food, clothes, and cars. That little economic system works at the national level too. This is still Adam Smith territory: he noticed that the French were better at making wine, but the Scots were better at making Whiskey. That’s why some wines, like Champagne and Bordeaux, are named for the region where they are made. I’ll presume you know why they call it “Scotch Whiskey.”
In the first nine months of this year, China exported to us $210 billion more in goods than we exported to them. That’s the FRONT part of the equation that they explain to you on CNN and Fox News. The back part of the equation is a little more complex, so you only find that in the Wall Street Journal and The Economist. That’s where you find this Chinese businessman holding a million US dollars and trying to exchange it for something. He ends up buying a shopping mall in Cincinnati, or a wheat farm in Kansas because that’s where the US dollar is honored. That back side of the equation is where you hear people complain “The Chinese will own the US someday.” That’s chicken little economics. I heard the same thing about the Japanese in the 1990’s. If the Chinese buy $210 billion worth of real estate in the US every year, there really is not even an ESTIMATE of how long it would take them to own a meaningful percentage of US assets. Recently, there have been reports that they are buying land near military installations. That’s concerning.
Trading Avoids War
There’s something called the Golden Arches theory of Conflict Prevention that goes something like this “No two countries that both have a McDonald's have ever fought a war against each other.” It was first proposed by Thomas Friedman in a New York Times column, then became part of his book titled a href="https://www.amazon.com/Lexus-Olive-Tree-Understanding-Globalization/dp/1250013747?
School Choice: The rich already have the choice to send their children to any school they want. The poor should have the same choice.
The rich should have a choice that the poor do not have. Really?! Think about it: The rich already HAVE school choice; they can send their kids to any expensive school they choose, but poor kids don’t have that choice. Shouldn’t we give them that choice?
We live in Texas, where our legislature is trying to decide what to do about school vouchers. To a Christian Economist, this is pretty simple. As an economist, I think people should have the freedom to send their children to a school of their choice. As a Christian, it certainly seems like a person should be free to choose Christian education over secular education. So who disagrees with that? People who want power.
They want power, not only over your decision but over the dollars you pay in taxes. First, they forcefully extract tax dollars from you, then when you want to direct the use of those dollars, they want to spend them on two monopoly providers. More on that in a minute.
The Poor Will Always Be With You
Jesus said that, because He knew we would not be able to keep the Biblical commandments to run a Biblical Economy. The school voucher issue is simply another example of it. People should be as free as possible to choose religious education over secular education. If people were better educated, production would increase, and our country would be richer. The productivity equation, after all, is what determines a country’s wealth.
“Know the truth, and the truth shall make you free.” That’s from John 8:32, and it follows after a pretty interesting scripture as well. The preceding verse reads, “If you hold to my teaching, you are really my disciples.” Oh, so teaching is pretty important to Jesus. So it’s through LEARNING that we find the truth. I don’t have the time today to deal with the philosophy of one truth or multiple truths, but don’t miss the point: The scripture clearly says THE truth shall make you free, the not truths, plural.
In podcast #163 Who Owns Education?), I quoted Oprah Winfrey saying, “Education is the key to unlocking the world, a passport to freedom.” Okay, so we’ve determined that people should have the freedom about how to unlock this key to freedom. I’ve often said, the intersection of Christianity and Economics is freedom. I guess that’s poignantly true in this podcast.
There are two monopolies at work here:
The first one is quite obvious. Public schools don’t like to compete with private schools. They’re happiest when they have a monopoly on education in your town.
I’m an academic, and one of the basic ideas is that no one knows it all. That’s why most academics study at various universities and then join the faculty at another university where they didn’t study. I’ve attended ten universities.
But why? Why didn’t I get all my education at the same place? Because, no one and nothing, not even a University, has all the answers. You have to study broadly to gain different views of the world.
When I started teaching Economics, I would teach Macro one semester, then Micro the next. My friend and co-author Sergiy Saydometov did the same thing. But that meant they either had two classes with me and none with Sergiy, or the opposite. But then, I camped on Macro, and he camped on Micro,
When Expenses Exceed Revenues
The US Federal Government's annual expenses are $1.9 trillion more than its revenues. That's a violation of the eighth commandment, and it is economically unsustainable.
You will be poorer every day, for the rest of your life, because the Biden administration has increased the national debt in the last three years. That’s the message I gave my sophomores at Dallas Baptist University recently. Going back a little further, the Wall Street Journal reports this week that Federal debt held by the public mushroomed from less than $5 trillion in mid-2007 to more than $21 trillion in 2020.
Sorry for being the bearer of bad news. They never liked prophets in the Old Testament either. Or, as I often say, “I’m just the boy at the edge of the crowd shouting, “The Emperor has no clothes!” I’m not responsible for who feels naked as a result.
I arrived early to lead some Certified Public Accountants through a management seminar in Pittsburg in the winter of 1998. Trying to start a conversation with stereotypically reserved accountants was difficult. Reading the local newspaper, I asked, “How did the Pittsburg Penguins of the National Hockey League manage to go bankrupt?” There was no answer. I waded in again, “How did an NHL team go broke?” Finally, one of the participants answered, “Expenses exceeded revenues in the long term.” At the time, I was a columnist for a publication called Sports Business Journal. My column the next week was titled, “When expenses exceed revenues in the long term.”
The Eighth Commandment & National Debt
Expenses are exceeding revenues in America today. This is unsustainable. According to the US debt clock, this year the federal government will have $4.4 trillion in revenue and spend $6.3 trillion You can’t continue to spend 30% more than you take in. I don’t care if it’s your personal checkbook, your business, your church, or the federal government. Consuming without paying for it is stealing, and it violates the eighth commandment.
So why do we continue to do it? When President Bill Clinton was asked why he had sexual relations with an intern, he flatly, answered, “Because I could.” And, that’s why the Federal government continues to spend more than they receive. Here’s how Investopedia explains it: “The nature of debts changed after the Great Depression and the rise of Keynesian economics. The extent to which British economist John Maynard Keynes influenced government spending in the 20th century can hardly be overstated. While both the Hoover and Roosevelt administrations extended public works projects and experimented with fiscal deficits in the face of the Great Depression, it was Keynes who provided the macroeconomic justification for running large budget deficits to stimulate aggregate demand and fight recessions.”
Danielle Lacalle at the Epoch Times has this to say in a recent article titled The US Deficit Road to Ruin, “According to the U.S. Treasury, year-end data from September show that the deficit for the full year 2023 was $1.7 trillion,
#190 We’ve Never Run Out of Anything
Scarcity thinkers tell us we are running out of resources. But Christians believe our "Made in the image of God creativity" will continue to find new ways of preserving resources.
One of my favorite questions to ask groups is to complete this sentence, “Life was better before we ran out of: _____” You’re right, there’s no answer. At least, in years of asking the question, I’ve never heard an answer. If you know of a valuable resource that we’ve run out of, please send me an email. But here’s the problem, we are continually being told that we’re running out of things.
Just one example for now: In 1976, Jimmy Carter intoned, “We have about 35 years of oil left in the world.” Oh, so we ran out in 2011?
The Coming Ice Age
In a video from 1976, frightening music plays as Leonard Nimoy speaks in a very worried tone, “There’s little doubt that someday, the ice will return.” More dramatic music plays, and he continues, “If we are unprepared for the next advance, the results could be hunger and death on a scale unprecedented in all of history. During the lifetime of our grandchildren, Arctic cold and perpetual snow could turn most of the habitable parts of our planet into a polar desert. The next ice age is on its way. At weather stations in the far north, temperatures have been dropping for 30 years. Seacoasts that used to be free of ice, are now blocked year-round. According to climatologists, within a lifetime, "we might be living in the next ice age.” Okay, let’s be simple about this. They were wrong in 1976. What makes you think the climate alarmists are right today?
“Nothing is more responsible for the good old days than a bad memory.” That’s the first line of the book Progress by Johan Norberg. The quote was attributed to Franklin Pierce Adams. Mr. Norberg goes on to write, “The truth is that the good old days were awful. The great story of our era is that we are witnessing the greatest improvement in global living standards ever to take place. Poverty, malnutrition, illiteracy, child labor, and infant mortality are falling faster than at any other time in human history.”
In my lifetime, the percentage of the world living in extreme poverty has dropped from 44% to just over 8%. On its current trajectory, it will approach zero in the next ten years.
When Karl Marx died in 1883, the average Englishman was three times richer than he was when Marx was born, in 1818.
Abundance vs Scarcity, Will We Run Out?
The magicians and entertainers Penn and Teller were playing a kind of poker game called Greatest Person in History, with pictures of great people on playing cards. Penn draws a card and pushes all his chips in on the bet because he KNEW that card would cause him to win the game. The face on the card….are you ready for this….Greatest person in history?
Let me tell one more story to keep you in suspense. Goldman Sachs came up with the idea of the BRIC countries in 2001. The countries with the greatest supply of land, labor, and capital are Brazil, Russia, India, and China. So, I started on a plan to take MBA students from Dallas Baptist University to all four. Just before we left for India the Dallas Global Alliance was hosting a speech by the Indian ambassador to the US. The Indian representative strode to the podium. He didn’t even say hello, or good morning, or it’s good to be in Dallas. The first words he spoke were,
You make way too much sense
A long time ago I majored in journalism and minored in economics. It would have been the other way around had I had you as a professor. I added an MBA and reported for the money section at USA Today, covering corporate leadership . I was proud working for a national paper that prided itself for balance. Even the editorials always included a counterpoint. Sorry to say my profession and former paper has become an embarrassment, as, unfortunately, parts of yours. Keep up the good work. Though shalt not covet has reared it’s ugly head in Israel. Maybe you can take that on as an Econ topic. God bless.
The Christian Economist
Thank you for speaking the truth in love through your podcast. Everyone around the world needs to listen to your podcast. You are awesome!!!
Wise insights into scripture
Application of biblical principles into the economic world support the need for more people in the world and increases human capital which helps everyone.