"Economic Collapse?" -- by the Rev. Michael Lerner

The fear is palpable. Those of us in the non-profit sector feel it deeply already, because with the predictions of collapse surrounding us, many magazines are reporting drops in subscribers, and many change-oriented organizations are suffering from a drop in membership or donations. And it's likely to get worse. There are predictions that even with the hundreds of billions likely to be spent to ameliorate some aspects of what we face, there might be as many as five million people who will be losing their homes in the mortgage crisis, and millions more losing their jobs as small businesses collapse. And if the price of oil remains high, and the storm in Texas last weekend has already sent prices soaring again, there will be tremendous suffering next Winter when many people can't afford home heating oil.

Unfortunately, none of the major political candidates has been willing to speak honestly about why all this is happening, if they even know.

But there's a simple and accurate answer: materialism and greed which has become a run-away epidemic in the contemporary capitalist world in general, and in the U.S. in particular, is the root of the problem. The oil crisis may be partly rooted in the desire of China and India to live a standard of material well-being comparable to that in the West, but it's mostly rooted in the speculative trading of oil futures that has artificially jacked up prices wildly. The collapse of the mortgage and banking industries has largely been a product of speculative investments as banks and mortgage companies sought to make super profits on their mortgage loans by turning them into monetary forms that could be traded and against which others could borrow money. It is this speculation, not solely the absence of the commodities, that has been a major source of the problem.

For decades we've watched passively as poor people and people of color have lost jobs, and faced a weakened net of social protection in the U.S. as the conservatives seemed to convince the American majority that the marketplace was fair, and that hence people who were not doing well had no one to blame but themselves. It was wrong to over-tax rich people, we were told, because they had taken the risk of investing in projects that could fail, so the public had no claim on their huge profits when they succeeded. The bailouts that the marketplace have required in the past, and now once again with the bailout of Fanny Mae and Freddie Mac, demonstrate the emptiness of this argument.

The reality? When poor people fail to flourish economically, the government shrugs its shoulders and gives a pittance of relief. But when super-giant firms fail, and the wealthy are endangered, the government, with the votes of many erstwhile conservatives, jumps to the rescue. The exception of Lehman Brothers may have something to do with the fact that the Bush Administration, so willing to spend hundreds of billions of dollars to save their friends, has little concern for an investment firm that was always perceived as "Jewish" and "liberal."

When it's their friends, they intervene to save the capitalist enterprises on the backs of the taxes paid by ordinary working people today, or our children tomorrow. It reminds me of an old saying: "When is it a "recession?" When YOU lose your job. When is it a "depression?" When I lose MY job!" Too many of the people who are suffering today were all too willing to allow others to suffer when it was "just" in a community of "people of color" or people with a "lower class status." Now, they are upset when it is they who the larger society is abandoning.

What can be done? Well, although there are many short run solutions (check our website www.tikkun.org for some of the recent discussion about short-term solutions), the real answer is this: when a private firm or enterprise fails, and it's socially valuable to keep that firm alive, then the U.S. government should take it over and nationalize it. That's what should happen to Fanny Mae and Freddy Mac and to the investment firms and banks that have needed our tax monies to bail them out. Or, let the firms remain in private hands, but let the tax payers automatically get the percentage of annual after-tax profits that our bailout tax dollars are compared to the total worth of the institition as that moment when it needs a bailout. And bailout individuals at the same time as we bailout banks and energy corporations. And if we need to use oil and gas from our own country, then the corporations that mine that gas and oil should not be allowed to make a profit off our natural resources except if all of those profits are 100% used to support public investment in alternative energy supplies.

So why isn't this at the center of the campaign? Why haven't Democrats passed laws to prohibit this speculation or to demand sharing the super profits of the oil and gas companies with he ordinary citizen? The answer is that all our thinking is constrained by the fear that if we talk about returning profits to our government or allowing government to set a "fair price" that we will be creating a socialist system. Well, I know that socialism "won't sell" in the US.. so instead lets call this people-oriented economics shmo-cialism or even fairness-ism. But be sure of this: if the speculators were in jail instead of running the economy, if super-rich people and institutions were fairly taxed instead of making out like bandits while so many of our fellow citizens suffer, we'd be in far less vulnerable

We are told that our fellow citizens would never support even shmo-cialism, because they imagine that someday that they will be rich themselves (do disabuse them of the fantasy) and that they can't feel empathy for others who are suffering. But this is not true. The truth is not that they don't feel identification with others, but that that part of themselves, their most generous and caring part, has been put down and made to feel "abnormal" so frequently throughout their lives that they don't feel ready to trust their own desires and think that they would just be making a fool of themselves to imagine a world in which people really took care of each other.

Here we get to the fundamental contradiction of antagonism to "big government." The whole point of having a democratic government originally was to create an institution to provide the kind of hands-on-caring that we couldn't do if we want to keep working and making a living. ˝Government" then, is the institution that should be the manifestation of our caring for each other. Instead, it has been largely shaped by the interests of the wealthy and the powerful, who use government to protect their own interests and honestly believe that their own interests are the public good. And as more and more people begin to see government failing to give a real priority to being an instrument of mutual caring, they get more and more incensed at having to pay taxes for this king of reality. Unable to imagine any other reality as "realistic," many people decide that their only refuge is to resist taxation and support candidates who promise to lower their taxes. The resentment of government that the Right plays upon is based in a correct assessment that too often it fails to serve the needs of ordinary people but only the needs of the insiders and their

Yet the underlying desire to be a caring person doesn't go away. Frustrated by the lack of any obvious way to be caring in the public sphere, millions of Americans flock to churches, synagogues, mosques, ashrams and civic institutions where they get an opportunity to actually act on their caring for each other. But these institutions lack the finances to make up for what government fails to do: protect the common good by taxing the super-profiteers like the oil/gas and military-industrial complex and criminalizing the behavior of the speculators that have ruined the mortgage

Until these dynamics are presented to the American people, the special interests (no, not workers organizing into unions to try to defend themselves from losing their jobs but the super-rich corporations and their corporate dominated mass media) will predominate and most people will feel powerless to do much. But the way to present this is by emphasizing the positive: that so many Americans really do care about each other, and that they are stunned when they watch the profiteers undeterred as they lead the society into economic crisis. But that stunning can eventually lead to cynicism and despair, psychological depression, and even to an openness to fascistic solutions if they are not presented with the vision of a really compehensive progressive

That's one reason why we should be asking our elected officials, at least the ones we trust, to make this kind of analysis more central in the way that they discuss what is happening and what needs to be done, rather than keeping that discussion in vague and technocratic terms that avoid the central ethical issues that are always at the heart of the economy. If Obama, for instance, were talking this way, actually confronting the power elites of this country, he would face a huge assault by the corporate-dominated media. Yet he would also reach many people who don't believe he really cares about them. Surrounded by the cautious insiders of the Democratic Party, Obama is unlikely to talk as forthrightly as is necessary to help people understand what is really going on. And without that, they will fester in their fear and their

Is is precisely in these moments that people turn toward fascistic forces that promise order and discipline and control over what seems to be out of control. If they cannot hear a reasonable and common-sense analysis of what is happening to them from the Left, they will turn toward the fantasies of the Right-- a return to less complex realities of small town America, hoping against hope for a return to the "good old days" when (in their fantasy, but not in reality) things were simpler and more straightforward and you could take care of yourself, shoot a moose or deer or buffalo for dinner, and rely on neighbors' generosity when you needed help. But don't blame this on the stupidity of the American people. They are looking for clear answers and solutions, and so far what they hear from the Democrats is confusion and an unwillingness to really confront the real sources of the problem in any straightforward way. They don't want policy wonks--they want someone to name the reality and give an ethically and spiritually coherent vision of what to do about it. Unless they hear that, they will look for others who have some willingness to present a coherent (though in our view, deeply distorted) set of solutions (though in the not-too-long-run they will prove to be non-solutions as the economic crisis deepens and shapes everyone's life--but the Republicans only need to get the economy to survive through November, because if they win power again, liberal people will feel so despairing and de-energized that the Republicans will only face the kind of opposition to their economic policies from the Congress that they faced in opposition to their war, which is to say, Nancy-Pelosi-style-capitulation and

Once again, the responsibility is on ordinary citizens to stand up and talk back to the politicians in both parties, and to do so in a way that demands a new set of values to run our economy, so that materialism and selfishness is put on the defensive and caring for each other becomes the central motif. It is only when some serious political leaders are willing to make that the center of their campaign, to demand that love, generosity and caring for others is the shaping force determining their policies, that the American people will be able to take that part of their consciousnss that wants such a world but believes it impossible, and finally transcend their fears and act on their highest desires rather than sinking into the other fearful part of their consiousness that leads them to seek magical solutions in repression and denial of much of what they know about the failures of the economy and of our foreign

--Rabbi Michael Lerner is editor of Tikkun Magazine and chair of the Network of Spiritual Progressives. RabbiLerner@Tikkun.org

"Hunger, Poverty and Economic Change" -- by John Hammock with the Rev. Gary Cartwright

Hunger riots, the cost of food soaring, soup kitchen lines getting longer--even in the United States. What is one to do? As Christians we know that if someone is hungry we need to give her food. We know that Jesus himself calls us to feed the hungry—as if we were feeding Jesus himself. But we also know that pure charity is not enough. People do not want to be dependent on charity over time. They want to be free to grow their own food, to start their own businesses—to have the opportunities to make it on their own with their families and communities. As Christians we give food gladly but we also must help people and communities as they move beyond charity. We can invest in micro credit and agricultural development programs; we can contribute to programs that fall within the goals of the Millennium Development Goals—from safe water to children’s education, from maternal health to community and environmental sustainable development in which local people own the process of local change.

I remember speaking to Fatima in Ethiopia. She had lost two of her small children to famine. Food had saved her other two young ones. When I spoke to her, she was clear that she did not want to be dependent on food aid. She wanted to move back to her own land again—to get on with her own life and make it in her own community. We need to be ready to help in a timely way in both these stages of her journey.

These two pillars are crucial—feeding people in need and assisting in the process of change leading to sustained development. But they are not enough. To solve the perennial problem of hunger, it is important to step back and look at the broader picture of poverty and economics.

Very simply, our current economic system is based on the assumption that if the national economy grows then the economy is doing well. Clearly the growth-based strategy makes some very wealthy; it unleashes invention and entrepreneurship. But the benefits do not trickle down to the majority of the poor. This growth-based strategy also produces more inequality and poverty over time. The very economic system that focuses on growth often exacerbates or leads to increased hunger. Unless we do something about our economic fixation on growth and income, we will not deal with hunger or with poverty. What can we do?

We must educate ourselves as to a new economics that accepts growth but moves beyond it to include what people value and have reason to value. Perhaps this is illustrated by the following equation: Freedom = growth +.

What does this mean?

Economics is not just about income and growth; it is about the freedom of each individual to do what he values or has reason to value. We all know that we value more than money. It means putting value on education, health, personal security, dignity and more. The wellbeing of its citizens becomes essential. It means putting a value on individual freedom. It means investing in the development and then promotion of a new approach to economics. This in turn means having a solid theoretical framework and good evidence based research to sustain such an approach.

This is not an argument against growth. Rather it is a plea in favor of broadening the dimensions that are essential to economics and development. It means that growth becomes a means to a goal, not an end in itself. It means that education, nutrition, health, empowerment, personal safety, employment and potentially other dimensions are given value and fall within the models and frameworks of national economics.

For example, if poverty is defined not just by income but rather includes some range of the types of things that people value given above, then our programs to deal with hunger and poverty will be shaped by this way of thinking rather than from the perspective of pure growth.

Governments and corporations can and must play a crucial role in putting people’s well being, not growth, at the top of their priorities. But we cannot leave this only to governments and corporations. Individuals have a crucial role. [See What One Person Can Do by Sabina Alkire and Edward Newell] And the church can mobilize people for this role. The Rev. Gary Cartwright, deacon in the Diocese of Southwest Florida, stated it this way:

Can we start a conversation that would grow and include others that is solution-orientated (not just hand-wringing)?…The intent would be to find solutions that would engage many others at the grass-roots level that could eventually change the political will of US and foreign world leaders.

Gary says (and I agree) that one place where that conversation could start is here at EGR. The earliest of Christians certainly focused on the role of economics. Gary writes:

When we look at the original group of Christians (as told in the Acts of the Apostles) it was a society where every new person joining turned over all their goods to the apostles who then distributed them according to the needs of the community. We don’t know what happened to that economic system, but it seems to have died pretty soon after. So, in my mind there is a direct connection between living as a disciple of Jesus Christ, and the participation in a fair and just economic system.

Gary ends by saying that he is not proposing the early apostles' economic system. Rather,

We do need a new economic system that is more than profit/bottom line oriented, and includes personal dignity, health, education, personal security and the like.. However, it needs to encourage personal initiative, a community understanding of our inter-connectedness, without establishing a world-wide government that imposes on personal liberties.

To deal with the current hunger crisis, charity and development aid are important. But equally relevant is rethinking our economics so that people’s wellbeing is at its center. Christians need to be involved at all three levels. Gary calls us to start a solution-based conversation on the need for a new economic system. It is a role for EGR.

For more information on this type of economic thinking please see
www.ophi.org.uk and www.hd-ca.org

Dr. John Hammock is an Associate Professor of Public Policy at the Friedman School of Nutrition Science and Policy & The Fletcher School, Tufts University. He is currently on leave until September, 2008 and working Sabina Alkire as a senior research associate at the Oxford Poverty & Human Development Initiative, John was Executive Director at Oxfam America from 1984-1995 and Executive Director at ACCION International from 1973-1980. He is the EGR board president.

Economics and Faith

by Andrew Langan

I'm feeling a deep sense of trepidation at joining this team of bloggers. I've never travelled to the developing world. I have no real hands-on experience with the human tragedies at which the Millennium Development Goals aim. As a result, any experiences I relate will seem mundane in comparison to those of my colleagues, and any policy ideas I advocate will be necessarily modest. Furthermore, my own angle on the issues this blog addresses will require slightly more of an explanation than the others.

I never expected to become an economist. But almost from the moment I cracked the first textbook, I could tell it offered a revolutionary way of thinking about the world and understanding individuals' actions, and through those things a powerful set of tools for bringing about changes like those set forth in the Millennium Development Goals.

In addition to the analytical framework, economics can also be a world-view, a philosophy on life. Economics as a world-view shares many of its core values with our Christian faith. It applies those values, however, in ways that sometimes lead to unconventional conclusions about the world and how we ought to act to accomplish our goals. Before I discuss how I think economics can help make the world a better place, I'd like describe some of those values and note where they overlap with our values as people of faith.

The first thing that strikes me about economics as a world-view is its visceral attachment to human equality and individuality. This is demonstrated partly in the phenomenon that economics analyze - "the market". Like the Church, the market is not a monolithic, top-down organization. Like the church, the market is the natural result of people's coming together for a shared purpose. It's an unplanned, organic, and yet finely concerted network of individuals, each with their own abilities, needs, and desires.

Further displaying economists' attachment to individuality is their handling of human differences. When we find the actions of groups or individuals perplexing, economists seek explanations in those people's environment, rather than in some features of the people themselves. As much as possible, we try to assume away the complex interactions of culture, moral fiber, and personality quirks, and look at the external pressures acting on people. Though removing the focus from the individual in this way may seem dehumanizing at first glance, in reality it is anything but. It is instead a two-fold act of humility. First, it is an admission that each person and group is so complex that it would be the height of presumption for an economic researcher to think they could account for all of personality's influence on decision-making. Second, it is a realization that, by and large, people share the same broad goals and values -- most everyone loves their family and friends, and wants to enjoy their life in whatever way moves them. Bearing these two facts in mind helps economists avoid what psychologists call the Fundamental Attribution Error, and also, I find, helps me as a Christian to be less judgmental and more charitably inclined toward my neighbor.

It reminds me simultaneously that we are all unique children of God, but that we all share some basic, if not genuinely universal human traits.

The issue I mentioned before -- about "enjoying life in whatever way moves you" -- is another important point of intersection between faith and economics. People often accuse economists of being more than a little heartless: of knowing "the price of everything and the value of nothing." Nothing could be further from the truth. Economics is a science that really truly gets that there's more to life than money. That in fact, there's even more to life than happiness. Economists view individuals as decision makers aiming to maximize their own "utility." This word is antiseptic and technical, but only because it must encompass every positive aspect of the human experience.

People sometimes mistranslate utility from econ-jargon to English as "happiness," which makes it seem as though economists view people as vapid, consumption-crazed herd animals. A much closer, though still insufficient, English translation of utility would be "satisfaction." Many things bring utility besides the Roman poet Juvenal's bread and circuses. Utility comes from loving relationships, from a sense of belonging, from moving experiences, from bringing true joy to others, from the knowledge that you've done the right thing even though it was painful and difficult -- the list goes on and on. The Church on earth increases peoples' utility in many, many ways, and points us to what we Christians believe are newer, better, more important sources of utility -- drawing closer to our neighbors and to God. Economics appreciates the centrality of all kinds of utility in individual and communal life. It respects the manifold ways in which people pursue their own and others' utility. And though all sciences are agnostic with regard to metaphysical questions about God, economics honors the church, along with many other institutions, as a source -- and an expression -- of deep, mysterious, utility-giving aspects of the human experience.

Finally, economics is fundamentally a study of human decision-making. As such, it holds human will -- the freedom to choose one's own path -- in high regard. Just as a psychiatrist refrains from passing judgment on a patient's potentially scandalous thoughts, economists as scientists have little interest in assessing the moral righteousness of other peoples' choices. Nor do we seek to play Monday-morning quarterback. Instead we ask why they act like they do. What incentives do they face? What relevant information do they have about the decision? What is their range of realistic options? What outcomes will result from those options, and if more than one outcome is possible, what is the likelihood of each? What values do people bring to the table to judge the preferability of each outcome?

This value-neutral analysis of the others' choices ties together economists' respect for each individual's quest for their own utility and the exhortation to "judge not, lest ye be judged." Just as a person's choices about what church (if any) to attend are ultimately between them and God, so are their decisions about how to spend their money, where to shop, and under what conditions they're willing to work.

Now, we can legitimately try to alter others' decision-making in a number of ways. We can provide them with more information if we think they're ill-informed. We can try to convince them that making a different choice or adopting a different set of preferences will give bring them higher utility. We can, out of our charitable care for them, try to increase their range of options at our own expense. But most economists would agree that in all cases, unless some objective harm is being done to parties not privy to the decision, the final choice must rest with the individual and their conscience.

This is, as it happens, an almost perfect description of how religious life works in our United States. How each religion "competes for souls," one might say. And as a result, our nation has one of the -- if not the -- most vibrant, varied religious environments in the world. We have a multitude of sects and denominations, each person, rich or poor, is free to determine if, how, and how intensely they will be involved in spiritual life. There is even less inter-denominational strife here than in other liberal democracies, not to mention theocracies like Iran or a state with an official religion like Saudi Arabia and Burma (these last being the religious equivalent of a Soviet planned economy). This vibrance and amicable interfaith environment results from having a "market for religion" which operates on an economist-like respect for the opinions and decisions of others.

Certainly, economics is not the only valid world-view. Indeed, it would be against the spirit of that world-view to say so! But it is my deeply held belief as a student of economics and as a person of faith that it is an extremely useful way of thinking about others' actions and how I can influence them. Thinking about the world economically helps illuminate what kind of things we can do to help achieve aims like the Millennium Development Goals and, just as importantly, how we can go about doing them most effectively. I see this, in addition to the intrinsic value of the economic world-view, as the primary contribution economics can make to bringing about a world where the tragedy of Baby Jean's story will be only a sad memory, never to be repeated.

Andrew Langan is an economist living in Arlington, Virginia. He graduated from Washington University in St. Louis in 2006, and works in Washington, DC.