Tag: Economy

Maybe it’s not just the economy

Tennessee does not have a state income tax. In fact, it’s the figurative third rail of state politics, the surest route to electoral oblivion for any politician. For example: a once-popular Republican governor, Don Sundquist, left the governor’s mansion all but ostracized from the party for even mentioning it.

I’ve puzzled over that attitude for a long time because it’s been established that a state income tax would have a net benefit to the state (which near the nation’s bottom rung for education spending), it would be almost a wash on middle class tax burdens, and it would actually ease the tax burden on poor people. (I’ve lived in four states, two with and two without state income tax. Being severely middle class, our total tax bill in each place was roughly the same.)

Yet voters reject it time and again. The state legislature is even on the brink of passing a “no income tax, ever” amendment in the state constitution.

Why do Tennesseans vote against their own best interests, I’ve wondered.

One hunch I’ve had — no proof, no hard evidence, no studies to back me up, just a hunch from talking to people and listening to the no-income-tax rhetoric — is that Tennessee’s political history is steeped a screw-you attitude when it comes to governments.

Exhibit A: The Watauga Association, possibly the first attempt at an independent (read: rogue) government on American soil, illegal under British law at the time, was formed in what is now Elizabethton, Tenn., in 1772.

Exhibit B: What is now northeast Tennessee was almost the nation’s 14th state, the state of Franklin, an attempted breakaway from North Carolina, which in the 1700s stretched–in theory, anyway–over the Appalachian Mountains to the Mississippi River. A bunch of settlers didn’t like an attempted “land grab” by North Carolina legislators, not to mention the idea of their hard-earned dollars going back east over the mountains to Raleigh. So they petitioned and even shed blood to form a new state.

Underneath these stories is an idea: We don’t want anyone telling us what to do, even if it costs us. We’re independent. (Never mind that Tennesseans receive $1.27 in federal benefits for every $1.00 of federal taxes they pay.)

But Jonathan Haidt puts all this much more neatly and convincingly in an essay last week in the New York Times, “Forget the Money, Follow the Sacredness” (March 17). He wasn’t talking about Tennessee and taxes; he has in mind a larger stage. But if the shoe fits, as the saying goes. The author’s name might ring a bell from a previous post.

I encourage you to read Haidt’s entire essay. Here’s an excerpt:

Despite what you might have learned in Economics 101, people aren’t always selfish. In politics, they’re more often groupish. When people feel that a group they value — be it racial, religious, regional or ideological — is under attack, they rally to its defense, even at some cost to themselves. We evolved to be tribal, and politics is a competition among coalitions of tribes.

The key to understanding tribal behavior is not money, it’s sacredness. The great trick that humans developed at some point in the last few hundred thousand years is the ability to circle around a tree, rock, ancestor, flag, book or god, and then treat that thing as sacred. People who worship the same idol can trust one another, work as a team and prevail over less cohesive groups. So if you want to understand politics, and especially our divisive culture wars, you must follow the sacredness.

This analysis may also explain why GOP voters generally aren’t thrilled with Mitt Romney as their presidential candidate, especially when compared with the followers of Rick Santorum—as well as Newt Gingrich, Ron Paul, Rick Perry and Michelle Bachmann before him. Romney’s rivals have stirred up more enthusiasm, if not more votes, because they seem to tap into big themes (even at the risk of getting their facts wrong), while Romney tends to sound more like the very capable office executive he has been: steady but not exciting. (Remember the old cliche about “the one you date and the one you marry”?)

Just this week, Santorum said the election isn’t really about the economy, which seems like a crazy statement at first glance. But he’s trying to tap into a deeper well—something more “fundamental,” to use his word. Or maybe something “sacred,” to use Haidt’s.

Top photo: Jaime Dowell (Manifestation Nation)

Notes from England: A Christian socialist on faith, politics and Thatcher’s legacy

Terry Wynn, MEP

In the last post, I introduced Terry Wynn, a long-time friend from England: Wigan native, rugby league fan, Methodist lay preacher, veteran of the shipping industry, Labour Party leader, former member of the European Parliament, author of two books that outline his beliefs about the relationship of faith and politics, Onward Christian Socialist (1995) and Where are the Prophets? (2006).

I emailed him a few questions last week, asking him to reflect on the Thatcher years, when my family and I lived in England, and to find out what he thinks now. What follows, slightly edited, are my questions and his answers. (I’ve kept the British spelling.)

Dahlman: What do you think Margaret Thatcher got right for the long term? (She served as prime minister from 1979 to 1990.) What did she get wrong? What did the UK gain as a result of her premiership, and what did it lose? What might Europe learn from those years?

Wynn: My industry was shipbuilding, and it was wiped out because it was being subsidised. New yards were closed and ships were then built in Korea or Japan. She did the same with the mining industry and there have been lasting legacies. … So I could have lingering anger at what she did.

However on reflection (and I speak from a centre-left perspective, having moved further right as I have got older), she was ahead of many in Europe who saw subsidising traditional industries as the norm. Over the years I have come to realise that most industries have to work in the market.

Having said that, I’m not too sure that profitable industries, like the energy sector, needed privatising. The privatisation of gas, water and electricity just gave massive resources to a small group who bought them. When water was sold off, huge tracts of land, the water catchment areas, went with it. … This really was giving away the family silver and it applied to other sectors.

Taking power from the trade unions was inevitable; they had gone too far under Labour. (Thatcher’s) trouble was that she was ruthless, and once she knew that she could get away with whatever she wanted, with no-one advising against, she just went gung-ho in what turned out to be a suicidal course.

Tony Blair (prime minister, 1997-2007) had a lot of respect for some of the things she did, and I suppose his attitude remains mine. Not many Brownie points in the Labour Party for saying that.

Terry and Doris Wynn, at home in 2003

The long terms pluses were a slim-line economy ready to face the challenges of new technology.

The downside was that she created a me-too society, where caring for one’s neighbour was less important. Looking after number one was what mattered most. The UK became a selfish society, and she did say, “There is no such thing as community.” It was the time when materialism took centre stage.

I think Meryl Streep’s portrayal (in The Iron Lady) was pretty good, but I know Labour colleagues who didn’t like it. I thought it a great movie.

As for Europe: The single market demanded a free-market economy and many countries had to come to terms with competition. (Thatcher) had put the UK at the forefront and it was a benefit.

How have your politics changed over the years? I thought of your book, Onward Christian Socialists. If you were to revise it, what would you change, if anything?

I re-read (the book) some years ago and decided the only thing I would change were the two or three typos that I found.

I’d like you to finish this sentence, in your own voice: “Jim, if there’s one thing I want you to learn from your time over here, particularly about putting faith and politics together, it’s …”

“… it’s that if you live by the teachings of Jesus, you can’t help but to be political. Whether that be as politicians or being involved in everyday local politics, even church politics. Jesus demands that we act, we are our brother’s keeper, we have to love our neighbour. But above all we have to stop being judgemental of others and learn to empathise and understand their plight.”

 “Socialist” has become an even more loaded word in the U.S. than it used to be and can be easily misinterpreted. (I think some readers’ heads might explode when they see “Christian” and “socialist” together.) So how do you define the word “socialist” or “socialism” in this context?

Can Americans accept that Tony Blair and Nelson Mandela would describe themselves as such? … Don’t forget the old Labour Party Clause 4, which Tony Blair had to ditch for electoral reasons, is straight out of (the book of) Acts: “From each according to his ability, to each according to his need.” That’s my kind of Christian socialism.

Christian retailing: Buyer beware

Xn retailThousands of Christians gathered out West this week, making decisions that could affect millions of believers, with the potential both to strengthen their faith and to ruin it.

I’m not talking about the triennial General Convention of the Episcopal Church, which met in Anaheim, Calif.

Instead I’m referring to the International Christian Retail Show, which drew thousands of religious retailers to Denver for a kind of commercial pilgrimage. The convention is “the largest annual gathering in the world of anyone and everyone involved in the creation and distribution of Christian products,” according to CBA, the world’s foremost trade association for Christian stores and the event organizer.

Every year retailers roam among displays of more than 235 publishers, music producers, church-supply distributors, jewelry designers, clothing manufacturers and game makers, looking for new merchandise to feed their customers’ faith. Last year’s convention in Orlando, Fla., attracted almost 7,500 people, representing more than 1,700 stores, from small, independent shops to large chains owned by denominations or multinational corporations.

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These shoes are made for walkin' with Jesus: A "witness wear" sample

Christian retail is big business. Sales of Christian products by CBA suppliers totaled $4.63 billion in 2006, and one-third of all Americans made at least one purchase in a Christian bookstore during 2005, according to a Baylor University survey.

But I have never met anyone who works in a Christian store mainly for the money. People who work at local stores say they want to help customers find a book, a CD or something that might provide fresh insight or offer personal help. They use words like “ministry” and talk about “making a difference.” Years ago an independent store owner told me his business was “just another wrench in God’s toolbox.”

Like any human endeavor that holds heavenly ambitions, however, Christian retailing comes with its own special, sometimes subtle dangers, besides the temptations that usually follow the money. Selling a Bible is not like selling a novel, much less a hot dog. Advertising slogans become theological statements, for better or worse.

Jim Street, pastor of North River Church, a small congregation in the Atlanta suburbs, and a former psychology professor at Milligan College, is sensitive to the issue of marketing among Christians. A dozen years ago, he and Milligan theology professor Phil Kenneson co-wrote a book with the self-explanatory title of Selling Out the Church: The Dangers of Church Marketing. Their target was not marketing per se but the problems that come when the church, the mystical body of Christ, is treated like a commodity.

This isn’t an abstract concern to Street. More than 100 other congregations are located within five miles of his church building, he told me in a phone conversation this week, and he’s watched several families depart for churches that offer more goods and services.

“The issue … is not our commitment to one another and to Christ, but ‘what are my needs and desires and which of these buildings can I go to have them met?’” he explained. “I understand the pressures. As the economy gets worse, the temptation to marketing will increase.”

He thinks selling religious merchandise to Christians carries similar risks.

“The fundamental problem with marketing the church and the business surrounding the church is the elevation of the consumer,” he said. “Selling Christian products puts the consumer at the center of attention. We try to understand him and then shape products to meet his needs. There has to be some amount of consumption to be production, but we’ve elevated the consumer to be a kind of idol in and of himself. The consumer is very much in the driver’s seat.”

That may not be a problem when selling cars, but it can be if someone is trying to walk with God. It’s always been easy enough to let social trends, politics, economics, or just the passing “vanity fair” distort Christian messages (and not just Christian ones). Add the power of modern retail marketing and we can end up with merchandise that creates a house of mirrors more than a window into heaven.

“The story of God is about God, and the Bible is about the works of God,” Street said. “We’re participants in the story of God. But marketing looks at consumers and says we have to shape this to fit what we think they need. Marketing wants to make the consumer into a god. That turns the whole biblical narrative on its head.”

Let the buyer beware. Amen.

Johnson City (Tenn.) Press, 18 July 2009.

After the tea parties

With taxation on American minds this week – what with income taxes due and the so-called tea parties protesting government spending – I looked through some old notes and came across a column from Sept. 29, 2007.

I couldn’t help noticing how the voices in this column spoke mainly about fairness and justice for poor people, not about safeguarding their own pocketbooks.

If Tennessee were ever to inaugurate an income tax, Lee Davis, a tax attorney in Johnson City, knows he’d pay more to the state than he does now.

But that prospect doesn’t bother him.

“I don’t mind paying my fair share,” he said in a phone interview. “I think our system would be better with an income tax. Too many laws are written to benefit those of great wealth.”

This is more a matter of faith than finances for Davis, who describes himself as “a lifelong Republican who believes in capitalism and free enterprise.”

A member of Central Church of Christ, Davis points to an incident in the New Testament when two very different groups tried to corner Jesus with a tax question: the Herodians, who supported the local king, a puppet of the Roman Empire, and the Pharisees, Jewish purists who thought cooperating with secular authorities meant flirting with heresy.

“Is it lawful to pay taxes to the emperor, or not?” they asked, figuring that any answer would land Jesus in trouble.

But he frustrated their trap – and confounded future commentators – with a deceptively simple reply: “Give to the emperor what is the emperor’s, and to God the things that are God’s” (Matthew 22:21).

People have tried to translate those words into good practice ever since.

But whatever Jesus meant, Tennessee’s tax system isn’t it.

“There’s a connection with all the social-justice aspects of the Old and New Testaments,” said Bill Howell, the Middle Tennessee organizer for Tennesseans for Fair Taxation, a statewide coalition for tax reform. “There’s a general preference for the poor expressed in the Bible.”

But the Tennessee tax system works exactly opposite, taking the proportionally biggest bites from its poorest citizens. At 11.7 percent, the total state tax burden on the poorest families, who earn less than $14,000 a year, is nearly four times the rate as for the wealthiest Tennesseans. This is according to a 2003 report from the Institute on Taxation and Economic Policy, a nonprofit, nonpartisan organization based in Washington, D.C.

The main culprit is the sales tax, among the highest in the nation overall and the highest for groceries (even after recent changes). A loaf of bread, for instance, costs the same whether someone earns $14,000 or $140,000, and so high-income households spend only about four percent of their budgets on groceries. Low-income households, by contrast, spend about 21 percent.

The stark bottom line: In proportion to their income, the poorest citizens get hit hardest by taxes while the richest get away easiest.

“It isn’t morally fair,” Davis said. “We have a regressive tax system.”

On many issues, Davis sits on the opposite end of the political spectrum from the Rev. Don Beisswenger of Nashville, a Presbyterian minister, retired Vanderbilt Divinity School theologian and left-leaning activist who once spent six months in federal prison for staging a nonviolent protest at an Army base.

But they agree about the inequities of the Tennessee tax system.

“The Bible strongly accents the importance of compassion and care for the poor,” Beisswenger said this week. “The Jewish law had harvesters not take all the grain from the fields, so poor people could get what was left. Jesus identified with the poor, spoke for them. I think he was killed (partly) because he advocated for the poor against the religious and economic powers.”

In his eyes, the tax debates reflect two competing “myths” in American society.

“One is the Horatio Alger myth – work hard and do your own thing,” he said, referring to the 19th-century author whose stories promoted self-reliance as the key to financial success.

The other storyline emphasizes “community connections (and) a responsibility to care for people who are unable to take care of themselves.” He believes that view is more consistent with biblical teaching.

 “Jesus said his mission was to bring good news to the poor,” Beisswenger said. “The gap between the wealthy and poor needs to be dealt with. That’s a necessary condition for the celebration of Jubilee, for the reign of God.”

Johnson City (Tenn.) Press, 18 April 2009.

Evangelicals, housing prices and pure contempt

The NY Times Economix blog posted a piece summarizing some research suggesting that evangelical Christians — a term not defined very precisely — may weather housing bubbles better than most Americans at least in part because their beliefs encourage them to avoid excessive spending and that sort of thing. You can read it here. It’s an intriguing study, surely open to debate about any economic-theological correlation. (Will anyone mention possible analogies with the old Protestant work ethic and its impact on colonial American economic growth?)

But I was struck — no, shocked is a better word — by the tone in several of the comments so far: pure, unabashed contempt served with generous portions of stereotypes and cliches. Even the commenters who raised valid questions about the  study’s conclusions  were obviously holding their noses.

Insert a long sigh of frustration here. Beyond that, no comment.

AIG meets the Golden Rule. (No, really.)

aig-logo-skyscraper

Is anyone not upset with AIG?

In case you missed it, after receiving $170 billion from the federal government to keep from collapsing, American International Group, the world’s largest insurer, paid $165 million in bonuses to 73 executives.

Whether the AIG executives were callous or just stupid, they look absolutely greedy, especially as tens of thousands of Americans are losing jobs and houses each week. This isn’t how we want our money to be used. So the president publicly scolded the company and Congress voted to tax 90 percent of big bonuses at any firm receiving more than $5 billion in bailout funds.

Bill Greer, an economics professor and vice president for institutional advancement at Milligan College (where I also teach), thinks we have good reason to be angry with AIG. Even so, he doesn’t assume that the lumbering giant is the only side of Wall Street.

“I genuinely believe that the vast majority of people who work in financial institutions are good, honest people,” Greer said this week. “I don’t think the majority are Bernie Madoff,” referring to the trader recently caught as the mastermind of the largest Ponzi-style pyramid scheme in history.

But Greer knows that, as in any profession, over time “a little bit of tunnel vision can develop.” It can happen to anyone. As the old saying goes, if you swing a hammer long enough, the whole world starts to look like a nail.

But the stakes are especially risky in the offices of high finance, where individuals and firms have their fingers on world economic triggers and they deal with other people’s money. When they stop asking too many questions and start making too many assumptions, bad decisions and big trouble won’t be far behind.

“People become numbers,” Greer said. “If I’m working at an investment firm, the fact that I may be managing hundreds of portfolios means I don’t see those faces any longer. There’s an anonymity that lets people make poor decisions with less fear of consequence.”

On the other hand, we can’t separate Wall Street and Main Street. Our decisions shape financial markets just as much as the markets shape us, and Wall Street’s problems aren’t Wall Street’s alone.

“In some ways, it has trickled out to the rest of America,” Greer said. “A lot of people on Wall Street saw an opportunity, but that same door was opened to us. We fed on each other, with our greed. We can gauge it by how little we have saved and how much we have spent over the past several years. We’ve become accustomed to having what we want, when we want it.”

But Greer, who has written and taught on business ethics, sees a silver lining.

“I think this economic downturn is forcing people to rethink their values,” he said. “Too many of us for too long lived beyond our means, did not save money, ran up large levels of consumer debt, and simply lived for today. Now there’s a sudden trend toward saving money. We’re getting our financial houses in order.”

He understands the so-called paradox of thrift – that if Americans save too much, the national economy can suffer – but he thinks it’s time for tightening belts. He’s convinced that living within our means and making money by making real, tangible products instead of trading in wispy financial deals will literally pay off in the long run.

He also thinks it’s time to bring back other ideals – on Main Street as well as Wall Street.

“I’m speaking as someone who teaches at a Christian college, but Christian or not, honesty and integrity are universal values,” he said. “What we do for people ought to be driven by care and compassion for individuals. That would make better decisions.”

He points to Adam Smith, who wrote The Wealth of Nations, the 18th-century book that laid the theoretical foundation for free-market capitalism. Smith realized that a free-market economy is driven by self interest, but he also knew the market works only when we also have the interests of others in mind.

“Somehow, we need to embrace more and more the fact we make decisions every day that affect other people,” Greer said. “In a lot of ways, the Golden Rule applies very well to the free-market economic system. Treat others as you want to be treated. You go out of business if you don’t.”

Johnson City (Tenn.) Press, 21 March 2009.

Squeezed: Ministries may need to do more with less money

foodpantryopen-webFreddi Birdwell’s wake-up call to the new economy came partly in the form of a young single mother at a transitional housing program in Knoxville run by the Catholic Charities of East Tennessee.

The woman and her young child had fled an abusive home, and she was trying to get on her feet, training for a new job and learning to run a household. She was in the final six months of a two-year program.

“She had a job and was doing great,” Birdwell recalled last week. “Then she was laid off and now she can’t find another job. I can only imagine the stress of that, with a child to take care of. We make sure she’s getting food on the table … just trying to Band-Aid it until we can help her with a more permanent solution.”

Stories like this have grown familiar in the past 12 to 18 months, said Birdwell, the community relations and development director for CCET, which is based in Knoxville but has offices in Chattanooga and Jonesborough.

As Northeast Tennessee feels more of the global economic downturn, people who normally walk on financial tightropes are falling into full-blown crisis, and others who were getting by are starting to stagger.

“We’ve absolutely seen a steady increase in the number of individuals and families who face some kind of housing crisis, who are homeless, who need assistance with utilities or food,” Birdwell said. “It was a slow increase for a while, but now that’s starting to pick up.”

Churches, faith-based groups and other charities are scrambling to keep up with the needs. CCET helped more than 17,000 people in the past year, about 15 percent more than the previous year.

“A lot of the people who’ve historically helped are on the edge themselves,” Birdwell said. “People who donated items to our thrift stores and pantries (in the past) now are coming to our stores. They’re one crisis, one job loss, one illness from putting them over the edge.”

Doug Miller, director of missions and media at Munsey Memorial United Methodist Church in downtown Johnson City, sees a similar trend.

“What we’re finding in the last eight to 12 months is that those on the (brink) of poverty are slipping over, and those already in the poverty level are losing the grip they had,” Miller said. “People who were not homeless before are living in their cars now.”

Munsey provides space for the Melting Pot, a ministry of Good Samaritan Ministries that offers free meals to people in need. The number of meals served has mushroomed in the last year, Miller said, from about 150 people per day at the end of the month to more than 200, a 33 percent increase. (More people come at month’s end, presumably when wages or benefits are running low.) Munsey’s own Wednesday-night dinners also attract more people now.

“We’re seeing people who normally don’t come,” Miller said. “A lot have jobs, but if they can get one more meal per week paid for – that’s another $5 or $6. That will pay for gas to get them to work for a week.”

The economic stresses are starting to show in other ways. CCET workers at shelters in Knoxville are reporting more incidents of child and elder abuse and neglect. Birdwell blames the financial uncertainty.

“It’s an on-the-edge kind of thing,” she said, “causing people such stress that they take it out on those around them.”

Despite such accounts, Birdwell and Miller sound optimistic. Miller said the number of volunteers at Munsey and the congregation’s donations for “compassion ministries,” which has expenses as high as $50,000 per year, are holding steady.

Birdwell reported that the CCET fundraising campaign during the last holiday season was more successful than the previous year. CCET operates 22 programs with an annual budget of almost $5 million, supplied by gifts from individuals and organizations, funding from the East Tennessee Diocese and government grants.

But churches, charities and other organizations that offer a safety net to people in need know they face a tough dilemma: The same conditions that make their services more crucial are hitting donors’ wallets too. No one knows how hard the economy will bite into giving, and these ministries may soon be trying to provide more while receiving less.

“We may not want to think about (more poverty),” Miller said, “but we can’t ignore it.”

 (Johnson City, Tenn., Press, 7 March 2009)