Archive for the ‘Economics’ Category

Eat & Run

July 21, 2017

I thought this was an interesting article about how recipients of food stamps tend to run out of money for food within a week or two, meaning that for at least half the month, they don’t have any of these funds to purchase food with.  The article purports to explore how and why this is, and emphasizes that because funds are dispersed in a single installment, people have trouble budgeting properly and therefore spend too much immediately and run out of funds.

What it doesn’t explore is what people are buying with this assistance.

For three years, as part of a Christian communal living experiment, my family lived in one of the poorest neighborhoods in St. Louis.  My observations are anecdotal rather than deliberate, but have stuck with me all the same.  What we saw the neighborhood children eating constantly was junk food.  Sodas, hot fries, Cheetos.  Constantly.  We never saw them with fresh fruit or vegetables or any other sort of food (unless we shared ours with them).  We know that these children lived in households that depended on food stamps – the vast majority of our neighborhood did.

Certainly the issue of telling people how to spend their assistance is a tricky one at best, but if the issue of running out of money is due not just to budgeting problems but also spending that assistance on low-nutrition snack food instead of food that can actually improve your health and last more than a few minutes, then doesn’t our government (who created and funds the food stamp program using taxpayer dollars) have a duty to at least help people know how to spend their assistance wisely?

When I looked into our state’s web site for the Supplemental Nutrition Assistance Program I didn’t see any information about good ways to spend the assistance wisely.  Perhaps that information is provided in another format beyond the web site, but perhaps it’s not being provided at all.

I’m sure that there is money used to lobby against any type of restriction on how food assistance is spent (beyond current limitations on alcohol, cigarettes, etc.).  I’m sure that companies that manufacture potato chips and soda would take issue with having their products declared off-limits for food stamp monies.  But if the issue is actually how to help people and make sure they’re getting the food they need, does it make sense to ignore the issue completely?

Path to Success

July 15, 2017

Thanks to Gene Veith’s always-excellent blog for steering me towards this study and this commentary on it.  The Reader’s Digest summary is this – if you want to avoid poverty, the best thing you can do is complete the following steps.  Complete all of them and complete them in order.  Skipping or rearranging them could be disastrous:

  1. Graduate at least from high school
  2. Start working full-time
  3. Get married
  4. Only after getting married do you have children

Once upon a time this was common sense and it was reinforced culturally.  Nowadays these steps are likely to be dismissed out of hand, but the statistical data presented in the study is pretty impressive.

 

Forcing Equity

December 9, 2016

We like the idea of a level playing field, even though we know that it is rarely practical or even desirable.  Whose job is it to enforce equity in the workplace?  Who gets to define what that even means?

The City of Portland has taken it upon itself to define equity and enforce it by imposing a 10% surplus tax on businesses where the CEO makes more than 100 times the median pay of all their combined employees.  As many as 550 companies based in Portland could be affected by this ordinance – the first of its kind in the nation.  The tax rate would increase if the differential was greater than 100 times.

Now, I agree that executive pay seems ridiculously disproportionate.  But I also wonder about the limited nature of this kind of rule.  Certainly disproportionate compensation is not limited to the realm of business.  What about public servants, legislators and presidents?  Should their compensation – including all the special perks and privileges of security and healthcare and retirement – be linked somehow to what the average city employee gets paid?

What about celebrities?  Why should a big-name music or film star command tens of millions of dollars to make a movie?  Why shouldn’t their salary be determined in relationship to what the lowest-paid positions in the studio or on the project are paid?

Are these environments somehow excluded from the idea of equity?  Should they be?

I’d like to think that industry will be self-correcting, that at some point businesses are going to say, Look, as concerned as we are about the bottom line it’s just irresponsible to pay our top execs these wild sums of money.  Maybe consumers should be made more aware of the wage differential in the companies that they do business with.  Would I buy a different brand if I knew the cheaper price tag was because they weren’t paying their CEO $70 million a year plus stock options?  Would I choose another brand even if it wasn’t cheaper?

What about a situation where every employee gets paid $500,000 but the CEO gets $60 million.  Should the company still get dinged even though the janitor is being paid half a million dollars a year?  And why is it the city gets the benefit of this surplus tax?  Why isn’t it returned to the employees who are making less than the mean of the scale used to assess the tax?  How is that surplus tax revenue going to be used?  Not to fund raises for city employees, by any chance?  Hmm.  What a conundrum.

I get itchy when a small group of people decide that they can define and create equity.  At the heart of things it means that a small group of people outside the company have a better understanding of what is fair than those within the company, or at least those who create and control the company.  Why might that be?  What enables people on the outside to know what fair is better than other people?  How was their education and upbringing different?  Where did they get their source of values from, and how do they know they can trust them?  How well do they understand the dynamics that create this sort of inequality?  I certainly don’t profess to understand, and perhaps nobody else really does either.

I’d be far more comfortable with the idea that we teach kids from an early age that it’s good to be creative and industrious and that you ought to enjoy the benefits of your labor, but that there is a perspective to all of this as well.  You should get a bigger return for taking the risks and pushing the envelope, but at some point, it just seems silly to keep increasing that return while not including others in the benefits.  Life isn’t fair, not by a long shot.  Trying to force it to be fair – and arbitrarily drawing a line that says this is fair and this is not – is often a flawed approach, even if the goal is admirable.

Thinking Theologically

September 13, 2016

How does one bring theology to bear on a topic of modern concern, such as how much to pay an employee?  Here’s one example of people attempting to use Scripture and theology (Jewish, not Christian) to help arrive at an answer.

There are lots of possible take-aways from this article, but at least at a basic level we should recognize that what we deal with today in our society and culture isn’t completely separate and different from what people dealt with thousands of years ago.  The fact that we have smart phones and drive cars doesn’t separate our investigation of the meanings of fairness from folks who used donkeys and by and large weren’t literate.

Certainly we have to be careful when we extrapolate from Scripture, which mandates individual behavior in a communal setting, and apply such principles to corporate behavior.  We might wish to argue that a corporation isn’t a person, but a collection of people and therefore under a different set of rules and obligations.  But people create corporations, and if Christians are creating them, we ought to expect that while the corporation may not be Christian in an overt sense, it  will be crafted with those sensibilities in mind.  In other words, incorporating isn’t a loophole out of following Biblical directives for someone who professes God’s Word to be the guiding word in their life.

 

Gleaning Wisdom

August 13, 2016

If we had a youth group at our congregation, I would firmly suggest that they go to work doing something like this.  Helping to minimize food waste and get fresh produce to those who need it most and can afford it least sounds like a perfect community project.  Everybody wins!  It isn’t glamorous or easy, but what a big difference it can potentially make to so many people!

Money Where Your Mouth Is

May 11, 2016

This is a fantastic article showcasing what is possible when people care enough to give of themselves to minimize food waste.   I often have people ask me why God would decide that so many people would be born into poverty and starvation.  This is exactly my response – it isn’t that God hasn’t provided more than enough food for everyone.  It’s that through active and passive sinfulness, we waste his bounty.  We take it for granted.  We use it as leverage for personal or communal gains.  We don’t have enough time to be bothered with the details.

I wonder if there isn’t grant money available to pay for some folks who would coordinate with local farmers and groceries to pick up food that would otherwise be destroyed, and convert it to meals ready to eat (not to be confused with the military MRE pouches!).  Lots of places focus on getting the raw materials of food to poor people (often-times heavily processed food rather than real fruits and vegetables).  What if a group of volunteers committed to the next logical step – making the meals?  I know places that do this on a small scale – but wouldn’t it be great to have outposts like that in every neighborhood?  So you could pick up a complete meal and bring it to your neighbor who is sick or homebound?  Literally, is there anyone who couldn’t benefit from a free (or low-priced) meal created from food that otherwise would be destroyed and wasted?  If nothing else it would cut down on people’s food budgets each month.

What an amazing God we have, who provides so abundantly.  Forgive us for being too blind to see all that You have provided!

 

Food Guilt

April 26, 2016

If you haven’t been made to feel guilty enough recently about all your shortcomings in open-mindedness and inclusivity, here’s yet another aspect of your life to repent of – your taste in foods.

According to this article, white Americans are basically racist when it comes to food.  We claim to like a broad variety of cuisines and tastes and influences, but we refuse to pay for them, relegating them to a substandard industry where they are forced to compromise to keep prices low while still making ends meet.  This results in non-authentic cuisine that is not reflective of the rich diversity of the cuisine in its native culture, which further reinforces our cultural stereotypes of the food.  A vicious cycle predicated upon our stupidity as consumers and our racist tendencies as human beings.

All of which is fascinating and, in various ways, I’m sure somewhat true.

However the article seems woefully one-sided in evaluating the nuances involved in this subject.  Primarily, it performs a basic form of racism itself, where it presumes that the guilt and decisions in this arena are completely in the realm of white Americans, and completely ignores the economics and priorities and choices of the people running ethnic restaurants.

The article makes no mention of how pricing of food in countries of origin affects the way restaurant owners price the food when they come to America.  If you come from a culture where the majority of people don’t pay for extremely expensive food, those assumptions about pricing will likely translate to your new culture – at least initially.

There is no mention about how a newly-arrived entrepreneur might need to price things more affordably because they can’t afford to fail.  Finding financial backing to launch a high-end, ritzy Chinese restaurant might be difficult for an emigree – in part because of stereotypes here in America, to be sure, but also perhaps due to a comparative scarcity of capital.  If your goal is to move to a new country and establish yourself with a reliable source of income, how risky do you want to be?  Do you set up shop quickly and sell food as cheaply as you can to build a large customer base?  Or do you hope that your understanding of your new culture is adequate enough to successfully launch a chic, boutique, upscale dining experience?

Who is the restaurant owner trying to cater to as well – Americans or a smaller ethnic population base within the larger culture?  Is the Chinese restaurant owner hoping to lure in other Chinese, or Americans?  How does this affect pricing, as discussed above, based on the pricing of food those other Chinese diners might expect from their own lives in China?

Basically the article ignores completely the role of the ethnic restaurant owner, and focuses solely on the white American consumers as the cause of problems and challenges.  Midway through the article the expert briefly admits that there is a natural, human tendency to like what we know, what is part of the dominant culture in which we are born and raised.  “It’s important to point out that this is all probably part of the natural ethnocentricity of a people.”  In which case, all cultures and all peoples are guilty of liking what they like because they were born and raised with it and because it is what they are most familiar with and because they are less familiar with other types of food and cooking.  And if this is the case, perhaps it isn’t something to feel guilty about, but rather to recognize as inevitable and probably at a base level, good.

The assumption that we all ought to be blank slates open to uniform and wide-ranging shaping and influencing is problematic on so many levels, yet forms the basis for most of our cultural self-critiques these days.  The upshot seems to be that we are bad people as white Americans, yet we are guilty of nothing more than the average Chinese or Indian or French person in this particular respect of food preference.  In this article the assumption is that we ought to be willing to pay more for ethnic food and we’re racist because we won’t.  Perhaps we ought to start questioning why we pay so much for certain kinds of food, and whether that’s really necessary or wise.

 

 

Book Review: Your New Money Mindset

January 28, 2016

Your New Money Mindset: Create a Healthy Relationship With Money

Brad Hewitt & James Moline, Tyndale House Publishers

 

I don’t read very many books on money.  By and large, there aren’t too many secrets (at least in my opinion) on dealing with your money unless you have a ton of it to begin with.  However these were being given away by our local Thrivent chapter a few months ago and our congregational president passed on a copy to me.

The premise of the book is simple – we need to have grateful and generous hearts in order to shift our relationship with money from always wanting and needing more of it for personal gratification, and to be a blessing to others.  It’s not a complicated mindset, and sounds vaguely Biblical so it ought to be a good sell.  There is an online survey that you take as part of reading the book, and the book is really just an explication of the various survey questions and exhortation to not be so consumeristic and self-centered.

The sad thing is that Christians need to be reminded of this.  We need to be reminded that life does not consist of buying and selling, but rather of contentment in Christ expressed as love for God and love for neighbor.  If we’re always worried about the next and the biggest and the  better, we are likely being exploited for the benefit of others and this hardly counts as love for either God or neighbor.

All well and good.

However, what I find painfully ironic, is that one of the co-authors is the CEO of Thrivent financial, formerly a fraternal organization specifically providing financial services and investments to Lutherans.  However 2-3 years ago the company called for a member vote on whether to expand their services beyond the Lutheran fold, in order to provide bigger and better services to a broader range of people.  I voted against this, incidentally, but the measure carried.  What has resulted has been generally less than pleasing as Lutheran stake-holders.  The company was embroiled in some rather unsightly revelations about funding of pro-abortion non-profit organizations,  which ultimately resulted in funds being denied to both pro-life and pro-abortion organizations, to the deep anger of many Thrivent members.

In other words, Thrivent as an organization (and I’m not sure if this happened under Hewitt’s watch or not) did exactly what Hewitt advises individual Christians not to do in this book – it succumbed to the desire to get bigger for the sake of being bigger.  No mention was made of financial difficulties pushing for the expansion of Thrivent services, it was just an opportunity to get bigger, and isn’t bigger always better?

No, it isn’t.  I argued that then.  Hewitt argues it now in his book while conveniently ignoring the corporate extension of that same philosophy.  I find that problematic.

The other thing I find problematic is that the book itself blithely touts certain societal expectations and norms that have huge financial impacts on families for decades.  Namely, Hewitt never questions the wisdom of parents being saddled with the cost of their children’s college educations, or with kids taking out massive loans to attend good schools.  In fact, more than once in the book graduating from a good school is cited as evidence of your reliability of judgment.

If there’s an area of personal finances that probably deserves some long, hard looks and some counter-cultural advice from Christian financial folks, college would seem to be at the top of the list.  But it isn’t here.  I’m sure it can be reasonably argued that the book aims more at heart issues than practical ones, but I still think they missed an opportunity to provide some really good, practical advice in favor of fairly generic Biblical citations.

Interested Lending

January 21, 2016

Someone inquired yesterday about usury.  Now there’s a topic you don’t hear too many people asking about these days.

Microfinance operations have been growing in popularity.  Organizations such as Kiva make loans available to people in places that wouldn’t be able to secure a loan otherwise.  The loan allows the borrower to invest in or expand their business, allowing them to improve their life as they repay the loan.  With Kiva, the individual lender can make loans to specific borrowers, assuming full risk for the loan.  This means if the borrower defaults, the lender (me, for instance) is out of luck.  However there is no interest on the loan – meaning that if and when the borrower repays, I receive my initial loan amount back but nothing more.

Lending Club is similar except that as the lender, I earn interest on the loan.  This will certainly provide incentive to some people to loan who wouldn’t otherwise.  It still claims to be helping people who might not qualify for loans under other circumstances.  But it also raises the question – for a Christian – of whether or not lending money to earn a profit as interest on the loan is unChristian.

Certainly the Old Testament is replete with warnings and prohibitions against usury.  Exodus 22:25 and Deuteronomy 23:19-20 seem like important texts in this regard.  One of the constant complaints of the prophets was that the rich took advantage of the poor through high interest loans (Ezekiel 18:13, Nehemiah 5:1-13, Jeremiah 15:10, etc.).  As such, faithful Jewish people have traditionally recognized that to lend to another Jewish person at interest is not permissible, though lending to non-Jews at interest is not.  But what about Christians?  Are the Old Testament prohibitions on lending at interest applicable to us?

I presume not.  But before you get all excited (or angry) about that, let’s think it through.  As with many of the Old Testament / Mosaic laws, God’s purpose in giving them to his people was to distinguish them as a geo-political, socio-economic theocracy.  He was making a point through how his people would conduct themselves.  The Church has long held (since the first Church Council in Jerusalem – Acts 15) that these Mosaic laws are no longer binding on followers of Jesus Christ.  The New Testament has very little to say on the subject of lending at interest, with Matthew 25:27 and Luke 6:35 seeming to be the only exceptions, and it could be argued that in neither passage is Jesus actually sustaining the Mosaic prohibition.

All that being said, how do I love my neighbor who I lend money to?  I think that the very clear sense of Scripture as a whole is that my lending to my neighbor should not harm my neighbor.  This prohibits any sort of machinations on my part to deliberately mislead my neighbor into a disadvantageous situation, but it also means that I don’t get to unfairly profit on the blessings I have received from God at my neighbor’s expense.  Somebody (my neighbor, perhaps!) might argue that lending to somebody at 20% interest isn’t unfair if that person can’t get a loan any other place.  Perhaps that’s true, but that doesn’t mean that I have to charge them that much interest, either.

At a certain level we need to recognize that we’re already likely involved in the business of loaning at interest.  If you have money on deposit at the bank, those reserves are theoretically able to be invested – loaned out – to businesses and individuals for the bank to make a profit and for you to earn interest (though these days, you have to have a lot of money to get even a small amount of interest on your money at a bank!).  We expect to earn interest in various situations.  Some might argue that even your grocery store customer card that entitles you to lower prices on certain products is a form of interest being received in return for the store’s right to gather information on your purchasing habits.  In other words, we are regularly selling and being sold for interest, and there are very few who can claim they aren’t.

So I don’t have a problem with microfinance lending companies.  I want to make sure that if I am earning interest, it isn’t excessive.  And I personally think that we should still be open to lending money to people we actually know at no interest.  Not everything is about making a buck.  Helping a neighbor out is valuable in and of itself, and there may be times even when repayment shouldn’t be expected, as Jesus states in Luke 6.  I don’t interpret his words as a unilateral command, but as a recognition that by simply assuming the standards of the world in all respect, we become like the world, when we are called to become like Him.

Curious Success

December 1, 2015

Figuring out how to make a living in this world can be a major anxiety for a young person.  While trite maxims about following your bliss and pursuing your passion all sound good (or look good on a bumper or a high quality jpg), they aren’t necessarily true.  Many people would argue that sometimes you don’t end up doing what you love for a living.  Sometimes you do what is necessary.

But sometimes, you can make a living doing what you love.  Here are a few examples.

These are curious successes, in my opinion.  Their success has been online, standing out in a glut of content and aspiring wannabes and knock-offs.  That’s impressive on its own.  Many of them are self-taught, meaning that not only are they enjoying significant financial success, they probably don’t have the burden of college loans on their backs to do so.

I have to admit I’m hesitant (to say the least) to encourage my kids to consider this sort of vocation.  It’s volatile, to say the least.  It’s dependent on the largesse of others, but then many professions (my own included) fall into this category.  But in talking about the future and livelihood and determining what you’re good at and what you enjoy as well, maybe I should be more willing to acknowledge that some people are very successful in a niche industry that, because of my age, I still consider very quirky.

Would you consider encouraging your kids/grandkids/nieces/nephews/etc towards a possible online vocation?  Why or why not?