Would Calvin have Occupied Wall Street?

Would even liberal Lutherans say this of Martin Luther?

The cause of demonstrators involved in the “Occupy Wall Street” movement would have been supported by John Calvin, the 16th century church reformer who helped shape modern-day Protestantism, says the General Secretary of the World Communion of Reformed Churches (WCRC).

“I am sure he would have been in the streets of New York or London with a placard,” says Setri Nyomi of the French lawyer and theologian who wrote extensively about social and economic justice.

Nyomi makes his comments in a lecture delivered Tuesday at Princeton Theological Seminary in the United States. The Ghanaian theologian and Princeton graduate is delivering three lectures this week on the role of the church in the 21st century.

“Calvin expressed opposition to all forms of social oppression resulting from money”, Nyomi says. “Today, it is the global economic systems and practices that have more sophisticated forms of effects.”

Nyomi believes Calvin’s words resonate with life today. “The church of the 21st century needs to align itself with voices of justice … even if it means being out there in the streets,” he writes.

via John Calvin would have been in the Occupy Wall Street movement, says Reformed church leader | Bringing together 80 million Reformed Christians worldwide.

HT: Jordan Ballor

Can natural gas ignite the economy?

New technology is unlocking vast amounts of natural gas in the United States, enough to have a huge economic impact.  Yes, it involves “fracking,” the controversial practice of pumping chemical-laced water into shale deposits, but improvements in that technique are starting to satisfy all but the most zealous environmentalists.  I’m glad to see companies from my native Oklahoma are leading the way.  Businessweek has a big story on the topic with the deck below the headline, “Unlocking vast reserves of shale gas could solve the energy crisis, the jobs crisis, and the deficit.”

“The United States,” [energy company CEO Aubrey] McClendon boasts, “has the capacity to become the Saudi Arabia of natural gas.”

A tall man who wears his wavy silver hair long by CEO standards, McClendon, 52, exudes the confidence of someone who’s certain he’s seen the future. Exploitation of newly accessible supplies of gas embedded in layers of what’s known as shale rock, he predicts, will help revive domestic manufacturing and change the terms of debate about global warming. “It’s a new industrial renaissance,” he says. . . .

Encouraged by the availability of inexpensive and cleaner domestic gas, some electric utilities are replacing their coal-burning capacity with gas-fired units. Energy-intensive manufacturers of chemicals, plastics, and steel are beginning to bring home operations that they exported years ago. “We believe natural gas must be part of any discussion on strengthening our country’s long-term economic health,” Mulva said in Detroit. “It should also be part of any discussion on improving energy security, protecting the environment, and, yes, creating jobs.”

On the economic potential of the nascent shale revolution, even some career environmentalists sound impressed, if cautious. “This thing is a potential game-changer,” says Fred Krupp, president of the New York-based Environmental Defense Fund (EDF). Shale production in the U.S. has increased from practically nothing in 2000 to more than 13 billion cubic feet per day, or about 30 percent of the country’s natural gas supply. That proportion is heading toward 50 percent in coming years. The U.S. passed Russia in 2009 to become the world’s largest producer of natural gas. An Energy Dept. advisory panel on which Krupp sits estimated in August that more than 200,000 jobs, both direct and indirect, “have been created over the last several years by the development of domestic production of shale gas.” At a moment of 9.1 percent unemployment nationally, additional decently paid work is just one potential benefit. “Natural gas burns cleaner than coal, emits less in the way of greenhouse gases, and avoids mercury and other pollutants from coal,” Krupp points out. “So this could be win-win, if—and this is a big ‘if’—we do it the right way.”

via Could Shale Gas Reignite the U.S. Economy? – Businessweek.

The commodities bubble

Economics columnist Steven Pearlstein describes how high finance is distorting the commodities market and warns that speculation and “financialization” is blowing up a big bubble:

Silly you.

You actually thought companies existed to make products and profits.

You thought houses were meant to provide a place for people to live and office buildings a place for people to work.

You thought food was meant to be eaten, oil and gas to be turned into energy, and metals to be turned into cars, bridges and downspouts.

You weren’t sophisticated enough to realize that these really are just different “asset classes” meant to give investors around the world something to speculate in and to diversify their portfolios.

Even worse, you actually believed all that stuff about prices being set based on market fundamentals. Little did you know that it’s no longer the supply and demand for companies, houses, office buildings, natural gas or wheat that sets prices. More likely it’s the supply and demand for the futures, swaps and other derivative instruments linked to those things.

Maybe they thought we wouldn’t notice that the financialization of the economy brought with it higher prices and a more volatile economy, along with higher profits for the financial services industry.

The latest example is the market for commodities: corn, wheat, cotton, silver, copper, oil, natural gas. In the past decade, hundreds of billions of dollars have flooded into the market, largely through swaps contracts and commodities index funds, ETFs and mutual funds.

These markets have long since outgrown their original function of providing producers and consumers of these commodities with a way to hedge their risks by guaranteeing supply and locking in prices. All futures markets require a certain number of “speculators” to take the other side of the contracts from commercial users and producers. Typically, these speculators would represent 30 percent of the participants in a healthy futures market.

But today, because of a sudden desire to earn higher returns and diversify investment portfolios, there are more people wanting to invest in corn and copper and oil than there is corn and copper and natural gas produced and consumed. But no problem. The financial wizards on Wall Street have magically conjured up synthetic corn and copper and West Texas oil so that speculators can provide hedging opportunities for other speculators. Instead of 30 percent of the market, these “passive investors” typically account for 70 percent or more. . . .

What’s clear from this tale is how little the financial services industry has really changed since the crisis of 2008. The financialization of the economy continues undeterred, creating a bubble in commodities just as it did with houses and office buildings.

via Steven Pearlstein: You bet it’s another bubble – The Washington Post.

Does this kind of speculation serve an economic purpose?  Is it just an example of free market economics?  Or does it actually distort and thwart the free market?

The Occupy ideology

I went into Washington yesterday and stumbled upon the Occupy D.C. folks.  They were in a little green space on Pennsylvania Avenue, which they have filled up with tents.  I was surprised to see how few of them there were.  Estimates have been a couple of hundred–which in itself is an unusually tiny demonstration by D.C. standards–but even that number seems high, based on the little tent village that I saw.  Also, they don’t really look like 99% of America!  I didn’t notice any working class folks–no truck drivers, factory workers, or farmers–despite the unions coming out in their favor.  (That’s always what’s frustrating to the American left:  the proletariat just never comes out for their causes!)  It was pretty much the usual cast of counter-culture radicals whom I remember so well from my college days back in the early 1970s.

The media has been fawning all over these folks, and Democrats–including the president–have declared their support.  That might come back to bite them, according to Michael Gerson, who describes the ideology at work in the seemingly unfocused protests:

But there is some ideological coherence within OWS. Its collectivist people’s councils seem to have two main inspirations: socialism (often Marxist socialism) and anarchism. The two are sometimes in tension. They share, however, a belief that the capitalist system is a form of “institutionalized violence,” and that normal, democratic political methods, dominated by monied interests, are inadequate. Direct action is necessary to provoke the crisis that ignites the struggle that achieves the revolution.

And we are beginning to see what direct action means. Occupy DC protesters recently assaulted a conservative gathering, then took over a public intersection to prevent the passage of luxury cars. Blocking the path of one driver and his 2-year-old son, an activist shouted, “Sorry, but you have no power right now.” That is the opposite of participatory democracy — the use of power to intimidate a fellow citizen on a public street. It is the method of British soccer thugs.

In Oakland, protesters have been playing at the Paris Commune — constructing barricades, setting fires, throwing concrete blocks and explosives, declaring a general strike to stop the “flow of capital” at the port. Here, OWS seems to be taking its cues from both “Rules for Radicals” and “A Clockwork Orange.”

Defenders of OWS dismiss this as the work of a few bad apples. But the transgressors would call themselves the vanguard. And they express, not betray, a significant ideological strain within the movement. Since the 1960s, some on the political left have sought liberal reform through the democratic process and nonviolent protest. Others have sought to hasten the crisis and collapse of fundamentally illegitimate social and economic systems. Both groups can be found within OWS, but the latter is ascendant.

OWS has, in fact, provoked a crisis of credibility for many American institutions. News coverage of the movement has been both disproportionate and fawning. The two encampments of Occupy DC, for example, have a couple of hundred inhabitants. If they moved to a nearby convention hotel, the group would probably be smaller than a meeting of the American Apparel and Footwear Association. During the Tea Party’s rise to national attention, the press scoured the country for any hint of rhetorical incitement to violence. OWS protesters smash windows, assault police officers and wear Guy Fawkes masks — a historical figure known for attempting to bomb the British Parliament.

City governments have also begun to look hapless for their accommodation of squalor, robberies, sexual attacks, drug use, vagrancy and vigilantism.

And what must Democratic leaders — who rushed to identify with a protean political force — now be thinking? OWS is not a seminar on income inequality — not the Center for American Progress on a camping trip. It is a leftist movement with a militant wing.

Will Americans, looking for jobs, turn in hope to the vandalization of small businesses and the promise of a general strike? Will citizens, disappointed by a dysfunctional government, be impressed by the endless arguments of anarchist collectives? Will people, disgusted by partisanship and rhetorical rock-throwing, be attracted to actual rock throwing?

This seems to be the desperate political calculation of the Democratic Party. Good luck with that.

via As radicalism creeps in, credibility retreats from OWS – The Washington Post.

OK, they have TWO encampments in D.C., so that explains how they might have 200 protesters, despite the mere handful that I saw.   Gerson’s point is a good one:  Radicals, whether Marxists or Anarchists, WANT the collapse of our economic system, which is understood as the prerequisite for the revolution.

Both sides are wrong

Robert Samuelson is an economics columnist who has tended to be sensible over the years.  (The Washington Post classifies its columnists online as either “tending left” or “tending right.”  Samuelson shows up on neither list.)  He makes the case that both liberals and conservatives are wrong on the economy:

Let’s banish the budget fictions of left and right.

The supercommittee — the 12 members of Congress charged with devising a plan to close mammoth deficits — cannot succeed without public support for its proposals. And public opinion won’t come along if it embraces fairy tales.

The conservatives’ fiction is: We can reduce deficits and cut taxes by eliminating “wasteful spending.”

The liberals’ fiction is: We can subdue deficits and raise social spending by taxing “the rich” and shrinking the bloated Pentagon.

You will notice one similarity. Both suggest that reducing deficits involves little real pain. No one, after all, favors “wasteful spending.” Similarly, taxing “the rich” doesn’t threaten most people who aren’t rich. Liberals and conservatives alike can reconcile all good things: fiscal rectitude (for both), tax cuts (for conservatives) and high social spending (for liberals). I wish it were so.

It isn’t.

Before explaining why, here’s a caveat. Liberal and conservative budget experts generally don’t endorse these myths. No one who studies the budget could. Still, politicians and partisan propagandists popularize them.

Start with conservatives. Where exactly is all the waste?

True, many government programs deserve the ax. I’ve railed against some for years: farm subsidies (food would be produced without them); Amtrak (it is non-essential transportation); public broadcasting and culture subsidies (these are unaffordable frills); community development block grants (they generally don’t enrich poor communities).

Entitlements — mainly Social Security and Medicare — should be trimmed. I’ve also made that a crusade. We need higher eligibility ages to reflect longer life expectancies. Wealthier retirees should receive less Social Security and pay more for Medicare.

But plausible savings don’t match conservative rhetoric. All the suspect “discretionary” programs come to tens of billions, not hundreds of billions. Culture subsidies total about $1 billion annually; community block grants in 2010 were $4 billion. Meanwhile, total federal spending was $3.5 trillion. Do conservatives really want to eliminate the national parks? The FBI? Highways? Food inspections?

Social Security and Medicare savings could be greater. In 2010, these programs cost $1.2 trillion. But there’s a catch. Savings from lower individual benefits will be offset by more beneficiaries: retiring baby boomers. By 2025, Medicare and Social Security enrollment will rise 50 percent from 2010.

Next, the liberal fiction. Contrary to liberal dogma, the rich already pay plenty of taxes. Indeed, they pay for government. In 2007, the richest 1 percent of Americans paid 28 percent of all federal taxes; the richest 10 percent (including the 1 percent) paid 55 percent.

For most millionaires, federal tax rates — the share of income taxed — exceed 30 percent. Some rich have lower rates. Raising these rates is justified but wouldn’t balance the budget. The plan by Senate Majority Leader Harry Reid for a 5.6 percentage point surtax on incomes exceeding $1 million would raise an estimated $453 billion over 10 years. Deficits over the decade are realistically projected at $8.5 trillion.

As for the Pentagon, the military was cut sharply after the Cold War. Combat forces are half to two-thirds of 1990 levels. Defense spending as a share of national income is headed toward its lowest level since 1940.

What liberals don’t say is this: Unless Social Security and Medicare benefits — the bulk of the budget — are reduced, we face three dismal choices. Huge, unsustainable deficits. Massive tax increases on the middle class, as high as 50 percent over 10 to 15 years. Or draconian cuts in the discretionary programs that liberals accuse conservatives of wanting to gut.

Since 1971, federal spending has averaged 21 percent of national income (gross domestic product). Even with aggressive cuts, spending may never again fall this low. The reason: the surge in retirees. Meanwhile, taxes averaged 18 percent of GDP over those years, leaving average annual deficits of 3 percent. The take-away for both liberals and conservatives is repugnant: They need to identify the most justifiable spending cuts — lots of them — and the least damaging tax increases, which will still be sizable.

They need to come clean with reality. For years, they’ve exuded self-serving platitudes. Conservatives should acknowledge that Big Government is a permanent part of the social fabric and that much of what it does is popular. It needs to be financed. Liberals should concede that Big Government can become so big that its crushing taxes weaken the middle class and economic growth. Government then promotes conflict and degrades social justice.

via Busting the budget myths – The Washington Post.

What if he is right?  Would a program of cutting government AND raising taxes be politically possible?   If not and assuming he is right, what does that mean for our capacity to solve our problems through self-government?

Gross National Happiness

The nation of Bhutan has developed an ideology that is being picked up by other countries:  The use of government to make sure its citizens are happy.  Whether they like it or not.

Some fidget, a few eyes wander here and there, but for a minute or two, hundreds of primary schoolchildren are quiet, learning to meditate together at morning assembly — palms upturned and thumbs together in the style of Buddha.

This is Gross National Happiness — or GNH — at work in the Himalayan kingdom of Bhutan, a country determined to hold on to its ancient values even as it modernizes, to preserve its environment even as its economy grows and to prove to the world that there is more to life than money.

The term was coined by the fourth king of Bhutan, Jigme Singye Wangchuck, in 1972 in an apparently off-the-cuff remark to a journalist.

“I am not so much interested in gross national product,” he reportedly said. “I am more interested in gross national happiness.”

Those words grew into an ideology that has been examined and embraced by development economists and political leaders the world over.

Not since Thomas Jefferson wrote in the Declaration of Independence of people’s inalienable right to “life, liberty and the pursuit of happiness” has the idea been so widely disseminated that a government should promote — or at least not obstruct — its citizens’ happiness. France and Britain are incorporating measures of happiness and well-being into their national accounts, and the U.N. General Assembly adopted happiness as an unofficial Millennium Development Goal in July.

The U.N. resolution was a victory for Bhutan as it looks to win global approval for its national philosophy, but the utopian-sounding idea has proved difficult to put into practice at home.

“The joy of GNH is that it offers Bhutan a distinct and alternative path to development,” said opposition leader Tshering Tobgay. “The pitfall of GNH is that we are more satisfied with talking about it, preaching about it, rather than sincerely implementing some of its important principles.”

The government has tried to factor happiness into policy in a systematic way, creating a Gross National Happiness Commission and conducting two comprehensive studies of the happiness of its citizens based on what it sees as the four pillars of happiness: sustainable development, good governance, preservation of the environment and promotion of traditional culture.

via In Bhutan, pursuit of happiness is a tough mountain to climb – The Washington Post.

The article goes on to explain efforts to quantify an index of Gross National Happiness and how mandatory utopia laws are just not working as advertised.  Still, that is not stopping the government of Bhutan.

Do you think this will catch on here?  Isn’t that what both parties are implicitly trading on, what policies will make us the most happy?