Italy’s Fiat will own all of Chrysler

January 7, 2014 By Gene Veith

So if you want to buy an American car–out of a sense of economic patriotism, protectionism, or because you were moved by that Chrysler commercial about being “imported from Detroit”–does this mean buying a Chrysler product doesn’t count? Does “buying American” allow for buying a Chevrolet made in Mexico? How about a Toyota made in Kentucky? From CNN:

U.S. automaker Chrysler will become fully owned by Italy’s Fiat under terms of an agreement announced Wednesday that also involves the United Auto Workers union. (more…)

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The Dangers of the Digital Dollar

April 7, 2022 By Gene Veith

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The Biden administration is laying the groundwork for the creation of a “digital dollar.”

This is not to be confused with “cryptocurrencies” such as Bitcoin. In fact, a digital dollar would be more like the opposite of cryptocurrency. That medium of exchange is highly decentralized. private, and unconnected to the government. A digital dollar, on the other hand, would be completely controlled and monitored by the federal government.

The effect would be to give the central government unprecedented control over the economy. So says Justin Haskins, writing in The Hill, who argues that a digital dollar “would be one of the most dramatic expansions of federal power ever made, one that could put individuals and businesses in grave danger of losing their social and economic freedoms.” He explains:

A digital dollar would not merely be a digital version of the existing U.S. dollar, but rather an entirely new currency that would, at least at first, exist alongside today’s currency. Similar to cash, the CBDC [central bank digital currency] would be used to pay for goods and services and would likely be managed by the Federal Reserve, the central bank of the United States.

Unlike the current dollar, though, a central bank digital currency would not exist in physical form, meaning you wouldn’t be able to go to a bank or ATM and withdraw it. . . .

Digital dollars. . .would be traceable and programmable. The Federal Reserve (or some other designated entity) would have the ability to create more digital dollars whenever it sees fit, and, depending on how the legislation is written setting up the currency, the dollars could be formulated to have various rules and restrictions built into their design.

For example, a digital dollar could be crafted to restrict fossil-fuel use, to give bonuses to people for spending at particular businesses, to enact de facto price controls by disallowing users from spending too much on particular products, or even to redistribute wealth.

Haskins is worried about how the government might use this power to advance its policies. He cites President Biden’s executive order last month that triggered the digital dollar’s development specified that the new central bank currency must mitigate “climate change and pollution” and promote “financial inclusion and equity.” He also mentions a Federal Reserve official’s refusal to give a straight answer when a reporter asked whether he could “assure us [the public] that these digital currencies won’t ever be used to tell us when, how or where our money can be spent?”

The immediate and most notable effect would be to cut out private banks, particularly for international transactions, as in global trade. Individuals too would be able to pay their bills immediately without the mediation of a commercial bank, which defenders of the digital dollar say would help low-income Americans. Opposing banks, of course, is a staple of anti-capitalism, so leftists like the idea, while Haskins, the director of the Socialism Research Center at The Heartland Institute, worries that it would be a precursor to socialism.

An article at Bloomberg is not so alarmed and gives the arguments for the new currency. But it too raises concerns that point to larger issues:

A digital dollar also raises questions about financial privacy. The ledger underpinning the currency would likely be operated by the government, which would potentially give it the ability to monitor transactions, halt them or confiscate balances.

“If the government controls the ledger, then there is a risk that it will monitor those transactions without going through the proper legal channels because it’s not taking information from someone else,” said Luther at the Bitcoin Policy Institute. “It’s just looking at its own information.”

I have problems with money in general–whether digital or crypto or tangible–that is created by fiat and accepted by convention, apart from any connection to something that has intrinsic economic value. Maybe someone could explain why I am wrong.

In any event, the digital dollar, even if it is not taken as far as Haskins fears, would seem to fulfill the longterm dream of liberal politicians, making it technologically possible for the government to control the economy.

Illustration by Revisorweb – Own work, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=4529960

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The Government Will Even Bail Out Churches

April 8, 2020 By Gene Veith

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Yesterday we blogged about the CARES Act, the government plan to bailout virtually everyone hurt economically by the coronavirus epidemic. That includes churches.

How the CARES Act Works for Churches

Churches, along with other non-profit entities, have explicitly been declared eligible for the Paycheck Protection Program. This is designed to enable small businesses–and, yes, congregations are classified that way for the purpose of the program–to keep giving their employees a paycheck, even though they cannot come to work and even though the company is not bringing in its usual revenue due to the coronavirus epidemic. They can also get money to pay for facility costs and utilities.

This comes in the form of a loan, but the loan used for these purposes will be “forgiven.” That is, it does not have to be repaid. The money comes from a lender, which makes it quicker to receive, but the government will fully reimburse that lender. It is possible to get larger loans for other purposes at a low rate of .5%, but loans for payroll and facilities are actually a grant.

Congregations that cannot hold corporate worship services cannot pass the offering plate. So many are finding themselves in dire financial straits. There is not enough money to pay the pastor or the church secretary, and the mortgage payment for the building is due. If that happens to your congregation, the government is willing to bail you out.

Cheryl Magness has written an excellent article for the Lutheran Reporter, explaining exactly how the program applies to churches and how congregations can apply for this money. Basically, you fill out a form, which you can get here. Then go to a regular lender approved for Small Business Administration loans. Not all of them are, but your local bank may well qualify.

But Should Churches Take the Money?

So that’s how the government bailout for churches works. The bigger question, though, is, should a congregation take this money from the government?

First of all, it shouldn’t need to, if members would keep up their giving as they did before the coronavirus hit. Friends, just because you can’t attend corporate worship, just because worship has moved online, you still need to keep giving your tithes and offerings! Don’t forget that!

But what if that doesn’t happen? My own view is that congregations should take the money. They should do that rather than cutting their pastor’s salary or laying off other staff or missing a payment on the mortgage. Not paying someone what they are owed is more problematic morally than taking money from the state.

A congregation is a spiritual entity, but insofar as it exists physically, handles money, owns property, and is a legally-incorporated body under the laws of the state, it is also a temporal institution, part of God’s Kingdom of the Left.

As such, a local congregation should be entitled to the same benefits as any other corporate entity–such as secular non-profit organizations and small businesses–in the state.

If strings are attached to those benefits, it’s another story. But the Paycheck Protection Program attaches no strings, to the point of including a clear Religious Liberty statement exempting religious institutions from federal anti-discrimination statutes that are often used against Christian teachings regarding sexual morality.

There is certainly plenty of precedent for the state to support churches, as is the practice in Europe. For centuries, this was the norm for Lutheran churches, including in Luther’s day. The United States, though, has laws separating church and state, though sometimes, arguably, they are taken further than they need to be. One could reasonably ask why tax money should go to a church. But that assumes the bailout is funded by taxes, whereas, given the deficit spending, it is actually money created by government fiat.

Consider this: Taking government money is against our principles. Not paying our pastor violates a clear command from God (1 Tim 5: 17-18). There are times when we may have to sacrifice our principles, valid though they be, to avoid an outright sin.

So I say, if your congregation has to, take the money. I may be wrong, though. In fact, I feel uncomfortable with my own advice. So feel free to correct me if you think I’m wrong.

I do agree that churches should be supported by their members. If the government prevents that from happening, it’s right for the government to make up the difference. And yet, churches are not businesses selling goods or services to their customers. Members of a church are not customers. Rather, they constitute that church. So members, no matter what the coronavirus does, keep giving to your church. Doing so would make this issue a moot point.

Image by Jeff Jacobs from Pixabay

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Bailing Out Everybody

April 7, 2020 By Gene Veith

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In an effort to stop the coronavirus epidemic, the government pushed “pause” on much of the American economy, then put up $2.2 trillion to sustain American workers and businesses until it can hit “play” again. But what will this mean?

Two weeks ago, President Trump signed the Coronavirus Aid, Relief, and Economic Security Acts (CARES) Act, which was approved unanimously in the Republican-controlled Senate and by voice vote with only one recorded dissenter in the Democratic-controlled House of Representatives. Now that it’s April, the measures are going into effect.

The law is breathtaking in its scope and largesse. We will all, pretty much, be getting $1,200 cash, with $500 for each child. There is money for everyone–big businesses, small businesses, workers, the unemployed–in an effort to bail out everybody. Here is a good survey, with information about how to access each program.

The government, for example, is promising to cover the payroll for businesses hurt by the epidemic so that they do not have to lay off workers, even though they can no longer work. Small businesses can get a loan from a bank to cover 2.5 times the total payroll and the loan does not have to be payed back. (We’ll discuss this program, for which churches are also eligible, tomorrow.)

The federal government will also subsidize what the states pay for unemployment benefits, typically half the person’s salary, plus add on $600 per week. Some lawmakers thought that must have been a drafting error, since it would mean that many people would be making more on unemployment than they would working. But that’s not a bug but a feature: This would give the unemployed an incentive to stay at home, out of the workforce, which is what we need in a quarantine.

I am not disputing whether or not this bailout is necessary, though feel free to debate that issue in the comments. If the government forbids businesses from operating and prevents employees from going to work, it seems just for the government to make up for the financial loss that it imposed.

What I’m trying to get my mind around are the implications of a government intervention into the economy on this scale.

The entire federal budget, as proposed by President Trump for the 2021 fiscal year–not including any of these expenses, of course, is $4.829 trillion, with the expectation of $3.863 trillion in revenue. That means a deficit for that year of about $1 trillion. The national debt is some $25.3 trillion. The entire Gross Domestic Product for the United States in 2019 was $21.73 trillion.

So perhaps $2 trillion, even though it adds half again as much to the federal budget and increases the yearly deficit threefold, is chicken feed, less than a 10% addition to the national debt. Still, it makes sense to ask, how are we going to pay for all of this?

And what are the political and ideological implications of this bailout? Every single Republican, conservative, libertarian, fiscal hawk in the Senate voted “aye” for this bill. Have they abandoned their small-government, fiscally-prudent principles?

The Left is exhilarated by this kind of spending. I saw multiple headlines on the theme “The Era of Small Government Is Over.” And crowing over the prospect that fiscal conservatism is dead. Never mind that we have not had “small government” for a long time, and that purposefully inducing a coma in the economy and trying to keep it on life support until it can be revived (I came across that metaphor somewhere) is not the same as ongoing government control. But the bailout mindset, which exists in both parties, may shape what people think is possible and have political consequences.

The Democratic Socialist Democrat Rep. Alexandria Ocasio-Cortez, D-N.Y. commented that Republicans have always put the kibosh on proposals such as Medicare for All and the Green New Deal by asking, “how are you going to pay for it?” But now, after the CARE Act passed, she said, that question is off the table. “It’s a fascinating progressive moment because what it’s shown is that all of these issues have never been about ‘how are you going to pay for it?,” but “about a lack of political will and who you deemed worthy to be in an emergency or not.”

Bernie Sanders says that his Medicare for All plan would cost between $3 and $4 trillion per year. The Green New Deal is estimated to cost between $5.2 and $9.3 trillion per year. These would dwarf the piddling $2 trillion for the bailout, which is designed to just last for a few months.

This all seems to be an exercise in Modern Monetary Theory, the notion that governments can create money by fiat. Thus, deficits don’t matter. If that theory is true, why shouldn’t the government implement whatever policies it wants, regardless of the cost? Then again, we might wonder, if that theory is true, why does the government need to tax us? But if everything works out nicely with the bailout, we might be facing a new era of not only big government but mega-government, confident that it can control the whole economy and operate without constraints.

If that theory proves not to be true, but free market economic theory is valid after all, we can expect big problems. Even in the short term, if lots of money is put into the pockets of Americans during the coronavirus, what good will that do, if production is dropping due to all of the closures? What will there be for Americans to buy with all of their money? And if the supply goes down, but demand is strong, won’t that drive up prices, causing inflation? And if price gouging laws that go into effect during states of emergency prevent higher prices, won’t the low supply and strong demand mean shortages of goods?

We’ll have to see what happens.

Am I too worried? I would gladly be wrong. Are there other possible scenarios that I am missing?

Maybe the bailout will function as advertised and after the epidemic fades away the private-sector economy will return to its previous growth and dynamism, whose higher revenues will generate more tax-revenue to cover the deficits.

Let’s hope the viral epidemic will not be followed by a government epidemic.

TOMORROW: What the CARES Act means for the Church.

Image by geralt, public domain, via Needpix.com

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The Courts Are Increasingly in Conservative Hands

November 21, 2018 By Gene Veith

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Donald Trump is controversial, even among many conservatives. But he already has accomplished a legacy achievement, something that will shape this country in what conservatives believe will be a positive direction for decades. He has practically re-made the federal court system, packing it on every level with conservative judges.

The Supreme Court is the most obvious example, with his appointment of the two conservatives, Justices Gorsuch and Kavanaugh, who will give the high court a 5-4 conservative majority. But President Trump has also done something similar with the circuit appeals courts and with federal trial judges.

Adam Cancryn, who laments the passing of the liberal judiciary, sums up the situation in Politico:

Aside from the Supreme Court, where Trump named Justices Neil Gorsuch and Brett Kavanaugh, the rightward shift may be most momentous in the 12 regional circuit courts that hear appeals, set binding precedents and often have the final say in the many cases the high court never takes up.

Trump has already placed 1-in-6 judges on the circuit courts, some of which are closely divided between Republican and Democratic appointees. Those 29 appointments are the most by any modern president in his first two years.

Counting both federal trial and appellate courts, Trump’s 84 judicial appointments to date far exceed the pace set by President Barack Obama in his first two years.

Furthermore, Cancryn points out, President Trump has been appointing not only conservative judges but young conservative judges, whose lifetime appointments will keep them on the bench for a long, long time, no matter which party comes to power.

Liberals have long imposed their ideas on the rest of the country–legalized abortion, outlawing school prayer, gay marriage, etc.–not through legislation but through the federal court system. They may not be able to do that so much anymore.

Now liberals are invoking such once-conservative judicial principles as the need to uphold precent and that judges should not legislate from the bench.

Conservatives should not get giddy, though, at the prospect of conservative courts. Liberal judges are the ones who predictably rule in accord with their political convictions. This is because they hold to a “living Constitution” and to interpretive principles that allow them to reach progressive conclusions, despite the original intent of the law. But conservative judges actually believe in following the law, as written and as intended by the lawmakers. This means that they will not always side with the conservative political position, even though they might personally favor it, if it violates statutory law or the Constitution.

But still, the rule of law is better than the rule of political fiat every time.

Illustration by succo via Pixabay, CC0, Creative Commons

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The Created Order

June 28, 2018 By Gene Veith

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The doctrine of creation means more than opposing evolution. It teaches that there is a “created order” that we belong to. As Christians wrestle with the controversial issues of our day, we often forget this fact.

So says Breakpoint writer and Patheos blogger G. Shane Morris in his post Rules Without Reasons: Why the Culture Is Eating Evangelicals for Lunch. He asks, “Is there a discernible moral and social order built into creation, as the old Christian theologians thought—an order which Christ came to this world to restore and glorify—or do the graces of salvation and special revelation abolish the natural order in favor of something unprecedented?”

The implications of how we answer this are far-reaching. For instance, do we need explicit statements from Scripture to reach certain moral conclusions, or are these conclusions evident in nature and accessible via reason? Do we need chapters and verses condemning women in military combat roles, LGBT “spiritual friendships,” masturbation, or surrogacy, or can we reach conclusions about these things by reasoning from the created order? Catholics have historically said “yes,” producing a rich body of natural theology that gives moral guidance (however imperfectly followed) to members of that communion. I suggest most evangelicals, by contrast, can’t answer this question, or else they will answer it in the negative, believing that the doctrine of Sola Scriptura requires them to “remain silent where Scripture is silent.”

To offer a more controversial example, evangelicals who see my social media posts about intentionally childless couples often reply that not everyone is “called to parenthood.” There is a superstructure of philosophy and assumptions buried beneath that sentence. It implies a theology of marriage as an essentially companionate institution which is fulfilled without even the intention of being fruitful. It also implies that parenthood is a supernatural, rather than a natural calling. Instead of being a major part of the telos or purpose of marriage, it is an optional side-quest to which God may summon a couple via new revelation. For many evangelicals today, there is no prior mandate evident in creation to reproduce, or for that matter, to do or refrain from doing much of anything. Roles, duties, and moral facts which generations of Christians before us would have seen as self-evident now puzzle evangelicals, who take the view that whatever the Bible doesn’t forbid is allowed.

This puts them in awkward postures when it comes to arguing against things like same-sex marriage. After all, if we have already embraced the companionate model of marriage, what is the difference between two intentionally childless heterosexuals and two necessarily childless homosexuals? It’s hard to make the case that marriage, shorn of its procreative telos, is something of which complementary sexes are uniquely and exclusively capable. This is one of the main reasons we evangelicals have lost the cultural and legal wars on this issue. We already accept many of the culture’s premises, and have little besides special revelatory fiat with which to answer the inexorable chant of “marriage equality!”

[Keep reading. . . ]

Note the confusion about the doctrine of vocation that Shane draws our attention to. “Calling” is not a feeling or inclination. It reflects reality in the here and now. If you want to be married, that is not in itself a vocation for marriage. If you get married, then you have the vocation of marriage. If you have children, then you have the vocation of father or mother.

I’m intrigued by the distinction he makes between the “companionate model of marriage” and, I suppose it would be called, the “procreative model of marriage.” The vocation of marriage, of course, involves both finding a companion (a “helpmeet”) and establishing a family with the purpose of having children (being fruitful and multiplying). If the latter proves impossible, that does not negate the vocation of marriage. Nor does problems with being “companionate” negate the vocation, contrary to the divorces on the grounds of incompatibility.

Shane goes on to apply the principle to other issues. Many Christians reason like this: “The Bible doesn’t say anything about transgenderism, so there can’t be anything really wrong with it.” “The Bible says that women shouldn’t be pastors, but that means they can be anything else, including warriors in combat.” “The Bible forbids sex outside of heterosexual marriage, so as long as the couple is celibate, they can be part of the gay lifestyle.”

As opposed to thinking about these issues in terms of what is natural–that is to say, not wildlife and wilderness, but what conforms to reality, to the created order.

Catholicism is all about the “natural law.” Protestants have held various positions about the natural law, usually seeing it as no substitute for the revelation of Scripture, but applicable to this-worldly considerations.

Lutherans, as I understand the issue (correct me if I’m wrong), hold to natural law as applying to God’s temporal kingdom, which includes His created order and civil righteousness. God’s eternal kingdom is brought about not by Nature but by His Word, which conveys Christ’s redemption.

Is Shane’s analysis too “Catholic”? Does he hold sufficiently to “sola Scriptura”?

Illustration by William Blake, [Public domain], via Wikimedia Commons

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