Americans are hurting. The unemployment rate stands at 9%[4]. That means more than 13M people are actively looking for work. Another 6-7% of the population is either under employed or has given up looking. The national debt has reached a record $15T.[5]
Politicians claim there is a political solution to this problem. Republicans and Democrats blame each other for the lack of an implemented solution. At the end of our American process, at the polls, each of us we will the opportunity to choose who is right. How will we know? 78% of us look to TV for answers[6], but I recommend we start with the Bible.
The purpose of this discussion is to offer a Biblical alternative to the ones proposed by politicians and special interests. The challenge is that the Bible does not say much about politics or economics. Jesus and his disciples were more concerned with saving our souls than our jobs and money. That said, there are key biblical lessons on hot topics like debt, taxes, immigration, and social justice that are central to our increasingly heated political discourse.
I am going to do some things in this discussion that are not done in church, especially not an American church.
1.
I am going to talk about politics, but I will not say
any one party is right. They are both wrong.
2.
I am going to assume the Bible is right. In fact, I am
going to do something even more shocking. I am going to assume the Old
Testament is right.
3.
I am NOT going to make this simple and easy. Americans tend
to hate any answer that can’t fit on a bumper sticker or a one-pager, but some
things are hard and complex.
Lastly, I am going to ask you to dismiss the implicit Christian belief that “you
can use the Bible to take both sides of every issue.” The Bible is clear on a
few, dangerously complex, political things that both Republicans AND Democrats
have gotten wrong. To illustrate, I intend to prove that the Bible takes a
strong position on three things that no Republican or Democrat would agree with,
and they are:
1.
Immigration Law: None
2.
National Debt: None
3.
Taxes and Social Welfare: Communism
Let’s start with immigration. Solutions to "the immigrant problem" are a significant component of the platform of both parties, but neither is close to the Bible's very clear mandate.
Believe it or not, Republicans and Democrats do not differ significantly on the subject of immigration. Republicans have championed the toughest laws to police immigrant communities (e.g. Arizona, California, Alabama), but in his first year, Obama deported 3x more immigrants than Bush and maintained that level throughout his presidency[7]. The Obama administration has been more aggressive in enforcement. (Bush averaged ramped from 120k to 350k; Obama averaging just below 400k). In fact, the two parties' platforms differ only slightly. Both require illegal immigrants to register or apply for citizenship[8], but one requires them to leave the country first[9]. Both are silly since most are Latin American migrant laborers that have one chance in a hundred of successfully completing either process.
Neither party is close to the Bible which says, "Treat the immigrant as native born." This means not hiring a person because they are an illegal immigrant is counter to Biblical teaching and law. Many argue that the Bible also says that we should obey our rulers and their laws, and illegal immigrants are breaking the law but what about unjust laws? Moses wrote, "The community is to have the same rules for you and for the foreigner residing among you." (Numbers 15:15) Hence, laws that make immigration illegal are counter to Biblical law. One might argue, "That was then; this is now. Those Old Testament laws no longer apply.” Unfortunately, this Biblical law is harder to dismiss as out-dated than most. Moses specifically called on future generations to honor it. “This is a lasting ordinance for the generations to come … The same laws and regulations will apply both to you and to the foreigner residing among you." (Numbers 15:15) The importance of respecting immigrants was reiterated 1200 years (~50 generations) later by Malachi and Zechariah. Most of our roots in this country are 80-90% shorter. (260 years, 10 generations for African Americans)
Now, I want to do something radical, something that you may not be used to hearing in Church. I am going to assume the Bible is right. No, even more radical, something that will make most Baptists uncomfortable. I am going to assume the Old Testament is right. I know some of you are thinking, "Ryan, we can't dismiss laws against immigration. If we did, the country would be overrun by ... THEM."
First, let's be honest about what we mean by them, more than 90% of immigrants deported from this country come from 4 countries[10], 70% from Mexico and another 20% from Guatemala, Honduras, and El Salvador. No other country amounts to more than a half a percent. If we made immigration legal, the demographics of this country would change.
Let me tell you a little story that will help you better understand how the demographics will change and how it can affect the community. The names in this story have been changed to protect the innocent and my confidentiality agreement. I used to work in a small town in the middle of nowhere in the South. You don't know this town. It is a 2-3 hour drive from the closest cities you might know. It is so far from being known that it was named after the least known and least successful of Washington's Revolutionary War generals. About 5-10 years ago, the Hispanic population of the town exploded. One of the plants not only hired illegal immigrants, it helped forge their paperwork. 20-30% of the plant was overrun by illegal immigrants who worked for wages that were 30% below the average of the locally born machinist. What do you think they did with the locals that worked for the plant before? .... No, they promoted them. Who else was qualified to inspect the quality of the parts made by the illegal immigrants? Who else was qualified to supervise them, to repair and engineer their equipment? In fact, the locals loved the influx of immigrants. They paid taxes, ate at local restaurants, and bought housing. Treating the immigrant, even the illegal immigrant, as native born was a boon to the economy.
Eventually, though, the plant's illegal (e.g. counter to US law now Biblical law) practices caught up to it. Local police were tipped off because an immigrant from El Salvador felt preferential treatment was being given to immigrants from Colombia. Corporate headquarters was alerted and immigrants stopped being treated as native born. All of the immigrants were fired along with the plant manager and his head of HR. The rest of the story is even sadder. The average wage in the plant rose to $17/hour, just under the national average for machinists, 3 times the average in Mexico and 10x the average in China. The plant could not compete against the foreign plants and started losing $20M/year. The next two plant managers were fired and the third was brought in to close the plant and move it to China.
I wish I could tell you I was the final plant manager, but I am not just telling you the story of the plant that I managed. I am telling you the story of nearly every manufacturing plant in that town and across the US. This isn't just the story of a small town. It is the story of America. US companies did not lose jobs in the past 10 years. We added 500k jobs to the economy. Unfortunately, we did not add them to the US economy. We add 500k jobs by removing 2.4M from the United States and adding 2.9M to Asia[11].
Maybe God knew a little more about economics when he commanded Moses to treat the immigrant as native born. Here are the economics. The US machinist[12] makes $20-$50/hour ($70 for UAW labor)[13]. Chinese and Mexican workers make $1-$5[14]. The American worker can be more productive but, typically, not more than 40% more. A product made with $40 of US labor can be made in China by someone who makes 80-90% less. If you adjust for productivity and hire an extra person for every two needed in the US, the US company can still save $34 for every $40 they were paying in the US (85%).
At this point, a social worker who blames corporations for this problem will typically ask, “Why can’t companies just pay workers what they are worth? Why do they need to double their profits at the expense of the country and the American worker?” The answer is that market dynamics force these jobs to move with or without greed. Sometimes, greed drives a company to double their profit. Other times, one company lowers its prices/costs to capture more business. Frequently, a foreign company forces the move by dropping prices to attract consumers looking for the lowest price. If you are looking for the greedy cheapskate, take a look in the mirror the next time you are bargain hunting at Walmart. “Wal-Mart was responsible for $27 billion in U.S. imports from China in 2006 and 11% of the growth of the total U.S. trade deficit with China [in 2007].”[15] Wait! Before you blame Walmart, keep looking at the man in the mirror. Walmart tried a “Buy American” campaign in the mid 90s when only 6% of its goods were imported. It did not work, and by 2005, 80% of its suppliers were in China.[16]
In a free economy, jobs and money flow to the lowest cost products and services. Of course, we will pay for quality and convenience, but given a choice between paying $400 for Gucci purse and $300 for the same purse, most of us will choose to pay less. Employers make the same choice. Given a choice between paying $20-$50 for an American worker and $1-$5 for the same labor in China or Mexico, they choose to pay less.
Instead of asking why jobs are leaving the US, we should be asking why any are staying. The answer is the cost of moving the job. Some products are really expensive to ship into the United States. Electronic components, for example, tend to be easy to pack into a shipping container, but a fully assembled car, on the other hand, is not. Hence, car manufacturers make most of their electrical components overseas and assemble them into the full car right before it’s shipped to the dealership.[17]
Allowing migrant workers doesn’t only add jobs to the US economy, it also makes it difficult for other countries to take jobs from the US. The reason machinists are willing to work for $5/hr in Mexico is because we make it so difficult for them to make more here. If they could triple their wages by learning a different language and paying taxes to another country, they would, and consequently, US companies would save less by moving jobs there. This is not hypothetical. It is exactly what happened when the wall was torn down between East and West Germany. Within 10 years, the average wage in East Germany rose 118%.[18] Companies that move to Eastern Europe to save money have difficulty realizing the savings because the low cost engineers they hire are soon able to move west for more money.
Did God know these economics back in 1454 BC when Moses wrote these laws in the first five books of the Bible? It is important to mention here that there are two schools of thought on the historicity or the “truth” of the stories of Moses. There is a school of thought that, around 600BC, a group of nomadic Canaanites slowly started to believe the best stories they had ever heard was their actual history, and they wrote it down as such. Others believe that Moses was an actual person whose literacy, gained in Egypt around 1454BC, allowed him and his successors to accurately record his story and that of the Judges and Kings to follow him. The archaeological evidence better supports the latter view, but it does not matter. Worst case scenario, the laws of Moses lasted 2600 years. Best case, they lasted 3500[19]. If you believe the best case scenario, then you might also believe these laws came directly from God, “The LORD would speak to Moses face to face, as one speaks to a friend ... And all the people saw the pillar of cloud stand at the door of the Tent." (Genesis 33:11)
As Christian immigrants, we should oppose these racist laws. We should vote against politicians that strengthen them and against those policies that enforce them. This is not advocating breaking the law. “Let every person be subject to the governing authorities. For there is no authority except from God, and those that exist have been instituted by God. Therefore whoever resists the authorities resists what God has appointed, and those who resist will incur judgment. For rulers are not a terror to good conduct, but too bad.” (Romans 13:1)
Legalizing immigration, as suggested in the Bible, does not mean lawlessness. Catching drug runners, violent criminals, and terrorists would remain a priority, but most illegal immigrants are careful to stay away from the law. Most of the ones that are deported enter the criminal justice system due to minor traffic violations.
Just as the immigrants in Georgia lost their jobs by discriminating against each other, we hurt ourselves by doing the same to the immigrants that came after our ancestors. Our forefathers did the same thing, benefiting when they allowed immigration and suffering when they stopped. Unfortunately, these benefits were repeatedly forgotten and eclipsed by discrimination with each generation. The largest economic boom this country has known came from the railroads. It produced 20% of the richest men that ever lived[20], all white. It was also done with the support of a massive influx of Chinese immigrants. The fear of this changing demographic brought the first anti-immigrant legislation in the US, the Chinese Exclusion Act of 1882. Similarly, the boom in Southern agriculture that was fueled by the importation of African labor was followed by the Act Prohibiting Importation of Slaves of 1794 and 1807. Slavery did not end for another 50 years but anxiety was high because Africans had risen to more than a third of the Southern population, 57% in South Carolina[21].
The next major changes in immigrant law followed the surge in Italian immigration and the economic boom of the 1920s. I once received an email from a neighbor that complained about how lax the US is in enforcing immigration laws. I replied saying, “John, you’re a second generation Italian American. The people that wrote that law were worried about you, not Mexicans.” Of course, 60 years (just two generations) later the quotas for these laws would be refined by, and it pains me to say this, Operation Wetback in the 50s and the Immigration Reform and Control Act of 1986 to target Hispanics. And the grandchildren of the people who worked so hard to say “Io (yo) sono Americano” would be discriminating against those who now work to say, “Yo SOY Americano.”
The country's two, most talked about problems are unemployment and debt. Interestingly, there is a direct relationship between the two[22]. Countries with legal, low wage workers have little debt. Increasingly, their citizens have jobs to pay their government’s expenses. Countries without legal, low cost workers, on the other hand, build up debt. Most are carrying relatively more debt than the United States. This brings us to the next gap between US and biblical law, lending and interest.
Interest and Debt
The national debt just passed $15T in November[23].
This is the size of our economy. Italy and Greece's debt is 30-50% larger than
their economy. Denmark, England, Germany, and France are all shouldering even
more. In fact, nearly every western economy has a debt greater than the size of
its economy. There can be little doubt that debt is central to our current problem in the global economy. Concerns about the US's ability to pay its debt led to the S&P’s first reduction of our debt rating and rattled global markets for most of the first half of 2011. The second half of 2011 has been dominated by the European debt crisis. The average European country owes about 50% more debt as a percent of GNP than the US! Italy and Greece are in danger of bankruptcy and they are not even the worst offenders!
Individuals are no different. Consumer debt in the US topped $2.5T in 2009. That is more than $22k per household and increasing because the average household spends more than it makes.
This is another example of a departure from Biblical law. Put simply, the Bible does not support most practices related to money lending. Specifically, it says that we are to “charge no interest" (Exodus 22:25). Forgive debts in 7 years (Deuteronomy 15:7), NOT securitize debts (Proverbs 22:26), avoid speculation (Proverbs 28:19, 13:11, and 14:23 and Ecclesiastes 11:4), and that, “the LORD your God will bless you as he has promised, and you will lend to many nations but will borrow from none.”
The US leads the world in national and personal debt. We have been the most creative and aggressive in securitization (AIG) and speculation (Enron). By nearly every measure, we lead the world in our departure from Solomon’s wisdom regarding Financial Services which is sad given Solomon started Proverbs by asking “do not forget my teaching, but keep my commands in your heart, for they will prolong your life many years and bring you peace and prosperity.” (Proverbs 3:1). Again, the Biblical solution appears radical. No one would lend money if they could not charge interest. An end to interest would be an end to debt, at least for poor, disenfranchised communities. It can be argued that the Bible’s “no interest” provision specifically bans interest for “one of my people among you who is needy” so this discussion will focus loans that affect poorer Americans, mortgage, student, and credit card.
It is difficult to imagine a world without loans and interest. I paid for a little more than half of my house with a loan from the bank. Without that loan, I doubt that my family could have afforded a house in NY. In fact, most of us wouldn't be able to. The average homeowner owns less than 40% of his house[24], a historical low. Perversely, if it were not for all of this money lending, house prices would not be so high. Money Lending helped fuel the escalation in home prices and the current housing crisis.
We need to return to the wisdom of our ancestors and the lessons of history. As individuals, we need to cut our debt. This means paying off credit cards every month if we use them at all. We need to reduce our mortgages, either paying the mortgage early or by buying the house we can afford in the first place. In fact, all major purchases should be entered into, “discreetly, advisedly, soberly, reverently, and in the fear of God.”
While it is difficult to imagine a world without debt, let’s consider one with less debt, a world that is closer to the Bible. Solomon says “Trust in the Lord … and lean not on your own understanding;” I might argue that if our own understanding is what led us away from the world, perhaps a deeper understanding can lead us back.
As difficult as it may seem for the individual homeowner, it a world without debt is not as difficult as it might seem. Many companies have no debt. They are entirely equity (shareholder) financed. In the Middle East, debt is less common because Islamic Sharia law forbids the payment or receipt of interest so strict adherents use a rent-to-own system to purchase houses. Germans used a 200 year old system called Pfandbrief , and “never, during its more than 200-year history has a Pfandbrief ever defaulted”[25]. These systems are arguably less efficient, but they are also less risky and erratic. In the words of Hank Paulson[26], the US Treasury Secretary,
“Covered bonds have the potential to increase mortgage
financing, improve underwriting standards and strengthen U.S. financial
institutions,” he said.
Covered bonds offer greater protection to investors
because banks keep the home loans on their books, and must make up shortfalls
if homeowners fail to pay.
The Treasury’s guidelines exclude riskier types of
mortgages that contributed to the crisis of the past year, including loans made
without documenting the borrower’s income and those involving higher debt
compared with property value.”
To understand why these systems are closer to Biblical law, we need to
understand a couple of terms better, namely money, debt, equity, and
securitization. Money is a “useless object that serves as a medium of exchange”[27]
(e.g. for goods and services). If I give you $20k, I’ll want something in
exchange for it, like ownership of a car or a business. If you can’t give me
something now, then I will want a promise
for more later
along with some form of penalty. That promise is debt, the “more” is interest and
the penalty is breaking your legs if I am a loan shark, fines if I am a bank,
your house if I am a mortgage bank, or “your very bed” if I am an Old Testament
lender. The lender does not share in the risk of the business or the house.
Their only risk is you. As the lender, I only lose if I can’t get you back, “an
eye for an eye, a tooth for a tooth” plus interest. It is a process that is the
opposite of forgiveness. In the alternative systems that are common in Germany and the Middle East, the lender shares in the risk, like a partner. They continue to own your loan or what you buy. This is different from US banks which like to sell their loan to someone else. This process is called securitizing a loan. It is very similar to the practice of being a guarantor or a surety that Solomon was warning against when he wrote, “Do not be among those who give pledges, Among those who become guarantors for debts.” It frees banks from being responsible for the loans they make and turns them into empty shells that buy and sell loans.
Instead of being an empty shell that buys and sells IOUs, these foreign banks actually own the house (Islamic mortgage) or responsibility for your ability to pay (German mortgage). If the government or its shareholders assess the business, they will assess real property. The bank is no longer too big to fail. If a bank goes under, real assets and real loans are left on the balance sheet. In the US system of mortgage backed securities, there are only promissory notes, and that was scary for all involved. It was so scary that the guys holding all of the paper sold it for real money. The guys who were living in the houses with all of the debt had no partner. When housing and other prices fell, they owned nothing, and many just walked away. Now, who’s in charge? This isn’t just bad Christianity. It’s bad Capitalism.
The German system is much closer to the Bible in many ways. German Pfandbriefe have an average maturity of 5-7 years, which is consistent with the Deuteronomy 15:1 “At the end of every seven years you must cancel debts.” German banks require borrowers to put 20%-25% down on a house. While 75-80% debt financing is not 0, it is much closer than the US was. During the bubble, American banks allowed lenders to put down as little as 10%. I have heard stories about people who walked into the mortgage company's office without a dime in their pockets who bought a condo and walked away from the deal with $10k in cash. What is that person going to do if the housing market falls 5%? They can't even afford to sell their house. If a person puts 10% down on a $200k condo right before the market falls 20%, they need to find $20k just to sell it. If they lose their job, and find a new one a couple of hours away, they can't afford to take the new job. This is why the unemployment rate is 9%, but companies still find they can't hire good people. No one can afford to move where the jobs are.
People have to be able to move where the jobs are. This is critical to the global economy. A recession is not the end of the world. It is the beginning. The greatest stories ever told in the Bible usually start with the words, "there was a famine in the land." (Genesis 12, 26, 41, Ruth 1, Samuel, 2 Kings 4, 2 Chronicles, …). Adam, Cain, Noah, Israel, Joseph, Moses, and Paul, to name a few, were all migrant workers. Even Joseph was on the move. If Mary were alive today, her name might be Maria and someone would be calling Jesus an anchor baby.
Conclusion
As stated in the beginning, the purpose of this article is not to promote the
position of either party. They are both wrong. Neither is in line with the wisdom
of the Bible on our two biggest challenges. Americans are highly resistant to
voting for presidential candidates that are not Jewish or Christian[28]
but we allow these politicians to casually dismiss the advice and dictates of
these religions. In so doing, we allow them to ignore the experience of a culture
that survived for more than thousands of years, outliving the Babylonians, the
Egyptians, the Romans, and many others too numerous to count. As individuals and as a nation we are suffering from historically high levels of debt, unemployment, and fiscal inequality. These are not new problems and neither are the solutions. We claim to be Christians but ignore the Book with the answers. It is a book of love, but it is a tough love.
We are like teenagers who avoid asking our parents for help because we already know what they will say, “You can’t afford that, and share with your brother.” Our problem is really that simple. We spend more than we make, and we are immigrants that discriminate against immigrants.
We know better, and we will rise to the challenge. The smart teenager eventually returns to the ways of their parents (Proverbs 22:6), and American money will again truly say “In God we Trust” and our largest city’s ports will more honestly tell immigrants, “Give me your tired, your poor/Your huddled masses yearning to breathe free.”
The term "socialist" is thrown around like it is a bad word. Jesus and his disciples were not capitalists. Early Christians operated in a system that rivaled communism. "No one claimed that any of their possessions was their own, but they shared everything they had … and distributed to anyone who had need" (Acts 4:32-24). Compare this to Webster’s, “a system in which goods are owned in common and are available to all as needed.”
Socialism may be the more appropriate label if any were to be applied. Socialism is "a stage of society … between capitalism and communism and distinguished by unequal distribution of goods and pay according to work done.” Compare this to Paul's writing to the church in Corinth, "whoever plows and threshes should be able to do so in the hope of sharing in the harvest." (1 Corinthians 9:10)
I don’t say this in defense of communism or socialism. I believe in the opposite. I am an industrialist and a capitalist. I have an MBA from Stanford. My economics literally come from the same school as Mitt Romney’s, the leading Republican, fiscal conservative. We went to the same High School, college, and later joined the same two consulting firms.
I only insist that we “keep it real.” The reality is that it does not make sense to say we love Jesus and hate Socialists. It barely makes sense to say that we love the Church and hate Socialism. The Church is modeled after a man whose response to complaints about taxes was a cavalier, “give back to Caesar what is Caesar’s.”
·
Interest for the needy
·
More on student loans
·
Is the law against debt driven enslavement?
·
No debt, even if you can pay it off?
·
Recommendations: immigration law
·
East Germany wages
[1]
Tahman Bradley, ABC News, Final
Fundraising Figure: Obama's $750M, 12/8/2008
[2]
Federal Elections Commission, TESTIMONY
BEFORE THE SUBCOMMITTEE ON ELECTIONS OF THE COMMITTEE ON HOUSE ADMINISTRATION,
11/3/2011
[3]
Rasmussen Reports, Right
Track or Wrong Track; 1/21-11/27
[4]
Bureau of Labor Statistics, October 2011
National Unemployment Rate, 12/1/11
[5]
Richard Simon, LA Times “Fighting
the national debt out of their own pockets”; 11/26/11
[6]
ZDNet, 10/28/2004, Major
news sources for political information
[7]
Molly O’Toole, Reuters, Analysis:
Obama deportations raise immigration policy questions, 9/20/2011
[8]
Democrats.org, “We
Stand for Immigration Reform”; 11/30/2011
[10]
Brady McCombs, Arizona Daily Star; “Most
deported illegal immigrants from 4 Latin American countries”; 10/27/11
[11]
Governor Jennifer Granholm and David Mulhern; Newsweek; “America’s
Workers Get Stiffed”; 8/7/2011
[12]
Bureau of Labor Statistics, Occupational
Outlook Handbook, 2010-11 Edition
[13]
David Leonhardt, The New York Times, “$73
an Hour: Adding It Up”, 12/9/2008
[14]
Bureau of Labor Statistics, INTERNATIONAL COMPARISONS
OF HOURLY COMPENSATION COSTS
IN MANUFACTURING,
2009
[15]
Wikipedia, apparently drawn from a PBS story referenced here later, “Is
Walmart Good for America?”
[16]
Robert E. Scott; Economic Policy Institute; The Wal-Mart effect: Its Chinese
imports have displaced nearly 200,000 U.S. jobs”; 6/25/2007
[17]
Hedrick Smith and Rick Young, PBS, “Is
Walmart Good for America?”; 11/16/2004
[18] Ira
N. Gang; Rutgers University; “Wage Growth and
Inequality Change During Rapid Economic Transition”; June 1, 2003
[20]
Malcolm Gladwell, Outliers, The Story of Success, Back Bay Books, 2008
[21]
Jenny B. Wahl, Economic History Association, 2/1/2011, “Slavery in the
United States”
[22]
CIA Factbook, Country
Comparisons of Debt, 48% R Squared between Debt over GDP and GDP per capita
[23]
Richard Simon, LA Times “Fighting
the national debt out of their own pockets”; 11/26/11
[24]
Federal Reserve; Flow
of Funds Accounts of the United States; 9/16/2011
[25]
Anne-Mary Ratariu, The International Conference on Economics and Administration,
“THE GERMAN
PFANDBRIEF – A TOP PRODUCT DURING THE
FINANCIAL CRISIS”, 11/14/2009
[26]
Rebecca Christie and Jody Shenn; Bloomberg; “Banks
Throw Weight Behind Paulson Covered-Bond Plan”; 7/28/2008
[27] Neil
Wallace. From The New Palgrave Dictionary of Economics, Second Edition, 2008
[28] Jeffrey
M. Jones , Gallup, “Some
Americans Reluctant to Vote for Mormon, 72-Year-Old Presidential Candidates
Strong
support for black, women, Catholic candidates”, February 20, 2007; http://www.christiannewswire.com/news/179294305.html;
Christians Won't Elect a Mormon President According to ChristiaNet.com Poll
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