Christian Lobbying II

It's sad to say that the abortion rights* group that Doug discusses below is supported by many parts of the mainline Protestant establishment, including my denomination, the Presbyterian Church USA. It's pretty well documented that dissatisfaction with the Washington political activities of agencies of the mainline denominations has been a source of great tension between the members in the pew and the denominational leadership. Currently, the added strains of fights over ordination standards are actually tearing the Episcopal and Presbyterian USA churches apart, with denominational leaders and individual congregations fighting over who controls church property if a congregation attempts to leave.

Believe it or not, there's a lot of economics behind all of this: principal/agent problems in hierarchies, rent seeking in non-profit organizations, optimal size of organizations, public choice issues about voting rules, and (in work I have done with two of my FSU colleagues) issues about the effects of organization rules that attempt to keep members from leaving. Our research has found that these rules are really quite counterproductive, even to the home organization.

As an economist who has studied these issues, I don't understand why Episcopal and Presbyterian leaders think it is a good idea to spend resources to make it harder for congregations to go their own way. Theologically speaking, when the world could only be made a better place by Christians putting more resources into orphanages, shelters, food relief, and so forth, the sight of us burning up such resources suing each other in (church and even secular) courts to determine who gets to keep the silver communion plates must be making Satan laugh out loud. My main hope now is that revolutions in communication and information will make these denominational lobbying groups as extinct as dinosaurs in the era of blogs and Facebook.

* I use this term specifically because it was actually used prior to the adoption of the more faith-friendly sounding term "reproductive choice".

Christian Lobbying

Last weekend someone who I admire very much spoke on justice and the value of the United Methodist Church having a lobbying office in Washington, DC. The idea behind the lobby is to exercise the collective United Methodist Church’s desire to construct a just society. That sounds wonderful, but, my I believe my friend and I have divergent opinions about the value of the lobby. Over the next three weeks before winter break I will attempt to articulate my opposing stance.

With a quick count of the General Board of Society and Religion the United Methodist Church employs 23 people at their site in Washington, DC. These people work in premiere office space located across the street from the Supreme Court. With those jobs located in Washington and the expensive office space what other projects could the United Methodist Church use those resources towards? Possibly orphanages or digging clean water wells or constructing community halls and recreation centers?

Seemingly lobbies exist for every type of interest group possible in Washington, DC. In addition to there being multiple church lobbies in addition to the United Methodist Church there are other political lobby groups that advocate for the same outcomes. How much are we simply duplicating the efforts of other lobby groups?

Finally, something that troubles me very significantly is my lack of knowledge about who to contact. The United Methodist Church supports with the money received from collection plates around the country an organization called the Religious Coalition for Reproductive Choice which is yet another Washington, DC lobby for Pro-Choice. I do not want any money that I give to the church to be associated with the finance of such a lobbying organization. But, who do I contact? My search on the web has turned up no leadership on the General Board that look like they would be the right contact. This is particularly frustrating because if people in the church do have grievances who should they contact? Who are “they” that decide what the United Methodist Church supports? This is a hopeful post, perhaps you have that information.

Until this weekend I did not know that the United Methodist Church allocated resources towards the costs of lobbying the federal government. Please share your opinion on this matter.

What Should We Want?

Many people have taken note of the popularity of what is sometimes called “The Prosperity Gospel” in modern Christianity. It makes many of us from traditional Protestant backgrounds nervous. It tends to come from pastors in non-denominational churches. It reminds us of the Janis Joplin song, “O Lord, Won’t You Buy Me a Mercedes-Benz” (written by Joplin, McClure and Neuwirth):

Oh Lord, won't you buy me a Mercedes Benz?
My friends all drive Porsches, I must make amends.
Worked hard all my lifetime, no help from my friends,
So Lord, won't you buy me a Mercedes Benz?

On the other hand, maybe we “frozen chosen” are missing something. It’s true that Jesus warned his followers not to worry about how they were dressed, or what they would eat, but he was by this same token obviously concerned about the fact that his followers were worried about what they had to wear and what they had to eat. Jesus was concerned, and not dismissive, about the daily life of his flock, about what they brought to God in prayer, and part of his theme of a great upheaval in which the least would become the greatest was that God cared about the petitions of his people. Jesus might be uncomfortable with a prayer for a Mercedes to compete with a Porsche, but what about a single Mom who desperately needs a better car to go to work to support her family. Why shouldn’t she pray for help? But, where do we draw the line between a reliable used Corolla and a new Porsche? What does God want us to want? This is both a religious and an economic question, as preferences are the basis for the microeconomic study of choice. If our economy responds to what people want, what does God want us to want?

In reading the Psalms recently, I have come across a cycle of seven Psalms (19 – 25, all listed as being from David) that, in addition to the many other things they talk about, seem to contain a complete cycle about our wants, or more specifically, how to pray about our wants.

PSALM 19 (“The heavens declare the glory of God…”) is a Psalm of praise to God. But it closes with a prayer for how we construct our wants. It’s a famous prayer: “May the words of my mouth and the meditation of my heart be pleasing in your sight, O Lord my Rock and my Redeemer."

PSALM 20 (“May the Lord answer you when you are in distress…”) is a petition to God, including, in verse 4, “May he give you the desire of your heart, and make all of your plans succeed.”

PSALM 21 (“O Lord, the king rejoices in your strength..”) is also a Psalm of praise, but an unusual one. David is praising God for the blessings he has given him. Specifically, we see in verse 2: “You have granted him the desire of his heart.”

PSALM 22 (“O God, My God, Why have you forsaken me…”) is the Psalm Jesus recited on the cross, and it is hard to imagine anything more different than Psalm 21. “O my God, I cry out by day, but you do not answer.”

PSALM 23 Pretty much needs no introduction.

PSALM 24 (“The Earth is the Lord’s, and everything in it…”) Is a call for us to recognize the glory and wonder of God, and to consider what it means to come into his holy place.

PSALM 25 (“To you,O Lord, I lift up my soul..”) is a complex prayer for God to forgive our sins but also to set us right.

These Psalms cover a lot of ground, but let’s isolate the cycle of what it says about what we want.

In Psalm 19, we are to told to pray that the things we desire will be acceptable to God. Psalm 20 looks the most like a Psalm of the prosperity Gospel (“may he give you the desires of your heart; may he make all of your plans succeed”). But this call to granting our wishes in prayer follows the instruction in Psalm 19 that these desires be acceptable to God.

It is Psalm 21 that the cycle begins to take on the form of a narrative, perhaps of David’s own life. Praising God is a good thing. But read Psalm 21 closely, and see if you don’t agree that David is slipping across a boundary into pride. He seems almost to be praising God because God has bought him the Mercedes chariot. We see the same language as Psalm 20, in a different context: “You have granted him [David, the king] the desire of his heart.” We hope that these desires have been formed in David’s own instructions in Psalms 19-20. But look at the list in Psalm 21: “rich blessings,” “a crown of pure gold,” “victories,” “splendor and majesties.” It must be nice to be the King. The problem of course, and we know this from the story of David, it all comes crashing down. In Psalm 22, David cries out to God, but God does not answer. The Mercedes has been totaled, the gold has been pawned, and God does not answer.

The rehabilitation of David’s relationships with the “desires of his heart” begins in Psalm 23. It is a radical transformation: simply “I shall not want.” Then, Psalm 24 follows with not a single reference to any of David’s personal wanting at all. Psalm 24 is entirely a celebration of who God is, with no reference at all of what he has done in terms of answering the desires of our heart. The only reference to the “desires of our heart” is that we are informed that only those with “a pure heart” may stand in God’s holy place. But how do we get such a pure heart? By prayers such as those in Psalm 25: “Show me your ways,” “Teach me your paths.” And finally, in Psalm 25 we get a prayer with the P word: “instruct” the man who fears the Lord, and “He will spend his days in prosperity.”

Pray that the desires of my heart are acceptable to God. Ask him for instruction. Don’t want for wants sake. Celebrate the blessings all around me, not the Mercedes chariots. Then petition God for the transformed desires of my heart. He will answer. This is the Prosperity Gospel.

Thoughts on Abortion

Nearly one month ago I opened up our Wise as Serpents blog to discuss abortion ("Blood Cries out from the Ground"). The central purpose for that post was to educate readers on the scope of legalized abortions (at least 50 million since 1973) and to illuminate my perspective on the motivations behind abortions (97% of which are carried out as a form of birth control). Today's post will focus on three threads within the abortion debate

1. Third Trimester Abortions
2. "Positive" Secondary Effects
3. Polished Names

Third Trimester
The earliest a premature baby has ever been kept alive is 21 weeks or a little over four months. Researchers have debated over the quality of life that such a premature baby could experience and some studies have emerged claiming that mothers should seriously consider keeping the baby alive if it is born before 22 weeks old. Moreover, some studies have posited that babies lack emotion and ability to experience pain until 26 weeks. Setting aside the current debate about the future health of the baby if born before 22 weeks and the development of the child’s emotions how is it possible that a child can be born significantly under six months and be kept alive and we still allow third trimester abortions? Third trimester abortions are abortions that occur after six months of pregnancy and they have never been legalized in Great Britain. Abortions in the UK must be performed within 24 weeks of pregnancy and in light of medical advances Parliament is considering moving the time for legalized abortions to earlier stages in the pregnancy. If the child can be born and kept alive by modern medical techniques any abortion performed before the time the child can be kept alive must be considered murder.

”Positive” Consequences
The book Freakonomics by Chicago economist Steven Leavitt I think is terrific. The book has shown many misinformed folks that the essence of economics is not stock picking but the study of how people make decisions. One Levitt study in particular is the study being referenced by a reader in their comment on the earlier abortion post titled “Blood Cries Out from the Ground.” The discussion of the positive secondary effects of lower crime rates being caused by the legalization of abortion is an interesting academic exercise. But, I do not believe that there are many cases in which positive outcomes justify the road taken.

Polish
Here are some words of wisdom from FSU's Offensive Line Coach Rick Trickett, "You can't shine a turd." Polishing the dirt from an immoral act however is exactly what many men and women have attempted to achieve; moreover, they have done so with some success. The Steve Levitt study is one example. Other examples of the beautification of an ugly reality are the labels of abortion advocates: Pro-Choice and Planned Parenthood. The fact that any woman has a choice is indisputable, so does anyone with a gun in their hand and anger in their heart. The justification of the act of abortions on the grounds of choice however rarely takes into account the fact that the baby has some free-will that can not currently be exercised because they are living in a state of dependence. Pro-Choice or infanticide? Finally, the location that women who seek an abortion go to in order to have the operation is called Planned Parenthood. The name blooms with warmness. Many parents would prefer preparation over surprise. But, the name implies that if you are not ready to be a parent, and you have not planned accordingly, abortion is okay. At least to my thinking this is another example of beautifying an ugly reality.

Sometimes being a defender of life is agitating and offensive to other people. Jesus knew this well when he said, "If the world hates you keep in mind that it hated me first." Any thoughts you might have are welcome.

Chicken or the Egg?

The Templeton Foundation is currently hosting an open forum topic entitled, "Does the Free Market Corrode Individual Morality?" which seems to be a common indictment even of the study of economics -economics is a culture killer and a soul stealer.

First, let me construct a definition of capitalism:

Capitalism is the system of free trade where all economic actors involved in the trade of goods or services are able to retain the gains from those trades.

From that definition, I presume many people would say, "What's wrong with that?"--people ought to be able to keep the money they earn. After all, the people gained by their own efforts. But people make the system of capitalism into much more than a mere system of free trade. They make it a constant and ever-present incentive to reward man's depravity.

Last week a young woman decided to auction her virginity on a radio show. When asked why she would sell her virginity, she remarked, "We live in a capitalist society. Why shouldn't I be allowed to capitalize on my virginity? . . . I'm using what I have to better myself." Did the ability to sell her virginity corrode her morals or were her morals sufficiently corroded by other influences to the point she would consider such an act? The problem of immoral behavior is not rooted in capitalism but in the depravity of human preferences. There are less outlandish examples as well, like the father who trades time spent with his children for long hours at the office to buy new toys. Did capitalism corrode his moral obligation to be the father of his children? Perhaps capitalism provided an option that, because of his weakness, he did not turn away from.

That we can be rewarded for distortions that we are willing to make to our own morality does not mean that capitalism corrodes our morals. Maybe capitalism is an ever-present incentive for some people to engage in questionable behavior. But temptation and compromise of character lurk around every corner in non-capitalist institutions as well (relationships and politics). There is a common indictment that markets are evil and create evil. But evil does not need the free market--it just uses it as a vessel sometimes.

"Who Will Guard The Guardians?" 2: Revenge of the Mule

In previous posts I discussed the “good intentions” that can sometimes have bad unintended consequences, such as the drive to make home ownership more available to low income Americans (in respect to the current financial crisis). In the last post, I indicated that I will be discussing other activities in this disaster that seem dodgy on their face (in the specific context of the rating of the sub-prime-mortgaged backed securities). What I’d like to discuss, as a bridge, is the idea of making mistakes and the Biblical injunction to humility.It’s clear even if you separate out people with good intentions, and even if you also separate out clearly venal behavior, that a lot of what went wrong in the subprime disaster can still be classified as many people being seriously, magnificently wrong … wrong specifically about the valuations and riskiness of many of these securities. I will discuss later some of the evidence as to whether any of this was deliberately misleading, but assume for a moment it wasn’t. The fundamental toxins that crept into the financial system were mortgage-backed securities that were a lot riskier (and hence worth a lot less) than people thought they were. This meant that many other financial transactions, including things like the credit default swaps, were based on fundamental bad information.

Economists looking at this wreckage might be tempted to say “I told you so” because of the highly publicized role played by “quants” whose mathematical models were behind the bad valuations --- "quants" are people with backgrounds in things like mathematics or physics or specialized finance who believed that the price of the securities could be valued almost without any reference to the economics of the actual markets supporting them. One incredible story from the Bloomberg series I referenced in my last post is of a West-cost banker, skeptical of these securities, who tried unsuccessfully to get securities industry analysts to take a “bus tour” of the actual neighborhoods and homes supporting the securities. He apparently got no takers.

However, it is incorrect to suggest that economists can shift all of the blame to the quants, because the statistical modeling of future economic valuations is our sandbox. Some of these folks had to have had some economics training along the way. And, it was a Nobel prize-winning economist who co-authored a report (appearing in “Fannie Mae Papers”) which predicted:

“The paper concludes that the risk of default of the GSEs [Fannie Mar and Freddie Mac] is extremely small.”

Or, in historical context:

“As far as it is possible to do, these two ships [the Olympic and the Titanic] are designed to be unsinkable.” ---- a White Star promotion quoted in snopes.com

“An absurd delusion” ---- Meteorologist Isaac Cline about the possibility of a major hurricane devastating Galveston, Texas, quoted by biographer Erik Larson.

So what does the Bible say about this? Is it a sin to be wrong? I don’t think so, but there’s no doubt that anything that sets up false gods is a sin, and a pride or arrogance in which we worship our own knowledge certainly fits the bill.

The Old Testament clearly distinguishes between knowledge and wisdom (Proverbs being the most obvious, but not only, example). There was a lot of knowledge in the sub-prime mortgage industry that was not backed up by wisdom. I strongly suspect, from his many teachings about the “last” and the “least among you”, that Jesus would have not spoken kindly of anyone in love with their own intellect, particularly if they (using a very apt idiom) “lorded it over” other people. And Paul warns (in the letter to the Philippians) against vanity and conceit. Doug has always been quick to point out that these warnings are particularly important to those of us whose vocation is one in which knowledge and prediction are our stock-in-trade.

If an engineer can be wrong about a ship or a bridge, or a meteorologist can be wrong about the path or severity of a storm, how much more humble should we economists be when what we are attempting to model are not physical forces but the behavior of human beings. I’m not saying we can’t try, and I’ll be happy to stand by my predictions about what would happen if the government imposed a $1.25 price ceiling on gasoline. But I always recall my favorite part of Asimov’s Foundation series when the spectacular scientific success of the Seldon model was upended by the behavior of a single person, the aberrant Mule.

Who Will Guard the Guardians? "Darth Rater" Part I.

I've been doing a lot of reading on our economy's financial institutions in preparation for a public forum sponsored by our undergraduate majors' club on the financial markets meltdown. I've been prepping to speak on the ethics involved, and I've obviously been working from my previous two posts.

In my second post, I mentioned that there many actions in this whole crisis that admitted of significant self-justification, the "good intentions" of the road-paving variety. I also mentioned there would possibly be some things discovered that, to reuse my favorite metaphor, could only be described as coming from the Death Star. I've been doing some reading on a highly technical and little known part of the crisis that is so disgusting that I'm calling it "Darth Rater". This is the saga of the companies (primarily S&P and Moody's) who provided ratings for the toxic waste securities. In case you didn't guess, the outrage is that these securities at least initially received very favorable ratings from the two companies.*

These "ratings" probably haven't received the notice they deserved. At one level they're not that complicated: These two organizations rate debt securities in a way that is not all that much different than two of my favorite non-profit organizations: Consumers' Union (at least their non-political arm, the magazine "Consumer Reports") and "Wall-Watchers" which rates Christian charitable agencies. Beyond these two examples, our society is full of ratings of everything from movies to software to football players for fantasy leagues. Often we treat these ratings game as a kind of parlor entertainment, with the fun of pitting our own opinions against those of the pros, and with very small long term consequences. I mean, I always check Consumer Reports, but what is the actual long term cost, if they are wrong, of getting the second best buy on a washing machine? However, the cases of S&P and Moody's have serious differences, as follows:

1 ) My reliance on Consumer Reports is a private transaction. However, the ratings of the financial instruments has been incorporated into the structure of public regulation. For example, according to Bloomberg and the Wall Street Journal, regulation on bank reserves, insurance companies and so-forth is sometimes keyed to the ranking of the securities by the two agencies. Consider the following: I can read Consumer Reports and choose to heed or ignore their ratings of new cars.... that's a purely private transaction. But if I were appointed as a trustee of the investments of a church, and the by-laws required that I only invest in securiteis of a specific quality as rated by S&P or Moody's, then I am not free to ignore that requirement. If I am a banker, and government regulations make a similar requirement, then the decision to rely on the ratings becomes explicitly a matter of public policy.

2 ) Requirements about trustees and bankers that I mentioned above are another example of my "... Good Intentions" thread. We want church trustees and banks to make wise decisions. But when put that expectation in terms of structured regulations, there is a huge incentive for CYA activity of relying solely on the outside raters and not on one's own independent investigations. But, according to the Wall Street Journal, these professional opinions may be less informed than what an informed layperson could "read in a newspaper." Playing if safe by relying on Moody's or S&P rather than on one's own judgment is another example of Moral Hazard.

3 ) Private reliance on raters is subject to market discipline. My wife and I once invited friends over for dinner and a DVD which a movie reviewer had labeled something like "a light-hearterd comedy". The movie turned out to be full of graphic sexual references and cannibalism. That was the last time I paid any attention to that reviewer. If Consumer Reports or movie reviewers persistently make bad recommendations, presumably they will suffer in the market place for opinions. But governments, specifically the federal government, have enshrined Moody's and S&P as a part of a tight, government sponsored oligopoly so that they are not subject to as much market discipline. If you want your securities rated, you have very little choice but to play ball with Moody's and S&P.

4 ) Consumer Reports and Wall Watchers get their money from the consumers of the rated good and organizations, in the form of donations and (for Consumer Reports) subscriptions and sales. Consumer Reports will not carry advertising. Obviously, issues of popularity factor into their decisions as to which goods and organizations to rate. There are some obscure appliances or tiny non-profits that simply can not be handled. However, securities issuers are put in a position (because of the regulatory requirements mentioned above) that their products must be rated. Therefore, it is the securities issuers who pay for the rating services. Or, to say the same thing another way, the ratings companies make their money from the issuers of the securities they are rating. I can imagine that you can see where this is going.... To Be Continued.

* See especially a two-part September series in Bloomberg and an article in the Wall Street Journal.