If God Made Economic Policy

I can’t shake last week’s announcement that one in six people in this country live in poverty. Data show that poverty has risen. Let’s not overlook that the federal government defines poverty as a family of four living below $22,350 a year, unless you live in Alaska or Hawaii where the threshold is higher. (See 2011 Federal Poverty Guidelines)

Add to that the report issued last week by the Economic Policy Institute, a liberal economic think tank.  Studying federal data of the past few decades, its research found that the decline in poverty rates that prevailed through the 1990s has been erased since 2000.  It also found that median household income steadily grew through the 1990s peaking at $53,164 and then began its decline to last year’s $49,445.  The median income for male workers was slightly better than stagnant from 1989 to 2010.  The median income was $36,292 in 1989 and $36,676 in 2010 (Figures are in 2010 dollars).  A separate report that analyzed the gain in wealth from 1983 to 2009 was more disheartening.  It found a huge disparity.  Almost 82% of the wealth accrued since 1983 went to the top 5% of the households.  Furthermore, the bottom 60% actually showed a loss of 7.5% over the same period.  In other words they had less wealth in 2009 than in 1983.  (See the chart, which displays this very dramatically.)

Is it any wonder that people are angry and feeling frustrated?  Clearly the belief that each succeeding generation would do better than its predecessor is not borne out by the data.  While one can make a strong case that economic policies begun in 2000-2001 harmed the people at the bottom of the economy, the overall data since 1983 indicate that policies regardless of administration have been weighted favorably to those in higher income brackets.

If I had to choose between fiscal policies promulgated by the GOP or the Democrats, specifically the president, I’d choose the latter.  Clearly the GOP policies from 2001 to 2008 ill-served the common good.  Although people can say the economic stimulus in 2009 didn’t reverse the decline, virtually all economists would say that the stimulus kept a falling economy from becoming worse.  Looking at the data, getting people back to work through infrastructure spending and paying for it by increasing taxes, particularly on the wealthy, is the better option than cutting government spending and reducing taxes and regulations, which was the basic economic prescription beginning in 2001.

While I’m not an economist (although I was one econ class short of a minor had my major, urban and regional planning, had a minor), I have a firm enough grasp on it to make a reasonable assessment.  As consumerism substantially organizes our current economy, the data indicate that when more than half of the households have lost wealth since 1983, a weak economy follows.  More than half of the households in this country don’t have the money to buy “stuff.” (True, we all buy stuff, but are we buying enough stuff to maintain a robust economy?)

Also, our economy is radically different than 1983 or 1990 or, even, 2000.  Technology has increased productivity, which means companies can do more with fewer workers.  Globalization allows capital to flow around the globe irrespective of national borders and combined with technology can enable corporations to seek places with the lowest labor costs.  Nations such as India, China, and Brazil are fast-growing and are now our economic competitors in many economic sectors.

Neither the GOP or the president’s plan strikes me as creating an economic climate that will actually address our restructured economy.  A real plan for our economy must ensure economic dignity for all people.  It also should enable people to reach their fullest potential.  It should also sustain the common good.  The theologian, Kathryn Tanner, calls it an economy of grace, a theological economy.  (See  Tanner, Economy of Grace, Augsburg Fortress 2005)

She sees the theological economy and the capitalist economy operating not in parallel, but in conflict.  They come together “in struggle because of their different vectors, their movement in opposite directions — one moving up, so to speak, in the direction of life; the other moving down, in the direction of death.” (Tanner, page 89)

Underlying a theological economy is the choices and the perspectives we hold in making those choices.  Implicitly, we cannot overlook that no one has immunity from the economy’s effects; at some point we all benefit as well as lose.  Economic decisions made to provide the greatest benefit to an individual or a small cadre eventually fail everyone else (probably what we’re seeing now).  A concrete example would be a corporation with a huge profit.  It can divide those profits among its executives, share it with its shareholders, or share it with all of its employees.  If the corporation shares most of that profit with its employees, it will probably engender greater corporate loyalty and productivity and will give its employees greater economic power (which they can spend in an economy organized by consumerism).

The above example illustrates a theological principal Tanner proposes for this economy, noncompetitiveness.  This doesn’t mean to eschew profits.  Rather, how do we use profit for everyone’s gain?  Sharing the profits with employees would increase loyalty and productivity which would translate to greater profits.  Keeping profits from employees means that their labors were not adequately recognized and rewarded.  This breeds long term resentment and poor labor relations, thus diminishing corporate value.  Essentially, a theological economy seeks to maintain equilibrium in a capitalists system so that the economy can function optimally.  When a company seeks to exploit competition in a win/lose situation, the system shifts and becomes non-competitive.

Tanner suggests another theological principal in an economy of grace is unconditional giving; welfare is based on need rather than largesse from those who are privileged.  Furthermore, this principal moves us to recognizing that universal giving goes beyond the traditional concept of welfare (TANF) to everything that the government does to increase everyone’s welfare:  public parks, public schools, trash collection, fire protection, police protection, etc.

The rise in inequality matches the diminution of the common good.  Somehow we’ve come to put greater faith in the belief that the one who wins has the most toys rather than believing that we all win when we share the toys.  We’ve forgotten that what we have is God’s and that we are stewards of it.

We need to think about our economy differently.  God loves us.  God loves us so much that we’ve been entrusted with God’s stuff, a huge responsibility.  It’s not ours to do as we please.  Rather it is ours to ensure that everyone gets his/her daily bread and that we only need daily bread each day.  We could think about the story in Exodus 16 when God instructed Israel through Moses not to collect more than an omer of manna each morning.  Manna that remained became filled with worms and spoiled.  Or maybe we should remind ourselves of the psalmist’s words (Ps. 50:10-12), “For every wild animal of the forest is mine, the cattle on a thousand hills.  I know all the birds of the air, and all that moves in the field is mine.  If I were hungry, I would not tell you, for the world and all that is in it is mine.”

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About Quentin Chin

Eclectic interests: religion, technology, food, music, current events. I live in the reality-based world.
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