Macroeconomics, QE, and Other Things Not Preached

It was one of those Sundays when I'd got two competing sermons, both of which are vying for attention from my spirit.  Both played off of the same passage.  Both talked about justice, and both were grounded in Jeremiah.  But come Sunday morning, er, there can be only one.

So it seemed to make sense to bail on the one that involved macroeconomics.  Fascinating as it is to me, it was feeling like a bit of a bludgeon.  And I know that sermon time is nap time, but I try not to go there too often.

Still and all, I didn't want to lose those thoughts.

Because when it comes to the relationship between the powerful and the struggling, macroeconomics matters.

Every market index has been flying high lately, setting all time records.  DJIA, S&P, you name it, stocks are soaring.  But what does that mean, and why is it happening?

It means, as I have blogged before, nothing more and nothing less than this:  that the price of stocks in US dollars is rising.  Period.  If the price of milk was rising, or the price of gas was rising, or the price for a young family to buy a home was rising, well, that'd be bad news.  But when stocks go up, for some reason, this is a good thing.

Oh, it would be good, if a stock was rising because its subsector of the economy was booming.  It would be good if people were being hired in record numbers, and it was a time of plenty, and the value of corporate endeavor was the rising tide that was raising all boats.  Sometimes, that's what the market measures.  But not always.  It can also measure irrational exuberance, as Alan Greenspan once put it.  Human beings can go nutso over things, and get so caught up in crowd-assumptions of value that they'll pay ten years wages for a tulip bulb. 

Or sink their life's savings into the IPO of eCheeseoftheMonth.com.

Thing is, most folks aren't exuberant right now.  The real economy is not soaring.  It's stagnant.  Production is meh.  Employment is meh.  Nothing is happening, and certainly not enough to justify the riotous expansion of market value we've seen over the last five years.

Well, actually, that's not true.  Something is happening.  Quantitative Easing is happening. 

Eighty billion new dollars are being printed into the American economy every month.  It's part of the Federal Reserve's strategy to "jump start" the economy, and I've honestly always viewed it with a little skepticism.  Money is money, meaning it is not the real economy.  It is neither harvest nor product, but rather a part of the meta-economy, the game we play as we manage our culture.

And in that game, all that money being printed up every month, has to go somewhere.  It's not going into salaries, that's for sure.  The Fed's intrabank cap on interest rates means it is also not significantly driving up prices of commodities, and neither is it boosting the impact of savings.  It's like a balloon being inflated, while you constrict all but one portion of it.

And so where it's going is the market, driving market valuations to one record after another.  Remember, just a few short years ago, the DJIA was in the six-thousands.  It just cleared sixteen thousand.

What that is doing, though, is the challenge.  It is creating and deepening imbalance.  For those who have bought in to the market, to the investor class, it's a time of boom and plenty. The C-suite folks, already flush from the recent and explosive growth in their compensation packages, will benefit the most.  Meaning, this is a hell of a time to be rich.  It always is, of course.  It's good ta be da king.

I benefit also, as my mutual fund and investment reports tell me every quarter.  But my wellbeing is not the only thing I see.

For those who cannot buy in, those who are wage and salary only, those who are just getting by, it means that the great class divide grows all the wider.  The few profit, while the many fall further and further behind.

It is a remarkably anti-progressive turn of events, and the deep irony of it being continued by a putatively progressive administration should not be lost on anyone.

It will be, of course.  We're too distracted to notice how wildly things are falling out of balance.  It does not exist on our scale, on the scale of the day to day.

But though I cannot speak with Jeremiah's confidence, I am reasonably certain that God notices.

The Parable of the Bad Job Creators

Once upon a time, there was a couple who ran a mid-sized business in a small town.   They just couldn't get along, and spent their days arguing about anything and everything.  Business was not good, as their workforce was dispirited and their clients were drifting away.

One day, after a particularly heated argument, one of their managers came to them and let them know that the morale had gotten so bad that most of the employees were likely going to quit.  "Our salaries have been stagnant for five years," said the manager.  "And we all hate working here.  The whole town knows how crappy it is to work here.  If you don't do something, we'll walk."

The couple went back into their office, realizing that if they didn't act, they'd lose all of their employees, and would have trouble finding new ones.  They argued quietly but productively, and then came up with a solution.

They needed to give their employees a raise.   But how?   They didn't have enough liquidity in their bank accounts, and their credit was nearly tapped out.   Suddenly, each of them had a solution.

We could take money they've contributed into the company-managed retirement fund, said she.  It's struggling anyway.

Sure, said he!

And we could also take money they've put into the charitable fund, the one we use to do giving to those two local nonprofits that provide care to the indigent elderly and the disabled and the orphans.

So long as people were getting a raise, what did it matter where it came from?  The employees would be happy.  The couple agreed.

Then, of course, they began to argue about how large the "raise" should be.  Their voices grew louder.

When the employees heard the arguing, they were angrier, and argued among themselves.

How dare they argue about the size of the raise!  It should be as big as possible!

And the couple heard them, and smiled.

Descending Into Hell

After two great worship services, a meeting or two, and some prep-work for this week's session meeting, I  clocked out of Poolesville at about 2:15 PM yesterday.  My pastorly duties were done for the day, but I wasn't finished being a Christian.

I donned my riding gear, threw a leg over the 'Strom, and hopped on the One-Oh-Seven heading back towards Dee See.  My destination was about 45 minutes away, at a local hospital, where one of the members of my former congregation has been for the last month.  

This is, let me note, not my job anymore.  I know this.  I do.  But that isn't really what matters, not ultimately.

He never really quite fit in at my old church.  He was an older man, big and vigorous and musical, but could be completely oblivious to others.  He also had an unfortunate semi-adolescent forwardness around women, one that required me, with others, to sit on him a little bit.  But my talks with him, which were frank and direct, both yielded a cessation in behavior and a knowledge on his part that I was looking out for his well-being spiritually.

He never married.  He has no kids.  His relationship to his family was, where it existed, only marginally functional.   His approach to finances was not wise.    And his health, over the last year, began to collapse, in that cascading way that bodes ill for life.

It was never quite clear what his diagnosis was, or, at least, he was never clear on it.   Weakness begat weakness, and his life spiraled downward into hospitalization, being sent home, and then being re-hospitalized, after which he'd be sent home again, too weak to care for himself.  His home descended into squalor.  I'd visit, and even though there were provisions for in home care, he'd have not eaten in days.

He had a stroke just after I moved on from my Bethesda church, and I'd visited him.   Then the word came that people thought...thought...he was in a coma following a surgery.  No-one was quite sure.

So of course, I had to visit.   Not because I was his pastor, but because I am the only person who visits him.  I got the hospital to confirm that he was there.  No other information provided, of course, HIPAA be damned to the hell it inadvertently creates.

I wish he'd been in a coma.

He was, instead, intubated.  He was also being fed through a tube.  He was catheterized.  And he was, despite being too weak to move his arms and unable to speak because of the breathing tube, aware, and in considerable discomfort.

I struggled to find a way to communicate.  My ability to lip-read is marginal, and as he tried futilely to speak, I ascertained that wasn't going to work.  A few simple questions indicated that no-one had been to see him for a while.  I talked for a little bit myself, spinning a simple wordspell of calm, of a beautiful fall and bright crisp days and little country churches that sang the old, old songs.  That helped, for a moment or two.

But he again grew agitated, and asked for the writing pad that the nurses had tried to use to reach him.  I saw it covered with meaningless chicken scratches.  He tried, he really did, to write.  But he couldn't.  He was simply too weak.

I simply could not understand him.  I tried to get him to sound out the letters of what he was trying to tell me.  After a minute, only one word:  AGENDA.

Is that what you mean, I asked.  He nodded.  This was what he meant to say.  I am still not quite sure what that means.

He began to mouth things animatedly, but I couldn't get most of what he was saying.

Before I left him, I held his hand, and we prayed together.  It seemed to help him a bit, and there was little else I could do.

I could not ask after his prognosis at the nurses station, because they are legally mandated not to tell me anything.  I could not ask the doctors what the goal of their treatment regimen was, of whether they thought that the tubes and the indignity served any ultimate purpose other than sustaining the organic process of human suffering.  I could not ask their agenda.

Though I was his pastor, and am still his friend and his brother in Christ, and he is otherwise alone in the world, that means very little in the American medical system and the laws that now govern it.

HIPAA does not recognize those things as valid categories.

I wonder just how many more souls like him there are, hidden away in the great warehouses for the broken and the alone we have created.

Percentiles

As the Occupy movement continues to camp out in the downtowns of major metropolitan areas, I find myself wondering about the position of those of us who occupy the upper percentages of the income scale.

I'm one of the rich, you see.

That might be hard to discern from observation of my day to day life.  My home is nothing much to look at, a squat, rumpled, ivy-covered suburban hobbit hole, nestled in trees.  It's about half the size of the average new home in America, but it's perfectly comfy for the four of us and the dog.  We drive efficient and unsplashy vehicles.  Our kids go to public schools.  I wear clothes that look like they're older than my middle-school age children, which is because many of them are.  We've spent most of our lives saving and scrimping.

My own modest annual income places me pretty much dead center for individual incomes in the United States.  I'm fifty-third percentile, just like that grim and defiant young reactionary whose image has been making the rounds lately.   But my wife, driven and smart and competent woman that she is, well, she's done well lately.   Her recent job transitions and career progression have tossed us up into an entirely different income category.

And for the first time in our respective lives, we can't accurately describe ourselves as middle class.  We're not.  We're somewhere between 95th and 96th percentile, and that, I fear, puts us squarely into the upper quartile of the upper class in the United States.

Does that make us better of more "blessed" than those in the lowest quartile of the bottom thirty percent?  No, not in any meaningful way, no matter what Joel Osteen says.  It does mean our lives are easier, both in the ways that make sense and in the ways the system in which we operate favors the wealthy.   We have no trouble getting credit, which we use sparingly.  Having walked alongside folks who desperately needed credit, but couldn't get it, this is a nontrivial thing.   We have enough of a buffer of amassed savings that we don't face uncertainty week to week or month to month, and there are many in our culture who do not have that luxury.  At the moment, my family does not worry about money.  This is utterly untrue for a substantial portion of Americans.

That doesn't even begin to factor in the many billions of human beings on this planet who live at levels so far below the US poverty line that we Americans don't really grasp just how immensely challenging the simple task of their existence is. 

Should I anguish over where I find myself?  Should I wallow in guilt?  No, I don't think so, and I don't. 

What I must not do, though, is allow my families' relative comfort right now to seduce me into believing that everything is just fine with the world.  It's not.  Not at all, and letting material comfort blind me to the struggles and suffering of others gets me into significant trouble with my Boss. Not to mention that wealth and material power aren't anywhere near to being one of the metrics He uses to assess the value of my existence.

It's a tricky wicket.