The Christian Economist | Dave Arnott

Americans are moving from restrictive economies in California and New York to free economies in Texas and Florida, much like the Israelites escaped captivity in Egypt.

Let’s Vote!

I had five grandkids in the van recently, and we were trying to decide which park to visit. One of the ten-year-olds suggested energetically, “Let’s vote!” Where did an American ten-year-old get the idea that she had the power to determine the market? Well, FROM the market. And, that’s what people moving from one state to another are proving, they have the power to vote about where they live. People are voting with their feet, as they move from one state to another, as explained in a recent WSJ article titled, “The Great Blue to Red State Migration Continues.”

I discussed some of this topic in podcast #131 titled Abraham and Wealth Migration. And, the great economist Arthur Laffer explains state differences in his book, The Wealth of States.

The WSJ explains in their article that in the category “Migration to other states,” the loss leader was California which lost the most residents to other states, about 340,000, and New York, about 220,000. Texas gained almost 475,000 and Florida gained just under 375,000.

Quoting the WSJ article now, “You don’t need artificial intelligence to spot what the losing states have in common: High taxes, burdensome business regulation, and inflated energy and housing prices. Those states also have higher than average unemployment as a result of businesses moving out of state.”

The WSJ article quotes a chapter from the Old Testament, “A big problem for Democratic-run states is that their affluent residents are leading the EXODUS, and they pay the majority of income tax that supports their expansive welfare programs. This is a major reason California’s tax revenue over the last five months has come in $24.5 billion below projections despite a rebounding stock market.” Hmmm, kind of reminds you of the scene from the old movie The Ten Commandments, where the Israelites are leaving Egyptian bondage. And, in an economic sense, the folks leaving those states were in economic bondage.

You may have heard that Benjamin Franklin’s choice for the great seal of the US was those same Israelites fleeing Egypt, just as Americans are now fleeing California and New York. It’s a little difficult to read the image, but it reads “Rebellion to Tyrants is Obedience to God.” The image shows the Israelites being pursued by Pharoh’s army.

People are moving to the Red States, and Moses parted the Red Sea… goodness, there are too many parallels that can’t be overlooked. In the Holy Land, I’ve heard the phrase “From the Med to the Red,” so we should expect a political cartoon soon, with Moses holding up his staff and parting “Red” and “Blue” seas, or the red and blue states.

 

Freedom

In my classroom at Dallas Baptist University, I have often crossed my arms and stated, “The Intersection of Christianity & Economics is freedom.” It’s such an important concept, that it’s the first of the ten Biblical Commandments of Economics that I found with Sergiy Saydometov, while writing the book Biblical Economic Policy. Well, that’s what we’re witnessing in the migration between states.

You don’t have to survey the estimated eight million people who illegally crossed the Southern border of the US in the last three years. They are seeking freedom. Gee, I wonder how many have crossed the border the opposite way?

Quoting the WSJ article again, “Democratic Governors such as California’s Gavin Newsom portray right-leaning states as benighted and undemocratic. But then how do they explain why so many of their states' residents are moving there?”

People vote with their feet.

 

The End Game

Where does this all end? A good case study might be Yugoslavia, which after the fall of communism, split into six constituent republics. Each group has their own country. That’s the way the US was designed, with states’ rights.

There are Ten Reasons for Hope in the New Year

 

I often explain that as an economist, I’m a pessimist, but as a Christian, I have hope. Hope is endemic to the Christian spirit and idea. We believe God is at work, even when the US debt clock shows that each individual’s share of the $34 trillion in national debt has increased from $85,000 to $100,000 in just the last three years. Think about it: Each of your children and grandchildren owes $100,000 in national debt.

Still, there is hope. Here are some economic hopes we can have for 2024.

 

The Omniscient God

From seeing God as a small g to God with a big G

God IS sovereign, so He can do whatever He wants, without our help, but He chooses to allow us to join Him in his great work. I explained this concept in my last economics lesson of the semester at Dallas Baptist University because it helps us understand HOW MUCH humans should do. That’s the whole ballgame in macroeconomics: How active should monetary and fiscal policy be? For an atheist, it’s easy: Since they don’t believe there IS a God, humans have to do everything, but for Christians, or really, anyone who believes in a greater being, we have decisions to make about how active fiscal and monetary policy should be. It’s pretty easy to see that Christians should hope for less active fiscal and monetary policies in 2024.

Accepting responsibility

When GK Chesterton was asked, “What’s wrong with the United Kingdom?” He answered, “Me.” Increasingly, people believe that there’s nothing wrong with individuals, and what’s wrong in society. That’s why liberal college professors train their students to be activists. Their objective is to change the regulatory systems of society. Well, THEY are wrong. What IS wrong is the fallen nature of individuals, not societal structure. If folks start to see that the problem is based on the fallen nature, 2024 would be a better year.

 

A Free Economic System

From Karl Marx to Adam Smith

Adam Smith explained a free-market capitalist system, where both producers and consumers could benefit in the same exchange. Karl Marx countered it with a system that calls for the oppressed to rise up and throw off their oppressors. Guess what happens next? Another revolution, followed by guess what? Another revolution. Marxism is a system of continual battles because they can always find oppressed groups. It never ends in peace. I asked my students just last week, “Do they still make you read Animal Farm in high school?” Most heads nodded. There’s a lot of Marxist thinking in the world today: People who support Hamas against Israel have been duped into believing that the smaller, weaker group is always oppressed.

From socialism to free-market capitalism

A Christian Economist favors a middle position, typically somewhere near the free-market end of the spectrum, where there is enough freedom to exchange goods fairly, but where government has the role of maintaining competition, and preventing monopolies. Socialism always produces monopolies that serve the supplier at the expense of the demander. It’s not even a debatable subject.

From spending to saving

Brazil went through a period of sustained high inflation between about 1980 and the year 2000. During high inflationary cycles, it’s not wise to save, because your money becomes worth less, the longer you hold it. This period created a culture of spending and not saving, which is still obvious in Brazil today. The US is moving that way. Before the covid pandemic, in 2019, the US saving rate was about 7%. It’s now half that, about 3.5% and total consumer credit card debt crossed the $1 trillion threshold last month. I don’t have time to unpack all the various reasons for this, but one of them is inflation, and the other is a moral hazard. The government bailed out many folks during the pandemic, and now people assume the government will take care of them. So, why save?

The market will take care of the woke problem in higher education, as consumers choose Christian colleges over corrupt state institutions. 

 

John Ellis wrote a fire-breathing editorial in the Wall Street Journal titled Higher Ed Has Become a Threat to America. Subtitled Our corrupt, radical universities feed every scourge from censorship and crime to antisemitism. He’s mostly right. But his prescription is wrong. As with most problems in a free society, the market will take care of the problem.

 

The Council for Christian Colleges & Universities

There is an alternative form of education that Mr. Ellis overlooks: Christian Higher Education. 150 members of the Council for Christian Colleges and Universities suffer from almost none of the maladies Mr. Ellis points out in his scathing article.

He writes, “Every one of these degradations can be traced wholly or in large part to a single source: the corruption of higher education by radical political activists.” Okay, let’s see. I have been on the faculty at Dallas Baptist University for thirty years, so I will speak for my university, and safely assume that applies to most of the other 150 CCCU members. There are no radical political activists on our campus. Never have been. Unless you count the very conservative Young Americans for Freedom, who recently hosted a speech by retired Lt. Colonel Allen West. There’s also the Pro-Life Patriots organization. On President’s Day, their Facebook page invited students to “Join us, this Presidents’ Day as we remember some of the most Pro-Life presidents in history!” The announcement was accompanied by photos of both Presidents Bush, President Reagan, and President Trump.

 

Biblical Justice

Ellis again, “Children’s test scores have plummeted because college education departments train teachers to prioritize “social justice” over education.” Nope, not at our university nor at just about any of the other CCCU members. We like to study “Biblical justice.” A phrase you might hear in a classroom is “There is neither Jew nor Greek, there is neither slave nor free, there is neither male nor female; for you are all one in Christ Jesus.”

Mr. Ellis complains, “Censorship started with one-party campuses shutting down conservative voices.” That’s never happened at DBU. Recently, we have hosted former CIA and State Department head Mike Pompeo, former President George W. Bush, former Secretary of Defense General Jim Mattis, and Kristen and Keith Getty. That last couple writes and performs Christian praise songs. Recently we also hosted retired Army General David Petraeus. We’ve never had a protestor, and we don’t expect to have one this week. Our students think, and don’t allow their feelings to control their lives. I unpack more on that topic in podcast #97 titled Thinking vs Feeling. During speeches, our students show respect for competing ideas, they don’t shout them down, or demand the speaker be ushered off campus. They treat guest speakers as guests, as they do all campus visitors.

 

Be Fruitful and Multiply

Ellis again: “The drive to separate children from their parents begins in longstanding campus contempt for the suburban home and nuclear family.” It’s the total opposite at our university. Dennis Prager spoke in chapel, then hosted his national radio program from our campus, with some students visiting him in the studio. He cited an article about three women featured in a recent Atlantic Magazine article, who stated they would not have children because of climate change. Mr. Prager asked our students how many of them wanted to get married. In the small sample in the studio, all of them raised their hands, and having children was beyond question: of course, they planned to get married and have children.

Opining about the border crises, Ellis states, “Open borders reflect pro-globalism and anti-nation state sentiment among radical professors.” Of the approximately 4500 students at DBU,

December is Christian Month. It starts with Thanksgiving and ends with Christmas: the most celebrated holiday event in human history.

 

December is Christian Month. It was not officially declared by any governmental entity. It doesn’t have to be. Just look around. It starts with Thanksgiving and ends with Christmas, the most celebrated holiday event in human history. Gift-giving, Christmas trees, lights, Santa Claus, office parties, and family gatherings are all part of Christian Month. Deloitte’s holiday retail sales analysis says consumers will spend $1,652 each on Christmas.

I made this observation while attending the CEO Summit at Liberty University recently. Independent reporter Lara Logan was complaining that every other group had their month. There is gay pride month, Hispanic Heritage Month, and Native American heritage month. She accusingly asked, “Why isn’t there a Christian month?” It was a formal presentation, so it was inappropriate for me to shout out, “December!” but December is quite obviously a Christian Month.

 

Black Friday

Black Friday got its name from the day when retailers went from red to black in profit terms. Without Christian Month, they wouldn’t make a profit. This year, shoppers spent $9.8 billion, an increase of 7.5% from last year.  Cyber Monday was shaping up to be a giant Christmas gift to retailers; 63% of Americans shop online for Christmas gifts.

By the time Christmas arrives, each American will spend just north of $700 on gifts alone. We give gifts because the wise men brought gifts to celebrate God’s gift to mankind: Jesus, the God-man.

 

Gifts

They brought gifts of gold, frankincense, and myrrh. Gold because he was a King, Frankincense was used by the Jewish High Priest in the temple, and myrrh is an embalming spice, which foreshadows His death on a cross.

Some people complain that Christmas starts too early but Halloween is not too early for me to celebrate the birth of my savior. People complain that Christmas has become too commercial, but that’s only if you let it. Others will celebrate however they wish. For me and my family, the reason for the season is the birth of Jesus: It’s a Christian month.

If baby Jesus was laid in a manger during Christian month, it was probably made of stone. Wood was scarce in first-century Israel, so farmers would take a large stone, and carve it into a dish shape that would hold water for their cattle and sheep. Jesus was likely laid in a stone enclosure, but he didn’t stay there long. His father took him out and cared for him, and his mother nursed him.

 

Why December?

Just under half of Americans start shopping for Christmas in October. That seems pretty early, but it helps spread out the shopping blitz as the holiday gets closer.

If the shepherds were out with their sheep when Jesus was born, it was probably September or October, when sheep were allowed to graze on a harvested field to eat the remaining straw and fertilize for the upcoming planting season. Christians moved the date to December 25 - Christian month - to put it exactly nine months after Easter, which was celebrated on March 25. That would mean Jesus was conceived and crucified on the same day of the month, the 25th.

Another reason for Christmas to be during the Christian month was to supplant the pagan festival of Saturnalia. Pope Julius made that change to coincide Christmas with the Roman celebration of the solstice on December 25 in the year 336. Pagans who lived in the northern hemisphere saw the sun slipping lower in the sky, and they believed they had to make a sacrifice to the gods, so the sun would return to warm them. There is pretty good evidence that the prehistoric druids, who lived in the British islands, celebrated the end of the year at a wood henge before they moved to a stone henge to celebrate the new year. Only faint evidence of the wood henge remains, but the stone henge still stands.

 

A Tax

Economics in 2023: we should not expect perfection on this side of heaven.

Many people leave the church because they find that their fellow congregants are not perfect. We also hear complaints about the capitalist economy not perfectly serving everyone’s needs. The answer to both of these complaints is found at the root of the problem of all mankind: There is no perfection.

 

Church

A friend in a Bible study recently mentioned that folks won’t attend church because, in the past, the church had harmed them in some way. About 150 years ago, my Southern Baptist predecessors claimed that the Bible endorsed slavery and used the scripture from Ephesians 6:5 stating, “Slaves obey your earthly masters.”

Avoiding the church because the fallen people there have made mistakes is a sophomoric excuse. Tell me, what organizational entity will NOT hurt you? The Federal government, state government, county, city? The Rotarians, the Lions, even the Optimists will hurt you. The Salvation Army will hurt you. I wrote a series of three podcasts recently about 1) how fiscal policy harms the poor 2) how green policies impoverish the poor and 3) tax policy and the poor. I have not heard about anyone leaving the United States because they were harmed by those policies.

People who leave the church because they were harmed have a very twisted understanding of the church and the gospel. There is no doctrine of perfection in the bible. As a matter of fact, the Christian doctrine is very clear about its imperfection. Romans 3:23 reads, “All have sinned and fallen short of the glory of God.” The church has been described more as a hospital for wounded folks, not a museum for perfect people.

I’m trying to imagine someone moving to the Dallas area and buying season tickets for the Cowboys. At halftime, we find him at the ticket counter demanding a refund. “The receiver dropped the ball. I didn’t pay to see mistakes!” What did you expect? In the same way, I’m astounded at people who are hurt by the church and exclaim, “They’re not perfect!” Where did this idea of perfection come from?

Seeing that we’re in the Christmas season, maybe we have an answer: we believe Jesus was perfect. As you and I travel through our lives, it’s kind of hard to understand, but that IS what we, as Christians believe. Jesus was perfect, but each of the other 117 billion people, before and since, are NOT perfect.

Our pastor actually admitted from the pulpit, “Come join our church. We will hurt you.”

 

Forgiveness

Here’s what Christians should be good at: Forgiveness. We believe in it. My consulting partner and I were asked to lead a “kumbaya” session of sorts with our local city council members and school board members. They are the two most powerful bodies in our community, and the mayor thought it would be a good idea, to get them all in the same room, and say good things about one another and it went well. When we asked for closing statements from the Mayor and the School Superintendent, the Super said succinctly, “We need to learn how to forgive.” That came out of nowhere. What did she mean?  Where did she get that? Well, thinking about it later, it occurred to me that our community was still suffering some lingering racial strife from the George Floyd killing. That’s what she meant, and she was right.

Where does this model of forgiveness come from? Well, Jesus died for your sins, because there is no free lunch, someone had to pay. Jesus paid for you and me, so we have been forgiven. That’s why when the question was asked in Matthew 18:22 “How many times should I forgive?” The answer was “seventy times seven.”

A society without forgiveness is a pretty ugly place to be, and that’s what’s happening in the post-modernity stage of United States society.

When I used to do a lot of management seminars, I would often mention that every organization has to have some kind of a forgiveness system, although I didn’t use that term.

Adam and Eve ate the apple because they wanted to be God. That desire has not gone away, and recently, we are seeing even more evidence of it.

Our society is moving from “God to Government” and the implications don’t look great.

 

Worldview

Christian Worldview to secular worldview

The Christian Worldview says God created a perfect world, fallen humans have messed it up, and we find redemption through Jesus Christ. Support for abortion provides ample evidence that many people don’t believe humans are created by God; I will cite many examples of the denial of the fallen nature in the next few statements. If we’re not fallen, who needs a savior for redemption?

Fallen to not fallen

The defund the police movement was based in the assumption that humans are not fallen. If you just leave them alone, peace will break out. This is not a theoretical belief system. It’s been proven over and over again, that if you reduce punishments, crime increases, as it is in America today.

From serving God to being “god”

In the book The Rise & Triumph of the Modern Self Carl Trueman explains why people believe they are “A woman trapped in a man’s body,” or the opposite. The supposition is objectively false, but the concept of expressive individualism has led folks to believe they can do it. Maybe it’s the best evidence for the departure from the Christian Worldview, because people don’t believe they were created by God, so they can create themselves. Frightening.

 

Economics

Supply side to demand side

Keynesians believe that during an economic downturn, the economy should be stimulated by shifting the demand curve out. The measure of that effort is called the Philips curve, and it has been shown to work in the short run, but not in the long run. In the long run, you end up with employment returning to its natural rate, but with the added debt that was accumulated to shift the demand curve. When shown this, John Maynard Keynes agreed, and responded, “In the long run, we’re all dead.” What a selfish thing to say. In about twenty years, I might be dead, but my Dallas Baptist University sophomores will be in the middle of their careers, struggling to pay off the debt our country has accumulated. I’ve told them many times, that they will look back on the years from 2019-2023 and ask why the national debt moved from $20 to $30 trillion in just four years.

Free market capitalism to socialism

This is the most dangerous movement in economics. The title “Free Market Capitalism” reveals its intent in the title, because it calls for free exchange of goods and services. Socialism is based in power, where producers and consumers are coerced to exchange goods in a way the government wants them to.

From private investment to government crowding out

To help my sophomores at Dallas Baptist University do well on their weekly quiz, I ask if we should smoke cigarettes. The obvious answer is “no.” “So we should nix cigs!” is exclaim, which helps them remember the equation for Gross Domestic Product: Y = C + I + G + NX. In the last quarterly GDP report, Consumption and Government Spending were up. Investment was down. That means we have a good short-term economy, but a bad long-term economy, because there is not enough investment being made.

 

Governance

Biden’s Sphere Sovereignty to Economic humanism

Biden’s Sphere Sovereignty is the title of my podcast #111. I caught him admitting that government could not solve some specific problem, so I took the opportunity to make it the title of a podcast. Economic Humanism is the title of my podcast #21, which explains how humans think they can do just about anything. After eating the apple, Adam and Eve found it didn’t work that way.

US Revolution to the French Revolution

In his book Last Call for Liberty, Os Guinness explains the difference in the US revolution, which defended religious freedom, and the French revolution, which deposed religion.

The Pilgrims tried socialism and it failed. Then private property led to so much prosperity that they hosted the first Thanksgiving.

 

If you have enough to eat this Thanksgiving, you should be thankful for the private property system that produced the food. We live in the most prosperous, fruitful time in human history. Let’s take a brief look at how we got here.

In October of 1621, Plymouth Colony governor William Bradford called a three-day festival, inviting the ninety Indians to join the 50 Pilgrims. This feast, which included times of thanks to God as well as athletic competitions and food and fellowship, is commonly celebrated as the first Thanksgiving festival in America. So, if you celebrate it with football games and food with your neighbors, you are re-enacting this cherished Christian tradition, but who were these Pilgrims, and how did they get here?

 

Fight or Flight

That’s the basic idea from psychology that our minds are built to either change ideas we disagree with, or run from them. It’s a pretty big discussion among Christians in the United States today. Or, at least, it SHOULD be. I delve into the question in podcast #72 titled Two Worlds. Being in the world, but not of the world is becoming more difficult in post modernity.

The Pilgrims response was flight, as explained by David Barton at WallBuilders: The Pilgrims are well known today for their association with the first Thanksgiving festival. The Pilgrims were Separatists — a set of Protestants who felt that they would be unable to reform the Church of England and therefore they chose “flight” over “fight.” They went to Holland and then eventually to America. But the other group who came later, were Puritans. They were “fighters” who believed they could reform the Church of England. It turned out that they were wrong, and following severe persecution, some 20,000 followed the Pilgrims to America.

The Pilgrims had obtained a land grant for Virginia and set sail in the Mayflower on September 6, 1620. But after a rough ocean crossing, they landed 200 miles north of Virginia in what became known as Massachusetts. On November 11, 1620, they finally dropped anchor and came ashore.

 

Grateful or Entitled

Of the hundreds of books and articles I’ve read and the hundreds of speeches I’ve heard, the one that makes the most impact on today’s subject is a little five-minute video by Dennis Prager, titled The Key to Unhappiness. He says there are two groups of people: Those who are grateful and those who are entitled. The grateful will always be happy, the entitled will never be happy. And here’s the strange part: Dennis is a Jew, who does not believe Jesus died for him. Think about it: A Jew is telling a Christian that HE should be grateful. Kinda backward, isn’t it? I’m the one who should be telling HIM to be grateful.

Jesus had to die for your sins because there’s no such thing as a free lunch. Somebody had to pay. And it wasn’t you. That’s why Christians are grateful, and why we celebrate Thanksgiving. We have a lot to be grateful for.

You’re welcome to feel sorry for atheists during this season. They have no one to be grateful TO. I don’t know how you can be grateful FOR, without being grateful TO. Oh, then the non-believer has to suffer through Christmas, and not celebrate the birth of Christ. You know, for all we complain about the difficulty of being a Christian, this time of year, it’s quite a blessing.

Our grandkids sometimes tell each other, “You get what you get, and you don’t throw a fit.” Actually, that’s a pretty good Christian economic philosophy. Be happy for what you have. After all, being happy is not having what you want, it’s wanting what you have.

In our book Biblical Economic Policy, Sergiy Saydometov and I mention this concept as one of the Ten Commandments of Economics, which we borrowed from the list by Moses. It’s #4 for us, and it’s called “Don’t Covet.”

 

If you Don’t Work

Trade with China makes Americans richer, but China is likely using the profits from their exports to build a military that the US will fight someday.

 

In the 19th century, if a sailor got too drunk in a port city, he might wake up the next day on a ship steaming toward Shanghai. The noun became a verb, and he had been “Shanghaied,” but in the current US-China trade relationship, who is getting Shanghaied?

Trade with China makes us richer, but they might be using those profits to build a military that we will fight someday. I’ve often said, you won’t find a one-armed economist because we will always say, “On the other hand.” Trade with China reflects this conflict. Trade makes us richer, but it also makes China richer. What do we do?

I think it would be difficult to find a scripture that encouraged market discrimination against a people group, just because they are from another country. That’s where Christianity and Economics support each other. They BOTH call for open markets and trade, among all people groups and all countries.

 

Trade is Good

Of course, trade is good. The entire Adam Smith economic legacy might be neatly tied up in a two-step process: First, increase production via specialization, then trade your surplus.

Trade is Good is one of the Ten Commandments of Economics that I found with my co-author Sergiy Saydometov, when we wrote the book titled Biblical Economic Policy.

If we didn’t trade, we would be very poor. I’m pretty good at giving economics lectures and writing, I’m an average farmer, a lousy tailor, and even a worse auto mechanic. I couldn’t make a car if my life depended on it. Instead, I specialize in writing and speaking, and I trade for food, clothes, and cars. That little economic system works at the national level too. This is still Adam Smith territory: he noticed that the French were better at making wine, but the Scots were better at making Whiskey. That’s why some wines, like Champagne and Bordeaux, are named for the region where they are made. I’ll presume you know why they call it “Scotch Whiskey.”

In the first nine months of this year, China exported to us $210 billion more in goods than we exported to them. That’s the FRONT part of the equation that they explain to you on CNN and Fox News. The back part of the equation is a little more complex, so you only find that in the Wall Street Journal and The Economist. That’s where you find this Chinese businessman holding a million US dollars and trying to exchange it for something. He ends up buying a shopping mall in Cincinnati, or a wheat farm in Kansas because that’s where the US dollar is honored. That back side of the equation is where you hear people complain “The Chinese will own the US someday.” That’s chicken little economics. I heard the same thing about the Japanese in the 1990’s. If the Chinese buy $210 billion worth of real estate in the US every year, there really is not even an ESTIMATE of how long it would take them to own a meaningful percentage of US assets. Recently, there have been reports that they are buying land near military installations. That’s concerning.

 

Trading Avoids War

There’s something called the Golden Arches theory of Conflict Prevention that goes something like this “No two countries that both have a McDonald's have ever fought a war against each other.” It was first proposed by Thomas Friedman in a New York Times column, then became part of his book titled The Lexus and the Olive Tree, which I read years ago. Maybe it was disproven by the UK’s struggle with Argentina over the Falklands, and the current Russian war on Ukraine, but the concept is still valid. Trading avoids war.

Part of the reason that Imperial Japan attacked the US was because the US stopped trading oil and steel with them. OK, the US had good reason. They were responding to Japan’s atrocious treatment of the Chinese, just across the Japanese border. That’s interesting to think about: My podcast today,

School Choice: The rich already have the choice to send their children to any school they want.  The poor should have the same choice.

 

The rich should have a choice that the poor do not have. Really?! Think about it: The rich already HAVE school choice; they can send their kids to any expensive school they choose, but poor kids don’t have that choice. Shouldn’t we give them that choice?

We live in Texas, where our legislature is trying to decide what to do about school vouchers. To a Christian Economist, this is pretty simple. As an economist, I think people should have the freedom to send their children to a school of their choice. As a Christian, it certainly seems like a person should be free to choose Christian education over secular education. So who disagrees with that? People who want power.

They want power, not only over your decision but over the dollars you pay in taxes. First, they forcefully extract tax dollars from you, then when you want to direct the use of those dollars, they want to spend them on two monopoly providers. More on that in a minute.

 

The Poor Will Always Be With You

Jesus said that, because He knew we would not be able to keep the Biblical commandments to run a Biblical Economy. The school voucher issue is simply another example of it. People should be as free as possible to choose religious education over secular education. If people were better educated, production would increase, and our country would be richer. The productivity equation, after all, is what determines a country’s wealth.

“Know the truth, and the truth shall make you free.” That’s from John 8:32, and it follows after a pretty interesting scripture as well. The preceding verse reads, “If you hold to my teaching, you are really my disciples.” Oh, so teaching is pretty important to Jesus. So it’s through LEARNING that we find the truth. I don’t have the time today to deal with the philosophy of one truth or multiple truths, but don’t miss the point: The scripture clearly says THE truth shall make you free, the not truths, plural.

In podcast #163 Who Owns Education?), I quoted Oprah Winfrey saying, “Education is the key to unlocking the world, a passport to freedom.” Okay, so we’ve determined that people should have the freedom about how to unlock this key to freedom. I’ve often said, the intersection of Christianity and Economics is freedom. I guess that’s poignantly true in this podcast.

 

Monopolies

There are two monopolies at work here:

The first one is quite obvious. Public schools don’t like to compete with private schools. They’re happiest when they have a monopoly on education in your town.

I’m an academic, and one of the basic ideas is that no one knows it all. That’s why most academics study at various universities and then join the faculty at another university where they didn’t study. I’ve attended ten universities.

But why? Why didn’t I get all my education at the same place? Because, no one and nothing, not even a University, has all the answers. You have to study broadly to gain different views of the world.

When I started teaching Economics, I would teach Macro one semester, then Micro the next. My friend and co-author Sergiy Saydometov did the same thing. But that meant they either had two classes with me and none with Sergiy, or the opposite. But then, I camped on Macro, and he camped on Micro, specifically so that our students at Dallas Baptist University were forced to hear economic views from two different angles. That’s how you build a market for information.

In contrast to the previously cited market where the intellectual capital of various people is poured in, the fallen nature always wants to reduce that market to a monopoly, and that’s what we have in lots of public education today.

The school superintendent who complains about resources being moved from their monopoly to a competitive environment is wearing shoes that were bought in a competitive environment...

The US Federal Government's annual expenses are $1.9 trillion more than its revenues.  That's a violation of the eighth commandment, and it is economically unsustainable.

 

You will be poorer every day, for the rest of your life, because the Biden administration has increased the national debt in the last three years.  That’s the message I gave my sophomores at Dallas Baptist University recently.   Going back a little further, the Wall Street Journal reports this week that Federal debt held by the public mushroomed from less than $5 trillion in mid-2007 to more than $21 trillion in 2020.

Sorry for being the bearer of bad news.  They never liked prophets in the Old Testament either.  Or, as I often say, “I’m just the boy at the edge of the crowd shouting, “The Emperor has no clothes!”  I’m not responsible for who feels naked as a result.

I arrived early to lead some Certified Public Accountants through a management seminar in Pittsburg in the winter of 1998.  Trying to start a conversation with stereotypically reserved accountants was difficult.  Reading the local newspaper, I asked, “How did the Pittsburg Penguins of the National Hockey League manage to go bankrupt?”  There was no answer.  I waded in again, “How did an NHL team go broke?”  Finally, one of the participants answered, “Expenses exceeded revenues in the long term.”  At the time, I was a columnist for a publication called Sports Business Journal.  My column the next week was titled, “When expenses exceed revenues in the long term.”

 

The Eighth Commandment & National Debt

Expenses are exceeding revenues in America today.  This is unsustainable.  According to the US debt clock, this year the federal government will have $4.4 trillion in revenue and spend $6.3 trillion You can’t continue to spend 30% more than you take in.  I don’t care if it’s your personal checkbook, your business, your church, or the federal government.  Consuming without paying for it is stealing, and it violates the eighth commandment.

So why do we continue to do it?  When President Bill Clinton was asked why he had sexual relations with an intern, he flatly, answered, “Because I could.”  And, that’s why the Federal government continues to spend more than they receive.  Here’s how Investopedia explains it: “The nature of debts changed after the Great Depression and the rise of Keynesian economics. The extent to which British economist John Maynard Keynes influenced government spending in the 20th century can hardly be overstated. While both the Hoover and Roosevelt administrations extended public works projects and experimented with fiscal deficits in the face of the Great Depression, it was Keynes who provided the macroeconomic justification for running large budget deficits to stimulate aggregate demand and fight recessions.”

Danielle Lacalle at the Epoch Times has this to say in a recent article titled The US Deficit Road to Ruin, “According to the U.S. Treasury, year-end data from September show that the deficit for the full year 2023 was $1.7 trillion, $320 billion higher than the prior year's deficit.”  This is going in the wrong direction.

 

On the Wrong Side of the Laffer Curve

The Biden administration increased taxes, but revenues declined.  That means we’re on the back side of the Laffer Curve.  Arthur Laffer’s simple curve shows a starting point on the bottom left of the graph, where a tax rate of zero produces zero revenue.  At the bottom right, a tax rate of 100% produces zero revenue.  So, logically, there has to be a hump in the curve.  Christina Romer was the Chief Economic advisor to President Barack Obama.  She determined the hump was at 33%.  That means tax rates above 33% reduce revenue to the Treasury.

When the Trump administration reduced taxes, revenue to the Treasury increased, proving we were on the back side of the Laffer Curve in 2017.  Apparently, we still are.

Mr. Lacalle again, “There simply is no excuse.