We can talk about the economy in traditional political terms if we want. To do so, we could talk about what I've mentioned in Facebook posts immediately after the election of Trump in 2016: leadership lag time. In many cases, when a new leader takes charge of an organization, be it a business, church, or government, the policies and general leadership of the new executive take awhile to have an effect, positively or negatively (likewise, new positive or negative effects of the previous leader may be seen for awhile after his/her departure). Often I talk about that in church terms: if a pastor works for ten years to create communal events that everyone attends, and in the ninth and tenth year those events finally become successful, and then after the tenth year the pastor leaves but attendance at the communal events and membership in the church continue growing for a couple of years after the new pastor arrives, we can't attribute much of the success of the events or membership growth to the new pastor. Likewise, since the economy and unemployment numbers were improving steadily under Obama, a continuation of the upward trend cannot be solely attributed to Trump. We also should mention that the president has little effect on the economy in the first place, other than working with Congress. Certainly there are hopeful signs in the economy that can be attributed to Trump: the stock market, for instance, while gaining steadily under Obama, did spike noticeably because of optimism surrounding the tax cuts. There are also concerning signs, however. The deficit will balloon and my generation will pay for it. Little to no talk about the debt and deficit and curbing the burden they will place on future generations has occurred. Traditionally, 'small government' and 'conservative' legislators and officials, whom I firmly affirm, have cut government spending in order to cut taxes in order to energize the economy. Instead, under Trump, we have raised spending and cut taxes. That makes little sense. Regardless of our position here, these are the traditional elements of an 'economy discussion.'
If we want to talk about the economy, we can talk about all of those elements. With that, we traditionally ask the question, "Who can we credit with the good? Who can we blame with the bad? How can we jumpstart the economy, generally? How can we cut taxes? Whose taxes should we cut, and whose should we increase?" Those are the questions we ask. Above I answer some of those questions in brief fashion. I don't intend to discredit Trump or the Republican Party with my answers but, instead, do want to imply that our thinking on the subject of the economy cannot be as cut and dried as we desire. Yet we have so politicized discussion on the economy (and, by the way, I love politics--politics is simply the civil engagement of what is best for the polis, the city, or state, and its citizens, so politics is good. By 'politicized,' I do not mean that politics is bad. Instead I mean by 'politicized' that we have 'partyified,' a term I am now coining, hoping to claim for one political party or the other the good or bad that occurs without any admission of the good that members of the opposite party have done), and the parties and members and associates of the parties are so divided, that we cannot fathom wading into some of the murkiness and admit that, maybe, our side is not always right.
The back and forth party fighting obsessed with the general state of the economy has blinded us to what truly matters about the economy. Using the catch-phrase, "It's the economy, stupid," has made us think that if the economy is good, then all is well; if the economy is bad, then all is clearly not well. We have thus become a country who wants to know the answer to two questions: 1) Which party will benefit the economy more? 2) Which party will benefit the military more?¹ Here I focus on the first question. While I have a number of responses to which party will benefit the economy more, I want to point out the main response now: All of our traditional discussion topics on the economy are misguided because "It's the economy, stupid," is a terrible, terrible catch-phrase.
Want to know why? We have been brainwashed by capitalism and have misunderstood the criticisms of Marxian communism. Hear me out. Please, hear me out. I know that 'communism' is a nasty word. I will address why in part two of this essay. For now, note that I am using the philosophical and spiritual understandings of communism more than the economic/political understandings. Also note that I, myself, am staunchly in favor of liberty, and therefore am a capitalist in practice because, as a form of economic development, capitalism does, in my mind, practically favor individual liberty.
With that said, let's dig into why our current understandings of the economy, in partyified form, are misguided and how we might better process our thoughts on the economy.
First, as soon as you reflect on the economy in any form, one has to acknowledge that it is separate from the government. The Federal Reserve is the government's economy watch-dog with a variety of tools at its disposal to slow down or speed up economic development and inflation. Even the Fed, as it is called, is mostly independent, though, from the elected officers that we put into the government. We can barely equate the Fed with what we traditionally think of as the government. Still, who is appointed to the Federal Reserve matters, so the government has an impact there, as well as through taxes, the accumulation of debt, and regulations. All these have an affect. Each party and their positions on the limited roles a government can have on the economy do matter somewhat. Perhaps not the impact we typically think, but enough of an impact to acknowledge the government's role.
The problem, however, with partyifying economic choices is that our thinking of which party is better for economic development and stability is emotional and misguided. One piece of evidence is playing out right now, as I've mentioned above. The Republican Party is, traditionally, the party of small government and low deficits. Suddenly, with control of the executive branch and both houses of government, the Republican Party has become the party of spending and high deficits. Why? For emotional reasons. Everyone likes a tax cut and everyone likes the results of government spending--may not like the concept of government spending, but the results of it, such as roads, Medicare, Meals on Wheels, housing programs, etc. are popular. What is happening now is proof that whichever party is in power seeks most to make as many people happy as possible right now in order to stay in power rather than follow through on principles. Our political parties understand that wen the economy is doing well, or when we perceive that it is doing well because we are receiving tax cuts and bonuses, we will think that the party in power is doing a good job. Various forms of amnesia and memory suppression take control and what is happening right now, and our perceptions of it, matters most. Principles be damned.
A second reason why our understanding of the economy is askew, and now we are getting to the heart of the matter, is that we have forgotten what capitalism is. Capitalism is a form of economy engineered to put as much capital in people's hands and let them do what they will with it. Freedom and liberty in capital terms is the rule of the day. In terms of justice and morality we defend such an economic plan because, essentially, of Adam Smith's century-and-a-half old ideas. Adam Smith claimed that when each person is given the freedom to do whatever they choose with the capital in their possession there will be an invisible hand, of sorts, indirectly navigating the general economy for the betterment of all people in general. Famously, people like John Nash, of A Beautiful Mind fame, have made improvements to that general concept, but anyone who has interacted with other human beings knows that such optimism concerning what people may do with capital is misplaced. Yes, a business, for instance, must address public sentiment or else be boycotted, so in a way in order to make more money a business must do what is good for its customers, not just for the owner of the business. That is true. But on the whole, human nature is such that if there were a way to accumulate capital without worrying about what is best for others, we would do so. Even the most generous among us would excuse ourselves to say, "I need to protect my interests, and those of my family, because otherwise I wouldn't be able to help others."
In other words, when a person has capital, there is nothing saying that they wouldn't seek to keep it for themselves. A business owner could use his or her capital to lobby the government to, say, reduce regulations on workers' safety, making it easier to accrue more capital while harming employees and caring little for customers. If that business owner has a monopoly or nearly so in a certain market, enforcement of such deregulation would have no impact on business because people would be forced to buy from that business. This is human nature. Earn capital, work to keep capital. I know I do it. When I earn more money than I absolutely need, I invest it in companies that will provide the highest return, with no consideration for the morality of such investments. I want to give my family a comfortable path through life, if not luxurious.
Adding to that, thirdly, the idea that businesses and business owners that have more capital will create more jobs is patently false. Again, we have a concept that if the economy, generally, is good, then businesses will hire more, and therefore a strong economy is good for all. This is true to an extent. Some businesses, for example, may have a market to expand but are afraid to take the risk of hiring more in order to expand business. For these companies, usually small businesses, more capital will probably lead to more hiring. But stop to think for a second about how business works: the fundamental of all business is supply and demand. We all know this. If there is greater demand, a business will need to create more supply, hence hire more workers. If there is not greater demand, however, then hiring won't happen, even if more capital is available. Again, taking me as an example, if I have more capital because of a tax cut, I am not necessarily going to consume more. I may save it. If I do save rather than consume, I have not increased demand for anything and therefore I have not increased supply or led to hiring.
We should keep in mind here that bigger businesses, who already possess more capital, are more able to increase supply in the hopes of meeting an unrealized growing demand. In other words, an economic boost through a tax cut or subsidy would benefit a small business more in terms of hiring. Since that is true, though, we are talking about many fewer jobs created thanks to economic development initiatives than we think, as small businesses obviously hire fewer workers. Bigger businesses are able to respond to demand without necessarily needing any boost, hiring more regardless of whether they receive a boost or not. For a bigger business, an economic boost is most likely to take the form of a one-time bonus for workers rather than a permanent job.
We cannot deny that many businesses are offering pay raises along with bonuses. But that is as related to low unemployment as to economic development initiatives. When unemployment is low, businesses need to work hard to retain workers. This would be true whether the economy, generally, were growing or growing super fast. Supply and demand and the pressures of the workforce apply all the time regardless of the strength or perceived strength of the general economy.
What we should be noticing here from these points is that a strong general economy does not necessarily mean stronger personal economies, for you and for me--personal economy defined by our financial stability, flexibility, and purchasing power. We could have a strong personal economy in a weak general economy or a weak personal economy in a strong general economy. The two are not necessarily in a direct relationship. More than that, a strengthened general economy does not proportionally strengthen personal economies. If in a certain time frame the general economy grows by 3%, the average median personal economy will almost certainly not grow by 3%. Again, the two are not necessarily in a direct relationship, and certainly not proportionally. And that's the point I've been leading up to: we have to make a choice between whether we desire the general economy of the country to be strong or if we desire personal economies to be strong. Do we want to emphasize strong personal economies for as many people as possible, or emphasize a strong general economy? Of course, the two are indirectly related, so strong personal economies will strengthen the general economy, though not by much; and a strong general economy will strengthen personal economies, though not by much. Which do we want to emphasize?
Recent events and comments by Vermont's governor, Phil Scott, have highlighted the importance of this question. As you probably know, the stock market hit a patch of volatility and downward movement after the Labor Department released strong job numbers. Unemployment hit a new low (though unemployment for African-Americans actually rose) and wages grew. That scared investors and many decided to sell off some of their investments. Higher wages are not good for profit, you see. It would be better for most businesses to operate within a weaker general economy to keep wages low, without fear of losing employees because they know new employees are waiting in the wings, and thus reap greater profits rather than share those profits with employees. Phil Scott's comments affirm this trend. In response to California's wildfires, Scott said that the future of global climate change would be good for Vermont because, if we protect our resources, we can then take advantage of our water resources by selling water to those displaced by or confronted by climate-induced disasters. While Scott may have a point, the obvious issue here is that he is looking forward to capitalizing on a majority of other people's pains and suffering in order to develop one small state. By nature, if we think about this logically, capitalism encourages the exploitation of persons if necessary. To accumulate more capital here, someone there needs to be exploited.
Clearly I have simplified the matter. I don't think that there's such a black and white choice before us. I have laid matters out this way because, at least for Christians, we should acknowledge that it's not the economy that should win our attention. Rather, it is the average median personal economy, the financial well-being of our brothers ans sisters, that most matters. We shouldn't concern ourselves mostly with the state of the economy; we should concern ourselves mostly with the living conditions of our neighbors. Again, there is an indirect relationship here, but the emphasis should be on the least of these, not on the economy generally. As a Christian, we should prefer a weaker general economy that provides for all people rather than a stronger general economy that leaves many people behind. Taking our faith seriously in the marketplace requires a certain perspective.
To recap before we await the next installment: there are logical, objective facts and data we can debate about 'the economy' and how persons are affected by the general economy. Capitalism is, let's agree, a great form of economic development. But all of those arguments we traditionally have are missing the point from a Christian theological and faithful standpoint. Capitalism and how it works does not necessarily entail universal and wide-ranging benefits of capital for personal economies because, partly, humans are not naturally good without God's grace. Personally I have a higher understanding of human goodness than most Christians do, believing God did create us good/divine and we have simply been taught otherwise, but even so, trusting in human goodness to benefit the entire community is not a realistic dream.
For Christians, anyway, the emphasis needs to be on our neighbors, on the least of these. Traditional capitalism and arguments about capitalism versus socialism miss that entirely. That's right, even socialists miss the point. Socialists are, generally, utilitarians, wanting the most good for the most people from a rational basis. But we shouldn't want the most good for the most people simply because that sounds reasonable. We should instead hear the word of God: essentially, "I don't care how good your economy is if you're not caring for the oppressed, the marginalized, the disabled, the elderly, the sick, and even those of you who appear to be 'lazy.' I care that all my people are lifted up." There is no substitute, for Christians, when addressing the economy--it should be a matter of personal economies for the sake of each person's dignity. God created and loves each person, so each person deserves dignity and dignified concern.
1. This essay does not address this second question. However, it should be noted that military spending has increased under the watch of both parties because support of defense spending has been equated to supporting the military and its personnel as well as patriotism. It is a false equation. We can of course support those in the military without needing to spend three times as much on defense spending as any other country; we can support the military without sending our men and women into harm's way all over the world with a vague notion of security. Yes, as a pacifist, I think we should more clearly process our reasons for building up our military, generally, but as a realist I understand that we are not going to abolish the military because I ask us to. With a full sense of realism I, as a political being, ask us to disengage from the false thinking that increasing military spending means we are more patriotic and support our military personnel more than those who want to curb defense spending. If we continue along that path, our government can never be small and can never be fiscally responsible, since defense spending already accounts for around 60% of our federal government's spending. If we force political parties to vie for the award of most supportive to our military via support for higher spending, then we are lost.
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