Hoarding and the Multiplier Effect

A few months ago I came across an article about the growing number of people who have been discovered with the mental illness of hoarding. As they get older, they accumulate stuff that eventually becomes a hazard. It’s not much different than the cause of our current economic state: in times of insecurity, institutions hoard. Then money stands still and people lose work. Money doesn’t do what it is supposed to do: move.

A market economy discourages hoarding and encourages exchange. Free exchange is better than the alternative: force. But as the market gets more complicated, hoarding wealth harms more people. People stop becoming generous when money doesn’t move.

But generosity multiplies. In simple capitalism, the economist Keynes, along with most modern economists, describe the importance of the “multiplier” effect. It is an accounting of how the market catalyzes trade, which ideally encourages jobs. When we employ people, we give them purchasing power, which employs more people, which encourages even more purchasing power. You get, then you spend.

In times of desperation, entrepreneurs get scared and hoard. In those cases, those who have cash lack confidence. Confidence is a dangerous position. It is an appropriate corollary with faith. It is the catalyst of making decisions. Good ones. Bad ones. It’s great when everyone’s making money. It’s bad when it drives us off a cliff. I know I’ll survive. It’s just a cliff, and I’ve been doing hundreds of squats a day.

Church economics takes this general map a step further. We give what we can, and even more so, risking ourselves. Last February we held a party to raise money for an organization that represented the homeless. It was noted that we probably needed the money ourselves. “How can we spend when we’re the ones struggling?”

But with that generosity, a few things were catalyzed. Our refrigerator broke that month; the organization replaced it. The United Way then came in and offered us cash to help with our Kitchen. Even now a funder has come to offer work on it. All following from our willingness to give to others. Because most people are surprised when a church gives cash to other people.

Without expecting a return back.

What we created was a “stimulus package.” It was the multiplier effect. And when we live lives of generosity, we’re catalyzing communities.

Granted, there are limits. The highest form of charity encourages sustainability, not dependence. And there are lots of steps along the way. The first step, alas, is coercion. Or “guilt” as they say in the religiosity business. The last step is out of love, so that the other person can get back on their feet.

For what its worth, there are about 5 tag sales happening in the area on the same day. I imagine that people will buy from several of the sales, and next year, they will donate them to be sold again. I can’t help but think that we got donations of things that were bought from this rummage sale several years ago. The money gets passed around, enough for us to pay a few bills and continue the daily work. But the catalyzing force was the generosity of people willing to bring goods to the church.

The work of the church then transforms other people’s castaways to what other people desire. As people stop hoarding, money is multiplied.

Like love.

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A Christian view on Health Care

Christians desire health and wholeness, and call for our public institutions to encourage such.   Just as Jesus’ witnessed to the old, infirm and sick, church communities have been intimately involved with healing.  In our modern age, many denominations established hospitals and mutual aid societies.   But we have a problem: Americans spend the most on health care anywhere, but get the worst health care in the developed world.  This is because of the system of incentives that makes profit the center of the relationship between patient, doctor, and intermediate institutions, not health.

Some would object that it is Churches and not government, who should be working for such a change. Yet, if Christians truly were to embody the virtues of self-control and charity, they would drink moderately, refrain from smoking and keep a trim waistline.   Christian doctors would provide free health care and churches would create free clinics. Churches would also create mutual aid societies and cooperatives that would help mitigate the everyday illnesses and injuries that occur on a regular basis. This would be an appropriate religious response to our current health care crisis.  However, these are often challenging to manage and require immense resources to care for catastrophic events or long-term care.

Until churches make such contributions to their communities, public reform is the next best option.  A public option would decrease inefficiencies in the private health care market, encouraging companies to cut bureaucratic fat and coordinating administrative paperwork.

As institutions, churches would benefit from a reformed health care like other small businesses.  I’m fortunate:  most of my employees have health care under their spouses.   However, I could get the public option, my church would have more money to spend on mission.   My church can’t afford my getting married.  It means I can only marry someone with better health care than I have.

Health care would change the culture in a variety of ways.  One of which is subtle.  It would integrate society in a way we have not seen since the military was integrated.  It is one of the few places where both poor blacks and poor whites will benefit.   That many of the protestors are whites who feel disenfranchised exemplifies how universal health care will crush the ideology that connected socialism, civil rights and liberalism:  a resilient theology that has been losing credibility since both capitalism and civil rights won.

The Democrats should be aware that a policy that penalizes individuals, however, will end their current position as the party in power.  A universal health care system, however, will shift both parties to the left, ending the rightwing alliance of race populism, tax-cuts and nationalism.  A strong health care system would destroy the Republican party.  Blue Dog Democrats should realize that passing such a health care program will make their positions stronger, not weaker, with their constituents.

A universal system will bring down costs, liberate a sector of the economy trapped by insurance bureaucracies, give small businesses greater freedom in hiring employees, and further integrate our culture.  A mixed economy will catalyze the market.  People will need to be employed as caregivers rather than as insurance bureaucrats.  It will be easier to hire people full time.   It will restore that constitutional idea that the responsibility of the government is for the general welfare of all people.

I understand the resistance.  The Israelites resisted Moses.  Many wanted to return to Egypt.  They created false idols.  Remember – for some people, the idols probably worked.   Just as the current health care system works for some people.  But it doesn’t work for everyone.  There is a promised land.  It’s time for us to move toward it.

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Brad Delong Explains

Brad DeLong explains “that the velocity of monetary circulation is an economic variable rather than a technological constant.”

I’ll be referring to this constantly.

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End the Drug War

Radley Balko writes what Phelps should have said.

Tell you what. I’ll make you a deal. I’ll apologize for smoking pot when every politician who ever did drugs and then voted to uphold or strengthen the drug laws marches his ass off to the nearest federal prison to serve out the sentence he wants to impose on everyone else for committing the same crimes he committed. I’ll apologize when the sons, daughters, and nephews of powerful politicians who get caught possessing or dealing drugs in the frat house or prep school get the same treatment as the no-name, probably black kid caught on the corner or the front stoop doing the same thing.

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Nicholas Taleb

I love this guy. Skeptic, statistician, Christian, public intellectual, he has a perspective that is compelling. Here is a blog that refers to some of his recent academic debates.

From This biographical article: Let me introduce you to Brooklyn-born Fat Tony and academically inclined Dr John, two of Taleb’s creations. You toss a coin 40 times and it comes up heads every time. What is the chance of it coming up heads the 41st time? Dr John gives the answer drummed into the heads of every statistic student: 50/50. Fat Tony shakes his head and says the chances are no more than 1%. “You are either full of crap,” he says, “or a pure sucker to buy that 50% business. The coin gotta be loaded.”

Taleb’s top life tips

1 Scepticism is effortful and costly. It is better to be sceptical about matters of large consequences, and be imperfect, foolish and human in the small and the aesthetic.

2 Go to parties. You can’t even start to know what you may find on the envelope of serendipity. If you suffer from agoraphobia, send colleagues.

3 It’s not a good idea to take a forecast from someone wearing a tie. If possible, tease people who take themselves and their knowledge too seriously.

4 Wear your best for your execution and stand dignified. Your last recourse against randomness is how you act — if you can’t control outcomes, you can control the elegance of your behaviour. You will always have the last word.

5 Don’t disturb complicated systems that have been around for a very long time. We don’t understand their logic. Don’t pollute the planet. Leave it the way we found it, regardless of scientific ‘evidence’.

6 Learn to fail with pride — and do so fast and cleanly. Maximise trial and error — by mastering the error part.

7 Avoid losers. If you hear someone use the words ‘impossible’, ‘never’, ‘too difficult’ too often, drop him or her from your social network. Never take ‘no’ for an answer (conversely, take most ‘yeses’ as ‘most probably’).

8 Don’t read newspapers for the news (just for the gossip and, of course, profiles of authors). The best filter to know if the news matters is if you hear it in cafes, restaurants… or (again) parties.

9 Hard work will get you a professorship or a BMW. You need both work and luck for a Booker, a Nobel or a private jet.

10 Answer e-mails from junior people before more senior ones. Junior people have further to go and tend to remember who slighted them.

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A couple thoughts about the inauguration

Like the two million people who went to the inauguration, I’m captivated by the change in administration.

Although my personal politics are non-partisan (heh, heh), I think that Obama has demonstrated – even apart from his political slant – sophisticated and agile leadership. The most important evidence is his ability to stay connected to people who think differently. He is motivated by curiosity and a sense that everyone has a view worth sharing.

I share some interests with our President. I moved to Chicago in 1992 because community organizing was part of the Divinity School ministry curriculum. Furthermore, the city’s physical landscape was organized around neighborhoods, and the city was a laboratory for many different kinds of effective, non-state institutions. In 1982 it elected Harold Washington, who some think was one of the truly great politicians of all time – a man who combined realism with idealism in a way that transformed Chicago. At the time, I was fascinated by Chicago much more than New York. And Chicago also gave me a full fellowship.

The university itself was also the center of rigorous conservative thought. It avoided an instinctive leftish position but was rigorous and fair, generally unimpressed by identity politics. Obama’s teaching at Chicago was a time when he would have been connected to social action, politicking, and conservatism that would help ground his ability to look at the world in complicated ways. I think this is a worthy gift – being able to see the world through many different lenses.

He inherits a challenge. Yet, our role is not to assent without understanding, to idealize without reflecting, or to worship. We must still organize ourselves as witnesses to love in the world, speak truth to power, and hold up a mirror to our leaders, holding them accountable for their actions. We can do so by remaining magnanimous and remembering the cardinal rule of organizing: there are no permanent enemies. Which is another way of saying, “love your neighbor.”

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