Showing posts with label Economics. Show all posts

When bad news prevails  

Posted by Denis Haack in , , , , , ,

            Over the past week the news dominating the media has not been good. The precise stories are not the point, since this next week new ones may take their place. Or the old stories—of Ebola and ISIS, of political paralysis and economic greed, of brutality, mistrust and injustice—may have evolved into new versions, as bad as the last one, or worse.
            And if you take the time to dig deeper into the reality of the brokenness, you find it extends far deeper than we know. Consider “Ebolanomics” in The New Yorker (August 25, 2014, p. 21). It’s a reminder that the problem is not merely individual sin or evil but that the brokenness infects all the systems of the world as well.

When pharmaceutical companies are deciding where to direct their R. & D. money, they naturally assess the potential market for a drug candidate. That means that they have an incentive to target diseases that affect wealthier people (above all, people in the developed world), who can afford to pay a lot. They have an incentive to make drugs that many people will take. And they have an incentive to make drugs that people will take regularly for a long time—drugs like statins.
            This system does a reasonable job of getting Westerners the drugs they want (albeit often at high prices). But it also leads to enormous underinvestment in certain kinds of diseases and certain categories of drugs. Diseases that mostly affect poor people in poor countries aren’t a research priority, because it’s unlikely that those markets will ever provide a decent return. So diseases like malaria and tuberculosis, which together kill two million people a year have received less attention from pharmaceutical companies than high cholesterol. Then, there’s what the World Health Organization calls “neglected tropical diseases,” such as Chagas disease and dengue; they affect more than a billion people and kill as many as half a million a year. One study found that of the more than fifteen hundred drugs that came to market between 1975 and 2004 just ten were targeted at these maladies. And when a disease’s victims are both poor and not very numerous that’s a double whammy. On both scores, a drug for Ebola looks like a bad investment: so far, the disease has appeared only in poor countries and has affected a relatively small number of people.

            One must be careful, since only God has the capacity to absorb the full brokenness of the world with descending into despair or cynicism.
            One friend appended to an email, “I have been following the news and ‘this world is not my home.’ ‘Even so come Lord Jesus.’” He is half right.
            My friend’s final phrase is from the end of St John’s stunning Revelation that brings the New Testament to its glorious end. The apostle allows us to see behind the cosmic dual of good and evil to the deeper reality of God’s triumph over the forces of death, darkness and disease that have infested his creation. To assure us that this is not merely the optimism of an exiled visionary, Christ as Lord speaks: “He who testifies to these things says,” St John records, “‘Surely I am coming quickly’” (Revelation 22:20). The king will return, will not delay, will consummate his kingdom, and his reign will be one of justice, world without end. This is the hope of every Christian who prays, as our Lord taught us to say, “Thy kingdom come, thy will be done, on earth as it is in heaven.” So, St John adds, “Even so, come, Lord Jesus!”
            My friend’s other quotation is not from scripture but from the hymn, “This World is Not My Home,” by Albert Brumley (1905-1977).

            This world is not my home,
                 I’m just passing through.
            My treasures are laid up somewhere
                 beyond the blue.
            The angels beckon me from
                 Heaven's open door
            And I can’t feel at home in
                 this world anymore.

It’s an understandable yearning, I suppose, but it’s wrong.
            The brokenness of the world is unnatural, true, and so we should feel the brokenness as wrong, as a perversion of what should be and of what was intended. The reason for my sin and brokenness is not “I’m only human,” but “I’m fallen and in need of redemption.” My hope as a Christian is not to escape this world for heaven, but for God’s redemption to be complete, so that a renewed heaven and earth show forth the full glory of which they are capable.
          The news also provides glimmers of that glory, shining through the darkness, as it were. Last week I also read “Termite Soldiers’ Legs Sense Alarms” in Science News (August 23, 2014, p. 16). This is the species of termite that builds tall mounds of red soil that hardens like rock for defense and is constructed with a myriad tunnels to provide cool air for the bustling millions of insects living below the surface.

Africa’s Macrotermes natalensis termite relies on a fighter caste to defend its hardened, meter-high-plus mounds and up to several thousand square meters of underground tunnels. When an aardvark or other predator gouges the insects’ home, termites known as major soldiers pound their heads against the floors. The vibrations from the drumbeats tell other soldiers to speed to the breach.
            These headbanger alarms vibrate through the walls of tunnels at about 130 meters per second. What lets a soldier know which direction to go is the slight delay between when the vibrations hit the soldier’s leg nearest the drumbeat source and when they hit its farthest leg, says Felix Hager of Ruhr University Bochum in Germany. A delay of as little as 0.20 milliseconds was enough to orient soldiers.


Even in a broken world, creation reveals a few hints of the wonder of what this world, made to be our home, will be like when the rightful king returns.

Film comment: Elysium (2013)  

Posted by Denis Haack in , ,


When wealth divides
            I went to see Elysium because I am fond of science fiction and believe it one of the best genres in which to explore the deeper questions of life.
            Elysium is written and directed by Neill Blomkamp, who had (partially) impressed me with District 9 (2009). That film failed because Blomkamp seemed so eager to make certain we understood his point that he turned the movie into a heavy-handed allegory. Critic Roger Ebert noted the parallels—the aliens landed in Johannesburg, South Africa, were kept in an isolated township called District 9 (like District 6 where “Cape Coloureds” were forced to live before being forcibly relocated), the plot is about the forced relocation of the aliens, and the alien’s speech includes numerous clicking sounds similar to some black African languages. “Despite its creativity,’ Ebert says, “the movie remains space opera and avoids the higher realms of science-fiction.” Still, it was creative, especially visually. The sets were striking and both wide-angle shots and closer shots including background details revealed a director who knew how to express ideas visually.
            Since Elysium starred both Matt Damon and Jodie Foster, I hoped that it would be a better film, but was disappointed. The allegory remains heavy-handed, this time set in the future (the year 2150) when the disparity of incomes between rich and poor has grown even more sharply than we experience today. The wealthy few live in an idyllic space station and the rest live in squalor on what remains of planet earth, exploited and hopeless. Both themes that Blomkamp has chosen to explore in these two films are important. When we see those different from ourselves as alien, and when wealth removes accountability from the process of gaining those riches, the very meaning of human dignity is called into question. What’s needed, it seems to me, however, is a subtler story line if the impact of the film is to awaken the conscience of those who subconsciously have chosen to pursue personal peace and affluence as primary concerns in life.
           Elysium is exciting, and the visuals are again striking (the surgery scene worth the price of admission), but it comes off as an action film rather than a story that makes us think. And there are two technical aspects that were irritating. First is the (over) use of a hand held camera. I realize this technique of filming draws the viewer into the action, but it can also be unsettling when used too much. It is unsettling here. And second, I understand the need in the story for the fight scenes and do not dispute that. However the film takes great effort to make us see how very human and ill the Damon character is, but then has him fight as if he were a hero in a Marvel comic. I suppose the point was to stress the importance of his struggle, but the lack of reality in the sequence made it merely implausible, instead.
            Someone needs to tackle this theme, because it is as real as apartheid and just as deadly. As long ago as the 7th century BC the Hebrew prophet Habakkuk issued a warning that if wealth is gained at the expense of others, an accounting will someday occur.

            Woe to him who builds his realm by unjust gain
                        to set his nest on high,
                        to escape the clutches of ruin!
            You have plotted the ruin of many peoples,
                        shaming your own house and forfeiting your life.
            The stones of the wall will cry out,
                        and the beams of the woodwork will echo it (Habakkuk 2:9-11)

Sounds like the plot of a science fiction film, doesn’t it?


Economics from a biblical perspective  

Posted by Denis Haack in , , , ,


It is hard to discuss economics today, both inside and outside the church. You wouldn’t know that from the frequency with which it is debated, because by this measure it seems to be an almost constant topic for discussion. The difficulty becomes clear, though, if you actually pause to listen carefully to what is being said. There seems to me to be three barriers standing in our way.

First, not surprisingly, is the lack of civility. Start talking about economic policy or theory and depending on what we say, there is a chance we’ll be tagged by some label: “socialist” and “uncompassionate” are two favorites. If we face a lack of civility outside the church, well, we should try our best to learn to communicate as clearly and winsomely as possible, but we really shouldn’t whine about it. Facing incivility within the Christian community, on the other hand, is reason for concern. I could list lots of biblical texts dealing with economic issues that will take a lot of hard work to interpret correctly. The biblical texts that describe how we should treat one another—for example 1 Corinthians 13—are unambiguous and clear enough for a child to understand.

The second barrier to a thoughtful discussion of economics, both within and without the church, is that the topic has been politicized. By that I mean that almost as soon as the topic is mentioned, partisan positions, parties, policies or personalities are invoked. This should not be. For one thing, economics and politics are not coterminous. For another, as Christians faithfulness requires we figure out how to think about economics from a biblical perspective and only after that will we be able to figure out what that means in the political sphere of life.

The third barrier is that very few of us have seriously tackled the topic of economics from a biblical perspective. We have some texts we use to justify some of our beliefs on the topic, but truth be told we’ve picked those up somewhat after the fact, and they are pretty selective. If you are feeling guilty about this, that is not my intention. (Feeling guilty about incivility and politicization is a different story—for those repentance is in order.) We live busy lives and economics is a huge topic, richly nuanced and like all of life, constantly in flux. For topics like this, we can be thankful for thoughtful Christian thinkers who do the hard lifting for us. Which brings me to an article I am eager to recommend.

The article is free, online (www.cardus.ca) and is a wonderful introduction to thinking Christianly about economics. Even if you don’t discuss the topic much, you’ll have a better foundation for understanding the topic by reading this piece. “Capitalism, Religion, and the Economics of the Biblical Jubilee” is by Paul Williams, the Executive Director of the Marketplace Institute, and Academic Dean, at Regent College, Vancouver.

Capitalism as Ideology
            Much of mainstream economics presents capitalism as a morally neutral economic system. It does so with two arguments.
            The first focuses on the individual consumer (or firm or worker). Capitalism is morally neutral, it is argued, because it is designed to enable individuals to make their own choices based on whatever values they happen to have.
            The second focuses on overall systemic outcomes: capitalism generates the largest possible economic pie and we can then choose what to do with the proceeds.
            But are these arguments compatible?
            Capitalism is not, in fact, morally neutral. The apparent neutrality of individual choice masks the underlying moral assumption that the individual is the final measure of good, and should always trump community choice, and that present choices should always trump those of our forebears. It also fails to account for the unequal nature of many actual transactions, so that frequently the choice of some undermines the freedom of others. My choice to shop seven days a week (or the choice of a superstore to open seven days a week) removes, or at least reduces, the freedom of the families of shop-workers to spend one day a week together, since the chances of both working parents getting the same day off recede and the influence of shop-workers on such economic outcomes is relatively small. The “good” of a family day of rest each week cannot be expressed in a system that only recognizes autonomous individualism….

Read the entire piece here.

The quiet skyscraper  

Posted by Denis Haack in , , ,


We live in a world that is networked in ways we cannot see, fully comprehend, or at times even imagine. The idea that brokers on Wall Street dealing in credit default swaps could have an impact on my retirement seemed unlikely not too long ago. I hadn’t even heard of credit default swaps. I didn’t own any. Still don’t. I don’t even particularly like hearing about them. But as it turns out the Wall Street brokers really exist, the impact on my retirement certainly is real—though whether credit default swaps actually exist as things with actual value is a question worth debating.

In any case, some huge investment banks—“too big to be allowed to fail”—have lost money, while some have made money, very large amounts of money during the crisis. One firm that has had a profitable time is Goldman Sachs. They recently built a new headquarters, a massive new skyscraper to house the brokers, lawyers, secretaries, and managers and that make up the firm.

Most large investment banks love the limelight, and calling attention to their flashy, expensive headquarters is just part of the process of projecting a successful image. Paul Goldberger picks up the story in “Shadow Building,” which you can read here (The New Yorker, May 17, 2010; p. 114-115):

Goldman Sachs, one of the largest and most profitable financial firms in the world, has a different view of things. Several thousand Goldman employees have just moved into a sleek steel-and-glass headquarters in lower Manhattan that is emphatically not called One Goldman Sachs Plaza. At 200 West Street, as the building is known, the name of the firm appears nowhere on the exterior, or in the lobby, or even on the uniforms of the security personnel or the badges given to visitors. Forty-three stories tall and two city blocks long, the Goldman building appears to have been designed in the hope of rendering the company invisible.

These days, it would be understandable if Goldman Sachs wanted to disappear: being the object of a suit by the Securities and Exchange Commission and, reportedly, of a criminal investigation by federal prosecutors is hardly conducive to the desire for a high profile. But this building, designed by Henry Cobb, of the firm Pei Cobb Freed & Partners, was planned long before the financial crisis, and before accusations were made that Goldman had bet against its own clients in the subprime-mortgage market. The design speaks less to Goldman's current problems than to the firm’s long-standing obsession with being both extremely powerful and utterly inconspicuous.

Today, the idea that Goldman Sachs could operate with a low profile seems bizarre, even delusional. But for a long time it did. Its previous home, at 85 Broad Street, was a precast concrete tower, from 1983, one of the most forgettable tall buildings in New York. Having outgrown those premises, Goldman hired Cesar Pelli to build a glass tower in Jersey City, facing the Hudson River—finished in 2004, it’s the tallest and most elegant skyscraper in New Jersey—and laid plans for a new headquarters on the New York side, too. It fixed on a plot in Battery Park City, one block northwest of Ground Zero, which had been a parking lot for years. At the time, there was not a lot of development going on in lower Manhattan, and Goldman’s plans appear to have sent city and state officials into giddy ecstasy. They quickly agreed to give the company a hundred and fifteen million dollars in tax breaks and cash grants to build the new tower. More singular still, state and local governments decided to give the firm another big subsidy by letting it use $1.65 billion in tax-exempt Liberty Bonds, intended to stimulate economic development after 9/11, to cover part of the building’s $2.1-billion cost. Last month, Goldman announced that it had made a profit of nearly three and a half billion dollars in the first quarter of this year—enough to have paid for the entire building, in cash, in a couple of months, without any help from taxpayers.

Interesting numbers (II)  

Posted by Denis Haack in , , ,


Total 2009 profits earned by the U. S. Federal Reserve Bank: $46.1 billion.
Of all years since its founding, which was most profitable for the U. S. Federal Reserve Bank: 2009.

Average number of hours/day a U. S. child spends using some sort of electronic device (including watching TV): 7.6.

[“Harper’s Index” in Harper’s Magazine (April 2010, p. 13, 82)]


How many Americans are stressed about work according to the American Psychological Association: 62%
How many working days are estimated lost each year in the U. S. due to stress related absenteeism: 275 million.
In the U.S., how much is spent each year on stress related health care: $22.8 billion.

[“Under Pressure” in Fast Company (April 2010, p. 112)]


When President Obama nominated Elena Kagan to the U. S. Supreme Court, the National Archives were responsible to release all documents relating to her work while in government service. Turns out she had received 50,000 pages of documents from the Domestic Policy Council (where she had been deputy director) and 30,000 from the Counsel’s office (where she was associate counsel). During this period she sent 11,000 pages of emails and received 68,000 pages. The estimated total comes to around 160,000 pages of documents. This represents four years of government service.

[“Politico Playbook Daily Update” by Mike Allen (May 16, 2010)]

A word from John Stott  

Posted by Denis Haack in , , ,


Over the years I have grieved that most of the time when an “evangelical spokesperson” is quoted in the media, it is someone I do not want speaking for me. Some are famous simply for having large congregations, or for being an inspiring speaker. Some have gained attention through their popularity on religious media, addressing topics for which they have developed no true expertise over years of careful thought and disciplined service. Some are far more consistent as commentators for political ideologies like conservatism, or Christian Zionism than they are for biblical orthodoxy or a clear application of the gospel of grace to the things of life. (I appreciate the fact that some journalists understand my dilemma here; Read David Brooks' New York Times column, "Who is John Stott?" here.)

He is retired from public ministry now, after a lifetime of faithful service, but one person I have always tried to listen to with care is John Stott. His voice is marked by wisdom, shaped by the Scriptures, moderated by the long tradition of orthodox belief and practice in the church, and never in service of some political ideology. Listen to this from Rev Stott at the beginning of a new year, a new decade, and let it hone your prayers today:


Our blind spot
It is easy to criticize our Christian forebears for their blindness. It is much harder to discover our own. What will posterity see as the chief Christian blind spot of the last quarter of the twentieth century? I do not know. But I suspect it will have something to do with the economic oppression of the Third World and the readiness with which western Christians tolerate it, and even acquiesce in it. Only slowly is our Christian conscience being aroused to the gross economic inequalities between the countries of the North Atlantic and the southern world of Latin America, Africa and most parts of Asia. Total egalitarianism may not be a biblical ideal. But must we not roundly declare that luxury and extravagance are indefensible evils, while much of the world is undernourished and underprivileged? Many more Christians should gain the economic and political qualifications to join in the quest for justice in the world community. And meanwhile, the development of a less affluent lifestyle, in whatever terms we may define it, is surely an obligation that Scripture lays on us in compassionate solidarity with the poor. Of course we can resist these things and even use (misuse) the Bible to defend our resistance. The horror of the situation is that our affluent culture has drugged us; we no longer feel the pain of other people's deprivations. Yet the first step toward the recovery of our Christian integrity is to be aware that our culture blinds, deafens and dopes us. Then we shall begin to cry to God to open our eyes, unstop our ears and stab our dull consciences awake, until we see, hear and feel what through his Word he has been saying to us all the time. Then we shall take action.

[From Culture and the Bible by John Stott (Downers Grove: IVP, 1981), p. 36.]

Every morning an email, Langham Partnership Daily Thought, arrives in my inbox, a brief excerpt from the voluminous writings of John Stott. This one arrived this morning, January 6, 2010, and as usual, I was glad to read it. The emails are free, and you can subscribe here.

I recommend subscribing, but be warned: wisdom shaped by biblical orthodoxy is far more bracing than the vacuous sound bites produced by media pundits who serve one ideology or another.

Health care reform from a Christian perspective  

Posted by Denis Haack in , ,

Bruce Wydick, Professor of Economics at the University of San Francisco, weighs in on the fractious debate over reforming health care costs.

Formerly the terrain of policy wonks and ivory tower academics, the recent health care debate in the United States has aroused public interest and angst more than any domestic policy issue in recent memory. I personally have been intrigued by this debate, both as an American economist and as an American Christian, and both of these factors make me a strong advocate of health care reform. I believe that the U.S. needs a strong version of health care reform to make our economy more efficient and our society more just.

Read the entire article, which appeared in Comment (published by Cardus), here.


Injustice in the financial mess  

Posted by Denis Haack in ,

If there is one truth to emerge from the financial crisis of the past year it is that no one knows for certain all that went wrong, how to make it right, and how to fix things so that a similar thing won't happen again. There are theories and ideas, proposals and strategies, some better and some worse, but that is all. And though that is not nothing, it calls for humility. A great deal of humility.


The complexity of the global financial markets is breathtaking, possible only in a world in which high speed computers and modern communication travel at virtually the speed of light. It is system that has produced much prosperity--India proves that--and for that we can be thankful. On the other hand, it also is a world in which injustice does not merely occasionally occur but is, at times, deeply systemic. For a video presentation by the New York Times that helps make an example of the complexity and unfairness clear, watch this.

Such injustice will never be adequately regulated (by either market or government) without an embrace of humility as a virtue more precious that gold.

Product labels and purchasing habits  

Posted by Denis Haack in , ,

In a globalized, pluralistic world there is no doubt that product labels can be important. We should know where things were made, what ingredients are in products we will consume, and to what specifications the gadget conforms. Research reveals, however, that there is a hidden trap.


Do you know what a megapixel is, or what horsepower measures? Consumers are irresistibly drawn to product specification—from the “distortion rate” of a stereo to the calories in a snack—even when the numbers mean nothing to them. In fact, given a chance to directly experience competing products, buyers are still more likely to jus pick the item with the impressive-sounding features on the package, even if it is more expensive.


Source: “Specification Seeking: How Product Specifications Influence Consumer Preference” in the Journal of Consumer Research noted in The Atlantic (March 2009) p. 17 which you read here.