Averting Depression — For Now
Our family has been carefully following the economic situation that has been riveting the attention of many other families, I’m sure. The technical lingo that obfuscates the issues keeps many people scratching their heads and wringing their hands (though maybe not simultaneously, unless they are also able to walk and chew gum at the same time), and that makes it easy for tricky demagogues to make political hay from the confusion. If only they were Rumpelstiltskins, spinning gold from all that hay. I’m afraid there’s a lot of spinning going on, but instead of gold we are getting inflation and the depreciation of the dollar.
One way we are trying to make sense out of all this is by reading some solid economics books written from a conservative and biblical perspective. In our selfish chronological snobbery, we are inclined to believe that the bad situation we are facing is unlike anything that has ever happened before, and we forget that there have been times in the not-so-distant past that may have been far worse. The 777 point drop in the Dow today sounds frightening (a 7 percent decline), until you recall that in October 1987 there was a one-day drop which was a smaller number but a decline of over 20 percent. Today’s drop was only the 17th-biggest decline. That doesn’t mean things are hunky-dory, but it gives a little perspective and takes some of the edge off the doom-and-gloom threats we are hearing if we don’t fork over the financial pie to the federal government. Reading sensible books and articles about other economic downturns and understanding the reasons we are in this mess is one practical way you can help your family to deal with the frightening issues we are facing.
I have been slowly reading to my children the chapter called “Idols of Mammon” in Idols for Destruction by Herbert Schlossberg. If you go to page 88 on the link I just gave, you can read a great deal of the chapter online, but I highly recommend the entire book for a biblical view of many cultural issues. I also got out Clarence Carson’s fifth volume in his A Basic History of the United States: The Welfare State–1929-1985. Does history repeat itself? Listen to the first paragraph in the introduction, in light of the current attempt to wrest $700 billion from American taxpayers through a “bailout” for irresponsible financial institutions:
A major thrust toward establishing the welfare state came swiftly in 1933. In a special session, which lasted from March 9 through June 16, 1933, Congress, prodded by the President, asserted the authority of the federal government over the American economy in an unprecedented fashion. Never before, certainly not in a time of peace, had such far-reaching legislation been passed by any Congress. The swiftness of it has led some historians to ponder whether or not it was a revolution. That is, it was not a successful revolt against the established authority, carried out by force of arms. If however, the term be taken to taken to signify a swift, as opposed to a gradual change, the change in direction was made quickly, and it did have a considerable impact on the country.
One major impact he says it had was a shift in the view of the government’s role. “But the premise of the welfare state was vigorously asserted, and it became established. The premise of the welfare state in the United States is that the federal government is basically responsible for the material well-being of the American people.”
That premise is now a given for most people. The powers-that-be have been spinning the current financial “crisis” and bailout proposal as necessary for the well-being of the American people, when it is really for the well-being of Wall Street. As Ron Paul said, if the government does nothing, we will have a bad year, but if they get their way with a bailout, then we will have a bad decade. Isn’t it funny how Congressman Paul’s opinions about this mess are suddenly sought by the media, when he was persona non grata just a few months ago?
I just read a great article about how we got into this financial meltdown, and why a bailout would be a disaster. Even though Congress thankfully refused to pass the bailout proposal today (Ludwig von Mises’s birthday, by the way), I’m sure a revised version will be brought forward soon, so read this, inform yourself, and write to your representatives to let them know why you don’t want them coming to the rescue.
You can get contact information for your congressman here.
You can see how your congressman voted on today’s bill here.
Pastor Bret has been writing quite a lot on the shenanigans of Wall Street and D.C. In answer to a question from a reader about the creepy Federal Reserve and a request for further economics reading, he said:
Should the Fed be axed?
Axed, burned, crushed into dust and sprinkled on your cornflakes for breakfast.
The book recommendations on this subject are a little difficult. Gary North has done some good stuff but you have to careful of his over Libertarian economic philosophy. Chilton’s book “Productive Christians In An Age Of Guilt Manipulators” is good. R. C. Sproul Jr. has a book out entitled “Biblical Economics.” I haven’t read it but I tend to trust Sproul’s counsel. A lecture you can find online that you should read is “I pencil” by Leonard Read.
Other books I would recommend are
Belloc’s “The Servile State”
Hayek’s “Road To Serfdom”
Rushdoony’s “Roots Of Inflation”
Ropke’s “The Social Crisis of our Time”
Nock’s “Our Enemy The State”
Hazlitt’s “Economics In One Lesson”
Griffin’s “The Creature From Jekyll Island”
Sowell’s “Basic Economics”To really understand Economics from a Christian perspective you have to get an understanding of what Socialism is. The appropriate chapter from “Idols for Destruction” should be consulted for help on that score. Also “You Can Trust The Communists To Be Communist” would help you here.
Well, that gives you a beginning. If you get all those done come back and I’ll recommend some more.
Also, for some articles which can guide you through the morass, you might find The Recession Reader helpful. It offers this good insight, with which I heartily agree…I hope you will take it to heart and make the effort to educate yourself and your family about these things, which unlike fiat money are not ephemeral, but profoundly affect you now and your children and grandchildren in the future.
What’s important is not necessarily the specific political opposition to this bailout, but rather educating people about the dangers of nationalization, central banking, and government regulation. Only when people recognize the dangers of the government’s “socialism for the rich” will we be able to get back on the road to prosperity. Unfortunately, a correction is necessary. There is no such thing as a free house. The more the government intervenes, the longer and more painful it will be. But this crisis gives the country a chance to rethink its previous assumptions about the economy and the government’s role in it. Hopefully, this reader will be a first step for many into an exciting, growing branch of economic thought.













