It's the Economy

Occupy Wall Street, unemployment, federal deficits, tax the rich, Obamacare, conservatives, liberals, Republican, Democrat, spending cuts, tax cuts, capitalism, socialism, big bad banks, golden parachutes, entitlements...

Socialists want to take money away from an executive making obscene amounts. Conservatives defend that income because, well, the executive earned it. Of course he earned it by making bad loans then selling them to other people who lost their money when the market crashed. Now we're back to punishing this fictional executive. Yet we know that socialism is wrong. But the free market failed. Around and around our argument goes - one big, giant circle.

Sadly, I find myself arguing in circles a lot at work. It's a sure sign that I'm solving the wrong problem. Could that be happening here too?

Socialism is wrong. Theft by the government is still theft. Socialism takes by force money or labor that does not belong to the taker. In theory, the taker gives the spoils to someone less fortunate. Look at socialist countries in the real world. You see that the spoils stay with the taker. I consider that pure and simple theft.

On the other hand, the book of Acts describes the early church practicing socialist policies. There must be something good about sharing wealth.

Capitalism too is wrong. It encourages greed and rewards the dishonest. Absolutely free markets collapse on themselves. Then again, capitalism built airplanes and skyscrapers. There must be something good about rewarding success.

The same dichotomy holds true if you compare democracy and feudalism. Each has shining examples of success. Each also has glaring examples of utter failure. Economic structure does not guarantee success or failure. Political structure does not guarantee success or failure. There must be some underlying factor that brought about the successes.

Root Causes

Proverbs sheds light on the subject...

No one can be established through wickedness, but the righteous cannot be uprooted. -- Proverbs 12:3

The wicked are overthrown and are no more, but the house of the righteous stands firm. -- Proverbs 12:7

Corporations are not the problem. The economic system is not the problem. The political climate is not the problem. Our problem comes from wicked people doing wicked things. People possess a will. We impose that will on the world around us - molding the world in our image. Now imagine that image is distorted, bent. What happens to the world?

The righteous care for the needs of their animals, but the kindest acts of the wicked are cruel. -- Proverbs 12:10

When the wicked rise to power, people go into hiding; but when the wicked perish, the righteous thrive. -- Proverbs 28:28

Her house is a highway to the grave, leading down to the chambers of death. -- Proverbs 7:27

Well, it destroys the world around the wicked. Everything a wicked person does destroys those around them. Even when trying to help, a wicked person only hurts. Microsoft brought personal computers into millions of homes. They also put thousands of people out of work with illegal business practices. They set back the state of the art by decades. They hurt the very people they were helping.

Is it wrong to extend unemployment benefits? It doesn't matter. When wicked people enact policy, they hurt the recipients. Extending those benefits will end badly.

Solutions

The opposite also holds true. Put enough righteous people in power and the world takes a different shape. Righteous leaders surround themselves with wise counselors. They create an environment where righteousness thrives. And it too spreads outward.

In First Break All the Rules, Marcus Buckingham and Curt Coffman discuss the role of talent in our work. Talents represent who we are. As we grow, we learn skills that complement our talents. Righteousness is like talent - it describes who we are, not what we do.

What happened to the discussion of character in political campaigns? I don't mean mud slinging throw around insults and lies. I mean real debate about character. Is a candidate honest? Are they self serving? Who's looking at their record, their actions, their speeches for integrity?

Wait, don't issues matter? Well, no. Remember Proverbs 12:10 - but the kindest acts of the wicked are cruel. So even if a candidate does everything you want, enacts every policy you want, in some way it destroys the world around them.

Consider that next November - how will your vote change the world?

How much do you really need?

So my daughter makes this comment about throwing away food when there are people who go hungry. Wouldn't it be great if we could give that food to people who need it?

Dad: How does that help them?

Deanna: What?

Dad: Imagine that we can efficiently give our leftover food to a hungry person. How does that help them?

Deanna: They get to eat, duh. (Okay, I added the duh. It fit a 14 year old.)

Dad: True. They eat today. What about tomorrow? What if we have no leftovers. What do they do then?

Deanna: I don't know. I guess they're still hungry.

Dad: So you didn't solve their problem. You just delayed the inevitable.

Deanna: I don't understand.

Dad: Okay, we start a problem by asking five why's. Why is this person hungry?

Deanna: They don't have food.

Dad: Good, good. Why don't they have food?

Deanna: They don't have money to buy food.

Dad: Alright, why don't they have money?

Deanna: Well, they don't have a job.

Dad: Why not?

Deanna: They lost their job, or they don't want one. They're not working.

Dad: Does giving someone food get them working?

Deanna: No.

Dad: So it doesn't solve their problem.

Root Causes

People have many different reasons for not working: lost a job, looking and just in between, can't hold one, or won't hold one. And the solutions are different for each reason. So the question is, do you want to solve the problem?

See these one-size-fits-all solutions can't work. Every person has a different problem. It takes time, energy, and commitment to unearth the root cause. Are you willing to pay that cost?

Welfare programs give us an excuse for not caring. Throw something at the problem (instead of someone). That comes from a fundamental disrespect for the people you're helping. I helped and can therefore turn my back on the deeper, more permanent problems underlying the hunger. I don't have to care about you.

Think about that for just a minute: giving away your leftovers can actually be a selfish act.

Deanna: So we shouldn't give food to hungry people?

Dad: No, that's not what I'm saying. Why you give them food matters more than giving the food. Have you spent time with them? Have you learned whether it helps or hurts them as a person? Are you giving them food because you respect their value as a child of God, or because you want them to go away?

You had a good question, Deanna. What can we do to help?

I need...

So I'm at a picnic table in Holiday World theme park. Vania - my 3 year old - sits in her wagon watching the nearest ride. It's hot. We're sweaty. I'm eating ice cream. What crazy paranoid thought goes through my head?

I imagine somebody snapping our picture. See that selfish father, eating ice cream while his baby sits there. Doesn't he have enough sense to know that she's hot too?!

And what lesson do you think I gleaned from this imaginary conversation? The difference between need and want. First thing off your tongue, right? I didn't expect so. Let me explain.

I catch myself needing all kinds of things - time away, this or that. After all, if I need it, then I'm justified in buying it. Who can argue with a need?

It's all a lie - self deception at its finest. I truthfully just want those things. Want, however, implies personal responsibility. If I want it, then I chose it. And if that thing is frivolous, more than I can afford, or bad for me, then the consequences are my fault.

Genesis says that God created us in His image. Then He commanded us to subdue the earth and rule over it. He most definitely did not say let the earth rule you. We're not supposed to live from one need to the next. God is sovereign. He did not set the universe in motion and let go. He actively controls its direction - molding it to His desire.

Want does not equal selfishness. Want is what God commanded from us. If you want something, don't lie by calling it a need. Stand up, take control, and want it. Say what's true: I want.

Okay, what does any of this have to do with me not sharing my ice cream with Vania? We really do have needs. Needs are when you die without it. I needed hydration and some minerals. I wanted them in the form of ice cream. Needs are very real physical limitations.

Vania also has needs. Vania needs to avoid dairy. Dairy physically makes her ill. It harms her body resulting in a sick feeling, grouchiness, and general misery. It is a physical limitation. By not sharing, I gave Vania what she needed. I saved her from pain, misery, and illness.

Honestly, I wanted to share with her. What father doesn't imagine themselves sharing an ice cream cone with their kid? The smiles, laughter, and good feeling of sharing. Putting my want over Vania's need is selfish.

And before everyone thinks that I'm a terrible Dad who lets his little girl roast in the hot sun - Vania had a sippy cup of juice. Her favorite juice, by the way. I enjoy meeting her needs with things that she wants.

The First Step is Always the Hardest

Richard: My wife and I just started that Financial Peace class.

Narrator: Cool. What do you think of it so far?

Richard: We've had just the first week. I'm not sure. I agree with a lot of what he says. I'm just not sure how practical it is. The first step is $1,000 in the bank. Where am I going to get $1,000? There's five of us that have to eat. With our other expenses, we just make ends meet. How in the world can I save $1,000?

Narrator: Well, I agree. The first lesson by itself is not very useful. The entire plan takes shape over the next couple of weeks as Dave walks you through what to do next. Yes, the next two or three lessons talk about real, practical things you can do tomorrow to get started. This first lesson set the finish line. The next lessons shoot the starter pistol.

And it is tempting to skip that first baby step. After staring financial ruin in the face, running away very fast seems like a really good idea - until you trip over your own shoelaces.

Because of school schedules, my wife took the class once and then we both went through it together. She made me hang onto our tax refund that year. So the $1,000 was quick and easy. It also left just as easily. The car broke - for $470. A water bed leak spread mold all over the mattress. Replacing those set us back $600. As you can see, the $1,000 disappeared while we were still in the class!

So the debt snowball went on hold. And we built the baby emergency fund back up. Then the dryer broke. A strange thing happened. My wife e-mailed me. She was a little upset because Murphy just would not leave us alone. Honestly, my first thought ran along those lines too. These crises usually elicit some type of frustrated prayer: why me? and what are you going to do about it, God?.

God's comeback: what's the worst that can happen? Well, let me see. I guess the worst is that we replace the dryer. A used dryer can run $100 to $200 delivered. We have $1,000. $100 to $200 is no problem.

Okay, what if I take a look at the dryer first? Spend one day on the problem. If I get nowhere, then we replace it. Again, the worst outcome is that I break something. It's already broken. I'm resigned to spending $200. What have we got to lose?

The story ends with a $15 belt. I saved $185 and never touched the emergency fund.

The emergency fund - even the baby emergency fund - provides a safety net. It takes the emotion out of emergencies. When you're fighting your way through the debt snowball, that $1,000 reduces your fear. It gives you the wiggle room for maneuvering into a solution, not just a band aid. You will take some more risks. And discover that it often works in your favor. Why? Because even the failures won't kill you.

Without the fear, your mind looks at the situation objectively. You pick the risks that have the greatest chance for success. You will find yourself succeeding because you put yourself there. God's blessing is not that we win the lottery. He doesn't make money appear in our pocket. He protects us. He gave us the will, intelligence, and creativity that turns risk into success. He removes the roadblocks and stops the trucks from running us over. And He expects us to run the race.

The $1,000 baby emergency fund is like tying your shoelaces. Not glamorous. Annoying because we have to pause before starting to run. And without it, you'll fall flat on your face. Run like a champ. Tie your shoes. Start strong. And finish even stronger!

The Evil Rich

So a group of us were chatting over lunch. Well, the two other guys were talking. I listen a lot. They discussed the protests in Egypt. One of them ended with the off hand comment: we will continue having misery as long as we use money and power for the measure of success.

That can't be right. Money solves a problem. The replacement would, in the end, solve the same problem. And still not fix all of the things that you see wrong.

Let's do a little thought experiment. What would you replace money with?

John: Love, the good of mankind.

Swami: Okay, and how do I know that I'm returning as much good as I receive?

John: Why does that matter? You give as much good as you can. And take only the things that you need.

Swami: Define need. You don't need friends, a house, food from a grocery store, electricity, running water, etc. Well, actually, you do. You need those things if you accept the spiritual side of humans. Esteem, power, and wisdom relate to ourspiritual needs.

Money provides a form of power. You recognize that power in the reported corruption and discontent. Would you agree that money itself is not the issue? The issue really revolves around the use of money as power.

John: Yes, I agree with that - rich people using their power to oppress poor people.

Swami: I agree. And that is why you are so despicable.

John: Huh? What?!

Swami: Look around you. You live in a solid structure with four walls, a roof, carpet, furniture, electric lights, and running water. Many people in Africa still collect their own water from a river. You are unquestionably rich compared to those people. If all rich people are oppressive tyrants - then you oppress those poor people in Africa. You are the problem.

But you're right - that's utterly ridiculous. It's just as ridiculous to assume that everyone with more money than you is a rich, evil, oppressor. I heard of one restaurant owner who closed down for a week and took his entire staff on vacation. That's a generous person. Would you consider them oppressive?

Relative wealth does not measure good and evil. Some rich people really are jerks. Some poor really are jerks too. Likewise, some very kind people have much wealth. And some very kind people have very little. Wealth cannot measure the quality of one's character.

Character determines good or evil. Character makes one man a tyrant and another a leader. Money determines the reach of my power - not how I wield that power. Reducing reach does not remove evil. God wiped out the earth just a few generations after creating it. Their reach can't have extended that far yet. Yet the corruption was unbearable.

Wealth is not the problem. Redistributing wealth solve nothing! You still have wicked people exercising power - tyrants oppressing the people. All it does is change the expression of their control, not the fact of it.

When we exercise power, we remake the world in our image. Wicked people impose their will for harm because they themselves are broken. Proverbs 12:10 says that the righteous care for the needs of their animals, but the kindest acts of the wicked are cruel. A righteous person remakes the world in their image - good, healing, kind.

The same power, the same money, works good as well as evil. Our root problem is power in the hands of wicked people. Redistribution of wealth, or even denial of earthly possessions, cannot solve that problem. We have a spiritual problem and it requires a spiritual solution. That starts a whole new conversation...

Everyone Needs a Credit Card

Sue: You can't live without a credit card in today's world.

Swami: Why not?

Sue: Hotels, rental cars, all of these things require a credit card. You can't borrow money at all without a good credit score. It's impossible to live now a days without good credit.

Swami: Hmm, that's interesting. May I make a clarification? We're using the word credit to mean two different things.

First, credit means borrowed money. You buy stuff (rent a car, book a hotel room, etc.) with Visa's money. Visa sends you a bill. And you pay Visa back.

In the second sense, credit means any transaction that goes through Visa's computers. This meaning is what the rental car and hotel companies use. They don't care if the money comes from Visa or your bank account. They run the transaction through Visa's computer.

Life in today's world does require transactions that run through Visa's computer. Life does not require that you borrow money. Do you see the difference?

Sue: Well, isn't that splitting hairs?

Swami: Yes. And you hid behind that hair justifying a decision made in selfishness. You want all of the extra stuff bought with somebody else's money. Our sin nature justifies those actions because everyone needs to borrow money. Oops - I mean everyone needs a credit card.

Those two statements aren't interchangeable, are they? Yet that is precisely the spirit behind it. We mean borrow money when we say credit card.

Sue: Quit being so self righteous. Some of us simply can't get ahead.

Swami: Sorry, my delivery isn't the best. I purposefully switched to the pronouns we and our. I have the same problem. "Hi, my name is Swami, and I'm addicted to stuff."

I have been in that place - beaten down, hopeless, staring at a chasm of financial ruin with nothing but sharp rocks at the bottom. It stinks. I hated that place. Bad things happened there. Like every other 12 step program in the world, the first step was wanting to change.

So I split that hair. I use a debit card for hotels, car rentals, etc. No more borrowed money. I have not mailed payments to Visa for 2 years. I mailed my last check on my last debt to anyone at all a measly 4 months ago. And that money now goes directly into my bank account - accumulating. My checking account balance goes up every month! Do you know how exhilarating that is?

It can be done. You can kick the debt habit. Take the first step...

Control and Flexibility

The scene opens with a woman crossing the street. This car comes out of nowhere and POW! She rolls off the hood, flung into the middle of the street. CUT!

Our mystery woman stands up and walks over to the director. She's a stuntwoman. Cool! She begins talking about the uncertaintity of stunt work - what's the next job, when will it appear, what risks does it involve. A sense of control matters a lot in her life. She finds that sense of control over her finances using the Chase Slate credit card.

It sounds perfect. Setup individual payment plans for different types of expenses. Pay smaller purchases right away to save on interest. I tell you, the emotion just wells up inside of me.

Narrator: CHEETAH!!!!! Cheetah, cheetah, cheetah! I warned you that the emotion wells up inside - the emotion to scream in terror. Think you have control of your finances? Miss just one payment. Then come back and tell how much control you have.

Guess what? Paying cash also saves on interest - without any risk of missing a due date.

And don't get me started on the tag line - debit card control, credit card flexibility.

Credit Card Flexibility

Okay, what exactly does the Slate Card offer that a debit card doesn't? Debit cards run through the same computer network as credit cards (i.e. you can use them in the same stores). Debit cards have the same fraud protections as credit cards (when used as credit in the store). The only difference is who supplies the money up front: you or Visa.

So credit cards are more flexible - for borrowing money! See how it always comes down to one question: will you save or borrow? There's no math involved. No comparison of pros or cons. Nothing but that one choice: save or borrow. Which one will you choose?

Get Cash Back with Every Purchase!

Dan: I've heard about what Ramsey teaches (in Financial Peace University). I see one problem with cutting up the credit cards.

Narrator: Interesting, what's that?

Dan: I have this gas card. It gives back 5 cents a gallon. Wouldn't it be irresponsible to not save money?

Narrator: That sounds perfectly logical. Proverbs clearly warns us away from debt. The Bible warns the wise away from these enticements. What are we missing?

Let's talk this out from start to finish. Figure about 15 gallons of gas every two weeks. You save 75 cents on every fill-up. Four weeks in a month, and you see $1.50 savings every month. With two cars, that's $3.00 a month savings. 12 months times $3 a month equals $36 a year.

Over the last year, gas ran between $2.00 and $3.00 a gallon in our area. You spent between $1,440 and $3,600 on gas last year. You saved a measly 1% to 2.5% with that gas card. That's less than the margin of error in a household budget.

For that 2.5% in savings, you sold your freedom. You became indebted to someone else - the credit card company. Can you beat these card companies? Sure - if you manage the account properly. That means you know the payment due date. You keep immaculate records of exactly what you owe. You reconcile the statement with your records immediately. And you're never late because you can mail the entire payment without ever receiving a bill from them.

Boy, that's a lot of work for a rounding error. It's a lot of worry over a paltry amount. Is it really worth it?

Proverbs 5 says...

For the lips of an adulteress drip honey, and her speech is smoother than oil; but in the end she is bitter as gall, sharp as a double-edged sword.

You don't really object on logical grounds. You're quite intelligent. And logically, the costs outweigh the benefits. The problem isn't logic - it's the heart. You have emotional attachment with the credit card. No, not quite right. You haves an emotional attachment with being right - pride.

I remember cutting up my credit card in FPU. Honestly, I didn't care for the card or the company behind it. They certainly didn't care for me. It was just business. But giving up the credit meant admitting I had been wrong. My way hadn't worked. God was right, I was wrong. And that hurt. It hurt my pride.

Dan: But,but, but...

Narrator: No but's. Be honest with yourself. Look past the rationalizations. The logic doesn't hold water. You know it. I know it. This was never about logic. Check out the book Leadership and Self Deception - Getting Out of the Box. The book explains that we make decisions then we establish the logic. We choose with our heart, not the mind.

Dave Ramsey points out that personal finance is 80% behavior. God frees our heart. If $36 over one year makes that much difference, then you're truly slave to your money. I failed at budgets because my heart worried about lacking money. When God freed me from that, when He turned my heart towards Himself, then the budget worked. When I let go of my pride and accepted His instruction, then the budget worked.

My son, do not forget my teaching, but keep my commands in your heart, for they will prolong your life many years and bring you prosperity. -- Proverbs 3:1-2

Finding Financial Peace

What is financial peace? I used to equate it with more money. Boy was I wrong!

We were paying off everything but the house when Vania came into the world. Vania's first formula came from samples the hospital provided. They were those little 1 or 2 ounce pre-mixed bottles of formula. Vania drank the bottle down, and two minutes later spit all of it right back up. So we decided to try another brand.

A new brand gave us the same result. On to soy based formula then. That worked for about a week. Vania still spit up as much as she drank down. My wife moved to a hypo-allergenic formula. That worked well. As a test, we moved Vania back to soy - maybe the dairy had a lingering effect. Nope, less than a week and she spit up the soy too. Hypo-allergenic it was.

Vania was born October 29. It was mid-December by the time we had this sorted out. January's budget was the first accounting for the new feeding regimen. Most parents know that you can buy five pound cans of formula for around $15. One or two cans a month only hits your budget for $30 - not a big dent to the groceries.

The hypo-allergenic formula comes in 1 pound cans. Those cost $27 a can. At eight to ten pounds a month, we were looking at $270. One-fifth of our family (the baby) took one-third of the grocery budget. That's a significant dent.

So I sat down, preparing my emotions for the worst. Down through each category - $270 for the baby's food, gas, electricity, our food, etc. Dropped the remaining debts to minimum, and it balanced! The three debts we paid off that year came to $270 a month. In that moment, I felt like we were winning with money.

Financial peace didn't come from having an insane over abundance of cash. It came from taking control of the cash God did provide. And seeing that when we obey Him, God meets every need. Vania has been a great blessing in our lives. God ensures that we do enjoy her, without financial stress taking anything away. That is financial peace.

We paid off those debts following the Baby Steps taught in Dave Ramsey's Financial Peace University. Proverbs 15:4a says...

The tongue that brings healing is a tree of life.

In our case, this was literal.