Monday, March 1, 2021

Part I

---

Economic Decisions Reveal Worldviews in Action: House Passes President Biden’s $1.9 Trillion “Stimulus” Bill Mostly Along Party Lines

We often talk about the fact that when you look at economics, when you look at economic theory, economic practice, economic policies, or just our economic behavior, you really are looking at a worldview in action.

And what we’re looking at is the fact that when you make economic decisions, when you think about economics, human beings making economic decisions, you really are talking about worldviews being on the line. We find out what we really believe by what we buy, where we go, what we purchase, how we save. Well, the entire nexus of economic issues, how we invest for example, becomes very, very important and it eventually illustrates our worldview.

Now, what are the things we’re going to see is that if you do measure a fidelity to, or commitment to worldview that way, what we will discover is that on the left and on the right, a lot of people do not live out their worldview at all when it comes to economic decisions. That’s not an ideological issue in only one side of the ledger but the fact is you are looking at the fact that a lot of people on the left who declare themselves basically socialists are very, very zealous of their 401k accounts.

And there are people on the right who say that their economic priorities are a government that would not spend money, but they do want the government to spend money when it comes to their own projects. Well, a lot to look at here, but of course, the big issue in the headlines is the fact that the house of representatives has pushed through on a largely party line vote. There were no Republicans voting for it, just a few Democrats voting against it, President Joe Biden’s $1.9 trillion stimulus bill.

Now, one of the things I’m going to argue is that it really isn’t a stimulus bill, and I’m going to tell you why. But nonetheless, one of the things we learn here is how big government programs epic changing practices when it comes to economic policy. They often come in the time of crisis, but they often have nothing to do with the crisis at all. And one of the things we’re going to see is that you are looking at a basically healthy economy in the United States.

Now that means the big picture, the big economic picture is basically very strong for the United States even in the context of COVID. You wouldn’t hear that, you wouldn’t know that listening to the Biden administration that is trying to use the crisis in order to basically reshape the economy, healthcare, well, and as we shall see, a lot more than that.

But when you are looking at economic realities, it’s not just the big picture of the stock market, the American economy, it is also the small individual picture of individual Americans who are trying to live through this pandemic, individual families, couples, trying to find their way. There is a massive problem of unemployment and underemployment. But in certain sectors of the American economy, if you are a relatively well-educated, securely middle-class professional, the likelihood is your job has actually done very well during the pandemic. You’ve been able to operate in a way that translates meetings into Zoom, you can do a lot of distance work, your office turns out not to be as important as you thought it was, but if you’re working in another environment, especially, say, in the service economy, well, the reality is very different.

And as you’re looking at the current controversies concerning the stimulus bill as it is called, let’s just zoom back a moment and look at some of the big worldview issues that really are at stake here. For one thing, it is a huge bill, $1.9 trillion. Now, just to put that into perspective, a million dollars is one thing. A billion dollars is a thousand million dollars, and a trillion dollars is a thousand billion dollars.

Now, just establish that graphically in your mind, a trillion dollars is really beyond our imagination. This is $1.9 trillion, and it’s coming on the heels of the government expending almost $4 trillion in so-called stimulus funds already. And this is included between two and three payouts to American individuals, at least those earning $75,000 or less as individuals, $150,000 or less as couples, you’re looking at a huge amount of money.

And you also have to look at this realizing that both parties have shifted on these issues. And in reality, both parties have shifted significantly to the left. If you were to go back in American history, just a matter of a little over 10 years, the great debate in the Republican party would be about the so-called Tea Party Republicans.

They were those who were calling for a kind of economic protest like the Boston Tea Party in which they were saying that government was growing too large, federal spending was absolutely out of control and they said that they were trying to bring fiscal control to the government. And in order to do that, they had to bring that philosophy of fiscal control back into the driver’s seat in the Republican Party.

But all that went out the door during the Trump years, President Trump was never really a fiscal conservative. He is a populist when it comes to economic practice and it was President Trump who worked with Congress for some very big spending. And the big spending, by the way, comes in one way that’s basically theoretical and another way that’s directly practical. The theoretical was involved in the massive tax cuts that came early in the Trump administration. And to be intellectually honest, that was a pretty partisan endeavor as well. Though there were some Democrats who supported.

Why? Well, when you’re looking at that kind of tax cut, the argument is you have to find the money somewhere, but that money is often at least found in a way that lends more to the imagination than to the actual bank ledger. The theoretical part is also when you’re talking about a tax cut, you’re talking about a gamble of sorts. You’re talking about what’s called economically revenue forgone. That is to say that the government forwent gaining certain money coming from taxes at a rate that had been set, lowering the tax rate in order to try to create new opportunities for innovation and investment.

And the federal government’s bet here is that in lowering taxes, the economy will grow so that even getting a smaller percentage of the economy that will end up with a larger actual figure. Now over time, it takes a long time to figure out if tax cuts have actually been successful in that sense. But there can be no doubt that during the Trump years, you did have a very clear and vigorous growth in the economic sector. Just look at the stock market, for example.

But if the Republicans have shifted left from a more classical conservative economic model to a more populist economic model, the democratic party that basically was left has now shifted far left.

How far left? Well, it’s hard to tell because they’re still going. But remember that we were looking at almost $4 trillion in stimulus already. And basically one of the most important questions in a worldview understanding is who in the world is going to pay for that?

Now, over time, the Democrats have argued that inflation is the friend to borrowers of money. Eventually the government borrows money, but inflation comes along and inflation basically discounts the debt. It is the same amount on paper, but it’s worth a lot less when it comes to actually repaying the debt. But there can be no doubt that inflation’s not going to solve this problem and instead we have to recognize that realistically, we are now spending money that our grandchildren and great-grandchildren are going to have to pay.

And furthermore, we’re also looking at birth rates that remind us that there will be fewer and fewer grandchildren and great-grandchildren to pay ever escalating costs. This is one of the most unjust elements of the American economic system right now. We have both parties cooperating. One to some extent, the other to a radical extent in borrowing money from generations of Americans not yet born.

But even as I hope you find this interesting. I want you to think about the fact that the argument for stimulus comes as the American economy is actually doing very, very well. The kind of economy that will be driven by giving people money. But now you have, after a $600 individual payout, you have President Biden proposing, and Democrats in the house now approving another $1,400. $1,400 in addition.

Now, no doubt. A lot of Americans will be glad to get another $1,400 cash to spend in some way. And no doubt, there are many Americans who actually do need the money. But this isn’t targeted. This isn’t being sent on the basis of any kind of demonstrated need that is called needs-based support. Instead, this is just a basic across the board support.

So, people who are making, well, $74,999 or $149,999 as a couple are going to get another say now $2,800 in the mail, plus some for their children. And you’re talking about a lot of money that amounts to billions of dollars. Now here’s something else just in the worldview perspective, you have to understand, the very purpose of government in the sense of taxation is to coerce the payment of money from citizens for some civic cause.

Now, that’s one of the reasons why the left thinks that taxes are a great idea because it has an ever expanding ambition for the state, for the government. That’s why conservatives are very loath to spend money or to raise taxes in that sense, at least classically they have been. But if you do have government that can coerce its citizens into paying money, and if you have an elective system of government whereby the citizens actually elect the government, then the citizens can eventually elect the government that will turn around and give the citizens money. And that’s a very dangerous thing.

Furthermore, throughout recent decades in American history and some of those decades, the government’s interest rate has been relatively high. Given the economic realities right now, the borrowing rate is quite low. But it won’t stay that way. And this is also an issue of vulnerability for the United States and that means for all of us, because a great deal of that government debt is held by others. A great deal of it is held by other governments. And the most important of those governments is China under control of the Communist Party.

Just think about the fact that to the tune of hundreds of billions of dollars and potentially a great deal more than that, the United States as a government is a net debtor to the Communist Party of China. But if you were arguing for a stimulus, then you have to look at a couple of figures. One of them is the gross domestic product. When I was younger, it was known as the gross national product, but the national was changed to domestic for reasons of just updating the nomenclature. There’s a lot more to it than that, but let’s just put it that way.

The gross domestic product is the sum total of the aggregate economic activity in the United States. And thus, the higher the gross domestic product, the healthier the economy. And you can measure whether or not an economy is growing or constricting just by looking at that one figure, the gross domestic product.

Now, how would you know if a government or an economy is underperforming and might need to be stimulated by some kind of government investment? Well, you would need to look at comparing two figures, the gross domestic product and what’s called the potential gross domestic product. Now, the potential is where economists think there might actually be, say, growth.

And so, as you’re looking at the potential gross domestic product for the United States at the end of 2020, and you compare it to what actually was the gross domestic product in the year 2020 as it came to a close in December, you’re looking at a gap that would justify a lot less spending than $1.9 trillion. How much less? A lot less.

Now, one of the questions is, and this is really interesting if you think about it, if the government gives someone a dollar, how much economic impact comes out of that dollar? The most famous economist of the 20th century, John Maynard Keynes, argued that that ratio was 1.5. If the government gives you $1, that dollar isn’t just spent one time, you spend the dollar at a store, the store is paying suppliers, the suppliers are paying employees, it goes down the list. The ratio, according to Keynes, and this is just generally accepted these days as 1.5.

So, if you’re looking at a 3% drop, which is what economists estimate for the difference between our gross domestic product and our potential gross domestic product in 2020. And you’re looking at that figure of 1.5 as the ratio, what amount would be justified in a stimulus bill? It’s actually easy to remember $444 billion.

Now, that’s a lot of money. That’s 444,000 million dollars. But there’s a big difference between $444 billion and $1.9 trillion. But politically, we’re looking at the fact that the Democrats have now approved that bill on a largely party line vote in the house and it’s going to the Senate. But that bill is passed in the house also includes some other things.

And that would include raising the minimum wage in the United States in almost all categories to a minimum of $15 an hour over time. $15. So again, if you ask employees, would you prefer a minimum wage at $15 rather than the just short of $8 that is now set as the figure? Would they be for it?

Well, the answer is, they would likely be for it. But you have to remember another economic principle and you must keep this ever in mind, every job comes with a cost and eventually employers decide whether they can afford that cost. The actual minimum wage in the United States is zero. That is to say, if you do not have a job and you have no income, your income is zero.

So, if you’re looking at raising the minimum wage, as I said in The Briefing, as we talked about it, there are arguments for and there are arguments against. Now, I want us to look at those arguments we have before and we will again. But the point is, that is in the bill, it’s in the house bill, but it will not be in the Senate bill.

And remember, to become law, a bill like this has to be signed by the president after having passed both the house and the Senate. The house is under democratic leadership, democratic majority it passed on a party line vote. It now goes to the Senate, but the minimum wage provision is going to be stripped out. Why? The Senate doesn’t want to deal with it. Well, that is actually probably the case, but that’s not the reason.

The reason is that the parliamentarian of the Senate has ruled that the Senate cannot deal with this bill with the minimum wage provision in it under the terms of what’s called reconciliation. And if this interests you, and I hope it does, it comes down to this. The Senate requires 60 votes for almost any major legislation.

But issues that have a major impact on the budget can pass with just 50% of the votes plus one. A vote of 51 is enough. And thus, you have to answer the question, what can and cannot be included in those bills? The parliamentarian of the Senate is not a Senator. The parliamentarian of the Senate is in an executive position that serves as staff to the Senate. And the parliamentarian has to make decisions which can be appealed by the Senate about whether or not something is germane to a bill.

And she made the determination that the minimum wage is not rightly included in budget reconciliation. And by the way, the reason she decided that is because the federal government is not really involved in the outlay that would be required. What is? It is what’s called an unfunded liability. In other words, it says, you have to pay this money, Mr. or Mrs. Employer, the federal government’s not paying it itself.

So the parliamentarian, and I think quite rightly, ruled that can’t be included in the reconciliation process. So, Democrats are trying to figure out how they can come up with some way to push the minimum wage provision since it’s not going to happen in this bill in the Senate. But here’s where you also have to watch another worldview angle, which is, things aren’t always what they appear.

A good many democratic senators don’t actually want to pass that bill. This ruling by the Senate parliamentarian, a likely opposition from Republicans that would lead to a filibuster if that provision is on the floor of the Senate. All of that means that some Democrats, at least, and some Republicans probably have some political cover. Because the parliamentarian’s ruling means that right now senators don’t have to put their name. They don’t have to list their name with yay or nay beside it on this issue.

And sometimes for a politician, that’s the main goal. Don’t risk getting credit if the greater likelihood is that you might get blame.

Part II

---

What’s Included in the Proposed Stimulus Bill? One Thing Is Certain: There’s a Lot of Pork and Planned Parenthood

But there’s more to look at in the stimulus bill, because if you look at the distance between, say, let’s just go back to $444 billion versus $1.9 trillion. What’s the larger amount really made up of? Well, an awful lot of what is politically called pork, as in oink, oink. As in spending that really doesn’t have anything to do with the bill. And in this case, you’re looking at the fact that the spending in this case for what is rightly defined as pork is bigger than the spending that would be justified for some kind of stimulus.

You’re looking at rapid transit funds there in California, and very conveniently, you’re looking at San Francisco and San Jose being a part of this. You’re looking at some of the most liberal areas in the country. And you’re also looking at the fact that you’re looking at the home of the speaker of the house, Nancy Pelosi. She’s been looking for these funds for a long time, and guess what? You can call it a stimulus if you want, but it’s really pork put into the bill.

Other things that are in the $1.9 trillion include $135 million for the National Endowment for the Arts, $200 million for the Institute of Museum and Library Services. No kidding, $200 million, I’m going to read it to you again, for the Institute of Museum and Library Services. Also, and this is very crucial, $50 million to family planning projects. And understand that the most likely recipient of those funds is none other than planned parenthood.

Yes, you’re looking at $1.9 trillion claimed as necessary in a stimulus, but yes, abortion is here, funding for abortion or at least for the largest abortion provider in the United States is right here. So, we’ll be watching to see what happens in the Senate in coming days with debate over the bill, and debate over the minimum wage, debate over the whole big picture. But remember, all this is actually at stake in this conversation, though many in government don’t want you to know that.

Part III

---

What Is Modern Monetary Theory and What Do Christians Need to Know about This Economic Theory?

One other big issue here has to do with what kind of theory is behind this. What’s the theory that you can just as a government borrow endless amounts of money and it won’t matter. Now, this is a new development known as Modern Monetary Theory, that is MMT. And the most important thing you need to know about it is that the basic claim of Modern Monetary Theory is that governments can basically borrow money at near endless amounts forever because they’re never going to actually have to pay them back.

Now, an economist listening to that would say, “No, that’s not exactly what it means.” And of course they would give a lot of detail to that. But the bottom line is that the most important thing you need to know about Modern Monetary Theory is that the theory is that governments can borrow vast amounts of money, far larger than anything imaginable in previous generations.

Now, just look back to the fact that about 12 years ago in the recession of 2008, 2009, the stimulus bill that was brought by the then new administration of president Barack Obama brought a stimulus package through it under $800 billion. And the government, even at that time, said that it dared not use the word trillion. But think of where we are now 12 years later. $4 trillion already basically spent, another $1.9 trillion teed up. There’s obviously been a very big change in economic theory since then. And here’s the sad thing.

We’re going to find out whether that economic theory works, but it’s really our grandchildren and great-grandchildren who are going to have to pay the bills.

Part IV

---

Hollywood’s Revolution in Morality: The Golden Globes Honor Two Leading Activists, Jane Fonda and Norman Lear

Finally, the Golden Globe Awards were handed out last night, at least digitally. And I want to talk about two of the recipients, both of them for honorary awards, because we’re really looking at the huge worldview shift in the United States that can be dated back to the 1970s. And there are no two figures in Hollywood that had a greater role in that than the recipients of these two awards, the Cecil B. DeMille award for outstanding contributions, given to actress Jane Fonda, and the Carol Burnett Award recognizing accomplishments in television, that went to television pioneer, Norman Lear.

Now, when you’re talking about Jane Fonda, you’re talking about one of the most controversial figures of the late 20th century. You’re talking about a famous actress. She was born the daughter of a famous actor, that is, Henry Fonda. He was more famous than she, until she became more famous than he. Her mother was Francis Ford Seymour, who has a lineage back to the English family, Seymour, that included the first Jane Seymour, not Jane Seymour Fonda.

The first Jane Seymour was the third wife of King Henry the eighth. She died in childbirth after having delivered King Henry’s only legitimate prince. And he became King Edward the sixth. He died the boy King, but nonetheless, he was very committed to the Protestant reformation. And for that, he deserves to be remembered. But let’s just say that Jane Seymour Fonda doesn’t have much more than historical ties to Jane Seymour, she’s of a very different bent.

And that bent was demonstrated to be on the American left, the cultural left, the artistic left and radically the political left during the sixties and seventies. She became, at one-time, far more famous for her opposition to the war in Vietnam than for her acting. Although her acting gained many awards and made her a sex star as well as a leading actress.

But the thing to remember about her politics is that she was so radical that she actually, during the Vietnam war, went to the capital of America’s enemy in Hanoi and with a helmet on was photographed sitting in an anti-aircraft battery as if shooting against American planes. That’s hard for America ever to forget.

She’s been a leading activist for feminism and for other causes, including LGBTQ rights and all the rest. Her current acting job right now is actually in a program that features an LGBTQ storyline. She was married three times, the last time to Ted Turner, who’s the founder of the TV network CNN. But her second husband was Tom Hayden, a famous, radical political activists of the 1960s. She was married to him from 1973 to 1990.

The point I want to make about Jane Fonda in this sense is that she was one of the driving energies of the political, cultural and artistic left from the 1960s to beyond. And the Golden Globes honored her. But at the same time, they honored Norman Lear.

Now, if you’re looking at television, having the power to change American minds and to change American attitudes, even to change American morality and social understanding by means not only of drama but of humor, you’re looking at the revolution that was nearly singularly brought by Norman Lear, certainly to an extent that can be matched by no other liberal activist in the United States.

And Norman Lear, by the way, who brought a show such as All in the Family that led for years in the ratings on television, he intentionally sought to bring about a revolution in morality on issues such as feminism, and divorce and abortion that became a very controversial issue when abortion was first featured in the program known as Mod, a comedy that was a spin-off of “All in the Family.”

Norman Lear knew exactly what he was doing. And at one point, he created a liberal activist organization known as People For the American Way. He launched a crusade to try to oppose the influence of conservative Christianity, especially in what was then called the religious right in the United States. He was part of a group known as the Malibu Mafia. No, we’re not talking about organized crime. We’re talking about organized philanthropy and political activism amongst Hollywood types with homes there in Malibu.

The Malibu Mafia sought to push their money and their artistic abilities towards changing America in a liberal, what they considered a progressivist direction during the last decades of the 20th century. And if Jane Fonda is probably more recognized both by image and name, Norman Lear is actually probably more responsible for bringing about moral change in the United States on any number of issues, including the entirety of the sexual revolution.

It’s just interesting to see that at the Golden Globes, the two honorary awards were given to two social artistic revolutionaries of the late 20th century. Both of whom are still very much alive in the United States. Norman Lear was born in 1922, Jane Seymour Fonda was born in 1937. She’s still acting. He’s still very much an activist. By the way, in order to understand the links between the cultural and artistic left on the one hand and the religious left as it is often called on the other hand, look at the conversation I had with author Benjamin Rolsky on my program, Thinking in Public.

We’ll put up the link to that program at the site for today’s edition of The Briefing. It’s about his book, The Rise and Fall of the Religious Left: Politics, Television, and Popular Culture in the 1970s and Beyond. Well, we’re living in the beyond right now and you can’t understand these times without looking back to Jane Fonda and Norman Lear.

I think you’ll find that conversation very, very interesting. It’s as relevant as the Golden Globes last night.