Monday, January 12, 2009

The First Three Commandments

In my book, Musings from the Christian Left, I address the topics ofChristian Humanism and liberation morality. My thesis is that human morality exists not for God, but for man, just as the Sabbath exists for man, not man for the Sabbath.

When I took Ethics class at Loras College, we discussed the obligatory nature of right action - that it is something we ought to do, not only because it fulfills us but because God deserves our good behavior. I never quite agreed with this last point, but it does raise the question of the first part of the Great Commandment, that You shall love the Lord, your God with all of your heart, all of your mind and all of your strength. The question again arises, why must you? Does God benefit from these things, or are they solely for our benefit?

We avoid idol worship because the idols are not real, although the Priests behind these cults are both real and greedy. We do not break the second commandment so that we do not take the pressence of God lightly. We rest and worship on the Sabbath so that we might have something to do in life other than work as human beings, not human doings. Jesus gave us a clue when he said the Sabbath was for man. God does not need our worship. If he did, he would not be worthy of worship. God freely choses to accept our worship, he does not require it.

It is good that God does not need our worship, for God would be in bad shape if He did. Our worship is but refrigerator art when compared with the worship of the angels, who do not say their prayers as much as sing them. I am a cradle Catholic, so I have heard the quality of human singing in Church. Angelic prayers are total expressions of who they are. This is why Satan could not fathom why Jesus would become man instead of one of his own angels. His real sin was to think that his prayer was essential to God. God freely choses to accept angelic prayer, which is simply a higher form of refrigerator art when compared with the perfect harmony of the Blessed Trinity. Let us not make the same mistake as Satan.

Saturday, January 03, 2009

Bailout Options

In today's Washington Post, David Ignatius and others talk about the bailout and the greatest generation. Whether the current bailout works or not, the Alt-A mortgage bubble will force the need for a new one. We need to be careful that we do not simply repeat the mistakes which set this one in motion by having too low interest rates leading to a reinflation of the housing bubble.

There are five reasonable options here. The first is liquidation - providing a means through bankruptcy or some other systematic default mechanism to allow people to get out of debt that does not work.

The second option is to end tht toxic practice of allowing people to get home equity loans to "cash out" equity for vacations and the payment of credit card balances - since this simply leads to more debting. Ending the deductibility of these interest payments would take care of this nicely, possibly as a part of comprehensive tax reform.

A third provision is to create government progams for borrowers to refinance their Alt-A morgages at lower fixed rates through their state housing finance agencies. This could be done either with or without adjustment of the principal balance. If the principal balance is adjusted, however, the government needs to reach back and capture through taxation some of the extreme capital gains people made in when the housing bubble was growing. For some, this would be a wash, since they sunk their gains into a new property which is now worth less then the purchase price - however other sellers got out and stayed out - although many of these probably lost money by investing in the toxic paper that resulted from these very transactions. If we bail them out for these investments, it must be net of their undo capital gains. This is why a government bailout is necessary, as the private sector has no place making such distinctions.

The fourth and most important piece of any bailout should be higher incomes. If incomes catch up to housing values, much of the problem goes away and housing prices can stabilize and debt will be repaid. Calls for governmental budget cuts, teacher furloughs, lower union wages need to be resisted - since they will exacerbate the problem. If anything, people should be getting raises and the minimum wage increased. For any who are displaced in the private sector, massive education funds with stipends should be made available when people are operating at a human capital deficit.

The fifth point is to increase the top tax rates, not at $250,000 but at $150,000, to at least Clintonian levels - as well as restoring the capital gains and investment rates to those levels as well. This will put more money in the consumption and government sector and take it out of the chase for overpriced investment instruments. Stock prices and real estate values were bid up because the wealthy and upper middle class had more money then the productive sector had investment opportunities - so toxic investment opportunities were created and unrealistic profit goals were required to compete. Take away the fuel for the fire and all will settle down.