Radical Environmentalism – Which Is Worse, An Ecological “Disaster” or the Federal Government? (Part 13)

The Gulf oil spill news has certainly waned in the last few weeks. I guess people got tired of watching each drop spill on national television. And while I don’t approve of lackadaisical methods by companies such as BP, who are ultimately responsible for the spill and its cleanup, I also think we need to put the spill in perspective (see my previous tongue-in-cheek post about how long it would take to fill the Gulf with oil).

For me, a couple of questions stand out in relation to the spill. First, how bad was it for the environment? To be sure, some beaches were impacted, but I can’t find any lasting evidence that any were ruined – if they were, don’t you think the media would report the “loss of a national treasure” ad infinitum? I haven’t seen it on the news, so I must conclude that there is no story there.

What about losses to animals in the Gulf? According to Jonah Goldberg’s latest column, the losses in the bird population stand at less than one percent of losses during the Exxon Valdez spill in Alaska back in 1989. That is remarkable, considering that this spill is larger and in a region which likely has more birds due to the warmer climate. And according to Goldberg, the total number of oiled mammal carcasses discovered to this date numbers only…three. Three? How many dolphins and porpoises died of old age during this period? And if this is not enough to make you think that a minimum amount of damage has been done, consider this article (from ABC News, no less), which claims that some clean-up crews are having a hard time finding any oil to clean up. “Even the federal government admits that locating the oil has become a problem”.

I concede that the oil is likely out there somewhere, breaking down over time as nature intended, but I refer you again to my calculations on the relative size of the oil spill (one or two grains of sand represent the relative size of the oil which has spilled, while the volume of the Gulf of Mexico can be represented by over 4,000 5-gallon buckets of sand). It’s going to be hard to find – and it’s going away more and more each day.

My second question is this – how bad was the spill for the economy? There is no doubt that the shrimping industry and the tourism industry have been hurt temporarily. And some families may not be able to weather the loss of half of their working season. That is sad.

But far, far more damage has been inflicted by the federal government’s intrusion into the economic policies of the Gulf region.

- An attempted moratorium by the Obama administration on new deepwater drilling in the Gulf (overturned by a federal appeals panel on July 9)

- The potential trickle-down effect of the above moratorium on things like boat shuttle service, and all of the industry that supports deepwater drilling.

- The potential passage of crippling federal economic laws that might come about due to this event – make no mistake, they are sorely tempted to limit America’s ability to drill for oil in the Gulf – though there is no corresponding decline in demand. This will simply open the door for others to replace that oil with oil obtained elsewhere on the planet, likely by non-U.S. companies. This would increase our dependence on foreign oil.

- The future “justified” shift to “greener” energy because of the oil spill – most of these so-called greener technologies are far more expensive, and many are not proven to be any better for the environment. But the federal government is pushing hard on these because of appearances, not because it is ultimately the right thing to do.

Finally, consider this. The Deepwater Horizon rig was incredibly difficult to shut down because it was in…deep water. The challenge of capping a wellhead that is a mile below the surface (where pressures are in the 2200 psi range) is far greater than if the well had been drilled in shallow water, and the drill bit allowed to tunnel sideways toward the oil reserve. But it is the very government which decries this disaster which then forces companies like BP out into the deep water areas to drill. Could it be that the government’s policy of forcing oil companies into deep water drilling is at least partially responsible for this “disaster”?

The oil spill is a nasty event. But it would appear that nature (designed by God) is already reclaiming the Gulf. When man (a.k.a. the federal government) thinks he knows more that he really does, bad policy is made. And the result of bad policy is ultimately higher energy costs, increased foreign dependence on oil, and a people with temporarily-soothed consciences who may later discover that much of the economic suffering was due to improper reactions to the spill, rather than to the spill itself.

Go, Gulf - I have a soft spot for the area since I grew up in Louisiana.

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...and this was released a week after my article - "The Gulf Recover Obama Does Not Want To See"

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A Little Lesson On Economics, Mr. President

Workers are disgruntled, benefits are being cut, and the unemployment rate continues to hover around ten percent. All of this has occurred while our nation’s leaders have been increasing the government’s deficit spending and were wooed by expensive, job-killing myths like government-run healthcare and “climate change” legislation.

So this week, President Obama revealed his best idea for jobs reform. A $5,000-per-head tax credit to businesses for each job they create. Put simply, the government will pay employers $5,000 for each hire they make, as a way to provide incentive for them to bring on new employees.

This is government naiveté at its pinnacle. What Mr. Obama fails to understand is that businesses aren’t sitting back with too much work to do, and a fear of hiring more people to do it. The problem is that businesses feel too restricted and overtaxed by the government, and so collectively there is not enough work to go around.

Obama’s idea is tantamount to the concept of paying our children five dollars every time they smile – and thinking that this will make them truly happy children (okay, okay – I recognize that our children may think this is a great idea and that it will lead them to happiness – but we all know it won’t be true happiness, right?). Paying them a token amount for an outward expression of behavior does not change them fundamentally inside.

Similarly, Obama’s plan does nothing about the root of the issue - job creation. Even FDR in the 1930’s understood that building highways and bridges and railroads actually created work for people to do. The New Deal had at least the advantage that it struck at the heart of the matter – it put people to work. Still, I’m no fan of Keynesian economic theory that thinks it acceptable for government deficit spending to somehow spark private industry. I believe that less government intrusion is what is needed.

One more thing – let’s not forget about that $5,000. I point out an obvious question – where does it come from? Clearly, it comes from the taxes paid by people who already have jobs and can afford to pay taxes to the government. More simply put, Obama’s plan takes money from the pockets of people who have it, and puts it into the pockets of those who don’t. That sounds an awful lot like socialism to me.

I am stunned at the clear lack of basic economic understanding in play here. Again, if a business had enough work to hire someone new, they would likely do so. Obama’s plan creates the risk that less-than-honest employers will cut hours or benefits for existing employees so that they can bring on new employees – and collect $5,000 for each. At the root, a jobs plan needs to first create work – and jobs will follow. Better yet, get the government out of the “jobs plan” business, cut corporate and personal taxes, and free up businesses to do what they do best – innovate, produce and hire more people. It’s not rocket science.

The Real Recipient of the Economic Stimulus?

$787 billion is a lot of money to spend. Most of us, given that amount of cash, would probably find it hard to spend the entire amount. To illustrate - I like Corvettes. They retail for about an average of $55,000 each. There are only about 27,000 made each year, though. So, if I bought every single one made this model year, I would spend about $1.485 billion (not including any discount that Chevy may give me for such a super-sized order). That would be a little less than 0.2% of the whole economic stimulus package passed by Congress last February. I could do that for 528 more years before I ran out of money. Put simply, I could buy every Corvette ever made (starting in 1953) – and still not come close to running out of stimulus money (but, boy, would I be happy!)

How big is $787 billion? Well, if someone paid you $1 million a day every day for the rest of your life, it would take until April 4165 before you collected all of the money (yes, more than 2000 years from now). Never fear, though, as I think the federal government will find a way to spend it.

Near my house, there has been some road construction going on lately. Well, that’s a little optimistic – I’ve rarely seen anyone actually working there, but there are some signs of occasional activity. There are concrete barriers and orange barrels blocking off some lanes of traffic. It’s as if they are going to do something to improve the road. But I can’t figure out what it is. Months have gone by, and my roads (what lanes have been left open) just stay the same.

Before approaching the area, from both directions, the workers installed a sign some months ago. The sign lets us know that funds from the American Recovery and Reinvestment Act are being used to implement this construction. I guess the sign is supposed to make me proud…but it doesn’t. From what I can tell, the only thing that the government is using my tax money for is to provide orange barrels, and erect a sign telling me about it.

I suppose this could be considered to be “stimulating” the economy if one were to evaluate how plastic barrel rental shops and aluminum signmakers are weathering the downturn. Hey, if you want to make a good investment, those look like two market segments whose stock should be on the rise.

I’ve said it before, but it bears repeating: the best way the government can stimulate the economy is to take less money from me at tax time, and give me the decision about where that money should be spent – rather than deciding for me. People are much more likely to consume or invest wisely on their own. We don’t need the government deciding where that should happen.

Because all I have for my tax money today is an obstacle course and some roadside reading material.

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Want to see some more government “song and dance”? Visit their Recovery.gov website to see exactly where your money is going. There is a state-by-state accounting of where the stimulus money is being spent. I must say, I tend to disbelieve much of what I see here. For example, if you hover over the state of Michigan, they will tell you that they have created (or saved!) 10,073 jobs. Um…my parents live in Michigan, and I’m pretty sure the government is stretching a truth here…..

What Happens When Congress Gets In A Hurry

There has been a lot of rushing around in Congress lately, as if there is no time to evaluate what laws are being passed.

The economic stimulus bill was rushed through as an absolute necessity. $787 billion was allocated for spending and agreed to in just a few days. And yet, the results are just the opposite of what was expected – unemployment continues to rise far beyond what we were told it would be if we would support the stimulus package. There have been no firm connections made between the stimulus bill and an economic turnaround. Things have become decidedly worse in our economy.

Now, healthcare is being rushed through Congress, even though such a bill has far-reaching and long-lasting effects. Revamping healthcare could have serious consequences – life and death consequences – if not properly done. And yet, thousands of pages are being written, Congress is voting on it without reading it, and our leaders are breaking their promises to allow it to be posted on-line for 72 hours before taking a vote. We are rushing toward something – but what?

The most recent penalty for a hurried attitude came recently when the Internal Revenue Service announced that they had erred in the release of the tax tables in 2009 – a result of President Obama’s signature tax credit offered as part of the stimulus package. The credits were designed to give individuals as much as $400 in “money back” and couples as much as $800. Because of an oversight, the tax tables for many couples were posted incorrectly, allowing them to claim more credit on their 2008 return than they were allowed. It is estimated that as many as 15 million people will now owe the government $250 or more – some as much as $400. Most of those affected are working couples, but the error also spills over onto single students and Social Security recipients (another error in which the government overlooked the possibility that someone might claim a new Social Security bonus and the above-mentioned tax credit – they are eligible for only one of these credits). Affected people in any category will have to make the correction, either through more tax liability for 2009, or in a reduced return. One thing is for sure – the government will get “its money”, even if they were the ones who made the error.

It feels to me that we are rushing to our own economic destruction. The tax credit was given to Americans with the instructions to “spend the refund in order to stimulate the economy”. How long can that tactic work? Is such a design sustainable? Isn’t there another route we can take – namely, to require the government to spend less, resulting in a lower tax burden, and allowing each individual to keep more of their own money to invest and use as they see fit? Imagine the economic strength of a nation where everyone was free from the worry of debt, and could concentrate on superior products and innovative ideas.

What is lost in nearly every news article that I read is that the tax money started out as ours. We work hard for our paychecks and we make many decisions about how to spend and save. And yet, the assumption made by so many is that the government has a right to take it from us at their whim. True – per the Sixteenth Amendment to the Constitution, Congress can collect taxes at will. What may have been forgotten is that before 1913, they did not have the right to collect taxes from our incomes (see a previous article here). They continue to abuse this law, taking more and more of our money to fund their own unread and poorly crafted laws. And we continue to send them cash with every pay stub.

I came across this interesting quote recently, from Herbert Hoover:

“Every collectivist revolution rides in on a Trojan horse of 'emergency'. It was the tactic of Lenin, Hitler, and Mussolini. ... And 'emergency' became the justification of the subsequent steps. This technique of creating emergency is the greatest achievement that demagoguery attains.”

The “emergency” has certainly been declared again, and we are falling for it just as surely as economic ruin awaits us if we continue on this course. What should we do? It’s time to get involved – write a Congressman, elect leaders who understand this principle, or work to repeal the Sixteenth Amendment. Without our income tax to spend, Congress just might get downsized. Would that be a bad thing?

Obama Pledges “Everything Possible” to Limit Abortion

Our president recently met with the pope at the Vatican. It was the first meeting of the two men – two men who are diametrically opposed in so many areas.

In a bold move, the pope gave the president a booklet explaining the Catholic opposition to abortion and embryonic stem cell research. I’m glad that the pope didn’t just resort to the simple and expected formalities. He had an agenda, and he pursued it because he believes it is vitally important. Obama’s response to the pope’s request, according to the Vatican, was that the president would do everything possible to reduce the number of abortions in the United States.

I got a little excited when I saw that. If I promise someone that I’m going to do “everything possible” to get something done, I tend to…well…do everything possible. But it looks like that was wishful thinking on my part.

Obama has stated that his method of doing everything possible is to improve the economic climate in the U.S., so that fewer women will feel the ‘economic need’ to have an abortion. Such an indirect method is a lot like me saying that I will commit to spending more time each day with my kids – by working for hours a day on a time machine that increases the number of hours in a day to twenty-six, instead of the usual twenty-four. The proposed solution is completely out of touch with the objective, and doesn’t guarantee the objective will be attained even if such a machine could be invented (I might use the two extra hours to sleep, or go fishing).

Obama’s comment is predicated on the belief that abortions occur because of economic hardship. But is this really the reason? According to an Alan Guttmacher Institute study in 2004, only 23% of all women electing to have an abortion cited economics as their primary motivator. In the same study, 59% gave their primary reason as one of convenience (not ready for motherhood, already has all the children she wants, etc.). Only 7% gave health as a primary reason.

Further, assume for a moment that economic times get better. Will this really lessen the number of abortions performed? Or will they increase? It seems to me that the more money a family has, the fewer children that family has. More children brought to term does not necessarily follow as a result of increased economic wealth. In fact, one could make the case that better economic times will increase the number of abortions in this country, as more families can afford to have them, and as their selfishness for more time with their boat or fancy car is increased. I think there is a strong case to be made that links better economic circumstances with an increase in the incidence of abortions. It would make an interesting case study. Just check out the graph above which shows abortion rates have declined somewhat in Michigan…during a period where Michigan’s economy has soured.

If President Obama really means what he says when he will do “everything possible” to reduce abortions in this country, then he should start by supporting the reversal of Roe vs. Wade from every aspect in his power. He should appoint strict constructionist judges who support this reversal. He should promise support to lawmakers who will sponsor legislation to help overturn the practice of abortion. He could hold a press conference (or one of his free infomercials on CBS) boldly stating that he believes abortion to be wrong and a stain on our country’s history. Don’t get me wrong – I truly believe that our president and our congressional leaders could have exactly this change of heart. I pray for it nearly every day. Maybe we all should. God can change men’s hearts in mighty ways.

California Is Still Leading The Way

For years, California has led the way in so many aspects. The state boasts the eighth largest economy in the world – all by itself. And the residents of the state have long prided themselves on their sensitivity to social issues such as the environment, gay marriage, and immigration laws.

Now, California is leading the way in another important category – state bankruptcy. Instead of checks, the state will be issuing IOUs this week to state vendors who are owed money and also to many of the elderly, the disabled, and the college students who receive aid from the state. Once again – these people are expecting a check from their state government and they are going to open the mail and find an IOU slip instead. California’s credit rating is now the worst of all fifty states, and creditors are considering taking it even lower. The effect of this will worsen the crisis, as it will cost the state even more in borrowing costs than they currently pay on the existing debt. By all counts, this is a “death spiral” from which it will be very hard to recover.

How did this happen? I believe it all starts with the arrogance of a government that thinks it should insert itself into every aspect of people’s lives. By claiming such an interventionist role, a cycle of bankruptcy is started - 1) more government programs are instituted to “help” the poor, needy, or those groups who have well-paid lobbyists– and these programs cost a lot of money, 2) taxes are raised to bring in revenue for these programs, 3) taxpayers grow disenchanted with the tax burden under which they live, so they either leave the state for a lower-tax state, or the state economy becomes so bad that businesses start to go under – taxpayers make less money and businesses collect less sales tax revenue, leaving less overall tax revenue collected by the government. Simply put, the spending went up by the government, but the influx of tax revenue went down.

This phenomenon is called the Laffer curve. Think of it in this way – if the government set a tax rate of 0%, then it follows that the government’s tax revenue income would be zero. But, if the government set our tax rate at 100% of our income, it’s likely that their revenue income would also be near zero, since none of us would have much incentive to work for money that we cannot keep. The curve rises between these points, and it must peak at some tax rate – at that point where people still feel an incentive to work and pay their taxes. The lesson to learn is that at some point, raising taxes will actually decrease the total revenue brought in by the government. Higher tax rates will then begin driving people away or out of business entirely.

The state of California is going out of business, too. Their only hope is to either get help from the federal government (who has so far refused to get involved) or else start cutting back on government programs and tax rates. This last choice is an extremely difficult one. Cutting back on government services will cause jobs to be lost – unemployment will rise, at least temporarily, until workers are able to shift from the government sector back to the private sector. And lowering tax rates is a fearful action, too, because tax revenues will temporarily go down along with them – at least until the economy turns around. This is tough medicine to swallow, especially for a state that prides itself on its standard of living and cutting-edge social awareness. This combination of events in the state has even led certain people within the state to propose the legalization of marijuana or same-sex marriage as methods to solve the budget crisis (they make dubious arguments as to how this will happen, but hey, it’s California).

Unfortunately, it seems that our federal government is now proceeding to make the very same mistake. Government programs and government’s intrusion into the private sector are increasing at a dramatic rate. All of this will cost money. So the federal government will propose to raise taxes. And the federal government has one more option that the states do not – they can print more money (and they do). But both of these actions will ultimately result in economic failure. In terms of federal taxation, we are likely already over the peak of the Laffer curve when it comes to tax rates, and inflating the money supply will only weaken the overall buying power of every dollar bill. Will the federal government foresee this, based on California’s example, and make the right decisions now?

Wait and see.

Homeschool Lesson – Economics and the Stock Market

One of the many joys of homeschooling is that my wife and I can get very creative when teaching a lesson. I designed a course on Economics for the last half of this year, relying heavily on the book Whatever Happened to Penny Candy? It’s a good read, and engenders many of the conservative qualities that we are instilling in our children. We have had a great year learning about inflation, the money supply, why to avoid debt, the reason that coins are no longer made from precious metal, etc. I’m thinking about putting the course outline and weekly homework questions into a product that I can make available to the homeschooling community at large.

For the last four weeks of the year, I decided to add to the curriculum and design a “contest” to teach some principles of investing in the stock market. I invited all three children to participate, and even provided some incentive for them to do well (if there’s not a feeling of true loss or gain involved, the lesson could seem a little less exciting…and less real, as well). The rules that I laid out to them were these:

· You will start with $10,000 of cyber-money to invest (no real money changes hands at this point!)
· You may own as few as zero or as many as five different stocks at a time
· Money not held in stocks will be kept in a Money Market account earning zero interest
· For a $10 cyber-fee per trade, stocks may be purchased at the end of any given day - the student may use day-trade or buy-and-hold strategies
· An e-mail summary, with tables and charts of the account value will be e-mailed to the student each day
· At the end of four weeks, I will pay 1%, in real money, of any account value over the initial $10,000
· Any student with an account falling below the initial $10,000 at the end of the four week period will be evaluated for special chores

The contest was pretty popular when it started – I know that the kids were thinking of their own little get-rich-quick scenarios. Just buy low and sell high – nothing to it. And the timing was in their favor. The contest started about the time that the stock market was at a seven-year low. The Dow Industrial average actually rose from 7841 to 8331 during this period, as it rebounded a bit after the housing and credit crisis. That’s a 6.2% increase in just four weeks.

So how did they do? The trend chart for the biggest stock loser is shown at the right. This child (we’ll call them Child “A”) started out with a pretty risky portfolio, buying a lot of General Motors (GM) when it fell below the $2 mark. After it continued to fall further, there was a hasty action to dump the stock and buy Apple Computers (AAPL) instead. While starting the contest with several risky and hurried trades, this child ate up quite a bit of money just in the overhead $10-per trade fees. In the end, the reported loss was $317. Chore time!

The second child (Child “B”) decided to buy what they knew – a good strategy – and purchased McDonald’s (MCD), Build-a-Bear (BBW) and Disney Studios (DIS). The trend started remarkably well, and this child’s account was in significantly positive territory right up until the last week of the contest. But consumers must have stopped building their own bears, because the stock suddenly took a sharp downturn. The end result – a loss of $99. Not devastating, but Child “B” was a little disappointed, nonetheless. More chores!

The third child – and the winner of the overall contest – has always been the conservative one of the bunch. I wonder if those of you who know our family will be able to guess who it is? This child (Child “C”) chose never to purchase any stocks, claiming that they didn’t like to spend money on “anything that they couldn’t wear!” Even after repeated invitations on my part, and the offer of a couple of free trades, I couldn’t get this one to budge. And in the end, this child had the best short-term stock trading strategy.

What a great learning opportunity for all of us! It is certainly not my intent to recommend explicitly against buying stocks. As this was a short-term contest, it’s probably not a completely fair assessment of trading in the market. But all three of my kids learned some important lessons, namely: 1) there is no get-rich-quick guarantee in the market, 2) at its core, stock trading is really not much different from gambling in Las Vegas, and 3) the person making the trades for a paltry $10 each is the one who really makes the money.

And that would be me. My next task is to create a fabulous summer chore chart.

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If anyone would like to guess who Child A, B, and C are, feel free to leave a comment. I’ll post the answer in a week.

Also, if you are reading this and are interested in having your children participate in just such an exercise (without the real monetary reward!), I am considering offering a five-week, home-school Economics course – daily e-mail stock account updates, along with conservative economics and investing principles will be taught. It will be enough for a quarter’s credit in Economics. Please contact me at alan@banyanconcepts.com if you are interested.

Get Out of My Wallet

$825 billion.

It’s staggering to imagine a number that high. The value is so large, that typing it out as $825,000,000,000 is too long for most printed articles, so we see it shortened into words. What other kind of everyday number creates that necessity? Think about “four”. Think about “twenty-two”. Nope – it’s far easier to type “4” or “22” than to write out the words – at least for numbers that have some meaning to the average person.

$825 billion is the amount the government is proposing for the next wave of bailout money. Add this to the $700 billion that seems to have been wasted in the first round. And add it, also, to the $1.2 trillion budget deficit that is forecast to occur this coming year. I’m going to ignore for the moment my revulsion for the leaders in Congress who truly think I will believe the idea that more government intervention is the answer to our economic woes. And I’ll set aside any arguments that I’m tempted to make about government waste and worthless spending programs – dropping billions on programs that not only are unconstitutional, but to which I am morally opposed. No, instead I want to think about one question – where does the government get $825 billion, anyway?

Three ideas come to mind. The first is that they got it from you and me, the American taxpayers. Governments are funded primarily by taxes, so to some degree, the source of this money came out of the pockets of every working American. Indeed, $275 billion of the total program is supposed to take the form of “temporary tax benefits” over the next two years. To me, this seems the same as if the government said, “Oops, we might have been taking too much money from you in taxes previously and it’s stifled your spending, so here – have some of it back.” And I have no illusions that the $275 billion that comes back started out as significantly more than that amount. The federal government isn’t known for being terribly efficient with our money.

The second place they could get such a staggering amount of money is that the government can borrow it from foreign nations. And they do. And it furthers a mounting debt obligation to those nations, putting the United States into a worsening position of weakness on the foreign markets. Will moves like this put the Chinese yuan into the position once enjoyed by the US dollar? However you view it, a foreign debt of this size weakens America in the long-term, regardless of the importance of fixing the problem right away.

The third place that our government could obtain this money is to get it the old-fashioned way – they print it. Our currency is no longer pegged to a gold standard, so the feds could print $825 billion in a matter of days if they wanted to. They could return some of those green bills to the taxpayer, and still go out and commission the construction of some new roads and bridges. But inflation would be the result – meaning that the money they send back to us would be worth significantly less than when they took it from us in the first place. Hey, government, what did you do with my money?

It’s time to stand up and say, “No more”. Government intervention has repeatedly caused economic downturns in the past. It’s the problem, not the solution. Let’s face it – would you trust the federal government to step in and run a private business more efficiently than the entrepreneurs who started it? Would Washington make a better (and less expensive) iPod every two years? Do we really think the feds will do a better job of overseeing innovations in automobiles than the free market can do?

A fourth source of the $825 billion just occurred to me – the government could steal it. But on second thought, that’s really not any different than the first source…

So Who Really Knows How To Fix Wall Street?

Almost anyone who has a 401(k) or owns at least a single share of stock knows that things are a little out of control at the moment.

But that’s okay, because the people on the television news keep telling us exactly what must be done to fix Wall Street. They’ve been telling us for the last two weeks, each night, and their suggestions are usually implemented in the following days. Funny thing, though, the stock market kept going down, contrary to their predictions. Could it be that the talking heads might not know what it takes to save the market?

I’m never more cynical than when I turn on the television (which is not often) to see a news reporter asking an “expert” what must be done to avert some disaster or another. Without exception, the person being interviewed assumes a professorial tone and begins pontificating as if they are qualified to dispense advice. The disturbing part is how the news media lap up the expert’s guidance and present it in a way that makes it seem all but unimpeachable.

So, let’s step back for a moment and consider the complexity of the global economy. The value of the U.S. stock market is determined by a nearly-infinite set of events and conditions. The buying habits of billions of people, the investment confidence of those people from day to day, the status of other world markets, the price of a barrel of oil in Venezuela compared to that of the London exchange, the value of the U.S. dollar compared to the Chinese yuan, the proximity of the latest hurricane to oil fields in the Gulf of Mexico, the stability of the government in Uzbekistan, the presence of nuclear activity in North Korea – all of these circumstances contribute to the value of the markets each day. Consumer confidence is a factor that is not subject to mathematical laws. If it were, we could publish the equation and tell everyone when and where to invest, with little risk.

The fact is, no man really knows for certain what must be done to make the whole thing hang together. Some people may pretend to know, and some people may actually believe they know, but the real truth is that the system is too complex and too dependent on unknown factors for any one man to grasp it. And this, of course, leads me to my point.

God created this world. He put things in motion originally, and he does not treat us like a science experiment – where the scientist puts together the initial conditions and then remains “hands-off” until the experiment is concluded. Rather, He is active in our everyday world. Like the stories we read in the Bible, God is involved with the happenings and occurrences of his creation. Proverbs 19:21 tells us, “Many are the plans in a man’s heart, but it is the Lord’s purpose that prevails.” How God gets this done is beyond my understanding, but I believe that His hand is touching everything that I see. When I wake up in the middle of the night with a feeling that something is wrong, or when I get stopped by an inconvenient red light only to discover that an accident just occurred ahead of me that I might have been involved in – I believe that God causes things to happen around me.

The world of finance, whether it is the complexity of world markets or just my savings account, is ultimately governed by God and it serves His purposes. James 4:13-14 tells us, “Now listen, you who say, ‘Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.’ Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes.” In the grand scheme of events, the size of my own financial investments is hardly under my own control, and matters little in God’s great plan for eternity. Continuing the verse, James 4:15 says, “Instead, you ought to say, ‘If it is the Lord’s will, we will live and do this or that.’” This clearly indicates that’s God will is what governs events, not what men predict or calculate. In fact, this proves that we cannot know with certainty what the future holds. But this flies in the face of humanistic tendencies, where men think they are god, and so must be able to control and ensure the future. But this can never be.

We should take comfort, though, in the fact that God is in control. You see, He really cares for us and wants us to be drawn to Him. He is not the blind watchmaker, winding up his creation to spin out its own existence in a series of random events. Psalm 37:28 says, “For the Lord loves the just and will not forsake his faithful ones. They will be protected forever, but the offspring of the wicked will be cut off.” This truth gives me comfort, even as I watch the value of my stock portfolio erode. Perhaps God has a plan bigger that I can envision. And perhaps God is using these events as a means to have us draw closer to Him. After all, it is when people are most destitute and stripped of their earthly possessions that they finally admit that they are not in control. And if they aren’t in control, Who is?