Monday, December 15, 2008

Spiritual resources for the crisis

Yesterday's "Speaking of Faith" program on public radio had an interview with Parker Palmer about the economic crisis, and how we can make use of our faith in dealing with it. It's very interesting, and can be found here. In fact, they're collecting a whole series of resources about this.

And in church, the appointed Psalm for Advent 3 was 126: "Restore our fortunes, O Lord, like streams in the Negev." Sometimes these readings come up in a really providential fashion. Anyway, that's one to tape to the bathroom mirror until the crisis is over.

Saturday, December 13, 2008

Review: Calvinism in the Las Vegas Airport by Richard Mouw

I recently finished Richard Mouw's Calvinism in the Las Vegas Airport, which is his approachable apology for Calvinist theology. As a Calvinist who is only beginning to learn the theology and history of this tradition, I found the book to be a helpful summary of how Mouw allows this tradition to shape his thinking and his life.

The only part of the book which really changed my thinking was his emphasis on "Heidelberg One" as the starting point for understanding Calvinism. His argument is that a person's acknowledgement that they are utterly dependent on God for all good is the central element of Calvinism, and that the doctrines of the Cannons of Dordt, while a defining element of Calvinist theology, are less widely applicable to our lives.

My only disappointment with the book was Mouw's sometimes overly apologetic tone. He seems to recognize that Calvinism is somewhat unpopular, and spends a lot of time acknowledging and dealing with the difficulties that people have. While this is helpful, he spends less time explaining the positive aspects of this theology – the freedom that results from recognizing God's ultimate sovereignty. Overall, however, the book was a very easy read, and does a good job of explaining the importance of Calvinist theology for his own life (and presumably his readers' lives).

Tuesday, December 9, 2008

The Butterfly and its Maker

I ran across the following line as I was reading Kent Van Til's article in Perspectives:

Christians aver that a butterfly never seen by human eyes nevertheless has the end to glorify its Maker, providing God with a small dosis of enjoyment as She watches its beautiful wings flutter. (pg 16, Nov 2008)

The statement is simple, but it is probably the most convincing argument I have heard against the standard approach for assigning value to environmental goods. Even if people are not willing to pay money either to visit the butterfly or to simply know that it exists, that does not mean that the butterfly is without value.

Now I have to reconsider my thinking on the environment.

Friday, December 5, 2008

I needed some uplifting news and found this happy note from today's Nikolas Kristof opinion piece.

Jimmy Carter is by far the best ex-president the United States has ever had,
and he underscored that again this morning by announcing that Guinea Worm cases
have reached an all-time low. For those of you who have never heard of it,
Guinea Worm is one of the worst parasites you can get. The worms burrow inside
of you, grow to almost three feet long, are incredibly painful, and finally pop
out of the skin and have to be reeled out, inch by inch, over many days. They
are an ancient affliction in tropical countries, but Carter has led an effort to
eradicate them.

Today he announces that Guinea Worm is down to 5,000 cases worldwide — mostly in Sudan, Mali and Ghana — and tantalizingly close to eradication. If it is eradicated, it will be only the second ailment, after smallpox, that we’ve been able to eliminate form Earth.


Worldwide cases have already been reduced by 99.7 percent, and Carter’s work
has truly transformed those villages where the worm used to be endemic. He shows
that these are battles we can win.

That is great news and truly did give me hope about the ability for human beings to work together for the good of this planet (Does that hope wax and wane for you as much as it does for me?). To be honest, though, the reason I went to that article was because the blurb about it on the front of was: "Jimmy Carter's efforts to eradicate a tropical parasite should set an example for future former presidents." I truly expected to see Jimmy Carter holding a gun on Robert Mugabe (Apparently I've been reading too much from The Onion). Oh well...maybe that can be George Bush's good deed as a former president.

Regulation and the crisis

One of the basic rules of banking that I teach in econ 331 is "Never take a risk you don't understand." The current crisis seems to have its roots in a new fashion in the banking industry to ignore this rule. Such behavior is remarkably foolish. But perhaps behavioral economics can explain it as a reaction to the invention of so many new types of financial instruments with extremely obscure risk characteristics. Rather than forego buying these things and risk looking stupid or slow, bankers bought them, hoping (or trusting) that their inventors were not selling them something dangerous. Of course, the result is that the bankers who bought these things now look stupid and slow. Better to say "Sorry, I don't buy things I don't understand" than to ruin your company.

Regulation could have forbade these instruments, or penalized banks that held them, but that would run a serious risk of stifling innovation, which we don't want to do. Bankers should be smart enough to reject innovations that are not transparent enough to be really useful. The real regulatory failure that is clear now (in retrospect) is that capital requirements for investment banks and hedge funds (and insurance companies that acted like hedge funds) were too low. This is the area that needs attention as we review regulation in the light of the crisis. The commercial banks and thrifts, with their higher capital requirements, are mostly OK.

While we're on the subject, I was always a fan of the original rescue plan for the Treasury to buy distressed mortgage-backed securities from the banks in a reverse auction. The government would not have had to buy all of them in order to establish a price, and private demand would have followed. Once a price was set, the size of the banks' losses is determined, and on that basis they could have gone to the private market to raise capital. But the approach that was followed (direct injections of equity capital from the Treasury) did not resolve the uncertainty about the magnitude of the banks' losses, and so did not open the private market to them. Who wants to inject capital into a bank and then see it eaten up by toxic securities that were already on the books?

Thursday, December 4, 2008

The Best Line I Have Read So Far Today

"I had rather see coming toward me a whole regiment with drawn swords, than one lone Calvinist convinced that he is doing the will of God."

Nicholas Wolterstorff, in the first chapter of Until Justice and Peace Embrace, quotes an unnamed "seventeenth-century English writer," as having written this, but does not name the author. Does anyone know who wrote this?