Rev. David Rommereim

Each June, the community of Good Shepherd assembles to share the stories of the past year's ministry.  As the pastor of this congregation, I am so very pleased with this expansive ministry. You are far reaching!  In the annual report, you will see that we continue to provide the three ingredients of Christian ministry.

First, we respond to crisis through simple and life changing efforts in ministry such as: Hurricane Sandy relief and rebuilding and our public vigil toward a just and humane comprehensive immigration reform.  Additionally we continue efforts in strong advocacy toward a health care system that includes our Safety Net hospital system of Lutheran Health Care and our partner Lutheran Augustana Center for Rehabilitation.

Second, we provide a safety net for many in our community needing a safe place to raise children, access supportive services, and offer discussion for many who are increasingly becoming biblically literate in the calling of our faith as a prophetic witness to the healing of creation. Having an office that is open full-time, a hospitable climate, and a hopeful exchange brings in people longing for strength, vitality, and a healthy communal life.

Third, we stand up when our public policies need the heart and soul of the faith community to lead them in justice. We seek to prayerfully walk that thin line between "church and state." We seek to bring our faith into the dialogue and action needed with our secular world to make the world a better place for our children their children, and their children's children.

This Thursday evening, in a large Church in Elmhurst, Queens it will be a privilege to stand with over 1,000 other faithful members of churches, synagogues and temples. Leaders from Faith in New York will square off with our top mayoral candidates and ask them what their agenda will be, if elected mayor, to restore the integrity of the middle class and pay attention to a growing number of poor, marginalized families in NYC.

Many of us learned, through the salt of Hurricane Sandy, that economic disparity is growing in our city. Government is being bought and paid for by large conglomerates.  It is becoming increasingly difficult to insure domestic tranquility among citizens and to promote the common welfare. Faith in New York will demand that these candidates are vigilant in that effort of economic well-being, or tell us why they disagree.

I say all this because I am so pleased that we have opened our doors, to not only this ministry of response, safety, and truth telling, but also as a place for individuals to feel safe in their own spiritual journey.  I say thank you to our fine Leadership Council for their service to this mission, and celebrate the new council leaders.  

The gift of this ministry is the treasures of these earthen vessels that continue to care and to share the joy of a safe community for Christian ministry.

- Pastor

by Rev. Robert Emerick

Facts; Myths; The Best Way Forward

     In 2011, I decided to investigate the conflicting claims being made in political campaigns about how to create jobs and strengthen the U.S. economy.  I compiled data on nine economic indicators from 1900 to 2011, in order to compare them as a way of seeing for myself what factors have actually coincided with lower unemployment and higher economic growth.  Thanks to Ms. Brita Rose, my findings were published as an article, A Lay Person’s View Of The Economy, in the online magazine Countercurrents.org on 12 July 2012.  This brief presentation is based on those findings. 

     My interest in this subject continues, and I try to learn as much as I can about economics, because I have learned that the way we think about the economy drives the policies that directly and immediately impact human well being.  As a Christian minister, I try to learn about this subject because I now see that it is essential to implementing Jesus’ core teaching that we should strive to make Heaven on Earth by loving one another – being radically committed to the physical, social, psychological, and spiritual well being of ALL people.  For me, this means caring and acting for human welfare, animal welfare, and the welfare of the planet that supplies our food, air, and water - and economics is woven into every aspect of human society. 

     I thank my friend Dr. Tracy Mott, Chairperson of the Economics Dept. at Denver University, for his patience and generosity in checking my work, making suggestions, and offering perspective.

     I thank my colleague in ministry, David Rommereim, for sharing in this interest and for engaging in fruitful dialogue with me.      

     I thank the members of Bay Ridge United Methodist Church, Lutheran Church Of The Good Shepherd, and the Community who study economics with me. 

     I welcome conversation.

FACTS

THE GREAT DEPRESSION marked the US economy in the 1930s.  When FDR took office in 1933, the unemployment rate was 24.9% - a 754% increase over the pre-crash 1929 rate of 3.3%.  Between 1929 and 1933, the entire economy shrank by 39% - the GDP (Gross Domestic Product) went from $103.7b (billion) to $63.1b.

THE NEW DEAL was the name given to the policies and legislation FDR used to address The Great Depression.  It included increasing the Federal debt to fund massive Federal spending to increase employment and demand, to get the economy moving.

THE NEW DEAL WORKED.  Between 1933 and 1937, the GDP rose 60%, “…the most rapid peacetime growth in American history.”  (Lind, p. 287)  Unemployment decreased by 42.5% - from 24.9% down to 14.3%.

In 1938, under pressure from Congress, FDR chose to fulfill a campaign promise he had made – to balance the Federal budget.  The 1938 reduction in Federal spending, along with the requirement on banks to recapitalize (which led to excessive recapitalization, [private conversation with Dr. Mott]), coincided with a 33% increase in unemployment, and a 2.5% decrease in GDP.  

The resumption of Federal spending in 1939 coincided with a decrease in unemployment of almost 2% in one year, and a 3.5% increase in the GDP.  

During the NEW DEAL years, taxes on the wealthy were high in comparison to today’s rates.  In 1936, the capital gains rate was 39%, and the marginal rate on incomes over $2m (million) was 78%.  In 1938 the capital gains rate was reduced to 30%.

During WWII, the capital gains tax rate averaged 25%, and the marginal rate on income over $2m averaged 85.6%.  Federal debt grew from 45% of GDP in 1941 to 120% of GDP in 1945.  The average wartime unemployment rate was 3.9%.  Wartime GDP rose from $120.4b in 1941 to $222.2b in 1945.

By the end of WWII, the Federal debt was 120% of GDP (compared to about 100% today).  After WWII, Federal spending continued with the GI Bill (which many in Congress opposed, charging that it was socialism), the Marshall Plan, the Eisenhower Interstate Highway System, and the first Federally-subsidized public housing.  Even with the high levels of Federal spending, by 1971 the Federal debt had dropped to only 37% of GDP.  GDP rose from $222.4b in 1946 to $1.1 t (trillion) in 1971 (an increase of 400% in 25 years, nominal dollars).

In 1974, CEO pay was 35 X (times) higher than the average worker’s pay.  In 1980, CEO pay was 40 X higher than the average worker.  In 1995, it was 150 X higher, and in 2011 it was 400 X higher.  From 1977 to 1989, CEO pay increased 104% while worker pay increased only 7%.  Since 1990, CEO pay has increased 298% and worker pay has increased 4.3%.  According to the economist Robert Frank, “…when researchers examine the data within individual countries over time, they find a negative correlation between [economic] growth rates and [income] inequality.” (Frank, 2011, p. 159, my underline. This means that higher inequality = lower economic growth. See also pages 13 and 112 in The Economist magazine, Oct. 13, 2012, Vol. 405, No. 8806; and the side-by-side comparison of economic indicator data on the next page.)

Comparison of Economic Indicators from 1946 through 2011

                                                                                                          from 1946 to 1971:           from 1972 to 2011:

1. Average marginal tax rates on highest incomes:                                80%                                    44.1%

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2. Average capital gains tax rate:                                                              25.8%                                 18.9%

    [ NOTE: as of 2006, “high net worth individuals” were tax sheltering at least $1.6 trillion “offshore” ]

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3. Average unemployment rate:                                                                 4.6%                                   6.4%

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4. Average annual Federal budget deficit as % of GDP:                         1.3%                                   11.5%

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5. Average number of Federal employees:                                           5.7 million                      4.7 million

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6. Average annual rate of inflation:                                                           3.2%                                    4.4%

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7. Number of Federal budget surpluses:                                            8 (about 33%)                      4 (only 10%)

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8. Average GDP growth rate:                                                                      3.6%                                    2.8%

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9. Average private sector growth rate:                                                       2.5%                                    1.8%

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10. Federal debt:                                                                                 went DOWN 69.1%             went UP 167.5%

     Because the economy is a system of exchange of goods and services that is affected by every human transaction that has a measurable exchange value, it is difficult, if not impossible, to prove economic “causation” beyond a reasonable doubt.  This means that, for the average person, the patterns of coincidence of economic indicators are the only economic “facts” available for us to use when we think about the economy in order to make economic policy decisions.   It would be extremely foolish for us to ignore clear and consistent patterns of coincidence of economic indicators.                                                                                                             

     As you can see from the above data, the economy was much stronger in every way from 1946 to 1971 than it was from 1972 to 2011.  A number of things happened in those respective years that certainly had an impact on the economy.  But the single most important public policy factor is the Federal tax code.  Beginning in 1972, the capital gains tax rate was cut in half.  In the mid 1980s, the marginal tax rate on the highest incomes was also cut; and thereafter, MANIPULATION OF THE FEDERAL TAX CODE BECAME THE PRIMARY POLICY MEANS OF REDISTRIBUTING WEALTH FROM LOWER AND MIDDLE INCOME TAXPAYERS TO WEALTHY TAXPAYERS. 

     This use of the tax code to transfer wealth from lower and middle income taxpayers to higher income taxpayers, along with the suppression of wages, has a name: trickle-down economics, or, supply side economics, or, as George Herbert Walker Bush called it, voodoo economics.

MYTHS

1. If you raise taxes on the “job creators” you kill jobs.  NOT TRUE.  Higher taxes on the wealthy have coincided with lower unemployment.

2. Balanced Federal budgets are good for the economy.  We have to balance the Federal budget to create jobs and grow the economy.  NOT TRUE.  Since 1921, we have had two balanced budgets – in 1938 and 1960.  In 1938, the “austerity” budget coincided with GDP reduction (the economy shrank by 2.5%), and unemployment increased.  In 1960, economic growth declined, and unemployment did not go down.   

3. Federal spending causes Federal debt.  We have to reduce Federal spending to reduce Federal debt.  NOT TRUE.  Higher levels of Federal spending have not coincided with increased Federal debt, and lower levels of Federal spending have not coincided with decreasing Federal debt. Lower tax rates on the wealthy have coincided with increasing Federal debt.  Higher taxes on the wealthy have coincided with decreasing Federal debt.  Case in point: In the 1980s, taxes on the wealthy were dramatically reduced, Federal spending was reduced from 23% of GDP in 1982 to 21.2% of GDP in 1988, and Federal debt rose from 38% of GDP to 55% of GDP – an increase of 17 points in six years.  The national economy is not like the household economy.  Federal spending is an investment in the economy – it produces income. 

4. Private enterprise is able to do everything better, cheaper, and faster.  NOT TRUE.  (See Stiglitz, pp. 172-186.)

5. Trickle-down economics works.  NOT TRUE.  The economy has had a declining growth rate since 1981: from 1951 to 1981, the economy grew at an annual average rate of 3.6%; from 1982 to 2011, the economy grew at an annual average rate of 2.8%.  “Inequality’s apologists…argue that…giving more money to the top will benefit everyone…because it will lead to more growth.  This is an idea called trickle-down economics.  It has a long pedigree – and has long been discredited… higher inequality has not led to more growth, and most Americans have actually seen their incomes sink or stagnate.  What America has been experiencing…is the opposite of trickle-down economics:  the riches accruing to the top come at the expense of those below.” (Stiglitz, p. 6. See also the Congressional Budget Office Report, Trends in the Distribution of Household Income.)

THE BEST WAY FORWARD

     If knowledge is power, then most of the American public is probably not very powerful, especially when it comes to economics.  Most of us probably don’t know much about our economic history.  I put myself in that category when I realized that I didn’t know enough to be able to discern the truth among conflicting claims in a political campaign, even though I had taken a course in economics in college.

     Most of what I hear in the media that passes for economic “common sense knowledge” – like the Myths on the previous page - is simply nonsense.  In fact, the Myths directly contradict the Facts.  The Myths have had heroes and champions in government.  In my opinion, Representative Paul Ryan is probably the best-known representative of economic nonsense in government today.  When myths of any kind guide policy, the consequences are tragic for all of us.  Many of the government officials who promote the Myths have been followers of Ayn Rand.  Ayn Rand wrote novels, NOT history. Her philosophy is based on fiction.

     Economics has been called “the dismal science.”  Yet nothing is more important for determining the quality of life, and equality of opportunity, for all of us.  What happens in the economy is directly related to the quality of our democracy, and ALL of our social institutions, including education, law, medicine, and public safety.  Economics affects our environment.  Politics and economics are two sides of the same coin, because they are both about “real world” power and potential – human well being.  In fact, economics used to be called “political economy.”        

     What can we, the people, do when all we have to go on is nonsense disguised as common sense?  And why would anyone in government and media choose to make assertions that have no factual basis, on such an important subject?

     We need to find The Best Way Forward that 1) relies on knowledge, not common sense nonsense, and 2) maintains the balance of our core American values, expressed in the Preamble to our Constitution.  This is NOT rocket science.  We can do this.

     1. We need an accurate and reliable way to think about the economy.  My research tells me that neither government-controlled economies nor government-free economies work well, especially over time.  That is, over time, neither model is able to provide for the well being of the entire population – not even for the wealthy.  This is because both of the extremes are unstable – both are extractive, exclusive, and unbalanced.  The U.S. economy has worked best when it has achieved a balance of the public and private dimensions.  The public and private dimensions NEED each other to function at their best. 

     I offer to you the model of the economy I use as I look at the facts of our economic and political history, and consider the best way forward:  I think of the economy as a circulation system with a heart that has two chambers – the private and the public.  The heart won’t work very well if either of the chambers is too small.  The entire body suffers when the circulation system is not nourishing ALL of the parts of the body because the heart is not pumping well from both chambers.  A well-functioning economic circulation system is NOT extractive and exclusive of parts of the social body.  Rather, it is inclusive and infusive of ALL parts of the social body. 

     It would be fruitful to have a national (and local) fact-based conversation about economic models, and their strengths and weaknesses.  But I fear that such a conversation is almost impossible now because too many people think they already know everything, and too many people don’t want to know anything.  

     2.  Ever since the New Deal was enacted, there have been those who want to end it, and go back to the old days of the unregulated, dog-eat-dog, winner-take-all free market, “let them eat cake” way of life.  In the 1930s, a group called The American Liberty League was formed and funded by a small group of wealthy interests – primarily the du Ponts.  The purpose of the group was to promote the idea that things like social security and government “interference” in the economy are “un-American.” The group ultimately failed, and disbanded in the 40s, because most Americans remembered the Great Depression that was caused by unregulated financial markets, and because most Americans could see the value of “the general welfare” – the common good.  Unregulated “free” markets always tend toward monopolies, and monopoly markets are not free markets.  Ironically, markets can be free only when they are regulated.

     The spirit and methods of The American Liberty League live on in the media and in government, still funded by extremely wealthy interests.  This group has a purpose – in effect, to strike the phrase “promote the general welfare” from the Preamble.  They still want to end the New Deal because they think that would serve their interests.  And if they are unable to end the New Deal, at the very least, they want to privatize it for profit.  (Do you remember the proposal to begin the privatization of social security? In fact, Social Security and Medicare are not a drag on the economy, and they are actually OK financially.)  The new Liberty Leaguers want to minimize the size and power of any and ALL governments that could inhibit their profit-making.  And they still believe that one of the best ways to increase profit is to minimize labor costs – and in this, they contradict Adam Smith, who is known as the Founder of Free Market (or, “Invisible Hand”) theory.

     The voice of the “small government” ideology can also be heard in the so-called “tea party” movement.  This is also ironic because all of us - all of us - are the beneficiaries of the government programs that built the post-WWII economy – programs like the GI Bill, the Marshall Plan, and the Federal Highway System.  Here is another Tea Party irony:  as I recall, the Tea Party began as a protest against the fact that Big Business and Big Finance (“BB&F” – a.k.a. “Wall Street,” the people who are responsible for the most recent crash) got an immediate and generous bailout from the Federal government, but homeowners and small businesses (a.k.a. “Main Street”) did not get a bailout from their government (which was “supposed” to be worried about them, too).  Their outrage was turned against government itself – striking against the goose that refused to lay the golden egg for them.  By turning against government itself, many tea-partiers have become, perhaps unintentionally, agents of the Wall Street agenda - which is to make government too small to regulate them, or otherwise inhibit their profits.  This was a major victory for “Wall Street.”  If we allow anyone to kill the only goose we have, the average person will have NO VOICE in managing our economy.  The goose that lays the golden eggs is legally ours – it belongs to ALL of us.  The problem is not BIG government.  The problem is BAD government – government which responds immediately and completely to the interests of only one part of the social body, i. e., those who use their financial power to control our political and economic agenda.       

     In my opinion, the Best Way Forward means finding the best balance of public and private, liberty and the general welfare.  This should be an ongoing experiment.  We could find the best balance of public and private, liberty and the common good, because our core values are mutually dependent, NOT mutually exclusive.  We could even learn how to adjust the balance from time to time, depending on circumstances.  But it’s hard to conduct an experiment when it’s impossible for most people to imagine that our core values are complementary, not contradictory.

     In my opinion, if we are able to see that our economic and political life are like a circulation system that can and should nourish all parts of the social body, and that the system is driven by a heart with TWO chambers, we have the best chance of achieving civil liberty and economic and political justice for all.

     Again, I welcome conversation, and I invite you to join our economics study group.



Robert Emerick  –  [email protected] - June 15, 2013


READILY AVAILABLE RESOURCES

Acemoglu, Daron, and James A. Robinson (2012) Why Nations Fail: The Origins Of Power, Prosperity, and   

                                                                                        Poverty.  Crown Business, Random House, New York.

Frank, Robert H., and Philip J. Cook (1996)  The Winner-Take-All Society: Why the Few at the Top Get So Much  

                                                                              More Than the Rest of Us.  Penguin Books, New York

Frank, Robert H. (2011)  The Darwin Economy: Liberty, Competition, and the Common Good.  Princeton University     

                                                                                                                                                              Press, Princeton, N.J.

Lind, Michael (2012)  Land Of Promise: An Economic History Of The United States. HarperCollins, New York

Stiglitz, Joseph E. (2012)  The Price Of Inequality: How Today’s Divided Society Endangers Our Future.  W. W.   

                                                                                                                                              Norton & Co., Inc., New York

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DATA, SUMMARY, and ANALYSIS compiled by and available from R. Emerick ( [email protected] ):

U.S. Economy – Comparative Factors (the raw data)   “Thank you” to Eleanor Ruth Geryk for her help with this project.

Summary of Economic Indicators and Averages by President, 1946-2011

Economic Indicators with Analysis, 1946-2012

Models of Political Economy

Economic Myths and Economic Reality: Balanced Budgets and Economic Indicators, 1921-2012

Quotable Quotes From Adam Smith

Notes from Adam Smith on Income Inequality and Economic Health

“A Lay Person’s View Of The Economy” Countercurrents.org  12 July 2012

     The Good Shepherd's Children, Youth, and Family Coordinator, Dana Turner, served on a panel this past Friday
evening at the New York Synod Assembly. The forum was titled, “Spark: Igniting Faith Conversations in
Community” and was organized by Charlie Germain, the Chair of the Children, Youth, and Family Ministry of
the New York Synod. The panel was made up of Chris Mietlowski and Danielle Miller who are each Pastors
from different churches in New York City, as well as Deacon Carlos Lopez and Dana, the Children, Youth, and
Family Ministries Coordinator of the Good Shepherd.

The purpose of the discussion was to question the relevance of the church in our communities and examine and
share the focus of our respective congregations. It was an expansive discussion that covered everything from
being messengers of God's love for those without a religious affiliation, to re-defining what religion means. We
shared stories of the change we have seen in our congregations, and Pastor Miller made a distinction between the
idea of change and transformation. Change, she stated, is simply doing something different, which usually
involves recycling old ideas. Transformation, however, is about the kind of shift that can occur when guided by
the holy spirit. As leaders, we can encourage transformation by creating a space for people to meet Jesus, rather
than forcing doctrine upon them. This entails meeting people where they are, which often means going outside
of the church.

Upon being asked about how I saw God impact my own life and the lives of others, the only place I could go
was stories about the children and youth of the Good Shepherd. I spoke about my role as a guide who creates
space for questions to be asked, and entourages students to work with one another and myself to develop
answers, which often leads to asking deeper questions. I embrace a lot of questioning in my own faith, and I
described a couple of stories which have reminded me of the presence of the spirit in our congregation and
community at large. I shared this story at the forum:

One Sunday I was having difficulty coming up with a lesson for Sunday School that would communicate the full
expanse of the week's gospel. I eventually though of an idea that would work and instead of pushing and pulling
for something that came only from me, I decided to allow room for the spirit to come into play. When we came
into the classroom on Sunday morning, Chloe, one of our students who is five years old, had prepared a lesson
that she wanted to do with the kids. She brought in paper and scissors and markers and a head full of inspiration.
She led us all in making prayer booklets. It was one of those moments where I saw the spirit face to face. Not
only did she come up with an amazing activity without me even asking, but she created the space to develop
herself as a leader and was supported by the other classmates. It was a definite beginning to a cultural shift in our
ministry.

A couple of buzz words of the panel discussion included authenticity and hunger. We discussed the kind of
yearning that people have to be loved, and to be recognized as children of God. Often times this is not a desire
that is expressed in these exact words, but we all have the hunger to be understood, accepted, and loved just as
we are. Pastor Miller brought up something that she does in relation to this. Each time she looks in the mirror,
she says she is usually so focused on what she did wrong that day and what she could've done better. However,
in her image she reminds herself of her beauty in being a child of God. She tells herself, “I am beautiful, I
matter, and I am a child of God.” In God's image we are all created just the way we are supposed to be. We are
all not only important to this community, but each of us is needed in this community. I witness the joy we all feel
for each others presence at Sunday worship at the Good Shepherd in the sharing of the peace as we all crowd the
middle aisle, eager to shake each and every persons hand. The spirit you bring to church, and the spirit you bring
to your community is indispensable to the mission of Jesus.

Recently in GIFT, we have been discussing the mission of our collective. I asked them, what is our purpose for
coming together? Yesterday we went to visit a child who is experiencing pain in her legs that is keeping her bedridden.
We said a prayer for her, brought her flowers and made her a card. We also sang a song while visiting.
We recognize that this gesture may not heal her, but perhaps it could make her feel a little closer to God through
us showing love and care. We can't underestimate the power of kindness. After all, this is all that Jesus showed in
his miracles, a limitless kindness that was so deeply rooted in the love of God that it created healing. It is this
outreach that brings us closer to Jesus mission, and hence helps to define our own. We have a gift of spirit and
joy, and as I told the kids yesterday, in working through the word of Jesus we have a responsibility to share our
gift with our congregation and larger community.

This weekend's discussion was a great reminder of why we do what we do. I was honored to sit on a panel with
these three professionals, and share in the enthusiasm and honesty that are needed to live out the love that God
gifts us with. At the end of worship, we are sent, not done. All of us, having experienced the love and joy that
comes through being in a community of faith, have the tools and gifts to authentically share this peace with one
another, each and every day.

Dana Turner
Children, Youth, and Family Ministry Coordinator