Housing Process Flow Chart

Subprime crisis cause graph

My Response to G-Man on the Freedom Post

Here is G-Man’s comment on my Freedom Cannot Ring post…

Dear Dave,

What a fascinating post. A few thoughts occur and I would be curious to hear your response.

1. What is the relationship between sacrifice/martyrdom/integrity and desire for reward? I ask because I believe it is an inverse one. That is, the more one seeks reward, whether in the form of money, advancement, self-aggrandizement, etc., the less one is likely to be willing to sacrifice those things in the name of any kind of integrity. I ask this because I’m curious whether you believe our country’s struggle with corruption is at all related to capitalism and its tendency (one tendency among many) to champion/reward/require individual achievement or accomplishment. In other words, if we live in a country whose economic system is designed to both promote and reward competitiveness, is it any wonder that we, as Americans, find it difficult to sacrifice advancement and profit in the name of integrity or charity? This may also be related to your idea about visibility, illustrating perfectly my point. Example: The stock market was doing well, then purposefully slipshod accounting and questionable business deals were discovered to be at the heart of some of the biggest corporations’ practices and then the stock market went down. This of course illustrates my point and yours: visibility is a wonderful tool for the fighting of corruption, but, on the other hand, it leads, in this one case, to economic downturns and to substantial amounts of innocent people losing their retirement while the people responsible for some of the mess are substantially rewarded.: In this case, visibility leads both to the curtailing of corrupt practices (a desirable end) and to significant financial losses for millions of people (an undesirable end).

2. Corruption, Faith and Hypocrisy. Many Americans refer to their country as a Christian Nation. Such a claim may not be entirely specious, but if, as the term implies, America was not only founded by Christians but also continues (or should ideally continue) to be a nation of Christian character, there are some deeply troubling trends. The first, and perhaps most troubling may be related to your comments about corruption. My interpretation of the New Testament reveals a Christ who is very clear about the differences between worldly and spiritual rewards. I can find nothing in the Savior’s earthly ministry that casts any sort of earthly prosperity in a positive light. This leads me to conclude that Christians who believe in the so-called “prosperity gospel” (see Joel Osteen, eg.) are mistaken. The question of whether they or I are mistaken can be put aside momentarily, but I think that the application of an ideology that appears to promote its polar opposite is indicative of the relationship between corruption and self-justifying rhetoric. This is a topic for further exploration, but I’d be interested to know if you seen any link between Americans’ tendency to re-shape an ideology to serve their own purposes and corruption generally.

Best to you in the New Year,

G-Man

My Response:

I need to set up a critical backdrop before getting into the guts of my response.  Trade is at the core of our essence.  One great and important paradox of existence is that we can only be defined individually by our social interactions.  We trade favors for status, money for goods, votes for pot legalization, devotion for trust, my labor laying sod for my neighbor for my neighbor’s well being.  Trade is at the core of our essence.  Jesus traded the only perfect, unblemished and precious life for our salvation.  A carrot trades it’s life to keep you alive and to give you health benefit.  It is at the core of what it means to be.  Karen Carpenter traded her time and outstanding vocal talents for my money at the record store.

We also trade sex for money, drugs for money, drugs for standing, votes for power, integrity for self-agrandizement, etc, etc.  If you allow for completely free trade, you will get a lot of good trade and a lot of bad trade.  The role of government needs to clear the way for good trade to happen and to block bad trade from happening.  Most governments and political organizations think it best to divide moral trade from financial trade.  Generally, Liberals want financial trade checked but allow for free moral trade.  Conservatives want free financial trade but checked moral trade.  Libertarians want free trade for both.  China opted to restrict moral trade and free financial trade.  Russia opted to restrict financial trade and free moral trade.  These are broad, sweeping generalizations, but I think they are directionally correct.

The great government opportunity and problem is to know how much to insert itself and where.  If the government inserts itself too little, you get anarchy.  If the government inserts itself too much, you have totalitarianism.  If a government restricts the right things and to the right degree, trade, both moral and financial is enhanced.  If a government restricts the wrong things, moral trade and financial trade are stifled.  It is the natural disposition of all men and organizations to centralize power.  Power centralization will ALWAYS result in disastrous consequences. This was clearly understood by the founders of the nation, and all of our founding documents reflect this understanding.  This is why there is so much in the Constitution limiting governmental reach.  The founders perceived, I believe accurately, that bad government is far more dangerous than bad trade.

The Problem at Hand

Your specific question was, “I’m curious whether you believe our country’s struggle with corruption is at all related to capitalism and its tendency (one tendency among many) to champion/reward/require individual achievement or accomplishment. In other words, if we live in a country whose economic system is designed to both promote and reward competitiveness, is it any wonder that we, as Americans, find it difficult to sacrifice advancement and profit in the name of integrity or charity?”

By capitalism, I assume you mean the following…

Capitalism is an economic system in which the means of production are privately owned and operated for a private profit; decisions regarding supply, demand, price, distribution, and investments are made by private actors in the free market; profit is distributed to owners who invest in businesses, and wages are paid to workers employed by businesses and companies.

If trade is at the core of our essence, Capitalism is successful insofar as it allows for greater creation of wealth by enhancing trade possibilities and efficiencies.  So far, it has been the greatest creator of wealth that we have seen, I believe, because it is closely aligned with our essence as human beings.  Among moral people, there is nothing that is proven to be better.  Among evil people, it is not the worst thing, but it is destructive.  Capitalism requires both facilitation and checks to work for the benefit of people.  Even if outlawed, capitalism will continue, only it will do so without the aid and sanction of the state (look at Russia’s thriving black market.  Demand will get met whether you agree with it or not).  The perfect storm exists when both capitalists and traders are equally corrupt.  When this happens, and I argue we are headed that direction, a huge fall is immanent.

Here is the answer.  I do not think that Capitalism, per se, is at fault.  I think that evil capitalists and evil government folks are responsible for most of our current financial woes.  I don’t know of even one capitalist that believes that Ken Lay and others who committed heinous acts in total darkness, both soul and financial, should be cut any slack. On the contrary.  I think that most believed that there was too much leniency.  It would be a reckless overreaction and destructive to the public good to cut the legs out from under the mechanism that is generating the wealth that will cover current and future tax revenues, not to mention recovery.  Need there be more laws?  Sure.  But if I had my way, Congress should be required to repeal ten laws for every new one created.

Answer part 2.  I also fear the destructive force of a totalitarian government far more than run amok capitalists.  One can be checked through law creation, the other through revolution and usually bloodshed.

Answer part 3.  Capitalism does not create competition, liberty does.  I remember well the number of coeds vying for your attention in college.  It was certainly competitive for them and had noting to do with capitalism.  They had the freedom to give their best arguments as to what would make them more desirable for you then the other.  You had your freedom to choose.  It made for wonderful competition, no capitalism required.  We could eliminate the competition and just assign you a spouse like they do in other cultures.  But then, who gets to decide?  Your mom?  That is an uncomfortable centralization of power that could easily result in pain and suffering.

Your point…

“visibility is a wonderful tool for the fighting of corruption, but, on the other hand, it leads, in this one case, to economic downturns and to substantial amounts of innocent people losing their retirement while the people responsible for some of the mess are substantially rewarded.”

I don’t see how visibility led to the corruption.  In fact, at least in the case of Enron, World Com and others, the accounting evils were done invisibly.  Enron corruption occurred in the dark.

Question 2

That is a brilliant question/observation.  My initial observations are, Jesus did not have much to say about wealth creation and economics other than to touch upon the importance of putting the kingdom of God first..  He had volumes to say about forgiveness, love, righteousness, charity, compassion, dedication, humility.  We are certainly failing as a nation on these points and I believe that invisibility is a major enabler of christian dysfunction.

Thanks for your comments, as always.  Hugs to you and yours.

Jesuits, Teens, Romance, Statistics and Frontal Lobe Development

1552

In 1552, St Francis Xavier, one of the founders of the Jesuits, sailed to China in an effort to convert souls to Christianity.  He never made it to the mainland, but others would soon follow who would have vast impact in China and on world technology exchange.  The same efforts were undertaken at about the same time in South America.  The campaigns were eminently successful.  At the peak of Jesuit prominence in China, several Jesuit Priests served in the emperor’s court and enjoyed thousands of converts to Christianity.  In Brazil, Argentina, and Paraguay, the Jesuits set up a unique society, successful by almost any measure, that lasted for 130 years.  It took the martyrdom of the priests to finally end what many considered heaven on earth.

These amazing priests, armed with education and the conviction that what they were to accomplish was divinely appointed, impacted the world in profound ways.  The priests were armed with three foundational skill sets that are virtually neglected in today’s educational system.  You have to go out of your way, and only then at the University, if you want to learn Logic, Economics and Statistics (LES).  Why these are not every bit as foundational in the American education system as reading, writing and arithmetic is a travesty.  Through these foundational skills, the Jesuits were regarded as prophets in that they were able to predict crop cycles, planetary movements, tides and weather patterns.  Their goodness and strict adherence to a clear and defined order made them trustworthy advisers and leaders.

The logic training they received came from the educational fare of the time, the Trivium.  Trivium learning consisted of three disciplines, Logic, Grammar and Rhetoric.  Or, a thing as it is (Logic), the symbolism of the thing (Grammar), and the communication of the thing (Rhetoric).  In the case of LES, Logic is the study of a thing as it is, Statistics is the study of the symbolism of the thing, and Economics is the study of the thing as it is exchanged.

2002

Studies at Cornell University point out one thing that most parents of teens already know and at least one thing that they do not know.  The already known thing is that teens have a hard time processing certain types of information.  The result is that they have difficulty recognizing future consequences resulting from current actions, choosing between good and bad actions (or better and best), overriding and suppressing unacceptable social responses, and determining similarities and differences between things or events.  What was not previously recognized by parents is, in the words of Dr. Geidd,

“…unlike infants whose brain activity is completely determined by their parents and environment, the teens may actually be able to control how their own brains are wired and sculpted.” Kids who “exercise” their brains by learning to order their thoughts, understand abstract concepts, and control their impulses are laying the neural foundations that will serve them for the rest of their lives. “This argues for doing a lot of things as a teenager,” says Dr. Giedd. “You are hard-wiring your brain in adolescence. Do you want to hard-wire it for sports and playing music and doing mathematics–or for lying on the couch in front of the television?”

1960

Especially since the 1960′s, but going back even further than that, the modern educational focus took a radical shift inward.  Instead of the student being a somewhat passive subject that stands before the wonder and awe of the world and learns as much as possible about “things,” educational theorists presumed that the real wonder was not in “things” but in one’s self.  The modern concept of self has Cartesian origins.  The Cartesian epiphany, “I think therefore I am,” is not mere highbrow phraseology, but has had viral impact in all aspects of modern life.

A theorist’s check is populace consent.  Said another way, to be successful, a theorist’s ideas need to be conveyed in a way that either the populace at large is convinced or the group in power is convinced.  The turn away from the world and toward self had the advantages of timing, a weakened logic core, stealth and sloth appeal.  The industrial revolution seemed to provide a shortcut for everything.  Thanks to Pasteur, you could shortcut an illness.  Cars allowed for time shortcuts.  Shortcuts were created for everything from science to sex to religious rite.  Because shortcutting was so successful in science, production, and other areas, it was implicitly believed that all areas of life cold be shortcutted as well.  Here was their shortcut argument for education.

1. On average, confident people do better in school, have better relationships and make more money in life.
2. Confidence is really self confidence.
3. Self confidence can be taught and learned through self emphasis
4. If we teach self-emphasis (self-esteem), we can bolster self confidence and thereby get people to do better in school, have better relationships and make more money.

The argument has several fatal flaws.  I will mention three.

One of the logical flaws in the argument is a Cum Hoc Ergo Propter Hoc fallacy.  The argument assumes that because confidence and well-being occur at the same time, that confidence must have caused the well-being.  The metaphysical flaw is in the assumption that there actually is a self that is somehow separate from a person.  The ethical flaw in the argument is that the concept of self elevates the satisfaction of the needs of the ego as being a higher order good than the satisfaction of the needs of others.  Christians should have spotted this weakness early (It is Jesus who taught and exemplified the opposite.  In an attempt to lull the Christians, some clever religionists found what was thought to be justification for radical self-regard in the passage “Love thy neighbor as thyself.” A deeper look into the injunction shows that Jesus is quoting Leviticus 19:18, and in the original Hebrew, there is no reflexive like there is in English.  Careful study of the passage will yield a different conclusion than, “therefore, I have to love myself before I can love my others.”).

2011

Fatherhood and my ecclesiastical assignments put me into the path of raging adolescents.  Their uniqueness is dwarfed by their commonality and predictability.  I am finding that there are fewer surprises and many more common experiences.  The adolescents having difficulty all suffer from the same LES malady.  They confront the world as a thing to be dominated, with an underdeveloped frontal lobe and with no logical, statistical or economic check and balance against dysfunction.  Their statistical mistake is that they believe they are exceptional, that probabilities, actuarial tables, and data do not apply to them.  They take risks that have enormous possibility to destroy with dubious gains in momentary satisfaction.  Their economic mistake is that they trade time, money, health, psychological health, true, lasting friendships and solid grounding for social currency that promises to yield some combination of the three P’s, power, pleasure, popularity.  Their logical mistakes are legion.

In a previous blog I wrote about the anecdotal fallacy.  Here is the example I used.

The fallacy is the Anecdotal Fallacy.  Basically, the fallacy is committed when immediate or more emotional evidence is given greater weight in an argument than what may be mountainous evidence supporting the opposite or another position.  The famous description used is the Volvo versus Saab dilemma.  Suppose that you need a new car and after weeks of research, you have narrowed your choice down to either a Saab or a Volvo.  After more methodical study, the Volvo is the clear choice.  You have read hundreds of magazine and customer reviews and nearly all of them indicate that the Volvo is the better choice.  You decide to buy a Volvo the next day.  That night, you attend a social gathering and you excitedly tell a friend of the family about your decision and your research.  The friend says, “Oh, NO!  Don’t buy the Volvo.  My sister bought a Volvo and it was nothing but trouble.  She ended up selling it for parts after three years of ownership.”  In the morning, you ignore the mountain of evidence, and because of hearing your friend’s experience, you go to the Saab dealership and buy the Saab.

The Twilight Anecdotal Fallacy

For most abuse situations, there was ample evidence that abuse was statistically probable long before there was any commitment or involvement between the victim and the perpetrator.  A friend recently told me of her aunt who was getting involved with a man who had a history of abusing women.  When confronted about the statistical likelihood that she would become a victim of abuse, her aunt said, “He would never do that to me.  It’s different between us.”  As you read this, ask yourself how this is going to end for the aunt.  Let me add some more evidence.  The man was incarcerated for abuse in the past, and he has shoved some of the female relatives of the aunt.  If you conclude from the evidence that there is a high statistical probability that the aunt will be abused, you are correct.  Mountains of evidence point to a high probability of abuse, yet the aunt is sure that she is can escape high statistical probabilities.  Everyone thinks they are the exception.  The affliction of supposed clairvoyance born of emotional connection is hardly a teenage-only malady.

Bella and Edward

Here is Bella’s evidence: Edward has killed humans in the past.  The taste of human blood is the only thing that really satisfies.  Her blood is beyond delicious and Edward has said that he may not be able to stop himself if he gets a taste.  He has warned her to stay away from him.  He has told her that he is dangerous.  He is exciting.

At one point in the dialogue between the two she is asked, “Are you afraid?”  Her response is, “No.”  Somehow, in spite of the evidence that she should be afraid, the only evidence that mattered was, “He is exciting.”

It’s a story.  Who really cares?

In the bedroom of one of my friend’s daughters (she’s 13) hangs a poster of Edward over her headboard.  If the light from her window hits the poster just right, you can see several good-night kiss marks on Edward’s face.  Edward will come along someday.  He always does.  The dangerous thing for my friend’s daughter is that Edward, true to form, will be problematic.  He may be violent, addicted to substances or media or have multiple other vices, and he will be exciting.  When he comes along, she will recognize him as Edward and will respond like Bella, “I’m not afraid.  He wouldn’t hurt me; I just know it.”

The modern educational curriculum is incapable of delivering the kind of education that safely guide teens through their brain challenged years.  It must be done by parents and mentors.  I have contemplated the creation and delivery of LES studies for both parents and adolescents for some time.  Would you want a copy?

Freedom Cannot Ring!

Quiz:

Rank the following in order of impact to your (you, your family and others you care about) future well-being or the lack thereof:

1. Having the right people in political office
2. Removing undesirables from political office
3. Second amendment rights
4. Stopping terrorists
5. Government debt
6. Corruption
7. Adherence to the Constitution
8. The Economy
9. Health care
10. Education

If you picked 6 first, you get an A.

John Adams accurately pointed out that,

Our Constitution is made only for a moral and religious people.  It is wholly inadequate to the government of any other.

Remove virtue, altruism, conscience, charity, public and private virtue, honesty, integrity, and you will quickly find your well-being substantially diminished.

Power and Corruption

Making the connection between power and corruption requires little study.  Most of us are familiar with Lord Acton’s quote, “Power tends to corrupt, and absolute power corrupts absolutely.”  What is not as easy to see is the connection between invisibility and power and, therefore, corruption.  For Tolkien, who really got the idea from Plato, the connection between invisibility and corruption comes down to a ring.

In The Republic, Plato, through Glaoucon, told of a shepherd named Gyges who found a cave that was revealed after an earthquake.  Gyges discovered that the cave was a tomb. Inside the cave was a bronze horse.  Inside the bronze horse was a corpse wearing a ring.  Gyges removed the ring from the corpse and found that as he adjusted it, the ring was able to make him invisible.  He sought after and was given the post of “messenger to the king” to report on the status of the king’s flocks.  Once inside, with the help of the ring, he seduced the queen, and with her help, killed the king and became king himself.  The Republic then launches into a discussion of whether or not justice is possible where there is no accountability.  In other words, “can you be invisible and just?”  For our purposes, “Can you avoid corruption if you are not held accountable?”

It is an important question, not because the answer is difficult or controversial, but because the conclusion is the battleground for the future of civil society.

The conclusion in The Republic is that it would be impossible to be invisible and just.  I concur.  Where there is no accountability, there will be corruption.  Tolkien implies that it would be nearly impossible but doable for someone like Frodo.  Every other ring bearer was unable to avoid corruption.  In Frodo’s case, the ring’s destruction was the only way that it would not be used at all.

The Ring of Gyges has become the prototype for societal disruption, and in the United States we have a particularly difficult dilemma on two fronts.  The first is that one of our sacred, implied rights is the constitutional right to privacy.  A peek into privacy law reveals a quagmire of opinion, commentary, conflict, and dysfunction.  It will certainly end up being one of the most important debates of this century.  The second reason that the Ring is prototypical for societal disruption for the United States is that we have not been able to adequately grapple with the difference between privacy and anonymity.

Though privacy and anonymity share likeness, the effective difference is drastic.  Consider Ebay, one of the best functioning exchange mechanisms ever devised.  You can buy and sell in complete privacy.  It is a unique marketplace where typical prejudices are irrelevant.  Judgment as to the possible success of a transaction is based almost solely on historical transactional data that is completely public.  Ebay’s success is found in the discrimination of what will be private and what will be public information (interesting that the free market dictated the wildly successful mechanism condition).  In an Ebay transaction, race, gender, weight, political affiliation, religion, nationality and personal history are private.  Skinheads and Black Panthers freely buy and sell to each other.  Liberals and conservatives exchange goods and services and give each other stellar ratings.  Yet, in the Ebay marketplace, you will find little to no anonymity.  Though identity is private, there is wonderful accountability and therefore no anonymity.  In fact, through protocol and Paypal guarantee, you will not suffer an anonymous (Ring) transaction.

Unfortunately, in other arenas, Ring seeking has become a national pastime as it was for others before us.  Those that hold the Ring can amass fortunes, gain influence, murder, plunder, and destroy with impunity.  In one historical example, by the 1400′s, Ring wearing had led to multiple sacerdotal abuses.  Priests could not be held accountable because only they had access to scripture and could claim scriptural justification for nearly anything.  Wycliffe, Tyndale and Luther were all Ring destroyers.  Their successful attempt to widely publish the bible cost many their lives.  In Wycliffe’s case, the hatred for his accomplishments in Ring destruction led to the un-earthing and re-burning of his bones after his death.  Tyndale was strangled and burned.  Others suffered similar fates.  Those that hold the ring will hold onto it at the cost of many lives and vast destruction.

It could be successfully argued that the world’s current financial woes are a direct result of Ring-holder activities.  For lawmakers, every attempt is made to remove accountability for one’s closed-door, backroom deals through spin, favors, bribes, kickbacks, mountainous paperwork, lies, promises, threats and compromises.  Conditions in manipulated financial markets allow for destructive speculator anonymity.  The resulting mortgage crisis can be blamed on both governmental and financial speculator anonymity.  None are required to account for the actions that have wreaked havoc on present and future financial markets.  Though some may lose office and position, they can safely float home in their golden parachutes.

How we are trending

We are in trouble.  Transparency International’s 2010 survey of corruption shows that, with the exception of Fiji, Georgia, Kenya, Sierra Leone and Palestine, we are far worse off than we were three years ago.  The data for the United States shows that 6% believed that there was a decline in corruption in the United States over the last three years.  22% said that there was no difference, and 72% said that there was more corruption.  Venezuela’s numbers are 7%, 7% and 86% respectively and they have a corrupt dictator at the helm.  As far as perception of corrupt institutions goes, the following numbers are sobering.  On a scale of 1 – 5 with 5 being the most corrupt United States scores the following:

Political parties             4.3

Congress                         4.0

Police                               3.3

Media                               3.5

Public officials              3.8

Judges                             3.4

Religions                        3.1

Military                           2.8

Education                        3.0

Action

We must push for public transparency, individual and business privacy and limited anonymity.  The end of the invisibility road is corruption, and where there is corruption, there is suffering and it is usually the suffering of the weak and the innocent.  The most serious of all of the President’s campaign promises to be broken is the transparency promise.  There is power in the presidency, on the courts and in Congress.  If these are allowed to work in the dark, corruption will breed faster than blame at an Obama press conference.  Integrity needs to be elevated to the number one electability criteria for all public officials.  Shareholders should insist on the same thing for corporations.

Not long ago, a friend and I were debating the relative merits of wikileaks.  I argued that wikileaks is aiding in anonymity destruction.  He conceded the point but argued that wikileaks amounts to vigilante justice and that although wikileaks did remove some anonymity, it also unfortunately removed some privacy.  There are two ways that integrity increases in an individual or a population.  It can happen internally and may begin with a religious or transcendent experience or by an awakening of sorts.  The other way is through the imposition of exterior conditions that threaten an undesirable consequence.  Wikileaks will only promote the latter.

Freedom and Rings

Two of the most poignant moments in movie and actual history occurred at the death of two martyrs.  The first was William Wallace as played by Mel Gibson.  Wallace’s last word before his execution was the cry “Freedom!”  The second was the same cry from Hans Scholl who, immediately before suffering death by guillotine, shouted “Freiheit!” (Freedom).  You may conclude from each film that bad government or some other entity or circumstance was responsible for the death of both Wallace and Scholl.  In the end, the executions were mandated and carried out by ring bearers.  Corruption and Freedom are antithetical.  To cry for the one and not decry the other amounts to the worst kind of ignorance. (If you are unfamiliar with the story of Hans and Sophie Scholl, you would do well to spend some time learning about them.)

Ring removal can be painful to the point of bloodshed, but where there is no accountability, there can be no freedom.

Luke 12:3

Therefore whatsoever ye have spoken in darkness shall be heard in the light; and that which ye have spoken in the ear in closets shall be proclaimed upon the housetops.