Poverty

Justice and Friendship

Income Inequality in the US

Insane Levels of Inequality – Which Hurt the Economy – Are Skyrocketing

Preface: All capitalist systems have some inequality.  We don’t want to prevent all inequality … just economy-wrecking levels:http://www.washingtonsblog.com/2011/09/conservatives-worry-that-runaway-inequality-will-destroy-economy-and-society.html” target=”_blank”>that is a myth.

Rampant Inequality – Which Hurts the Economy – Is Skyrocketing

A who’s-who’s of prominent economists in government and academia have all said that runaway inequality can causefinancial crises.

Extreme inequality helped cause the Great Depression, the current financial crisis … and the fall of the Roman Empire.

But inequality in America today is actually twice as bad as in ancient Rome , worse than it was in in Tsarist Russia,Gilded Age America, modern Egypt, Tunisia or Yemen, many banana republics in Latin America, and worse than experienced by slaves in 1774 colonial America.

Inequality has grown steadily worse:

It is worse under Obama than under Bush.

A recent study shows that the richest Americans captured more than 100% of all recent income gains. And see this.

There are 2 economies: one for the rich, and the other for everyone else.

Alan Greenspan said:

Our problem basically is that we have a very distorted economy, in the sense that there has been a significant recovery in our limited area of the economy amongst high-income individuals…

***

They are fundamentally two separate types of economies.

Why is Inequality Going Through the Roof?

The world’s top economic leaders have said for years that inequality is spiraling out of control and needs to be reduced. Why is inequality soaring even though world economic leaders have talked for years about the urgent need to reduce it?

Because they’re saying one thing but doing something very different. And both mainstream Democrats and mainstream Republicans are using smoke and mirrors to hide what’s really going on.

And it’s not surprising … Nobel prize winning economist Joseph Stiglitz says that inequality is caused by the use of money to shape government policies to benefit those with money. As Wikipedia notes:

A better explainer of growing inequality, according to Stiglitz, is the use of political power generated by wealth by certain groups to shape government policies financially beneficial to them. This process, known to economists as rent-seeking, brings income not from creation of wealth but from “grabbing a larger share of the wealth that would otherwise have been produced without their effort”^[59]

Rent seeking is often thought to be the province of societies with weak institutions and weak rule of law, but Stiglitz believes there is no shortage of it in developed societies such as the United States. Examples of rent seeking leading to inequality include

• the obtaining of public resources by “rent-collectors” at below market prices (such as granting public land to railroads,^[60] or selling mineral resources for a nominal price^[61][62] in the US),
• selling services and products to the public at above market prices^[63] (medicare drug benefit in the US that prohibits government from negotiating prices of drugs with the drug companies, costing the US government an estimated $50 billion or more per year),
• securing government tolerance of monopoly power (The richest person in the world in 2011, Carlos Slim, controlled Mexico’s newly privatized telecommunication industry^[64]).

(Background here, here and here.)

Stiglitz says:

One big part of the reason we have so much inequality is that the top 1 percent want it that way. The most obvious example involves tax policy …. Monopolies and near monopolies have always been a source of economic power—from John D. Rockefeller at the beginning of the last century to Bill Gates at the end. Lax enforcement of anti-trust laws, especially during Republican administrations, has been a godsend to the top 1 percent. Much of today’s inequality is due to manipulation of the financial system, enabled by changes in the rules that have been bought and paid for by the financial industry itself—one of its best investments ever. The government lent money to financial institutions at close to 0 percent interest and provided generous bailouts on favorable terms when all else failed. Regulators turned a blind eye to a lack of transparency and to conflicts of interest.

***

Wealth begets power, which begets more wealth …. Virtually all U.S. senators, and most of the representatives in the House, are members of the top 1 percent when they arrive, are kept in office by money from the top 1 percent, and know that if they serve the top 1 percent well they will be rewarded by the top 1 percent when they leave office. By and large, the key executive-branch policymakers on trade and economic policy also come from the top 1 percent. When pharmaceutical companies receive a trillion-dollar gift—through legislation prohibiting the government, the largest buyer of drugs, from bargaining over price—it should not come as cause for wonder. It should not make jaws drop that a tax bill cannot emerge from Congress unless big tax cuts are put in place for the wealthy. Given the power of the top 1 percent, this is the way you would expect the system to work.

Bloomberg reports:

The financial industry spends hundreds of millions of dollars every election cycle on campaign donations and lobbying, much of which is aimed at maintaining the subsidy [to the banks by the public]. The result is a bloated financial sector and recurring credit gluts.

Indeed, the big banks literally own the Federal Reserve. And they own Washington D.C. politicians, lock stock and barrel. See this, this, this and this.

Two leading IMF officials, the former Vice President of the Dallas Federal Reserve, and the the head of the Federal Reserve Bank of Kansas City, Moody’s chief economist and many others have all said that the United States is controlled by an “oligarchy” or “oligopoly”, and the big banks and giant financial institutions are key players in that oligarchy.

Economics professor Randall Wray writes:

Thieves … took over the whole economy and the political system lock, stock, and barrel.

No wonder the government has saved the big banks at taxpayer expense, chosen the banks over the little guy, andsaid no to helping Main Street … while continuing to throw trillions at the giant banks.

No wonder crony capitalism has gotten even worse under Obama.

No wonder Obama is prosecuting fewer financial crimes than Bush, or his father or Ronald Reagan.

No wonder:

All of the monetary and economic policy of the last 3 years has helped the wealthiest and penalized everyone else. See this, this and this.

***

Economist Steve Keen says:

“This is the biggest transfer of wealth in history”, as the giant banks have handed their toxic debts from fraudulent activities to the countries and their people.

Stiglitz said in 2009 that Geithner’s toxic asset plan “amounts to robbery of the American people”.

And economist Dean Baker said in 2009 that the true purpose of the bank rescue plans is “a massive redistribution of wealth to the bank shareholders and their top executives”.

Quantitative easing doesn’t help Main Street or the average American. It only helps big banks, giant corporations, and big investors. And by causing food and gas prices skyrocket, it takes a bigger bite out of the little guy’s paycheck, and thus makes the poor even poorer.

As I noted in March 2009:

The bailout money is just going to line the pockets of the wealthy, instead of helping to stabilize the economy or even the companies receiving the bailouts:

• Bailout money is being used to subsidize companies run by horrible business men, allowing the bankers to receive fat bonuses, to redecorate their offices, and to buy gold toilets and prostitutes

• A lot of the bailout money is going to the failing companies’ shareholders

• Indeed, a leading progressive economist says that the true purpose of the bank rescue plans is “a massive redistribution of wealth to the bank shareholders and their top executives”

• The Treasury Department encouraged banks to use the bailout money to buy their competitors, andpushed through an amendment to the tax laws which rewards mergers in the banking industry (this has caused a lot of companies to bite off more than they can chew, destabilizing the acquiring companies)

As I wrote in 2008:

The game of capitalism only continues as long as everyone has some money to play with. If the government and corporations take everyone’s money, the game ends.The fed and Treasury are not giving more chips to those who need them: the American consumer. Instead, they are giving chips to the 800-pound gorillas at the poker table, such as Wall Street investment banks. Indeed, a good chunk of the money used by surviving mammoth players to buy the failing behemoths actually comes from the Fed.

Government Policy Is Increasing Inequality

Without the government’s creation of the too big to fail banks (they’ve gotten much bigger under Obama), the Fed’s intervention in interest rates and the markets (most of the quantitative easing has occurred under Obama), andgovernment-created moral hazard emboldening casino-style speculation (there’s now more moral hazard than ever before) … things wouldn’t have gotten nearly as bad.

Goosing the Stock Market

Moreover, the Fed has more or less admitted that it is putting almost all of its efforts into boosting the stock market.

Robert Reich has noted:

Some cheerleaders say rising stock prices make consumers feel wealthier and therefore readier to spend. But to the extent most Americans have any assets at all their net worth is mostly in their homes, and those homes are still worth less than they were in 2007. The “wealth effect” is relevant mainly to the richest 10 percent of Americans, most of whose net worth is in stocks and bonds.

AP writes:

The recovery has been the weakest and most lopsided of any since the 1930s.After previous recessions, people in all income groups tended to benefit. This time, ordinary Americans are struggling with job insecurity, too much debt and pay raises that haven’t kept up with prices at the grocery store and gas station. The economy’s meager gains are going mostly to the wealthiest.

Workers’ wages and benefits make up 57.5 percent of the economy, an all-time low. Until the mid-2000s, that figure had been remarkably stable — about 64 percent through boom and bust alike.

David Rosenberg points out:

The “labor share of national income has fallen to its lower level in modern history … some recovery it has been – a recovery in which labor’s share of the spoils has declined to unprecedented levels.”

The above-quoted AP article further notes:

Stock market gains go disproportionately to the wealthiest 10 percent of Americans, who own more than 80 percent of outstanding stock, according to an analysis by Edward Wolff, an economist at Bard College.

Indeed, as I reported in 2010:

As of 2007, the bottom 50% of the U.S. population owned only one-half of one percent of all stocks, bonds and mutual funds in the U.S. On the other hand, the top 1% owned owned 50.9%.***

(Of course, the divergence between the wealthiest and the rest has only increased since 2007.)

Professor G. William Domhoff demonstrated that the richest 10% own 98.5% of all financial securities, and that:

The top 10% have 80% to 90% of stocks, bonds, trust funds, and business equity, and over 75% of non-home real estate. Since financial wealth is what counts as far as the control of income-producing assets, we can say that just 10% of the people own the United States of America.

As Tyler Durden notes:

In today’s edition of Bloomberg Brief, the firm’s economist Richard Yamarone looks at one of the more unpleasant consequences of Federal monetary policy: the increasing schism in wealth distribution between the wealthiest percentile and everyone else. … “To the extent that Federal Reserve policy is driving equity prices higher, it is also likely widening the gap between the haves and the have-nots….The disparity between the net worth of those on the top rung of the income ladder and those on lower rungs has been growing. According to the latest data from the Federal Reserve’s Survey of Consumer Finances, the total wealth of the top 10 percent income bracket is larger in 2009 than it was in 1995.Those further down have on average barely made any gains. It is likely that data for 2010 and 2011 will reveal an even higher percentage going to the top earners, given recent increases in stocks.” Alas, t his is nothing new, and merely confirms speculation that the Fed is arguably the most efficient wealth redistibution, or rather focusing, mechanism available to the status quo. This is best summarized in the chart below comparing net worth by income distribution for various percentiles among the population, based on the Fed’s own data. In short: the richest 20% have gotten richer in the past 14 years, entirely at the expense of everyone else.

***

Lastly, nowhere is the schism more evident, at least in market terms, than in the performance of retail stocks:

Saks chairman Steve Sadove recently remarked, “I’ve been saying for several years now the single biggest determinant of our business overall, is how’s the stock market doing.” Privately-owned Neiman- Marcus reported “In New York City, business at Bergdorf Goodman continues to be extremely strong.”

In contrast, retail giant Wal-Mart talks of its “busiest hours” coming at midnight when food stamps are activated and consumers proceed through the check-outs lines with baby formula, diapers, and other groceries. Wal-Mart has posted a decline in same-store sales for eight consecutive quarters.

Indeed, as CNN Money pointed out in 2011, “Wal-Mart’s core shoppers are running out of money much faster than a year ago …” This trend has only gotten worse: The wealthy are doing great … but common folks can no longer afford to shop even at Wal-Mart, Sears, JC Penney or other low-price stores.

Durden also notes:

Another indication of the increasing polarity of US society is the disparity among consumer confidence cohorts by income as shown below, and summarized as follows: “The increase in equity prices has raised consumer spirits, particularly among higher-income consumers. The Conference Board’s Consumer Confidence index for all income levels bottomed in February/March of 2009. The recovery since then has been notable across the board, but nowhere as much as for those making $50,000 or more.”

Over-Financialization

When a country’s finance sector becomes too large finance, inequality rises. As Wikipedia notes:

[Economics professor] Jamie Galbraith argues that countries with larger financial sectors have greater inequality, and the link is not an accident.^[66][67]

Government policy has been encouraging the growth of the financial sector for decades:

(Economist Steve Keen has also shown that “a sustainable level of bank profits appears to be about 1% of GDP”, and that higher bank profits leads to a ponzi economy and a depression).

Unemployment and Underemployment

A major source if inequality is unemployment, underemployment and low wages.

Government policy has created these conditions. And the pretend populist Obama – who talks non-stop about the importance of job-creation – actually doesn’t mind such conditions at all.

The“jobless recovery” that the Bush and Obama governments have engineered is a redistribution of wealth from the little guy to the big boys.

The New York Times notes:

Economists at Northeastern University have found that the current economic recovery in the United States has been unusually skewed in favor of corporate profits and against increased wages for workers.

In their newly released study, the Northeastern economists found that since the recovery began in June 2009 following a deep 18-month recession, “corporate profits captured 88 percent of the growth in real national income while aggregate wages and salaries accounted for only slightly more than 1 percent” of that growth.

The study, “The ‘Jobless and Wageless Recovery’ From the Great Recession of 2007-2009,” said it was “unprecedented” for American workers to receive such a tiny share of national income growth during a recovery.

***

The share of income growth going to employee compensation was far lower than in the four other economic recoveries that have occurred over the last three decades, the study found.

Obama apologists say Obama has created jobs. But the number of people who have given up and dropped out of the labor force has skyrocketed under Obama (and see this).

And the jobs that have been created have been low-wage jobs.

For example, the New York Times noted in 2011:

The median pay for top executives at 200 big companies last year was $10.8 million. That works out to a 23 percent gain from 2009.

***

Most ordinary Americans aren’t getting raises anywhere close to those of these chief executives. Many aren’t getting raises at all — or even regular paychecks. Unemployment is still stuck at more than 9 percent.

***

“What is of more concern to shareholders is that it looks like C.E.O. pay is recovering faster than company fortunes,” says Paul Hodgson, chief communications officer for GovernanceMetrics International, a ratings and research firm.

According to a report released by GovernanceMetrics in June, the good times for chief executives just keep getting better. Many executives received stock options that were granted in 2008 and 2009, when the stock market was sinking.

Now that the market has recovered from its lows of the financial crisis, many executives are sitting on windfall profits, at least on paper. In addition, cash bonuses for the highest-paid C.E.O.’s are at three times prerecession levels, the report said.

***

The average American worker was taking home $752 a week in late 2010, up a mere 0.5 percent from a year earlier. After inflation, workers were actually making less.

AP pointed out that the average worker is not doing so well:

Unemployment has never been so high — 9.1 percent — this long after any recession since World War II. At the same point after the previous three recessions, unemployment averaged just 6.8 percent.

– The average worker’s hourly wages, after accounting for inflation, were 1.6 percent lower in May than a year earlier. Rising gasoline and food prices have devoured any pay raises for most Americans.

– The jobs that are being created pay less than the ones that vanished in the recession. Higher-paying jobs in the private sector, the ones that pay roughly $19 to $31 an hour, made up 40 percent of the jobs lost from January 2008 to February 2010 but only 27 percent of the jobs created since then.

Alan Greenspan noted:

Large banks, who are doing much better and large corporations, whom you point out and everyone is pointing out, are in excellent shape. The rest of the economy, http://www.washingtonsblog.com/2010/12/theres-huge-difference-between-what-is.html” target=”_blank”>foreign sales and foreign workers. As APnoted in 2010:

Corporate profits are up. Stock prices are up. So why isn’t anyone hiring?

Actually, many American companies are — just maybe not in your town. They’re hiring overseas, where sales are surging and the pipeline of orders is fat.

***

The trend helps explain why unemployment remains high in the United States, edging up to 9.8% last month, even though companies are performing well: All but 4% of the top 500 U.S. corporations reported profits this year, and the stock market is close to its highest point since the 2008 financial meltdown.

But the jobs are going elsewhere. The Economic Policy Institute, a Washington think tank, says American companies have created 1.4 million jobs overseas this year, compared with less than 1 million in the U.S. The additional 1.4 million jobs would have lowered the U.S. unemployment rate to 8.9%, says Robert Scott, the institute’s senior international economist.

“There’s a huge difference between what is good for American companies versus what is good for the American economy,” says Scott.

***

Many of the products being made overseas aren’t coming back to the United States. Demand has grown dramatically this year in emerging markets like India, China and Brazil.

Government policy has accelerated the growing inequality. It has encouraged American companies to move their facilities, resources and paychecks abroad. And some of the biggest companies in America have a negative tax rate … that is, not only do they pay no taxes, but they actually get tax refunds.

And a large percentage of the bailouts went to foreign banks (and see this). And so did a huge portion of the money from quantitative easing. More here and here.

Capital Gains and Dividends

According to a study published last month by a researcher at the U.S. Congressional Research Service:

The largest contributor to increasing income inequality…was changes in income from capital gains and dividends.

Business Insider explains:

Drastic income inequality growth in the United States is largely derived from changes in the way the U.S. government taxes income from capital gains and dividends, according to a new study by Thomas Hungerford of the non-partisan Congressional Research Service.

Essentially, what Democrats have been saying about income inequality — that it’s in a large part due to favorable taxation and deduction policies for high income Americans — is largely right

***

The study … conclusively found that the wealthy benefitted from low tax rates on investment income, which in turn caused their wealth to grow faster.

Essentially, taxing capital gains as ordinary income would make the playing field more fair, and reduce over time income inequality.

Joseph Stiglitz noted in 2011:

Lowering tax rates on capital gains, which is how the rich receive a large portion of their income, has given the wealthiest Americans close to a free ride.

Indeed, the Tax Policy center reports that the top 1% took home 71% of all capital gains in 2012.

Ronald Reagan’s budget director, assistant secretary of treasury, and domestic policy director all say that the Bush tax cuts were a huge mistake. See this and this.

Article taken from The Big Picture - http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2013/02/why-are-inequality-levels-skyrocketing/

The Poor as a Point of Meeting

“Blessed are the peacemakers for they shall be called sons of God.” Matthew 5:9

A few years back in Kolkata, I was working at Mother Teresa’s Home for the Dying where I met another American who had just finished his doctorate studies in Ireland. The theme of his studies was the politics of peace. His desire was to work with the United Nations for the establishment of peace policies, but he wanted to come to India to get some experience working with people. I thought that India was an interesting place for him to come because of the dire poverty, the threat of different forms of violence, and the variety of faiths, cultures, languages, and histories. I asked him if in his doctorate studies he had ever seen a place where policy-making had successfully created peace. He said that policy-making never created peace; it could only create space for dialog or create structures that maintain peace.

I told my new American friend about an organization that I had visited a day earlier called L’arche that cares for people with handicaps. I told him that it was a hopeful model of people from different backgrounds living together in peace. Though the organization was founded by Christians, they accept people from different faiths, and in India that means people from the Hindu, Muslim, Buddhist and Christian faiths as well as others. The name of this particular home was appropriately called Asha Niketan “Home of Hope”, and that is what I saw it to be. There people came together each day in prayer to be closer to God and to serve those with handicaps. Though we may criticize the lack of persuasion to a personal relationship with Jesus Christ, the community exists in self-giving love. There they make peace. They do not curtail conflicts in the name of peace, but they work through them for the sake of peace. That is because peace is not the absence of conflict but the presence of justice and love. And love, justice and peace are fruits of the Spirit and not the fruits of policy-making.

At the L’arche community, it is evident that the poor have the potential to be a point of meeting for people of diverse cultures, beliefs and histories to come together and serve on their behalf. In a world where violence breeds violence, the poor give us the opportunity to lay down our weapons of destruction and to pick up tools of service. The weakest and most vulnerable provide a place where we can come together, and they show us the potentiality of striving for peace, justice and love. As Christians, we are called to love the poor. But we are not so naive to think that the poor can be separated from the world in which they live – a world of godlessness and idolatry. As we love God with all our heart, mind, soul and strength and as we minister to the distressing disguise of Jesus in the poor, we must soberly engage the whole world with all her “regimes of truth.”

Mahumut Aydin said, “[I]n a globalized world, the duty of adherents of different religious traditions should not be to claim the superiority of their own religious tradition as an a priori entity, but to show in practice how much their faith brings liberation to the poor and how much it contributes to the development of the common good” (“Globalization and the Gospel: A Muslim View”). Many of those living in pluralistic societies share this view and see it as a way in which we can live together while keeping “our religion” private. Though Aydin is saying something important, his statement cannot be normative for the fundamental motivations of the Church’s mission.

We do agree with Aydin that liberation of the poor does point to faith. We recall that throughout Jesus’ life, He pointed to the liberation of the poor as a sign of the coming Kingdom and to point to His Sonship (Luke 7:19-22). Likewise, faith in God does develop the common good. When the God of love indwells His people, His people love. Where His Kingdom is, the world cannot escape the goodness of God. That is why Jesus says that He causes the sun to rise on both the evil and the good (Matt. 5:45), and it is not insignificant that the evil are mentioned before the good.

We must also recognize that Aydin is correct in saying that the integrity of our Christianity can be measured by our relationship with the poor. Jesus says that “Whatever we do to the least of these, we do it unto Him.” If we are not serving the least of these, how are we being Christian? James reminds us that true and pure religion is this: ministering to the orphans and widows and remaining pure in the world.” If we – you and me and not just the institutions to which we belong – are not ministering to the defenseless and marginalized, how is our religion true? One does well to remember that religion (religio) means “to bind” in Latin. This term can have two diametrically opposing connotations: bonding or bondage. When we bond with the poor through solidarity and service, our religion is true; when our religion simply becomes a worldview that saves us or legitimizes our lifestyles, we live in bondage.

We can also follow Aydin in affirming that Christianity is not a religion of superiority. Christ leads us to seek the last place, even the place of death. We are not called to what the world sees as victory but to what it terms victimization. In 2 Corinthians 4, Paul outlines how our faith is victorious when it is vulnerable. Unfortunately, we usually reject this place of vulnerability. Desmond Tutu said, “I fear that we have all been so seduced by the success ethics that we have forgotten that in a very real sense the church was meant to be a failing community.” The missioligist David Bosch said, “A church which follows the model of the victim-missionary is one that is called to be a source of blessing to society without being destined to regulate it. It knows that the Gospel ceases to be Gospel when it is foisted upon people.” At the same time, we believe in Jesus Christ because He is worth believing in. We therefore can stand before the world with what Lesslie Newbigin terms “proper confidence” which is a firm commitment to truth. 

As we reject the world’s terminology of superiority and power, so we must be critical about legitimizing our faith through our practice or, as Aydin puts it, “to show in practice how much their faith brings liberation to the poor and how much it contributes to the development of the common good”. Of course, faith and practice are intricately related. Christian belief normatively shapes Christian practices, and engaging in practices can lead to the acceptance and deeper understanding of these beliefs. As Dietrich Bonhoeffer said, “Only the obedient believe, and those who believe are obedient” (The Cost of Discipleship). But we must ask with Miroslav Volf, “What grounds what: belief or practice?” (Practicing Theology). Is our service among the poor rooted in our faith in God, or is our faith in God rooted in our service among the poor? Subordinating beliefs to practices, as contemporary popular and academic culture does, leads to the completely functionalizing of beliefs. We as Christians must realize, as Volf asserts, that “adequate beliefs about God cannot be ultimately grounded in a way of life; a way of life must be grounded in adequate beliefs about God.” We identify with God through beliefs, and we encourage practices for the sake of God (Col. 3:23, 24).

Because belief has priority, we must concern ourselves with the disputed truth claims about God and that unambiguously includes the “regimes of truth” of other faiths and ideologies. That means that as we go into the world to preach Good News to the poor, we engage other claims to truth. If we detour these truth-claims, we are not faithful to truth but permissive of lies, and we are not makers of peace but accomplices of injustice. All regimes of truth are critiqued by the Truth which we come to know in the person of Jesus Christ. Truth is a person which demands that we be personally involved. “Truth, then, is available only to the one who is personally committed to the truth grasped. Knowing cannot be severed from living and acting, for we cannot know the truth unless we seek it with love and unless our love commits us to action” (Lesslie Newbigin, Proper Confidence). In response to Aydin that means that we cannot separate our faith and action at any point and that our service (truth-commitment) to the poor is rooted in our belief in God (Truth) who loves and identifies with the poor.

How, then, do we engage the world? How do we come together as human beings to serve other human beings? How do we minister among the poor? How do we become peacemakers? How do we affirm the truth within diverse beliefs while critiquing the false truth claims? I do not want to offer any simple answers to these questions, but I want to provide a platform from which we can respond.

The poor can be a point of unity. When we put aside our own initiatives and selfish motivations, we can come together for the sake of the Other. We can do this together with people from other denominations and religions. Often, in our ministry among the poor, we have had non-believers work alongside us. They are not defining our motivations or direction, but they are participating in this work which we pray is bringing glory to God. Here we are not accentuating our differences but celebrating our common humanity. Behind this base of relationship lies a theology of creation. The Bible tells us that we are all created in God’s image. Yet, we are not primarily looking at our commonness as humanity; rather, we are looking together at the God in whose image humanity was created. Monotheism led to the concept of a single humanity. This is the God of whom it is said, “Hear o Israel, the Lord your God is one.” The one God in whose image humanity is created intrinsically links every person to every other person. But, as I said earlier, this does not mean that we blindly accept one another’s beliefs. What it does mean, in effect, is that we have created a point of meeting where we can mutually challenge one another.

The poor can be an instrument through which God makes Himself known. Some theologians use the phrase “epistemological privilege of the poor” to describe the ability of the poor to understand and receive the gospel. To the poor, the Gospel really is Good News. Likewise, God often speaks and makes Himself known to the non-poor through the poor. Here we recognize a theology of the Spirit of Jesus. When we witness the injustice that the poor suffer, we can find hope in the God that is actively championing their cause. I know some non-Christians who are fervent advocates for the poor. As Christians, we can recognize and affirm the Spirit of Christ that moves beyond the edges of the Church into the world for which He died.

We can come together with all humanity to serve the poorest and weakest. There is a humble place of solidarity in our human frailty and inability. But we cannot come together to offer simple solutions. When confronted with poverty, we are confronted by suffering and dying that exposes our own powerlessness. We can confess that our solutions are exhausted. We take heart in something that Dietrich Bonhoeffer said in Germany during World War Two – a time and place where “the Final Solution” was propagated. Bonhoeffer said that Christians should not base their faith on the scientific method. He said we are not seeking after solutions to problems; we believe, rather, in the redemption of sinful, broken creation. Here lies a theology of redemption. Taking our foothold in God’s action, we as Christians can speak of redemption in the face of problems such as death and poverty. We can witness to a God who suffers with us and who has defeated sin and death.

Sari Bari

I’m so thankful that I get to know these people:

Oxfam: the cost of inequality

Oxfam: the cost of inequality

Generosity in Scarcity

A little over a year ago, we received Sara* into our program at the Valley Community Center. She is now 8 years old and in the second grade. An only child, Sara lives with her parents, who are unofficially married, in the home of her paternal grandmother. Their home is in a neighborhood that is cut off from the rest of the city by the railways. Still, the family is fortunate to have electricity and running water.

Just last year Sara’s father was released from prison, where he had served a 3 year sentence for theft. Those three years were very difficult for Sara’s mother, who had never been to school, had no job, and was trying to care for Sara all by herself. Although her parents are now together, they are still unemployed and work odd-jobs when they manage to find them. From time to time, they receive some financial help from a brother who is working abroad. Otherwise, their only consistent income is Sara’s school stipend, which amounts to about $22 per month.

One morning, a few weeks into this school year, Sara told her mother that she wanted to bring some money to the Community Center to give to the poor. Sara’s mother protested, asking, “What? Do you think we are rich?” Sara replied, “Yes, we have a house. There are other people that live on the street.” Since then, all of our second grade children decided to save half of their milk money every day in order to give to those in need.

One day, Bobby, another one of our second graders, took out his money to put in the donation box, while Sara registered the money in the notebook. It seemed that Bobby was struggling to live up to his commitment to be generous. Still, he put his money in the box. Lenutsa noticed this and praised Bobby for his sacrifice. But words were not enough for Bobby. He quickly turned to Lenutsa and asked, “Yes, but what about you?”

The generosity, the sacrifice and the initiative of these children have challenged us. These kids live in dilapidated houses. Some of them are squatting in parts of abandoned buildings. Most have no running water or electricity. And yet they notice others with greater needs than their own. What is more, they want to help them.

Every day on their way from school to the Community Center, the children pass by a family that is living in make-shift tents. The family was evacuated from their home after it was re-privatized and returned to its pre-communist owner. But since the family has nowhere else to go, they have set up camp in an open lot. Last week, the children took their collection of funds and decided together that they would help this family.

As they gathered the money and were preparing to go, Sara’s dad arrived early at the Center to pick her up. As Sara got her backpack and left to go home, she started to sob. Although her father is a pretty tough guy, he stopped to ask her what was wrong, but Sara was crying too hard to talk. So, he asked Lenutsa, and she explained what they had been planning. Sara’s father smiled and said he would wait.

Sara’s tears quickly dried, and the kids walked together to visit the homeless family. Sara was the spokesperson and asked them if there was a way that they could help. The grandmother, with weathered and wrinkled skin, said, “No one has asked us what we need or how they could help us.” Sara and her classmates took their money and bought some bread, cheese and cold-cuts. To protect the dignity of the family, Sara and Lenutsa returned by themselves to discretely give them the groceries.

This is a sample of the lessons of generosity that we are being taught by those living in scarcity. A child challenges the assumption that gift-giving is the privilege of the powerful and that the needy are objects of our philanthropy. Sara and her classmates show us that sacrifice and a shared commitment can become a profound gift that meets desperate needs and touches neglected hearts.

*Names have been changed to protect their identities.

Resisting Fatalism

I sometimes find myself caught in the clutches of fatalism. I grew up in a family with an alcoholic father. Although he went through medical and psychological treatments, worked the Alcoholics Anonymous program, and managed to stop drinking for months and even years at a time, he is beaten by his illness. He is resigned to his addiction. And his resignation finds reflection in mine.

For the past 16 years, I’ve served among youth and adults with addictions – addictions to the streets, to gangs and to substances. While we’ve seen many of them come off the streets and some of them into healthy situations, a number of them are in jail, in hovels or on the streets. I feel like Lazarus’ sister, Mary, who went to Jesus and said, “Lord, if you had been here, my brother would not have died,” and Martha, who said, “‘Lord, already there is a stench because he has been dead for four days” (John 11:32, 39). Despite love, prayer, support and opportunities for change, we are watching our friends die in their addictions. I find myself being moved unwittingly by an undercurrent that says that people cannot change.

I also look at my own life and the changes that I hope for, pray for and work for but which, after years, I still don’t realize. The lack of change, of answers to prayer, of expected results all cultivates fatalism: no hope for the possibility of change. This reminds me of Albert Camus, a philosopher who deals with fatalism in many of his novels. In his book The Plague, Camus depicts the torturous disease that dominates people and over which they have no control. Camus’ character suggests that we resign ourselves to eminent death because we “… will [only] have suffered longer.”

The flicker of fatalism is fanned by society. Most of the public replies to the government with a defeatist sigh. They look at our environment and say, “That’s just Romania”. They look at the disenfranchised population among whom I serve and say, “Why waste your time and resources? They will never change. And if they do, they won’t amount to much. They were born into poverty, into a bad family, into dysfunction, and that’s where they’ll remain. That’s just the way they are.”

Of course, our kids, youth and families are raised and living in this very fatalistic society. Social psychologists, like Csikszentmihalyi and Seligman, affirm that helplessness is learned. Many of our kids lack any vision for the future other than what they see in their parents. There isn’t even a perspective which hopes for something different.

What is worse is that we witness fatalism creeping into the church. There I see mixed messages. Some overstress God’s determinism to such an extent that they make God responsible for sin and minimize any human freedom or responsibility. Others proclaim a prosperity gospel, which is a form of positive thinking that has no basis in reality. It is a positive fatalism, believing that certain determined effects follow certain human actions. On the other side of this unhealthy optimism is a millennial pessimism. Those that purport this view believe that things will get worse and worse and then the end will come with cataclysmic destruction. What is worse is that some think that they will be raptured to heaven and saved from the pain of the world, thereby relegating God’s passion for the redemption of creation and skirting any personal responsibility for the stewardship of creation. And even worse is that these bad theologies project fatalism onto the character of God.

These are the shackles of fatalism – a chain that binds the families I serve among, the society in which I live, and my own life. But I would concede to fatalism if I stopped here. There is an alternative, transformative vision for the history and destiny of humanity. There is a reality that breaks our despair.

This reality is God. God, who is Creator, has a plan for the renewal of all creation and refuses to let us go. It isn’t so much that I need to find resources of hope for God, for the world or for our kids; rather, I find that God himself hopes. God hopes for us. In the person of Jesus, God met fatalism and all its correlates at the cross, bringing fatalism to its end. In the resurrection and ascension, Jesus is the declaration, sign and execution of all God’s promises of healing, redemption and transformation. This is the Good News that snaps the chain of fatalism. And it is here that I am invited to live and hope. Our hopes are rooted in God’s.

This does not mean that we simply believe without acting. Ultimately, it means standing in the face of addiction, dependency, death, destruction. There we must either resign ourselves to these domineering finalities, or we must find grounds for hope. And that ground is God. We see that Jesus acknowledges death, destruction and decay. He experiences the weight of this finality, for example, in the death of Lazarus. Jesus wept (John 11:35). But God brings hope, the possibility of change, and even the possibility of the impossible. Jesus said with a loud voice, “’Lazarus, come out!’ The dead man came out, his hands and feet bound with strips of cloth, and his face wrapped in a cloth. Jesus said to them, ‘Unbind him, and let him go’” (John 11:43-44).

This is not hope that evades and avoids fatalism; rather, it addresses it head on. It is the hope that, with Abraham and Sarah, looks at our bodies and our possibilities and still hopes in God. That is, against possibilities for hope, still they hoped (Romans 5:18).

Hope isn’t something we always have at the start – a source that motivates us in the midst of trials. Rather, it is a result. St. Paul tells us that sufferings produce endurance, endurance produces character, and character produces hope (Romans 5:3-4). This is hope that is formed in the fire of pain and waiting and unfulfillment.

And this is the place where we must cultivate in the lives of our kids and their families, in our church and in our society. Although hoping hurts and although the things we hope for are not seen and often contradicted, we hope against hope in the promises of our Father in the Son and through the Spirit. Apart from the discipline of hoping against hope, I would also suggest two other actions.
First, we can pray. We pray for the things we hope for. In this way, the very act of prayer cultivates hope. In prayer we affirm our own powerless to transform and our faith that God can. Here I am reminded of the prayer attributed to Reinhold Niebuhr that is said at every Alcoholics Anonymous meeting:

God grant me the serenity
to accept the things I cannot change;
courage to change the things I can;
and wisdom to know the difference.

Second, in our communion with God our imaginations are infused with God’s dream for humanity and for creation. As ambassadors of Christ, we are called to give articulation to God’s dream. This is part of the prophetic office of the church. One way that this gift may be manifested is by affirming God’s dream and vision for those that are given over to fatalism.

Although this isn’t necessarily an example from within the church, the move The Cider House Rules depict such words of destiny spoken over children’s futures. It is a story of an orphanage – children that are abandoned and from the very early stages of life are in positions of disadvantage and despair. But every night as the children go to bed, the director of the orphanage tells them, “Goodnight, you princes of Maine, you kings of New England.” This is a prophetic vision that refuses the temptations of fatalism, opening up possibility and horizons to those who thought they had none.

We can affirm the destiny of the children and their families as being God’s creation and God’s beloved. We can affirm God’s plans of good and hope for every life. We can affirm life, wholeness, health and salvation in the face of fatalism. We can invite them to God’s dream and God’s hope for each one: Christ in you, the hope of glory!

Cemetery at the Margins of Galati

Our community practices remembering: remembering the forgotten, the marginalized and the lost. This past summer a group of students from George Fox University spent a few weeks serving with us. One afternoon we visited a cemetery on the periphery of our city where many of our kids have been buried. Sadly, many of their graves are no longer marked; some have been removed altogether.

Margi Felix-Lund, one of the leaders of the summer team, wrote this poem:

God remembers…
…the birth of each child
the smiles & the tears
the injustice & the sorrow
the hope & the joy

God remembers the death of each child.

Although men & women may try
to wipe these children from the face of this planet-
although they may succeed in eradicating
the physical commemoration of their death-
these children, these vulnerable ones
will remain forever present
in the memory of God.

Roma, Romanians, Racism and Racial Differentiation

Since this image has been shared on facebook at least 9,200 times and multiplying, I thought I would respond.  Along with the image is the “hope that there is no more confusion” about these two ethnicities. And “those of the opinion that Romanians should no longer be considered Gypsies,” then they should “share this picture wherever they can.”

This message, it seems obvious to me, is racist. However, some think it’s simply a correct view of reality that doesn’t conform to the trends of political correctness. But I think that is a misunderstanding of “political correctness.” To be politically correct would mean that you, at least, adopt terminology like “Roma” or “Romani” rather than “Gypsy” or “Tigani”, which the Romani have rejected because of their derogatory roots and connotations. In this case, I don’t think we succumb to secular liberal ideology by using “Roma” or “Romani”; rather, it seems to me to be an opportunity to show a basic respect, or what Romanians call “bun-simt”. But I don’t want to die on the battlefield of politically correctness. I am willing, however, to fight against racism. This caricature is not simply politically incorrect, it is racist. Let’s walk through this:

1) To caricature the Romanians with 19th and 20th Century great males on one side but the Romani by females in traditional dress is full of denigrating undertones. If it were Romanians in traditional dress on one side and Romani in traditional dress on the other or Romani greats on one side and Romania greats on the other, that would be a step in the right direction.

2) Some have heard the Roma claim that these preeminent Romanians (Eminescu, Enescu, Brancusi, Blaga and Eliade) have Roma heritage. It isn’t unusual for various ethnicities to lay claim to great people. When I was studying in Moldova, I heard Russians laying claim to Eminescu. But I don’t hear those claims much from the Romani or from other Europeans. This is a straw-man argument; it doesn’t support the argument for ethnic differentiation.

3) With over 2 million Romanians spread across Europe, the US and Israel, it begs at least to nuance the affirmation that Romanians are from Romania and Romani from everywhere. There are millions of Romani from Romania. By stating otherwise, this caricature is false. Without any nuancing, the caricature is also racist.

4) It would also be helpful to nuance national identities and ethnic identities. Romani are nationally Romanian, and Romanian Romani are different than Romani from other nations. Additionally, there are many, many who are of mixed ethnicities (i.e. Romani/Romanian) in Romania. What is worse is that many “Romanians” with Roma ancestors deny their own history because of the dominant culture’s views of this marginalized minority – an attitude that amounts not only to the hatred of the other but also the hatred of one’s self.

5) This gets to larger problem with this caricature, which presents the “Gypsies” as the problem, and Romanians as good contributors to culture. If Romanians thought Gypsies were good, I believe that they wouldn’t be so offended when ethnicity and nationality are conflated. This cartoon is a rejection or exclusion of the other.

6) While I don’t paint the whole ethnicity with the same brush, I realize that there is a significant amount of criminal behavior by the Romani in western Europe that attracts the press and portrays the whole ethnicity and even nationality in a negative light. I decry the criminal behavior of Romani. But this can also be said of ethnic Romanians. I personally know dozens of Romanians who are involved in illegal activity in western countries, some of whom are now in jail, who attract the attention of the media. Just look at the area of cyber crime: http://www.news24.com/World/News/Romania-FBI-crack-down-on-cyber-crime-20111219 and http://www.fbi.gov/news/news_blog/u.s.-and-romania-targeting-organized-romanian-criminal-groups. To place the negative image of Romanians on the shoulders of the Romani is a way of scape-goating, and it is racist.

7) Some are upset that the Roma moved to western Europe in the 1990’s, told stories of persecution in Romania, and requested asylum. They were then seen as being “from Romania.” While I realize that many claims of persecution were false, we also need to recognize the places where persecution did occur. For example, Human Rights Report from attacks on Roma villages in the early 1990’s: http://dosfan.lib.uic.edu/ERC/democracy/1993_hrp_report/93hrp_report_eur/Romania.html

8) We also need to introduce historical factors into this discussion. Many Romanians, at best, do not know or, at worst, fail to acknowledge that the first evidence of Romani in Romania was in bills of sale as slaves. I would not promote the idea that contemporary Romanians are presently guilty of slavery or that they must atone for the sins of their ancestors, but I think we would do well to recognize the benefits we reap today by not having a heritage of slavery. The social conditioning that slavery and discrimination has on a people, as we see, is passed from generation to generation. And that is where I think we must share not in guilt but in responsibility for creating equity and inclusion in society.

9) As a Christian, it seems to me the issue is how do we live together and move together toward being what God intends us to be as a human family – without diminishing or confusing identities. If we want to differentiate ethnicities, there are healthier and more constructive ways of doing it.

Identifying Assumptions in Christian Approaches to the Poor

Today with the George Fox Discovery Team, we discussed the assumptions of different Christian approaches to the poor.

We looked at:

- Evangelism leads to social change

- Social action is pre-evangelism

- Transformational ministry

- Christian presence

- Microfinance

For each approach we asked the following questions:

What are causes of poverty for this approach?

What are the assumptions of this approach?

What would this approach use for scriptural support?

What are other examples of this approach?

What are positives? What are negatives?

How would you answer these questions?