Yes….Yes

Yes….Yes(1)

An appeal to all Christians.

Times are never better for us, Christians: we suddenly live in an era as advantageous for the proclamation of the Gospel as the post-Pentecost time 50 days after Jesus rose from the dead, when the Good News spread like wild-fire.

Then too the world was one, under the rule of the Roman Emperor, travel was easy, sort of, one language, one political power, not unlike today. Then too people were confused where and what to worship.

Now too we have a single ruler: the Mighty Market dominates the globe, as yet there is one currency recognized by all, the still mighty U.S. dollar, English monopolizes all transactions, and travel never has been easier. Now too people are uncertain and mixed up, not knowing what will come next, because all is not well.

Capitalism, the banner under which the world operates, is having a brown-out, as suddenly its power is waning, its influence collapsing, its rule being challenged. That’s why Christianity has a second chance, because the gods of this age are found wanting.

Let me warn you: I can’t write this in the way you are used to when you watch television: a few pictures, a comment from a so-called expert, a sob story, then an opposing view, and a bit of a wrap-up, all done in 10 minutes, with advertising introducing and ending the show. That won’t work. Matters are too complicated, and, frankly, because we live in New Times, the Gospel too needs updating.

I will divide this into shorter segments, but that also means that this will be a long series, because it’s a rather involved question, and will involve some serious questioning. I hope this will not turn you off, even before I begin.

Let me start with Barack Obama, president of the USA, whom I admire greatly for his forthrightness, his intellect, and his efforts against terrific odds. We all should pray that he will succeed.

He has pumped trillions of dollars into the financial institutions. As an aside, a trillion dollars is one million times one million. To give you an idea what this means in practical terms: Canada’s total Gross Domestic Product is just over a trillion, which includes all the money changing hands by the 30 million Canadians in one year.

Obama’s money infusions were called ‘stimulus packages’, extra cash created by the Federal Bank to replace the bad debts banks have on their books.

You may wonder what all this has to do with the Gospel’s Golden Opportunity. Patience, I will come to that eventuality, because all of life is religion, especially including money matters. It’s money, the lust for money, actually, that is at the root of today’s crisis.

The origin of today’s recession started more than 30 years ago, in 1975, to be exact. It wasn’t the sub-prime lending, or the housing bubble that caused it. It wasn’t Wall Street greed, or the investment managers’ feckless “innovations,” or even the reckless borrowing that has characterized almost all sectors of the economy. These factors have all played a role, but they are at best proximate causes.

What really started today’s malaise was that since 1975 wages, the take-home pay of American workers, went flat. Before that, the 30 years after World War II, 1945-75, was capitalism’s “Golden Age,” when the great boom in wages that began with World War II lifted tens of millions of Americans to a life of home ownership and unprecedented comfort.

All workers then shared in the productivity growth that capitalist innovation produced, but this “social democratic contract” expired in the mid-1970s.

So how come that, until just a year or two ago, business still boomed? What was the magic there? With wages flat, how was it possible that people still bought the products, as over the past thirty years the average annual salary in America increased only 10 percent? The answer is simple: they borrowed. Credit card debt increased sevenfold (adjusted for inflation) since 1975, home equity loans mushroomed, students went deeper into debt, and automobile loans rocketed upward. All in all, outstanding household debt grew from 47 percent of GDP in 1975 to 100 percent of GDP thirty years later.

I am a statistics man. Each day I record the distance I bike, the kilometers I run, the hours I work outside, and total it  monthly and yearly. Especially debt figures fascinate me.

Here’s the current picture, obtained from Zero Hedge:

U.S. Debt                              Consumer Balance Sheet

$9.7 Trillion in bailouts             $20.5 Trillion residential real estate

$11 Trillion National debt          $8.8 Trillion equities

$17 Trillion corporate debt        $7.7 Trillion deposits and cash

$13.8 Trillion household            $4.1 Trillion durable goods

$1 Trillion credit card               $1.6 Trillion corporate bonds

$10.5 Trillion mortgages           $960 Billion municipal securities

Total $115 Trillion of Debt        $44.9 Trillion of Equity

Even if I don’t count the 52 trillion in social security/medical obligations, reducing U.S. Debt to $63 Trillion, this by far exceeds the equity picture.

The banks and other lending institutions are now loath to lend because they know that these debts are never going to be repaid.

Especially the Wall Street money-men did exceedingly well in the last three decades.  Those earnings flowed into the stock market, setting off a bubble there, and then, later, into real estate. The Dow Jones doubled during the Golden Age from 500 in 1956 to 1,000 in 1972, during which time wages doubled also, but it increased fourteen fold from 1975 till 2007 when it hit 14,000. People felt richer, so they spent more and were able to borrow more against ever-rising asset values. Now, 2 years later, the Dow Jones is down 40 percent and so are house prices in the boom areas.

Will happy times come back again?