The Dangers of Blind Ideological Adherence

ideological
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The dangers of blind ideological adherence apply equally to all. They are not limited to a certain political party or economic school of thought. When one objectively analyzes the present state of affairs of the real economy, the federal government’s and the Federal Reserve’s (Fed) actions have been an unequivocal failure.

It is both obvious and correct to say that the economy is not the stock market, and the stock market is not the economy. It is also correct to observe that there has been a clear divergence in the performance of the stock market and the real economy, with the stock market far outperforming the real economy. This divergence goes well beyond the ongoing dysfunctions in financial markets. It is also a grossly immoral outcome for the American people who, by and large, live and operate in the real economy.

Therefore, it would be incorrect to conclude that the Fed, whose dual mandate is price stability and full employment, i.e. to make sure that the real economy is performing well, is meeting its mandate because the stock market is performing well. I think this is elementary logic.

Objective Premises, Ideological Conclusion

Krugman, however, arrives at just this erroneous conclusion given the same premises. To quote Krugman (2020) in his last opinion piece in the NYTimes, as of the present, “G.D.P. report for the first quarter. An economy contracting at an annual rate of almost 5 percent would have been considered very bad in normal times, but this report only captured the first few drops of a torrential downpour. More timely data show an economy falling off a cliff. The Congressional Budget Office is projecting an unemployment rate of 16 percent later this year, and that may well be an underestimate.” Thus, we are both of the mind that the present economy is terrible.   

Now, Krugman’s description of the stock market, again in his own words, “Yet stock prices, which fell in the first few weeks of the Covid-19 crisis, have made up much of those losses. They’re currently more or less back to where they were last fall, when all the talk was about how well the economy was doing.”

Now, here is Krugman’s assessment of the Fed’s response to the 2008 financial crisis, and by extension and implication, his assessment of its response to the present crisis, “Now, one question you might ask is why, if economic weakness is if anything good for stocks, the market briefly plunged earlier this year. The answer is that for a few weeks in March the world teetered on the edge of a 2008-type financial crisis, which caused investors to flee everything with the slightest hint of risk.”

Krugman continues, “That crisis was, however, averted thanks to extremely aggressive actions by the Fed, which stepped in to buy an unprecedented volume and range of assets. Without those actions, we would be facing an even bigger economic catastrophe.”

Explanation of the Ideological Argument

Let us consider the argument Krugman provides. The first main point is that the Fed responded to both crises by lowering interest rates, which is the standard monetary policy response to an economic downturn no matter how it is triggered, and lower interest rates hurt bond markets and help stock markets since market participants have to put their money somewhere.

Thus, the stock market is being helped by the Fed as a “side-effect” of its efforts to help the broader economy. (A debate worth having is how the Fed can gain better traction on credit availability and terms and do so without relying so heavily on financial markets for their transmission.)

Krugman’s second main point, although not as explicitly articulated, is that the Fed, acting as the lender of last resort, should have and has done everything it can, a “whatever-it-takes” approach, to mitigate the economic damage. This is the same ideological view that ended up prevailing in the last crisis (see this previous post), and by his assessment, this approach was a wild success.

Then again, maybe not, since Krugman also states the following, “While employment eventually recovered from the Great Recession, that recovery was achieved only thanks to historically low interest rates. The need for low rates was an indication of underlying economic weakness: businesses seemed reluctant to invest despite high profits, often preferring to buy back their own stock. But low rates were good for stock prices.”

The intellectual incoherence is symptomatic of an intellectual disease that afflicts many of all ideological persuasions. It is an obstinate adherence to a set of beliefs even when the evidence clearly contradicts the ideology. Krugman knows this problem well. It could be reasonably argued that he popularized the term, “zombie economics,” which was the title of a book by John Quiggin, Zombie Economics: How Dead Ideas Still Walk among Us.

Ideologically Yours, Keynesian

In Quiggin’s words, which is what Krugman also believes, “For decades, their [market liberalism’s] advocates dominated mainstream economics, and their influence created a system where an unthinking faith in markets led many to view speculative investments as fundamentally safe. The crisis seemed to have killed off these ideas, but they still live on in the minds of many—members of the public, commentators, politicians, economists, and even those charged with cleaning up the mess.”

Instead of assessing the Fed’s performance based on a thorough, unbiased evaluation of the economy after the last crisis or in the midst of this present one, Krugman instead concludes that the Fed, headed by Jerome Powell, has done an incredible job, giving them and him an A grade. What is the basis for Krugman’s conclusion? The Fed has responded in what he considers Keynesian fashion. His is an analysis based on the application of an ideology, Keynesian economics – not on its actual outcome. This is essentially a variant of “zombie economics.” Even if the response might be theoretically correct, the form of the present (and past) application is clearly wrong because the outcome is clearly bad.

Intellectual Honesty Is Not Optional

The dangers of blind ideological loyalty and purity apply to all, including the right and the left, whether they are politicians, economists, or even Christians. In reality, when one objectively analyzes the state of affairs of the real economy, the federal government’s and the Fed’s actions have been disastrously bad.

To be a good economist or policy-maker, more broadly, a good intellectual, is to be intellectually honest. It is to have knowledge of various schools of thought and to dispassionately pick and choose from them based on what actually works. There are those among us who consider ourselves liberal economists but base our analysis not on the application of any one ideology, left, right or center, but on its actual outcome.

The outcome of the Fed intervention in the financial crisis, which was not fully disclosed to the public, was plainly and simply terrible, and the outcome of the present intervention is even worse. The data and facts speak for themselves. Lastly, the counterfactual is not redeeming when the reality is damning.

Eternal Truths: Grief, Death and the Cross

Grief
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I won’t pretend to speak about grief with any real knowledge, as I have never experienced it on a deeply personal level. However, I find Good Friday the saddest time in the liturgical calendar and, for me, it best approximates a feeling of grief. Like the rest of us, I know how the story ends, it ends joyfully with Jesus’s resurrection on Easter Sunday, yet it is so moving and hard every time.

Harrell writes, “the manger is not the central symbol of our faith. The empty tomb isn’t either. Christians decided early on that the sign of their faith would be a cross.” He goes on to say, “We hang on to our crosses, even at Easter, because it is in the hard places of life where Christ’s presence with us proves most holy.”

Grief and the Passion

I agree, but I think that Christians chose the cross to symbolize them and the faith because the crucifixion is the most selfless aspect of Jesus’s life. It is an incomparable sacrifice, and if you have the courage to engage with the Passion fully, it can bring you to your knees, maybe to the ground completely.

During Catholic masses on Good Friday, priests will lie prostrate before the altar, above which often hangs a cross or a crucifix. Just to watch that act of devotion and humility can bring one to tears. Theirs is a gesture of grateful submission that invokes Jesus’s gracefully submission to God the Father’s will.

This is also why Christians around the world literally walk Jesus’s path, the Stations of the Cross, year after year. They want to remember his pain and suffering, his divine grace, his love and compassion at the most difficult moment of his life, at his death.

To remember Jesus’s beauty in death is also a way of vicariously engaging with our suffering and our mortality. When death calls us, will we respond with bitterness, resentfulness, anger, fear, or depression? Or will Jesus’s steps to his Father remind us that we can bear the momentary weight of the cross because each step ultimately brings us closer to another life, one free of everything that burdens us in this one.       

Grief and the Coronavirus Pandemic

The coronavirus pandemic has not fundamentally changed death’s calculus, as it is always and forever a possibility. Really, what has changed is our awareness of the possibility of death or serious illness and our daily lives. As a thought-exercise, imagine if the probability of death were always at a relatively heightened level, as it is now. Imagine that it were even higher, such as during the Bubonic plague.

If this were “the new normal,” would we alter our lives permanently? Constantly hiding in our homes, practicing social distancing, or would we just resign ourselves to a lower life expectancy and a higher likelihood of death, and simply change psychologically or spiritually instead? Would we make peace with death?

If it is the latter, what would the shape of the peace be? Would it take the shape of the cross? Ultimately, the death that awaits us is unlikely to be anywhere near as hard as Jesus’s. And for many people around the world, they might view death as easier than their present lives.

For all of us, Jesus’s life and death is a source of comfort. In our darkest moments, we can find him there, or we can choose to go to him. To kneel in a quiet church, alone, staring up at the cross with his dead, tortured body hanging from it, and in our gratitude and submission, we can escape everything else because, ultimately, nothing else really matters.

I have no standard words of comfort to offer those in fear of death or those in grief, no angels or other well-meaning but essentially hallow allusions. I have only the truth, Jesus’s truth, and I hope that in his divine truth, one can find the shape of peace. It is the shape that Christians everywhere wear with pride, strength and full knowledge that the way, the truth and the life leads one out of this world and into the next.

The Tradition of the #Trending

#trending
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Innovation without truth is, well, without truth. It is instead a mere gimmick and, as such, fails to register in history’s ruthless separation of the wheat from the chaff. At best, it might resurface in a lackluster version of its once equally misguided former self. Speaking of which, there is a new #trend as younger people try to satisfy their need to believe in something aside from themselves, as their parents have often taught them, or to cope with the inevitable anxieties that are part of life.

They grope in the religious marketplace for something not quite so “established” and “normative” as Christianity, something, well, cooler. As if they are searching for the perfect countercultural outfit or posture, they might decide that being a witch or perhaps just a pagan seems cool. As a young child dressing like its parent, it reprises the hippie dippie chic without whatever modicum of imagination it once held.

This is a free country, as it should be, and we are all free to exercise our right to practice the beliefs we would like. However, let us also be honest in saying that all belief systems are not made alike. Returning to a pre-Christian pagan era is not simply idolatrous from a Christian perspective, it is valueless from any perspective, as it literally has no associated definitive values.

Although it is true that Christianity is the most popular religion in the world, perhaps its appeal is because it is appealing. It is reasonably argued that it is successful because it was and will always be the most authentically countercultural set of beliefs in the world. After all, we worship a poor man from Galilee who was crucified on a cross for preaching about truth, love and compassion.

Christianity does now fall into the category of “organized religions,” but perhaps that is also a testament to its past success and a necessity for its future success. After all, it is pretty hard to manage the spiritual lives of and other services for over 2 billion people and growing without organization or structure.

So, maybe a confirmation picture complete with crooked teeth or a bike-grease stained first communion dress is not cool, even embarrassing, but then what is cool without a certain amount of conformity-induced humiliation. So, on second thought, maybe it is cool, but it is just not #trending.  

Also see Douthat’s (2019) remarks on the (overstated) #trend – https://www.nytimes.com/2019/10/29/opinion/american-christianity.html

>>https://longinglogos.com/necessity-for-christian-witness-secular-society/<<