Of Wise Men of the East and Wise Men of the West

Who were the wise men of the east? Where did they come from, what did they know, and how did they know it?

The scriptural account of the visit of the wise men to the young child Jesus is a reminder that Christianity is not a regional religion derived from the cultural heritage of a small group of people in a small corner of the world. The sociologists and others who see religion as nothing more than a human creation would have trouble explaining how people in widely scattered parts of the world, with little or no communication with each other, have come to bear the same witness of the Savior of the world, born near Jerusalem.

This was no mystery to the prophets of the ancient Americas. One of these, named Alma, wrote, “For behold, the Lord doth grant unto all nations, of their own nation and tongue, to teach his word, yea, in wisdom, all that he seeth fit that they should have” (Alma 29:8). That is to say, that the gospel of Jesus Christ has been spread by God throughout time throughout all the earth in the proportions and forms that the various people of the earth were able to receive it. This accounts for the broad similarities in moral standards found around the world.

The vision of some was particularly clear and strong. The wise men are one example. Traveling from somewhere in the “east” where their knowledge of the Jews and of the Kingdom of Judea was limited, they knew enough to go to Jerusalem to find where the “King of the Jews” was born. It was evident that they did not have in mind a mere earthly king, for they came “to worship him.” (Matthew 2:2) The people of Judea did not worship their king, so why would anyone else? The scripture makes it clear that the wise men were seeking the Christ (see verse 4), the King of the Jews of prophecies such as Isaiah’s:

For unto us a child is born, unto us a son is given: and the government shall be upon his shoulder: and his name shall be called Wonderful, Counsellor, The mighty God, The everlasting Father, The Prince of Peace. Of the increase of his government and peace there shall be no end, upon the throne of David, and upon his kingdom. (Isaiah 9:6,7)

Where did the wise men obtain this knowledge of the Christ, this knowledge that He would be born in the land of Jerusalem,that He would be the King of the Jews (in a more than worldly sense)? Most of all, where did they obtain the knowledge that He would be the Christ, the Savior of the world, and a fit object of worship? Clearly they did not obtain this knowledge from the Jews of Judea. Perhaps they gained knowledge from elements of the House of Israel, already by then scattered throughout much of the world. But even if they received from scattered Israel the knowledge of the Messiah, from where did they gain the knowledge that He would be born in that day, knowledge that even Herod and his chief priests and scribes did not have? These wise men from a foreign land had sources of revealed knowledge from heaven, independent of the knowledge possessed by the people of Judea, yet confirming the testimonies of the Christ.

The wise men of the east were not alone. Their testimony was echoed by wise men from even farther away, by wise men of the west. The ancient American prophet Nephi received revelation from an angel about 600 B.C., ratifying the words of other prophets, that in six hundred years the Messiah would come to earth and would be called “Jesus Christ, the Son of God.” (2 Nephi 25:19) The descendants of those prophets, six centuries later, also witnessed unmistakable signs in the heavens, signs of the Savior’s birth, “and they knew that it was the day that the Lord should be born,” even though they knew it would happen in a land across the ocean from them. “And it came to pass also that a new star did appear, according to the word” of the prophets (3 Nephi 1:19, 21).

The Lord explained to that western prophet, Nephi, the universal reach of the knowledge of the mission of Christ, “Know ye not that there are more nations than one? Know ye not that I, the Lord your God, have created all men, and that I remember those who are upon the isles of the sea . . . ?” (2 Nephi 29:7). The testimonies of these wise men, east and west, have come together in harmonious witness.

As we sing songs about the wise men this Christmas season, remember the wise men of the east and of the west, and consider their independent testimony from far flung parts of the earth that Jesus Christ is the Savior of all mankind everywhere. They received their own revelations from the same God of heaven of the birth and mission of His only begotten Son, born in Bethlehem, near Jerusalem, but witnessed across the globe.

Of Carols and Carnage

Among the beautiful carols of Christmas there is one that surely seems odd and out of place. At least that is how I, as a young child, thought of it. The haunting melody is in significant measure responsible for its lasting popularity, but the words are anything but joyful for a joyful celebration. Rather than recount the birth of the Savior, Jesus Christ, the song expresses the inconsolable sorrow of a mother of Bethlehem mourning the cruel murder of her little child. Popularly known as “The Coventry Carol,” it includes these words:

O sisters, too, how may we do,
For to preserve this day;
This poor Youngling for whom we sing,
By, by, lully, lullay.

Herod the King, in his raging,
Charged he hath this day;
His men of might, in his own sight,
All children young, to slay.

Then woe is me, poor Child, for Thee,
And ever mourn and say;
For thy parting nor say nor sing,
By, by, lully, lullay.

The song helps retell the sad chapter in the story of the early days of the Savior's mortal life when jealous King Herod, fearful of even rumors of potential rivals for his throne, ordered the slaughter of all of the children in Bethlehem of two years old and younger. Sometime before, Herod had been advised by the wise men of the birth of the future King of the Jews. The wise men mistakenly thought that Herod would rejoice with them at the news of the birth of the Messiah and freely told him what they knew. Under cloak of feigned rejoicing, Herod sent the wise men to Bethlehem, the place prophesied in the scriptures as the city where Christ would be born. He urged them to report back when they found the child, that he might come “and worship him also.” (Matthew 2:8)

But worship was far from what Herod had in mind. Herod’s reaction was typical of many throughout history when confronted by the work of God. He saw only danger to his own power and sought to destroy God’s work if he could. The Lord warned the wise men, who avoided Jerusalem on their way back home. Herod struck out in anger and ordered the death of all of the young babies in Bethlehem. Again as throughout history, Herod missed his mark, for Jesus was no longer there. Joseph, warned by an angel, had taken his little family away to Egypt.

Among those who take it upon themselves to second guess God there are those who would question why God would save His Son, while allowing all those other children in Bethlehem to be slain. Again, these critics miss the mark. They get it wrong by failing to consider the whole picture.

God the Father did not spare His Son from the slaying of the children at Bethlehem. The unfair and cruel carnage begun in David’s city was finished on Calvary. Jesus’ life was spared only momentarily so that it could be offered as the last sacrifice for all. That seemingly doleful song merits an essential place in our Christmas celebration. It points us to the full meaning of Christmas as part of a story that winds through Bethlehem and leads through sorrow in Gethsemane to death on Calvary.

Importantly, the story continues on from there to a glorious resurrection morning on the third day. This saddest of carols reminds us that Christ was born to save us, in spite of the evils of the world that He most of all could not escape, a salvation that extends especially to the children of Bethlehem and to all of the little children of the world.

Of Thanksgiving and Light

Thanksgiving is one of my favorite holidays of the year. It is a warm, pleasant, kind, family day. Not surprisingly, it is a day of reflection for me, despite of—or because of—all the family and busy activities involved with the day. As busy as the day may be, it is for my mind and spirit a day of rest, a very family day, a day when all is right because the family is right. It is a day during which I reflect with gratitude upon how, through the blessings of God, I have been able to provide for my family and that we have been able to enjoy so many good things. We gather rich in the mutual affection we have for one another, comfortable in how pleasant it is to be in each other’s presence. It is very appropriate that we celebrate with a bounteous meal shared by as much of the family as we can gather and often with fond friends, representing the bounties that God has bestowed upon us in the previous months.

Thus in our home, Thanksgiving Day is a time of reflecting on the abundant blessings of the past. It also serves as a gateway to our Christmas celebration, in which we celebrate all of the good things of life made possible through Jesus Christ. On Thanksgiving night, as soon as darkness has descended, we turn on the outdoor Christmas lights for the first time of the season. There is the apple tree, shining in brilliant white lights in memory of the Tree of Life, which Tree is a representation of “the Love of God, . . . the most desirable above all things . . . and the most joyous to the soul” (1 Nephi 11:22, 23).

Beside that tree, red lights flame the upward and outward branches of a maple tree, symbolic of the tree of the knowledge of good and evil, in opposition to the tree of life. This illumined tree represents how by the exercise of our power of choice we also unleash our energy to become good or evil—and that we do not always exercise that power for good (see 2 Nephi 2:15, 16).

In the middle of the yard, our flagpole is transformed into a tall, narrow multilight cone topped by a bright white star of light, again representing a tree, our Christmas tree. This and the tree we decorate inside the house are bright reminders that through Christ we can obtain “every good thing” (Moroni 7:25), whether spiritual or material.

The doorway to our house is outlined with a garland of evergreen also illumined with light to proclaim to family or friends that they will find welcome inside. Similarly, our lamppost is trimmed with red and green lights as if to say, “Here we are, don’t lose your way. Come and celebrate with us.”

In many ways it is very appropriate that we initiate this holiday season with a celebration of gratitude. The spirit of gratitude is the foundation of humility, and humility is the first step to opening our hearts to receive the Christ. So bring on Thanksgiving, welcome the family and friends, and open our hearts and homes to Christ, who brings us every good thing.

Of Financial Panic and Lessons Learned

Late last month I met with a group of German businessmen. They were on a visit to improve international understanding through cross-Atlantic dialog. As you can imagine, they were most interested in how the economy was doing. The German economy is off to a quicker recovery than is the U.S. economy, but in all fairness the Germans have not had to overcome as much government help as we have (during and following the financial panic of 2008)—although they are very worried about having to swim while being chained to drowning economies like Greece and perhaps others of the European community.

Among the specific issues that they asked to discuss was the question, “Have we learned lessons from the recent world economic crisis?” As I pondered that question, I came up with a list of eight lessons that we perhaps have learned. There are certainly others you or I might add, but here are the eight lessons learned that I came up with at the time, in no particular order of priority:

1. Economic and financial models are not as good as advertised. Much of the financial regulatory program of recent years was based upon the notion that regulators and the firms that they regulated had come up with powerful models to identify how well financial firms and the economy were doing, models that could be relied upon to control the economy. In fact, confidence in models was so high, that policymakers were starting to rely upon them to help predict the future. It turns out that economic reality is far more complex than any models, regardless of how powerful the computers are that run them. Once again we have seen that no group of policymakers, regardless of how smart they are or how much information they have, can control the economy any more than they can control the weather, and we should not fault them for failing to do so. We can only fault them for trying.

2. Fannie Mae and Freddie Mac are not the best run companies in the world. This lesson seems so painfully obvious that it is hard to believe that there was a time when people held them out as examples for emulation of corporate and financial management. But that was their reputation. We now know that the government privileges that they enjoyed allowed them to become sloppy in many crucial ways, especially in the management of their financial risk.

3. The biggest risk to the financial system is regulatory risk. Nearly every one of the financial firms that were strongly “persuaded” by policymakers to take government TARP money suffered market and reputational damage from those investments far worse than any financial challenges that they had. Nearly all of the largest recipients of TARP money paid it back as fast as the Congress and the regulators would let them, at a very expensive rate of interest. While a few have complained of these and other regulatory costs, more would if they were not afraid of the danger of being sent to the cornfield if they did, so they just say that it is “all very good” as their highest new costs today come from government regulations.

4. Economic reality always catches up with you, eventually. By the laws of economics, housing prices cannot long continue to exceed the rate of economic and population growth, but during the housing bubble the myth was that housing prices do not go down, at least not by much and not for long. The same was said about oil prices, by the way, as they grew even faster than housing prices. All came down, and all who believed and acted as if they would forever go up paid for expensive lessons. The same lesson is true today about government deficit spending. In spite of economic reality, too many policymakers act as if there is no limit to how much debt the government can put into the market. That false notion will crash on the rocks of economic reality, eventually.

5. Accounting rules, especially mark-to-market rules, are highly pro-cyclical. Accounting rule makers are on a multi-year crusade to force all companies to value practically everything by what you can sell it for in the market place right now. That means that in times of exuberant markets everything will look great and better than it really is, transferring market manias onto the financial books of companies. It also means that in times of panic, all things will look worse than they really are, accounting rules making sure that panic prices are written onto companies’ financial books. Mark-to-market financial rules were the amplifiers that helped puff up the housing balloon, just as they helped feed the subsequent financial panic.

6. You can hide risk, mask risk, but you cannot avoid risk. All economic growth comes from someone taking a risk. There is risk in whether a new invention will be well received in the market place, or whether a new store will succeed in its new location, or whether the new employees will do a good job, and on and on. There is a natural human tendency to want to harvest the rewards of investment without being exposed to its risks. So people try to get others to take that risk, or try to pretend it is not there, but the risk will be there, and the less obvious it is the less likely that people will take precautions to manage it. The biggest problem from the housing boom was that people thought that building houses and lending people mortgages to buy them were riskless, when in fact they are loaded with risk. A variety of things masked that risk. When it finally asserted itself, people who thought that they had made no-risk investments panicked. The same is happening today with people who invest in “no-risk” government securities. You might be able for a time to hide the risk; you cannot avoid it.

7. Bad underwriting is bad. When a lender decides to lend money he first evaluates the ability of the borrower to repay the loan. That evaluation is called underwriting, it is the lender making the determination that the loan is a good investment. Lenders and others will make mistakes: borrowers will get into unforeseen troubles, their new invention might not work as well as thought, their business might face a new and better competitor, some tax or new regulation might eat away anticipated profits. The lender expects that some small portion of loans will run into repayment problems, and the lender plans for that by setting aside reserves for loan losses. But when the lender does not pay attention to the risks that he can see, then he engages in bad underwriting, and no amount of reserves can absorb those losses. Would we have had a housing bubble and then a housing crash if so many mortgages were not provided to people who could not afford the houses that they were buying? Not enough lenders looked carefully enough into that question.

8. Financial firms cannot long offer products that policymakers and the public do not understand. Recent legislation and regulations are aimed at curbing some of the most successful financial products and practices, largely because policymakers and the public do not understand them. In times of financial turmoil, policymakers look for something to do, and one of the first things that they try to do is stop what they cannot understand. The public is vulnerable to the rants of people seeking to deflect criticism from their failings to products or practices that the public does not understand. The credit default swaps market was one of the few financial markets that worked extremely well throughout the recent financial turmoil, never freezing up while other markets pretty much stopped. As another example, bank investments in the securities markets—other than loans—were an important source of diversified income for banks, helping keep banks afloat when bank loans were suffering heavily from people and businesses that defaulted. Recent legislation and regulations are placing heavy new burdens on these profitable activities, and in some cases banning them entirely, because policymakers do not understand them. Financial firms have to be more active in explaining everything that they do, or they will continue to find many of their newest and best financial activities curbed in times of regulatory fear.

As I say, you can probably add to this list, as could I. As I ponder now the question that the German businessmen put to me, the actual lessons that we have learned seem to me less important than whether we will remember the lessons.

Of Huckleberry Finn and Heavenly Rest

You might recall that despite her best efforts, the Widow Douglas’ sister, Miss Watson, was unable to interest Huckleberry Finn in heaven. In fact, you might say that because of her best efforts she inoculated Huck against any interest in heaven. To Miss Watson, and surely the Widow Douglas, too—who doubtless were old enough to have experienced their share of the troubles and turmoil of life—their image of heaven seemed very attractive. “She said all a body would have to do there was to go around all day long with a harp and sing, forever and ever.” Huckleberry Finn’s judgment on this depiction of heaven was, “So I didn’t think much of it. . . . I asked her if she reckoned Tom Sawyer would go there, and she said not by a considerable sight. I was glad about that, because I wanted him and me to be together.” (Mark Twain, The Adventures of Huckleberry Finn, chapter 1)

For Miss Watson, heaven was a haven of rest, while for Huck it offered far too much rest. Both were right and wrong together. For the real heaven offers “every good thing” (Moroni 7:20), full of rest and activity, and you do not have to die first to find them.

The Apostle Paul, writing to the Philippians, spoke of “the peace of God, which passeth all understanding” as a promise to be awarded in this life (Philippians 4:7). Shipwrecked, beaten, persecuted, and jailed, ever traveling about in his missionary service, where was the peace, where was the rest in Paul’s life?

The prophets have ever promised rest and peace to the faithful disciples of Jesus Christ. What are those gifts, though, and when are they given? Rest assured that the peace and rest of Christ do not approach what Huckleberry feared and reach far beyond what Miss Watson could imagine.

The peace and rest of heaven are not some kind of holy lethargy. The modern prophet, Brigham Young, said this about our eternal existence, what he considered life in its fullest meaning:

Life is an accumulation of every property and principle that is calculated to enrich, to ennoble, to enlarge, and to increase, in every particular, the dominion of individual man. . . . It is to pursue that course wherein we shall never, never lose what we shall obtain, but continue to collect, to gather together, to increase, to spread abroad, and extend to an endless duration. Those persons who strive to gain eternal life, gain that which will produce the increase their hearts will be satisfied with. Nothing less than the privilege of increasing eternally, in every sense of the word, can satisfy the immortal spirit. (Journal of Discourses, Vol. 1, p.349. 350)

There is no peace and rest in that if you mean a peace and rest that are akin to sleep. But if you are looking for a peace and rest that are full of life and that fill and satisfy the soul, then you are looking for the peace and rest promised by the prophets of Christ in all ages.

This enduring peace and genuine rest come from living a life of integrity, in which all of the parts of one’s life are working together, where there is no war going on in the mind and spirit. The man whose life is an unending series of moral dilemmas, or whose daily walk seems continually out of step, who frequently is torn between one path or another, knows agony and frustration and is familiar with nagging anxiety, living his own personal and daily portion of hell. The ancient Christian disciple, James, declared, “A double minded man is unstable in all his ways.” (James 1:8) Coming to Christ puts all of that internal warfare to rest. Jesus taught in the Sermon on the Mount, “if therefore thine eye be single to the glory of God, thy whole body shall be full of light.” (Matthew 6:22 [JST]) Then the Savior warned, “No man can serve two masters” (Matthew 6:24).

We have to make our decision, to follow Christ or not. Until we do—with full purpose of heart— we will know no meaningful peace and find no lasting rest. Indeed, a man will remain an enemy to God until he turns his heart singly to the Lord, “and becometh a saint through the atonement of Christ the Lord, and becometh as a child, submissive, meek, humble, patient, full of love” (Mosiah 3:19).

When we do that and only when we do that do we begin to live, to be fully alive, to enjoy all that life has for us. As Christ declared, “I am come that they might have life, and that they might have it more abundantly.” (John 10:10) Those who have obtained that abundant life were referred to by the ancient American prophet, Mormon, as “the peaceable followers of Christ . . . that have obtained a sufficient hope by which they can enter into the rest of the Lord, from this time henceforth until ye shall rest with him in heaven.” (Moroni 7:3) That is a promise to surpass the joys of any Miss Watson and satisfy the aspirations of the Huck Finn in us all.

Of the Power of Change and the Power of Christ

Change is in the air. It is autumn, the leaves have begun their brief flash of color before gliding to the ground to be swept away.

Fall is also the season when politicians promise change. The mood predominating among the electorate this year seems to be disillusionment with Change. They want change from Change—that is, from Change that makes things worse and reinforces what is bad in Washington. At least for now, voters are showing a strong preference for candidates who do not fit the usual political mold, who reject solutions imposed from Washington. Such moments do not come very often, and like the autumn they seem to pass too quickly.

Yet with all of this discussion of the change apparent in nature and the political world, it seems strange to find those who doubt the ability of people to change. Properly understood, the plan of God for His children is all about change.

The central message of Jesus Christ and of all of His prophets has been the need and possibility for people to change, to change their world by changing themselves, from the world of unhappiness and distraction, to a life of purpose, growth, and deep joy. All who have drawn close to the Savior have experienced change, have drawn upon His power to change, and the closer they drew to Him the more that they changed and became more like Him.

Consider the early Apostles who lived while the Savior walked the earth. Mere fishermen (Peter and John) were turned into inspired leaders whose testimonies have endured for two millennia. A tax collector (Matthew) was converted into a human benefactor. A persecuting zealot (Paul) turned into a powerful missionary. In earlier days, a slave (Joseph) became viceroy of Egypt, a fugitive from Pharaoh’s court (Moses) became the mighty lawgiver who led Israel from bondage, a shepherd (David) became King of Israel. The change in these whom history calls great was repeated among millions of their less well-known compatriots.

In our own times, an untaught boy (Joseph Smith) became a wise prophet and religious founder, a craftsman (Brigham Young) became the greatest colonizer of the West. Again, these are more prominent examples among millions of others similarly changed through the power of Christ, the more effectively changed the closer that they approached Him.

When I was in college a friend explained to me her disillusionment with her church, which in her view told its members to be good but somehow lacked the power to transform them. It lacked the power of Christ, who made change of life possible. As the ancient American prophet Mormon explained in a letter to his son, Moroni, through Jesus Christ our sins can be forgiven, our past can be overcome.

And the remission of sins bringeth meekness, and lowliness of heart; and because of meekness and lowliness of heart cometh the visitation of the Holy Ghost, which Comforter filleth with hope and perfect love, which love endureth by diligence unto prayer, until the end shall come, when all the saints shall dwell with God. (Moroni 8:26)

There is power, the greatest power on earth, the power to change the greatest creations on earth, the children of God. There is the power to transform men and women and make them fit to live with the Father in His presence forever, “that ye may at last be brought to sit down with Abraham, Isaac, and Jacob, and the holy prophets who have been ever since the world began, having your garments spotless even as their garments are spotless, in the kingdom of heaven to go no more out.” (Alma 7:25) Thank God that power is on the earth.

Of Organized Religion and Living Apostles of Christ

Sign me up for organized religion, if God is the organizer. I have little interest in being part of the religions of men or observing the commandments of men, and I understand why others are put off by manmade religions. Equally, I find it hard to see why someone would not want to be part of a church that is run and organized by the Savior Jesus Christ, the Author of all good, the Source of all knowledge, the fountain of all love. What is there not to like? All that can be desired, all that really matters, all that is really joyful, is there.

The Apostle Paul described Christ’s church—its organization and purpose— in a letter to the saints in Ephesus:

And he gave some, apostles; and some, prophets; and some, evangelists; and some, pastors and teachers; For the perfecting of the saints, for the work of the ministry, for the edifying of the body of Christ: Till we all come in the unity of the faith, and of the knowledge of the Son of God, unto a perfect man, unto the measure of the stature of the fulness of Christ: That we henceforth be no more children, tossed to and fro, and carried about with every wind of doctrine, by the sleight of men, and cunning craftiness, whereby they lie in wait to deceive . . . (Ephesians 4:11-14)

It is clear that Christ intended His church and all of its parts to continue until all of God’s children became like Christ. And it also seems clear that without this church and its various parts, the children of God would become vulnerable to the doctrines and teachings of men.

Fortunately, Christ’s church is on the earth again, with all of the component parts that made up His church anciently, built on the foundation of apostles and prophets, together with the other important offices, “Jesus Christ himself being the chief corner stone” (Ephesians 2:20).

This past weekend, as they do twice each year, the apostles and prophets of the Church of Jesus Christ gathered in conference and spoke to all the world. Their words were a combination of the timeless and the timely, just as they were anciently. Test them and try them. They can be found at this website:

http://www.lds.org/general-conference?lang=eng

While the messages are spoken for all, as you listen carefully you will invariably hear messages spoken directly to you. For me, one of those messages was delivered by the Apostle Dieter F. Uchtdorf. He spoke of the sin of pride, reprising the words delivered more than a decade ago by the Lord’s prophet at that time, Ezra Taft Benson. He described the difference between two ways in which we use the word "pride." First, there is what we call pride, which is really rejoicing in the accomplishments and achievements of others, the pride we feel in our children, in our spouse, in our fellows, a pride that unites us. That is far different from the pride denounced by God throughout the ages, the pride that separates us from our fellowmen, the pride of comparison and hostility that has, in the words of Ezra Taft Benson, enmity at its roots.

The cure is humility. But the apostle did not mean the self-demeaning attitude that some mistake for humility. In his inspired words, “Humility is not thinking less of ourselves; it is thinking less about ourselves.” Working with, and among, and together with others, reaching out beyond ourselves, this true humility is a great antidote to the pride that would separate us, because it is built upon charity, the pure love of Christ.

This was a simple but powerful message, as were the many others presented. Whether on family and marriage, faith, deliverance from addictions, financial security, the power of gratitude, or the worth of the individual, the cures for the problems of society were offered through words inspired from heaven.

I could have received or enjoyed little of this left to my own devices. It was made available in an eternal abundance through the religion organized by Christ and offered to all of God’s children. And for that I am grateful.

Of Living on Earth and Preparing for the Heavens

The Prophet Joseph Smith, writing from the dirty damp pit of a crude jail on the frontier lands of western Missouri, where he and other Church leaders had been imprisoned beyond the effective reach of Constitutional protections of freedom of religion, admonished the Latter-day Saints not to set their hearts too much on the things of the world. At that point in time they had left nearly all of their things of the world behind them. They were being driven at sword and gunpoint across the cold November plains, the Governor having declared that all Mormons were to be “exterminated.” They received kindness and shelter from the people of Illinois and soon built what for a time became the largest city in the state, a city they called Nauvoo, the Beautiful.

Yet the Prophet’s admonition continued to ring true, as it does today. Under divine inspiration Joseph Smith wrote that, “there are many called, but few are chosen” to have the close association with God that the Father desires for all of His children. “And why are they not chosen?” His answer is important for any who would seek to rise above the vicissitudes and decay of this world and find happiness here and eternal joy in the world to come. In short, they are not chosen to receive the blessing and powers of God, “Because their hearts are set so much upon the things of this world” that they fail to learn and understand that the things of God “are inseparably connected with the powers of heaven” and can only be exercised by those whose eyes are fixed on heaven (Doctrine and Covenants 121:34-36). In other words, it takes a focus on God and heaven to receive the things of God and heaven.

As one draws closer to God through the companionship of the Holy Spirit, the less important the things of this life and this world become. The brevity of mortality becomes ever clearer as does the recognition that the conditions of immortality that prevail after the resurrection are the more normal and real human condition. Mortal man lives some seven or eight decades, while immortality never ends. Where does it make sense to place our focus? College degrees, political advancement, business position, and public recognition shrink in comparison with eternal values of family, friends, kindness, and personal integrity. As a modern-day Apostle declared, the omniscient God is not going to be impressed by your Ph.D. Neither will the Ruler of the universe be awed by your title of CEO.

This is not to say that achievement and accomplishment in this world are not important. They are very important, but only from the perspective of what they mean for you with regard to your life in heaven. An ancient American missionary explained that mortal life “is given us to prepare for eternity”. It is our responsibility to “improve our time while in this life” (Alma 34:33). Education, political achievement, business accomplishments, and the many other ways that we can improve upon our time are important because of how they prepare us.

It is the why that makes them important, not the what. Why did we learn, why did we seek to work in politics, why did we devote so much effort for our business accomplishments? If the answer is, to achieve public recognition, gain the praise of our fellows, increase our personal comforts—even to be admired by others as a good person—all of those may seem fine while mortality lasts, but for us they die with us. Fortunately, the hollowness of those purposes is felt in this life as a warning to us.

On the other hand, if the purposes of our achievements in life are in line with the values of heaven, then the real achievements, of which the worldly indicators are at best imperfect measures, will be with us now and remain with us forever and be amplified in the eternities. If our education has enabled us to live more wisely and to lift up our fellowmen, if our political efforts have been intended to promote human freedom and to give recognition to the worth of the individual, if our business accomplishments have been intended to unlock the creativity and achievement of ourselves and our fellows (which as a side effect contribute to the welfare of all) then in short as we have lived with an eye single to the glory of God we will have developed characteristics and built relationships with family and friends that will serve us well in the eternities. Then and only then can we envision with faith the Lord saying to us at the door of the eternal worlds, “Well done, thou good and faithful servant: thou hast been faithful over a few things, I will make thee ruler over many things: enter thou into the joy of thy lord.” (Matthew 25:21)

Of What Government Knows and What It Will Do

The biggest cause of the lingering financial trouble and the 2008 financial panic has been bad government policy. The markets did not fail. The markets did just what government policies encouraged them to do, namely over-invest in housing while paying little attention to the risks. That created twin bubbles in house prices and in the ways that building houses and buying houses were financed.

When the bubbles burst, the government leadership panicked, and the markets followed their leadership. Treasury Secretary Hank Paulson predicted imminent disaster, and the Federal Reserve rather than playing an independent steadying and calming hand reinforced those predictions (although without the public “fire in the theater” shouting of the Treasury Secretary).

Perhaps the best that can be said about the federal financial leaders during the financial crisis is that they did the best that they knew how to do. The problem was, that they did not know what to do. Each new memoir or retrospective published by one of these financial leaders reveals that they were acting on insufficient knowledge, insufficient information, and most of all insufficient understanding of what was going on. In other words, none of them knew enough to know what to do, and none of them knows enough now.

No one can ever know enough. The economy is just too big; there is too much for anyone but God to know. In an economy as large and diverse as ours, with billions of economic decisions being made all in the same day, it is impossible for anyone to know enough at any one time—of all that is involved—to be able to make the right decisions to control the economy, even if there were someone wise enough to do it.

That problem is not solved by creating a committee to control the economy. While any one person who serves as decision maker will suffer from lack of knowledge and will wear blinders towards the parts of the economy he either does not understand or is not watching at the moment, a committee of people has its own major shortcomings. Not the least of these is the proclivity of any group to be captured by group think, by the members of the group reinforcing each other to form a consensus and not venturing to upset things by questioning or looking beyond the consensus.

That is usually what happens with economic and financial bubbles. A key idea, usually a wrong idea, captures the group imagination. So many people come to believe this idea—like the odd notion that housing prices rarely if ever decline—that they all act on it, building up artificial values that increasingly depart from reality. When there is no government involvement, these bubbles burst soon enough and are resolved pretty quickly. Government leadership can hasten the formation of group think when an idea is part of official policy, and government policies can help to keep it going. Then, because government officials are slow to admit their own mistakes, government policies slow down the quick and natural adjustments that the market provides when the bubbles burst.

Unfortunately for all of us, the new Dodd-Frank financial regulatory legislation increases the power of new government financial czars to try to control virtually any aspect of the financial system that they choose. That error is not diminished by requiring these financial czars to meet together in committee from time to time, in a new Financial Stability Oversight Council (FSOC).

This last week two of the financial czars testified before a commission created to discover what caused the recent financial trouble and to recommend what to do about it (seems that if people were serious about this commission it would have made sense to pass new legislation only after the commission finished its work). One of the commission’s members, John Thompson, asked this question: “Why should we believe that this Council (the FSOC) is going to be uniquely different and keep us out of trouble?” (Donna Borak, “FCIC Presses Bernanke, Bair: Will Dodd-Frank End Bailouts?”, American Banker, September 3, 2010) Good question, but it got a poor answer, basically the observation that government regulators have more authority now. That is akin to saying that I will improve my aim because now I have more ammunition and a bigger gun.

Federal Reserve Chairman Bernanke admitted that even with all the new power given to the federal financial czars it will take political will to use it. “If there’s a lack of political will, there’s probably no solution that is sustainable.” Even were we to believe beyond all experience that any federal regulators or group of federal regulators could possibly know enough, where is the evidence that there would be the political will to break through the regulatory group think? Where would there have been the political will to bring the housing bonanza to a halt, or even to rein in the politically powerful housing giants Fannie Mae and Freddie Mac (which at least the Federal Reserve was seeking to do, against strong opposition from Congress—the stronger political will opposed needed reform)?

You do not need political will, however, if discipline in the markets is not a political decision. Market solutions do not require any political action or the exercise of political will by some federal financial czar or council of czars. No one needs a federal agency to drive down the stock of a badly managed company. Enron was beaten up by the markets long before Congress got around to it. The financial firms that disregarded risks in the housing bubble were put out of business by the markets—except for the firms that the government decided to prop up.

Which highlights the danger we are now in: today, as a result of the Dodd-Frank Act we have a financial system dependent on the government. Every important financial decision has now become a political question for one or more regulators to chew on and manage. Ready or not, here they come.

Of Visions and Reason

At age 14, in the year 1820, a young boy, Joseph Smith was visited by God the Father and His Son, Jesus Christ. It is very reasonable that the Father and the Son appeared to this boy.

First of all, it is very reasonable that God, the Father of our spirits, is interested in communion with His children. It is natural and reasonable to want to communicate with those whom we love. Parents certainly are more eager than most to want to communicate with their children. It is unreasonable to assume that God the Father, the perfect parent and possessor of infinite love, has no desire to communicate with His children.

Certainly it cannot be claimed that God the Omnipotent lacks the ability to communicate with His children. The scriptures provide ample evidence that God communicated directly with His children throughout the thousands of years of antiquity. Is it reasonable to assume that God has somehow lost that ability and no longer has it in modern times? Remember that for those living in antiquity, those were modern times. God has always had and continues to have the ability to communicate with His children.

Nor can it be reasonably asserted that there is less need today than anciently for God’s children to receive the light, wisdom, and instruction that come with divine communication. As recorded in the scriptures God has spoken with His children about the need for honesty, kindness, diligent labor, peace within the society and proper relations among societies. He counseled on respect for life, the worth of the individual, fairness in financial dealings, marriage and childrearing, care for the poor and needy, and healthy foods and hygiene. Which of these issues are unimportant to modern man? Which are free of controversy today? It is reasonable that man today could benefit from Divine guidance on each and all of these issues, and on many new ones besides.

As happens among human families, perhaps some estrangement has occurred in God’s family, between the Father and His children. There is some truth in that. Again, the scriptures provide numerous examples of the estrangement between God and man, as men have rejected God and turned to idols and other alien loves. The Egyptian captivity of Israel and the Babylonian captivity of Judah are two prominent examples. What the scriptures also demonstrate is that, not unlike human parents, God has been persistent in His efforts to overcome that estrangement, to bring His children back into His presence. That was the mission of many of the prophets. Indeed, foremost of all, the sacrifice of Jesus Christ is all about the infinite effort by the Father, through his Firstborn Son, to bring His children back into His presence. Being brought back into that presence has always been accompanied by an increase in direct communication between God and man. It is reasonable that God is as persistent in His efforts with modern man as He was with ancient Israel to overcome the estrangement of man from God and strengthen divine communication.

A major consequence of the estrangement of man from the Father is the enormous confusion that prevails today among the children of God about the nature of their Father. Indeed, the simple knowledge so commonly held anciently that God is the actual Father of our spirits and that we are His children and heirs has been replaced by any number of man-made ideas and speculations. It is reasonable that the Father would want His children to know who and what He is, particularly since it is so important to their understanding of who and what they are. God could tell His children, as He has and does, but it is very reasonable that He would want to show them, as He also has done before. What more effective and reasonable way to break through the web of confusion about the nature of God that prevails in the world today?

It is extremely reasonable and sensible that the Father would choose a young boy to be the recipient of this great vision of the Father and the Son. Joseph Smith was old enough to understand, at the age when young boys’ queries of the Divine and the nature of the universe and themselves can become acute. At that age and with his limited exposure to the world and its ways, he was free of crippling vices and possessed a mind largely free of preconceived notions and indoctrination in human theories. The young boy Joseph was a clean vessel into which the Lord could pour divine knowledge with little fear of it being clouded with evil dispositions or mixed with false notions. The fourteen year old boy Joseph Smith was a very reasonable choice for God to reveal the pure and bright truth of His nature.

Why then and there? It is often difficult for modern man to appreciate that he is living in historic times, when great and historic things happen. It is when someone’s “modern times” become history to a new age of moderns that the mind can give more room to acknowledge a great event. That is why some are more willing to accept that God appeared to the ancients than they are the idea that He might do so today. But it did happen, and the time was right for it.

The religious freedom that prevailed in the United States in the early nineteenth century—which is still so foreign to so much of the world today—was a relatively new and fragile achievement in 1820. There was just enough of it enshrined in the Constitution and generally accepted by the people that God the Father could make a new attempt to restore direct and open communication between God and man without governments or mobs seeking to destroy it and its challenge to their ways of thinking and doing things. As it was, it was touch and go. Those who accepted new direct revelation from the Father were driven by mobs and local governments from town to town and state to state.

But it did survive, and since 1820 the estrangement between God and man that restrained communication between the Father and His children has been receding all across the globe. It had to begin with someone. God had to talk to someone first. For these and many other reasons, God the Father, and His Son, Jesus Christ, appeared to the young boy, Joseph Smith, and God has continued to increase His communication with His children ever since. Today the Father is in direct communication with millions of His children across the world, and more every day. It is very reasonable that He do so.

Of Faith and Works

I wish to share a recent conversation on the subject of faith and works. Some very theoretical theologians seek an artificial—and non-biblical—separation between the two. The presumed differences erected between faith and works by these arguments are seemingly philosophical and semantic, but they lead to very different practices that can mean great differences in real life. I repeat the conversation below, simplified into its chief elements. I will refer to my partner in the conversation as Sam.

Sam: Christianity is divided into faith-based churches and works-based churches.

WAA: I reject that division. I think that it’s artificial, man-made, not God-made. But so that I might understand you better, explain to me what you mean by it.

Sam: Really, there is a difference. There are those who believe that they have to do works to be saved, that by their works they earn salvation and that they need those good works to be saved. We believe that no amount of works can be sufficient to earn salvation, that Christ provides salvation through His grace, and that we receive that grace through faith in Christ, faith alone. Indeed, we think it presumptive of anyone to think that he can somehow earn his way to Christ’s grace. If you could earn it, it wouldn’t be grace—and in any event you would always come up short.

WAA: I would suggest then, that either there is no difference between what you and I believe on this matter, or you yourself do not believe in what you are saying.

Sam: How do mean?

WAA: Just this. You say in effect that we cannot earn Christ’s grace, that if we do, it would not be grace, that believing is the essential thing and that it is enough.

Sam: That is correct.

WAA: What does belief involve? Can I believe and still swindle my neighbor?

Sam: No, if you are swindling your neighbor, then you probably don’t really believe.

WAA: So it seems that you agree with James, the brother of Jesus, that there is a connection between faith and works. He was the one who taught that our faith is shown by our works.

Sam: But it is the faith that saves, not the works.

WAA: I would agree with that, taking faith in its wholeness. For it is clear that the two are connected, that faith and works are not irrelevant to each other. As James says, without the works there is no faith. Faith without works is dead (James 2:20, 26). But I will go even so far as to say that any good works are good, because they are a demonstration of faith, a demonstration of what you believe. I think that you believe that, too. You act like you do.

Sam: How do you mean?

WAA: You go to church regularly?

Sam: Yes.

WAA: You obey laws, you are kind to your neighbors, you are loyal to your wife and family. All of that is true?

Sam: Yes, all true. But I make plenty of mistakes and have my share of unkind thoughts in the course of the day.

WAA: I think that you are making my point. Why do you do the good that you do—acknowledging that you are otherwise prone to live not so good if you just let yourself go—why do you overcome those unkind thoughts and act kindly?

Sam: Because it would be wrong to be unkind.

WAA: Why? Measured by what? Measured by Christ’s commandments, especially Christ’s two great commandments, to love God and to love your neighbor.

Sam: I can’t argue with that. But by my faith in Christ I am saved, no matter how many good works I do.

WAA: Is that so? Do you really believe that? Do you think that you would be saved if you were cruel to your wife and unkind to your children, swindled your neighbor, cheated your employer? If you stopped going to church, neglected your duties?

Sam: As I said, that would show a lack of faith.

WAA: Exactly. We are saved by our faith because our faith is part of our works. You cannot have faith without it revealing itself. You cannot hide your faith. Faith shows itself in good works. God has spent a lot of time and effort giving us commandments to show us the path of goodness. You have to disregard a large part of the Bible if you assume that commandments and keeping them is not important. It seems important to God. Your good actions—measured by their consistency with God’s commandments—demonstrate your faith in the giver of those commandments.

Sam: But it is never enough. We cannot do enough to merit salvation. The apostle John taught that whoever claims to be without sin is deceiving himself (1 John 1:8).

WAA: That is true. That is precisely why we need a Savior. Christ knows that we would never do enough. But that is no reason to stop trying. There are many things that I have not mastered but that I keep trying to master. For a righteous person driven by faith, falling short is incentive to get up and try harder, having faith that Christ will help you to do better, that with His help you can do better. The Master of all takes our very best efforts, however imperfect, and makes them perfect. He makes up the difference, in fact draws us on and helps us to narrow the difference. And He makes our efforts worthwhile with faith that the Savior will add the necessary finishing touches.

Sam: But only for those who believe in Him.

WAA: Again, we agree. Because we believe in Him, we try to be like Him, we do what He asks. Through our works we show Him—and perhaps show to ourselves—our faith. Or, as John taught, through our works of obedience we reveal that we love God and make that love real (1 John 2:3-6; 5:3). It is to those who have faith in Him, who love Him, in real life and living practice, that He extends His grace and salvation. We may not earn salvation, but in this way we qualify for it by meeting the conditions set by the Savior. The ancient American prophet, Nephi, explained it this way: “reconcile yourselves to the will of God, and not to the will of the devil and the flesh; and remember, after ye are reconciled unto God, that it is only in and through the grace of God that ye are saved.” (2 Ne. 10:24)

Sam: I still think that we disagree.

WAA: It is only if you try to separate faith and works that we will disagree. James described it in a powerful metaphor. He said that as the spirit and body united give life to the body and when separated the body is dead, so faith and works, when separated, become dead also (James 2:14-20, 26). So, we are saved by faith if you mean the faith that produces the works of complying with God’s commandments. If you do not, then your faith is dead and cannot save you because it does not help you to become better. What good is that kind of faith? It is of no value at all. It is the faith of the devils, as James explained (James 2:19), who have known the Savior from before the beginning of time. But God is the God of life and the living, and if your faith is alive it will lead you to the Source of all life, even to God the Father. As Jesus taught, “if thou wilt enter into life, keep the commandments.” (Matt. 19:17)

The conversation continues, but I will leave it there, for now.

Of Thousand-Page Laws and Our Republic

Congress is broken. Few are satisfied that our representative system of government is working. As a very important measure, I would point to massive new 2,319 page laws (which weigh more than 12 pounds, printed on both sides of the page). You have to talk yourself into believing that it is O.K. for a new law to be over 2,300 pages long. After all, the Constitution itself is only a couple of pages long—albeit written with a fine hand on large sheets of paper. Perhaps the most important set of laws in the history of man, the Ten Commandments, is only 297 words long (King James Version). And Jesus Christ reemphasized the teaching of the prophets from the Old Testament that even those words and all other laws are summed up in just two commandments:

Thou shalt love the Lord thy God with all thy heart, and with all thy soul, and with all thy mind. This is the first and great commandment. And the second is like unto it, Thou shalt love thy neighbor as thyself. (Matthew 22:37-39)

I understand and expect the retort that these are two very different kinds of laws. With that I would agree. The difference is not, however, that the Constitution and the Ten Commandments are foundational principles, while the 2,300 page variety of laws referred to at the beginning of this comment (the new Dodd-Frank financial regulatory law, by the way) is in the way of practical implementation. The Ten Commandments are very much in the way of practical implementation. “Thou shalt not steal” is pretty practical. And the first implementation laws passed by the new Congresses under the new Constitution were not thousands or hundreds or even dozens of pages long. The lengthy laws have developed the farther we have come in time and spirit from our Constitution.

The big difference from the laws of the earlier days of the American Republic and the multi-thousand page laws of today’s Obamacare and Dodd-Frank financial regulation is that when government takes upon itself the task of controlling what people should do, of controlling their daily lives through such things as how to manage their health and their wealth, it takes a lot of words. It only takes a few words to say that it is against the law to maim someone or to rob him. That is to say, it only takes a few words to outlaw crime, but it takes a lot of words to “guide” people in the exercise of their freedom and to turn harmless individual choices (such as which medical procedures you want or how to invest for retirement) into crimes.

Our Republic rests upon the notion that we elect and trust a relative handful of people to represent us in the making of laws, at the federal level just slightly more than 500 people out of more than 300 million. They do the legislative work because it would be impractical for all of us to do it together. They stand in our place, voting for us with authority derived from us, the people.

How can we have a representative government, though, where the representatives pass laws that they do not and cannot read? How can they represent us when they do not and cannot know what they are voting on? Do they not, indeed, fall down on their duty to us when they vote for laws that they have not read? Is not their job made impossible when they are asked to consider laws made up of thousands, or even hundreds, of pages?

That is to say, that our Republican form of government is inconsistent with the kinds of laws that Congress has been passing today (a trend which really got going in earnest during the Congresses of the Depression). Only if our representatives get back to passing short laws that outlaw crime, and abandon efforts to direct the lives of the people, can they really do their job and only then will representative government in America work the way it was intended.

Of Individual Worth and the Fatherhood of God

In recent times Jesus Christ declared, “Remember, the worth of souls is great in the sight of God” (Doctrine and Covenants 18:10), a reminder of the high value that Christianity places on the value of the individual. This is unusual where much of the world focuses on masses and classes and elevates rights of the group over the rights of the individual. In much of the world and throughout history individuals have been considered expendable, particularly if expending them could be feigned as benefiting the group. That is certainly at the core of Marxism and other variants of socialism, that read history as the story of classes. It is at the core of statism, that considers all issues in terms of how they affect the state rather than how they affect the individuals in the state. Of course, just like the oriental despotisms (the ethos of which prevails in many “modern” oriental governments) the focus on the rights of groups and of the state or the society is a mask for reinforcing the power of the rulers of the masses who pretend to speak for the masses and govern for their good while continuing to exploit them.

The worth of the individual in the doctrines of Christianity comes from the fact that each man and woman is literally and not figuratively a child of God. That is fundamentally what makes men and women different from all other animals, a fact that requires little reflection to recognize its truth and lots of sophistry to convince people otherwise. You need a lot of explaining to make people believe that they are no different from the dogs and the snakes and the trees, and even then the idea is so foreign to everyday observable reality that few are convinced, and of those, few stay convinced. The intellectual and moral gap between man and beast is too vast, despite enormous efforts throughout the ages to make it appear not so.

Individual worth based on the literal fatherhood of God is an original doctrine of Christianity, found in the first pages of the Bible. Consider these words from the story of the creation. “And God created great whales, and every living creature that moveth, which the waters brought forth abundantly, after their kind, and every winged fowl after his kind” (Genesis 1:21). Notice that the creatures of the sea and air all came forth “after their kind”. Those are not accidental words. Consider the description of the creatures of the land. “And God made the beast of the earth after his kind, and cattle after their kind, and every thing that creapeth upon the earth after his kind” (Genesis 1:25). Again, all of the land creatures were made “after their kind”. Notice how differently the creation of man is described; what was the “kind” after which man was created? “So God created man in his own image, in the image of God created he him; male and female created he them.” (Genesis 1:27)

Of course, this idea of the divine heritage of man is unpopular with despots who choose to use and abuse God's children. In the ancient Americas a prophet of God was killed by his king for preaching “that man was created after the image of God” (Mosiah 7:27).

Again, in the New Testament the Savior and His disciples taught the divine lineage of man. For example, Paul wrote to the saints in Rome, “The Spirit itself beareth witness with our spirit, that we are the children of God: And if children, then heirs; heirs of God, and joint heirs with Christ” (Romans 8:16, 17). That notion probably did not sit well with the Caesars, who were busy eroding the rights of the individual found in much of Roman law.

The worth of the individual is certainly at odds with the modern-day Caesars. Their emphasis on group rights, their programs to divide societies up by classes and ethnic groups, would leave individuals powerless to protect themselves against sacrifice on state altars except by appeal through their membership in some favored group.

The worth of the individual is the foundation for the freedom of the individual. Consider how much of the Constitution—particularly the Bill of Rights—is focused on the preservation of individual freedoms: freedom of religion, freedom of assembly, free speech, right to armed self protection, right to trial by jury, protection of private property, and so on. These constitutional rights are a partial enumeration of what the Declaration of Independence proclaimed to be “unalienable Rights” by which all men have been “endowed by their Creator.” While you may not have to be a Christian to believe in the divine worth of the individual, this very Christian doctrine is embedded in our system of government and at the heart of what has made America different from much of the world and much of history.

That is why those who seek to change America work to undermine all that proclaims the individual worth of each and every man and woman. It is hard to justify treating God’s children like so many cattle; you first have to get people to believe that they are more like cattle than they are like their Father in heaven. So far, most Americans have shown a stubborn adherence to truths that they have held for more than 230 years to be “self-evident” and which God our Father has taught us from the beginning.

Of Liberty and the Caesars

As we near another annual celebration of our Declaration of Independence and the proclamation of American liberty, it is worthwhile reflecting on what that independence and liberty rest. At its core, the American Revolution revolved around the deep desire to preserve something. That something was the rule of law, an elementary principle of government that the founding fathers had found here and nurtured. The rule of law is the fundamental idea that we should be governed by laws and not by men. It is that principle that throughout our history has set America apart from the rest of the world. Embracing the rule of law the founders built our nation upon a written Constitution.

Our founding fathers frequently used the word “liberty” when referring to the rule of law. When they said “liberty” they did not mean wantonness and libertinism, to be abusive without consequence. Our founding fathers meant by “liberty” the freedom that they had found in America to live beyond the wanton grasp of the arbitrary rule of kings, lords, ladies, and even parliaments. Our founding fathers were comfortable with the idea of government only if what the government did—or more precisely, if what the people in government did—was closely and clearly controlled by laws that everyone understood. To them that meant that they had liberty, and they loved it. The Declaration of Independence is a detailed protest by the Congress of the thirteen new States against the arbitrary violations of the rule of law—of American liberty—by the British crown.

Precisely because the American Revolution was an appeal to the rule of law we succeeded in creating a stable government and society where the French Revolution (and many others since)—appealing to the rule of men, albeit a different crowd of men—fell into chaos and anarchy, merely replacing one despotism with another. The French tore down the monarchy in order to replace it with the Reign of Terror. Americans enshrined liberty in a document that still operates today to resist the arbitrary rule of one group of men over the rest. The Constitution protects the rights of each and all—individuals and minorities—through the rule of law.

The rule of law was not a new idea. Rome’s greatness was built upon it. Its weakness and eventual collapse came as the Romans traded the rule of law for the rule of men under the Caesars. Even then, the Roman tradition of the rule of law was so strong that it took nearly 500 years for the progressive rule of men to lead to the sack of Rome and the ushering in of the Dark Ages, an era dominated by the rule of men.

The idea of the rule of law, however, is much older than Rome. It is found at the heart of Christianity, reaching back to the Garden, from which man was expelled by the breaking of law. Man was redeemed from the broken law by Jesus Christ, whose great sacrifice was made to bind up the broken law and create the path for man to live in harmony with divine law. In modern times Jesus Christ explained the eternal purpose of law in these words: “that which is governed by law is also preserved by law and perfected and sanctified by the same.” (Doctrine and Covenants 88:34)

As our eternal freedom is protected by law, so it is with our civil freedom. Law is our shield against the whim of other men. Without the law, our only defense against someone’s whim is the protection provided to us by the whim of someone stronger. That is the essence of feudalism. That is what our founding fathers were so desperate to leave behind in the Old World, whichever “Old World” they left. That same search for liberty under the law inspires many refugees to America today.

That is perhaps why Americans are made nervous by all of the policy “czars” that have been created by the Obama administration. Czars suggest rule by men rather than by law. “Czars,” the Russian variant of the Latin “Caesar,” are justified by the argument that “they can get things done,” but in the doing they rely upon the arbitrary will of single individuals invested with extraordinary power: rule by men (and women).

Congress is on the verge of enacting—unless the Senate votes “No” when it returns to session in mid July—a major restructuring of the American financial system that would replace rule of law with the rule of men. The new structure rests upon enormous power given to new financial czars. There is a new czar for all federally-chartered banks and thrifts, a new financial consumer czar with power to dictate every aspect of any financial product and service that is offered to the public, and a new systemic risk council with authority to reorganize or even break up any company in America if in their opinion its operations are too risky for the financial economy. The authorities that this new legislation would give are broad, the instructions on how to use those authorities vague, and the ability to find appeal from the mandates of the new czars seriously restricted.

Our founding fathers, who escaped from that kind of rule, would have warned us.

Of Wall Street and Pennsylvania Avenue

Who wants another financial crisis? To hear the advocates of the Administration’s financial regulation bill, anyone who disagrees with them does.

Let us walk past the discussion of others’ motives, important as they might be. Let us, you and I, agree that we do no want another financial crisis. Or, phrased better, let us agree that we would like to reduce the likelihood of another financial crisis and minimize the extent of crisis when it comes. Anyone believe that there will never be another one? Recognizing that crises will occur and that we will be better prepared to face them by acknowledging and preparing for their possibility, let us consider which approach is likely to work to reduce their frequency and their severity.

Which is more likely to be more effective at reducing the risk of financial crises: government regulators or market discipline? Relying upon experience as a reliable guide, the question is soon answered. Government was all over the most recent crisis. In fact, the most recent financial crisis was fomented by government regulations and stimulated into panic by unwise government actions, all of which worked to shield key players from market discipline. Government housing programs and guaranties led people to ignore the risks of mortgage lending—ignored by borrowers and lenders. Credit rating agencies (CRAs) were able to classify risky mortgage securities as nearly risk-free, shielded by the Securities and Exchange Commission from market pressures to identify risks that the CRAs were paid to find.

The crisis was fanned into a panic after the Paulson Treasury Department (1) orchestrated the bailout of the securities firm Bear Stearns, then (2) subjected investors to a big tease with Lehman Brothers which they at last decided not to bail out, (3) bailed out AIG, (4) bailed out bond investors in Fannie Mae and Freddie Mac, and then (5) demanded from Congress $700 billion for the catastrophic Troubled Asset Relief Program (TARP). None of the TARP money was used to buy any troubled assets. A third of it went to bail out banks that were not in trouble (until they took the Treasury’s shilling) while other billions went to auto companies that were.

So why are the Administration and leaders in Congress on the verge of enacting legislation that will give Washington bureaucrats virtual control of any and all of the financial system at their whim? Could it be that these friends of regulation, who control the lawmaking powers this year, are unwilling to admit their mistakes? Or is it that the friends of regulation see the financial crisis—whatever its cause—as a wonderful opportunity to expand regulatory controls? Or maybe it is just that once you tell a story—that Wall Street caused the financial crisis—you have to carry the story on to its conclusion, however wrong that might be. In either case, the friends of regulation control the megaphones and the levers of power. If they have their way, though, Time will surely tell whether it was a good idea for Pennsylvania Avenue to replace Wall Street as the financial center of America.

Of Financial Reform Promises and Too-Big-to-Fail Firms

One of the many astonishing things about the Obama Administration’s financial regulatory legislation is that it promises so much and delivers so little of what it promises. In fact, in most cases it delivers the opposite of what it promises. Seemingly, the Administration knows what the American people want, so it uses promises of delivering what the people want and what the nation needs in order to enact changes that most Americans will neither want nor like.

As Senators and congressmen prepared to return to their states and districts the Administration published a list of “Top Ten Things You Should Know About Financial Reform.” Presumably this would serve as a guide to politicians giving their Memorial Day stump speeches. I heard one Democrat congressman at the Memorial Day ceremonies in Waterloo, New York. Neither the list nor the legislation found its way into his remarks. Good thing for the congressman, because the legislation as currently written fails on all ten of the “Things” that the Administration paperwork boasts that it delivers.

Let us examine Thing 1:

1) End of Too-Big-To-Fail: If a big financial firm is failing, it will have only one fate: liquidation. There will be no taxpayer funded bailout. Instead, regulators will have the ability to shut down and break apart failing financial firms in a safe, orderly way—without putting the rest of the financial system at risk, and without asking the taxpayers to pay a dime.

Part of that Administration statement is true, but only part of it, and not the most important part. The legislation would provide regulators with the ability to shut down and break apart failing financial firms. Regulators already have that authority today and have been exercising it weekly for the past two years to close down failed banks “without putting the rest of the financial system at risk, and without asking the taxpayers to pay a dime.” Failed non-bank firms have been closed down through bankruptcy proceedings—again, “without putting the rest of the financial system at risk, and without asking the taxpayers to pay a dime.”

The risk to the rest of the financial system and the demand for taxpayer bailouts have all come in the past few years as the federal government has gotten involved to prop up firms that the federal government did not want to fail. Prior to the recent financial crisis, too-big-to-fail was a theory. Treasury Secretary Paulson made it official policy and practice, which policies and practices have been officially approved and adopted by the new Administration.

The new financial regulatory legislation—even while making it easier for financial regulators to break up and unwind failing financial firms—would also give to regulators legal authority to bail them out, prop them up, and have them born again as clean firms, free of the financial encumbrances of all of their sins of the past. In very real and important ways the legislation would take the theory of too-big-to-fail, turned into official practice by the Paulson Treasury Department, and make it the law of the land.

There are several ways that the legislation would provide this service. One important tool is the new explicit ability of the FDIC (which would become the agency for handling not just failing banks but any failing firm that government leaders considered important enough for the FDIC’s care) to treat the investors in a failing firm differently. The FDIC would be explicitly authorized to protect some investors and not protect others, giving special attention to the customers of a firm and those who have lent money to the firm. Shareholders are supposed to be wiped out and the leaders of the firm fired, but the bondholders and counterparties doing business could be protected.

If this sounds familiar, this is exactly how the federal government has been treating housing giants Fannie Mae and Freddie Mac. When the government took them over in late 2008, shareholders were nearly but not entirely wiped out, leaders were let go, but all of the bondholders, counterparties, and investors in debt securities of Fannie and Freddie became 100% protected by the federal government and remain so today. Several other participants in the financial system were “put at risk,” the government’s exercise of discretion to pick winners and losers precipitating the failure of several banks that were holding preferred shares of Fannie and Freddie that the government chose not to protect. The taxpayer has not been protected either, the Treasury deciding last Christmas Eve to allow Fannie and Freddie to receive unlimited federal support, already totaling hundreds of billions of dollars.

Fannie and Freddie are government sponsored enterprises (GSEs). The government subsidy programs for these GSEs would be the new model available for any firm designated as systemically significant by the federal government under this legislation. That is to say, that under this legislation, in place of two GSEs we would have potentially dozens.

There is a price for this attention. Whether a firm wants it or not, under this new legislation, if enacted, any firm could be given the GSE treatment. Once the government considered a firm to be “systemically” important it could be told in as much detail as the government leaders considered necessary exactly how to run its business. No part of the business of the firm would be exempt from the government’s reach. The federal government would become the effective partner of that firm. And as former Congressman Dick Armey once said, when you partner with government, the government is never the junior partner.

Now, ask yourself this real-world question: as senior partner, would the government ever let any of its partner financial firms fail? If, as is the case with Fannie and Freddie, by following government mandates the firm got so deep in the red that action became unavoidable, the federal government would be able to use another powerful tool in the proposed new law: the authority to create a “bridge bank." As the government has been doing with Fannie and Freddie—and as many suspect the government will do to “fix” Fannie and Freddie—government officials could take over the operations of the firm and use this bridge bank authority to protect whichever investors they wished and make others (not leaving out the taxpayer) suffer loss. Through a legal and financial “baptism” administered by the federal high priests of finance all of the sins of the failing firm could be gathered together into one “bad bank” and all of the remaining operations of the firm could emerge as a new firm washed completely clean of bad debts and uncollectible assets. The new firm could then be offered up again—either with the same name or a new one—to investors. Of course, the federal government would likely remain as senior partner, but this would give comfort to investors who, like investors in Fannie and Freddie, were looking for a place to put their money where the government would be expected to protect those investments.

Ending too-big-to-fail? In the Administration proposal too-big-to-fail becomes the law of the land. The Administration’s number one selling point for financial legislation is a very good reason to oppose its bill.

Of Financial Safety and Lost Liberty

Americans are about to lose more of their liberty, in a very big way. Like the oil leaking away from the deep well in the Gulf of Mexico, American financial liberty will be steadily draining off with few ideas on how to stop the leaking once it has begun.

First the housing markets panicked, then the Paulson Treasury panicked, and then the financial markets panicked. Now panic has hit Congress. Ignoring that the housing-financial crisis was set up and fomented by bad government regulatory programs, Congress is on the verge of enacting legislation that will give to government regulators authority to control any financial activity in the United States.

You may think that I am exaggerating a bit here, getting carried away by rhetoric. I wish that I were. Looking at the provisions of the legislation that the Senate is now debating and is scheduled to pass in the near future, I cannot think of a single financial transaction that government agencies would not be able to control. By control, I mean set rules as to how the transaction would be structured, to whom it could be offered, by whom it could be offered, how it could be advertised, how it would be priced, or even whether it could be offered at all.

Let us consider a simple financial service: a home equity line of credit, or HELOC. With a HELOC a customer can borrow money from the bank up to the amount of equity that the customer has in his house. The attractiveness of the HELOC is that you do not have to sell your house in order to use the equity in it to help pay for college, fund needed remodeling, or even start a small business. With the loan backed by the equity in the house, the borrower gets a far lower interest rate than he would without that collateral.

The legislation would create a new, totally independent federal bureau of consumer regulation. This new bureau—headed by a one person consumer czar endowed with power that would make an old Russian despot jealous—could determine, for example, that it would be “unfair” or “abusive” if the amount of money that a customer could borrow under a HELOC were reduced by the bank when the value of the customer’s house declined. I am not making this up. At a recent Federal Reserve meeting self-appointed consumer advocates, who would dominate the new bureau, complained that banks during the housing bust were lowering HELOC amounts for no good reason other than that home prices declined, neglecting that what makes a HELOC affordable is that it is backed by the value of the house. The value of the house goes down, so must the value of the collateral and the loan amount secured by the collateral. The law would not require, however, that the new consumer bureau be guided by common sense.

Other provisions of the proposed law would allow government agencies to break up any company in America, or make it set aside any reserves, or give up any line of business—and allow the agencies to play favorites by acting one way with one company and very differently with another—as long as the agencies claimed that their actions were appropriate to deal with systemic risks. The agencies would be the sole judges of what makes for a systemic risk. Or, to look at the authority another way, the federal financial agencies would be able to define what they consider to be “safe” financial conduct and effectively ban everything else, and steer individuals and businesses into government-identified safe financial activity.

In case the recent financial panics tempt you to think that all of this is a good idea, remember that we have tried this all before, and very recently. The example—housing—is staring us in the face. Maybe policymakers in Washington are too close to it all to notice.

In the housing fiasco, the government determined that mortgages were very safe (as demonstrated by Federal Housing Administration programs that allow homeowners to have a negative equity position on day one of their new government-guaranteed mortgages), that investing in mortgages was safe (hence the creation of government-sponsored Fannie Mae and Freddie Mac, to encourage investment in mortgage securities), that packaging mortgage securities was safe (as demonstrated by AAA ratings for packages of securities, awarded by credit rating agencies that were franchised by the Securities and Exchange Commission), and that housing assets on bank balance sheets were safe and worthy of incentives by regulatory standards that allowed banks to hold relatively little capital for their mortgage loans.

So, given how well the government identified safe financial activity in the housing markets we can expect the government officials to be equally mistaken in identifying other forms of safe financial activity. Even as I write this, government officials are working on new plans to establish rules to require banks to stock up on various types of government debt. These rules are based upon the near-sighted assumption that government debt is safe—ignoring the rising flood of Greek government debt, held back only temporarily by sandbags filled with fiat money from other European governments.

On the wall in my family room I have a framed $500 government bond. Only one coupon from it has been clipped, a semiannual payment for $15 in interest. The next coupon is payable on July 1, 1865, by the government of the Confederate States of America. That coupon and all the rest of the coupons through 1894 remain unredeemed. The proposal by Congress to exchange American financial freedom for the wisdom of government to identify safe financial activity has the crackle of Confederate money.

Of Politics and Principles

The debate and development of public policy in the greatest republic in history has been my career. Discerning between good and bad ideas, detecting valid and erroneous arguments, is part of my daily job. The success of a republic, however, requires that all citizens have competence in judging right and wrong in the debate of public issues. All do not have to be experts in all the details of every issue for a republic to work, but they do need to be able to judge enough to know to whom they should entrust the duty to represent them and attend to the details of governance—and to know when to withdraw that trust.

With public debate becoming increasingly confusing but also, apparently, increasingly prone to slogan and devoid of substance, with emotion seeming to take up more space than information, with error and deception playing a progressively more prominent part in discourse, how do citizens whose careers are more focused on producing goods and services and the things that make an economy work figure out who is right and who is wrong? Without leaving their day jobs for politics, how do they choose the right people whose lawmaking can dramatically affect everyone else’s day jobs, as well as their hearth, home, and health?

I believe that the answer is that every citizen of the Great Republic, as Winston Churchill called the United States, needs to be familiar with and dedicated to the founding principles of the Republic. The consideration of every public issue should be based upon an appeal to this foundation. That approach may not resolve every issue, but it will ensure that we do not stray very far into error. In fact, for most of the key issues of today an appeal to the founding principles would quickly disperse the foggy talk that makes up so much of contemporary public debate.

Those founding principles are embedded in our Constitution, but they are perhaps most clearly presented in the Declaration of Independence. I present a few examples of founding principles that would serve as reliable guides in considering such issues as healthcare, financial regulation, and taxation and public spending.

The Declaration begins by invoking “the Laws of Nature and of Nature’s God.” Our concept of government rests upon the idea of truth and laws that are as immutable as God Himself. Trust that those who say that truth is relative and law is founded on whatever man or Congress or the Supreme Court want it to be are leading you far astray, regardless of how attractive a ribbon they put around their poisonous policy packages. If law is relative, then government is a mere matter of the will of whoever can sway the crowd today. There is no protection for the minority—and all will find themselves in a minority of some kind whose rights need protecting.

The Declaration, in words that hopefully all Americans still find familiar, proclaims the “self-evident” truths that, “all men are created equal, that they are endowed by their Creator with certain unalienable Rights . . .” Among those immutable truths on which our system of government was founded is the focus on the individual, that the individual has worth, has importance, has rights that cannot be taken away. These rights can be usurped by tyrants—and at the time when the Declaration was written and approved by the representatives of the new nation nearly all of mankind labored under tyrannies—but that does not eliminate these rights, it only violates them. Our nation was created to protect the rights of the individual. Reject politicians whose formulas are invoked to violate your individual rights, especially when they justify the taking of individual rights by an appeal to benefiting the group. Remember, at the head of every group is a leadership who in fact enjoys and wields the “rights” of the “group” as the spokesmen for the group. They derive their power, vampire like, from the blood of the members of the group, from individuals whose rights are violated to empower the group leadership.

In direct relationship to these individual rights, the Declaration explains, “That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed . . .” Withhold your consent from those who would seek to govern with plans that rather than protect your rights would limit your rights. Resist those whose plans assert that government should be given the decision over your daily choices. Resist those who assert that all must be “regulated” and who believe that finding that something “is not regulated” is a justification to regulate it, that is, to impose government decision-making over the power of your individual decisions. Your right to choose is the reason the government was created, to protect your individual rights, not usurp them.

On reflection, it is all too easy to find regulations and programs in our government and laws that are inconsistent with the Declaration and the founding principles of our government. The immutable rights remain, however they may be currently violated. That should alert us to the danger in which we live, but it should not be cause for despair. Rather we should be motivated, as were our nation’s founders, to reassert the principles on which our nation was founded. The tools for doing so, embedded in our Constitution, are still available to us.

Of Geography and the God of All the Earth

A colleague this past week had a religious conversation in which an old academic chestnut was brought up. This was the one that begins with the undiscerning observation that the different religions are in fact pretty much all the same. Step two in the argument is that all religions basically teach the same thing, such as to be a decent person and kind to your neighbors. Step three in the argument is needed to explain why, then, if they all teach the same thing are there so many different religions. The third step is the assertion that the different religions are manifestations of different cultures or civilizations around the world. Judaism, so the argument goes, is the manifestation of an ancient culture from the area of Palestine, Christianity the religion of Europe and its colonies, Islam the religion of the Middle East, Hinduism the religion of India, and so on. The final step of the argument is that—and therefore—there is precious little in the way of “truth” in religion and certainly not enough to argue about.

No doubt you have heard the argument before, and as you consider it you very likely can see how thin of an argument it is. I have nearly always encountered it as a variety of argument intended to end rather than engage in conversation.

With regard to the first two parts of the argument, there certainly are similarities among religions, but it seems that the more knowledgeable one is about a particular religion the more prone he is to see how different it is from others. Religious converts are particularly good experts on differences in religion, the differences being powerful enough to motivate a change of beliefs and not infrequently a change in their entire way of life. The sameness tends to be seen more by those who are more casual about their religious knowledge.

As to the third and fourth elements of the argument, it is one thing to recognize geographic and cultural influences in religions and quite another to assert that the discovery of these influences means that the quest for religious truth is a waste of time and effort. To begin with, geography fails even as a superficial explanation for religious difference. How does it explain different religions that are embraced by large numbers in the same region. India is one very clear example, where several religions have tens of millions of adherents. It also poorly explains how Christianity, Judaism, and Islam have such close geographical ties that they have had and continue to have bitter disputes over the same sacred sites, most especially Jerusalem.

This is not to say that one cannot find original roots of particular religions in one place or another. After all, the religion had to start somewhere, with someone or some group living in some place on earth. From that place the particular religion spread to other places and people.

But now I present a different case. What of a religion that has its rising in two different locations, on two separate continents oceans apart? That is the case with the doctrine of Jesus Christ. With the testimony of the Holy Bible and The Book of Mormon taken together we have two witnesses—one from the Old World and one from the New World—that Jesus Christ is the Son of God and Savior of the world. No other religion can or does make that claim. Each volume of scripture is an ancient record of God’s dealings with His children, teaching the same plan of salvation through the atoning sacrifice of Jesus Christ and His resurrection from the dead. In the writing of these records there was no comparing of notes between the separate series of authors, no communication other than through God and His Holy Spirit.

Whatever the geographical explanation of religion might claim, its claims fall to the ground in the case of Christianity. There truly is something different about the doctrine of Christ. It comes with the tangible testimony of dual volumes of scripture that proclaim with two voices from two hemispheres the single message that Jesus Christ is the God of the whole world and not just a part of it. As Christ explained to His disciples in ancient America,

Know ye not that there are more nations than one? Know ye not that I, the Lord your God, have created all men . . . ? Know ye not that the testimony of two nations is a witness unto you that I am God, that I remember one nation like unto another? Wherefore, I speak the same words unto one nation like unto another. (2 Nephi 29:7, 8)

Of Government Collusion and Market Discipline

There is a lot of noise and confusion about what caused the recent financial panic. The Obama Administration believes that the basic problem is that markets do not work right, people are too dumb to choose for themselves, and that regulatory agencies were not able or were unwilling to keep up with bank shenanigans. Their solution: more of the same, that is, create a variety of new government agencies and bureaus that have the authority to dictate and control any part of or player in the financial system, including control of financial customers large and small (look in the mirror for the definition of financial customer). This neglects the fact that government agencies were the most blameworthy in the recent financial panic. In fact, it is impossible to have a long, sustained economic recession or depression without government policies causing it. (I will save for another day how the policies of the Federal Reserve and the Franklin Roosevelt administration made sure that an economic downturn became a depression lasting for a decade.)

Let me address the first of these points in the Obama administration’s justification for taking over the financial system. First of all let us consider the markets. It is true that the markets did not perform right. That was because government rules, structures, and programs did not allow the markets to perform right. The government guarantees bank deposits, so depositors do not care very much how safe or sound a bank is. Government-sponsored enterprises (GSEs), like Fannie Mae and Freddie Mac, bundle up mortgages into securities that investors assume have little or no risk. The Securities and Exchange Commission (SEC) approves and controls the small number of credit rating agencies, and investors believe that these agencies are right when they give to a particular company or investment their highest credit rating (such as AAA), a rating that is thought to present little or no risk. The SEC has protected these agencies from competition and from market discipline for their errors while providing little in the way of regulatory discipline.

With those and other government protections in place the appearance of risk just about disappeared from the mortgage markets. Different investors have different appetites for risk. It was not the people hungry for high risk returns that fueled the housing bubble. Many of those with the weakest appetite for risk, seeking the safest investments, were drawn to the mortgage markets. In this government-manufactured atmosphere of little or no risk, many mortgage firms, increasingly non-bank mortgage firms, made it more and more possible for people to buy houses that they could not afford. Once the mortgage firm made the mortgage, regardless of the ability of the borrower to repay, the firm sold the mortgage to the GSEs, who sold it on to investors who poured trillions of dollars into what they thought was a safe haven. Then the mortgage firm went on to make more mortgages. Investors were shielded from asking whether the mortgages were any good, that is, whether the person buying the house could actually afford it.

That mispricing of the risk pulled more and more money into mortgages and real estate, driving prices up and up, pulling in more and more investors as the prices rose, until it was impossible to put one more Jack on the house of cards without it tumbling down. People panicked when “safe” investments turned out to be risky. Then the government started panicking, bailing out some firms and not others, changing the rules almost weekly, demanding hundreds of billions of dollars from taxpayers in order to pick financial winners and losers. Investors, not knowing where the government would turn next, panicked some more.

It was government interference in the market that failed, not the markets. Without all of the government camouflage, investors would have insisted on knowing that the mortgage borrowers could afford their houses before funding loans to buy them. Ask yourself this: would we have had the whole housing blow up if people who could not afford to buy houses were not given mortgages? Yet the Obama Administration, even today, is tripping over itself to find new ways to guarantee new mortgages, in many cases especially for people who cannot afford their houses. Where have all the subprime mortgages gone? They have gone to the Federal Housing Administration (FHA), where they have a government guaranty. (Watch what happens to the FHA house of cards in the coming months.) When will they every learn? Oh, when will they ever learn?

Giving more power to the kind of government agencies that helped create these problems hardly seems like the sensible answer. That is what the Obama Administration proposes, though. Instead of controlling the markets with more government interference and masking of risk, more bailouts for firms that should be allowed to fail, more power for some new government bureau to pick winners and losers and to tell people which financial products they can and cannot have, we should be exposing financial players more to market discipline. We should make it harder to hide risk and easier for investors to recognize the risks and allow the markets to charge higher prices for higher risks and lower prices for lower risks.

Market discipline has always been the quickest and surest regulator. It rewards the efficient provider of what the buyers in the market want, and it punishes the incompetent. Very importantly today, the market is stingy about bailouts.