Of the World Bank and Washington Parties

Last evening and this afternoon I was in Washington, D.C.  That would be an unremarkable statement, since I work in Washington.  But I am not often there in the evening and even less often on a Saturday afternoon.  I was in Washington at those unusual times because my son, I’ll call him Peter, was participating in a choral program at a church in the city.

I write this to explain why in the world I would be in Washington not only on a Friday night and a Saturday afternoon, but of all weekends, on the weekend when the World Bank and the International Monetary Fund (IMF) are having their annual meetings.  Two out of every three years they hold their joint meetings in the capital of the Free World, the third year somewhere else.  They like holding their meetings in the capital of the Free World because they are very much interested in the capital of the Free World.

Finance ministers, government economic development experts, and related hangers on from all over the globe gather to talk about poverty and economic hardship in the poor countries and how the rich countries have an obligation to channel more money in the direction of the poor countries.  They have been doing this for something over 65 years.  And yet, with a few exceptions, the poor countries seem to remain poor, the most notable growth being in the number of poor countries.

Early in my career in Washington, back in the early 1980s, these meetings used to be a lot of fun.  The world’s largest commercial banks would hold lavish parties.  In those days the big banks, encouraged by the IMF, the World Bank, and their own governments, were big into lending money to the poor countries, billions and billions of dollars.  That money was supposed to fuel economic growth by funding big projects that politicians could take credit for and where they could have their pictures taken at elaborate ribbon cutting ceremonies.  The projects were started, some of them built, but very little economic development resulted.  The poor nations were not very good at paying back the loans.  In the mid-1980s it almost destroyed the banks.  Since then, they have gotten out of that business.  They stopped holding the parties, too.

Walking through Washington last night and this afternoon I could see nevertheless that lavish parties were still going on.  I am not sure who was hosting them.  I think that at least some were sponsored by non-profit groups.  But they were still lavish.  It was very difficult getting past the fanciest hotels and restaurants and some of the popular museums.  Stretch limos were packed in as the financial leaders of these poor countries were climbing out and milling around, dressed in tuxedos, evening dresses, and pricey jewelry, to hear speeches from well-paid development experts, delivering their latest reports on the tough financial times and their clever theories about the obligations of rich nations like the United States to send more money to the poor nations.

This afternoon we walked by Lafayette Square, within earshot of a group of protesters in front of the White House.  Somebody was bellowing through a bullhorn.  I could not quite make out what he was chanting.  I think it had something to do with the World Bank and IMF not giving poor nations enough money.  As I say, I could not quite make it out.  My son said it sounded all the world like,

No more pencils,
No more books,
No more teachers’
Dirty looks.

Of the Spirit of America and the Spirit of Tyranny

Last week I experienced two memorable events, each in its own way pointing to the spirit of America. One, appropriately enough, was called “The Spirit of America,” the annual presentation of the U.S. Army’s Old Guard, headquartered at Fort Myer, in Arlington, Virginia. The program chronicled the history of the Army from its first days in the War of Independence to the present.

There is no reliance upon hyperbole in saying that the U.S. Army has been one of the most effective instruments in the history of mankind for the promotion of freedom. Without the Army, independence would not have been achieved and very likely not even attempted (the Army came into being a full year before the Declaration of Independence).

The very existence of the United States has been a beacon and stimulus to people around the world to strive for and obtain freedom. Would the colonies of Latin America have sought liberty without the successful example of the United States? How significant was the example of America to the struggles of the peoples of Europe to cast off their monarchies? To what extent did Great Britain learn from its painful mistakes administered by the citizens and Army of the United States and provide for a gentler path to liberty for its many colonies around the globe? The Army has been a reliable and effective protector of that beacon of American freedom.

With direct action, the U.S. Army became the essential element that gave force to Abraham Lincoln’s Emancipation Proclamation. Without the victories of the U.S. Army over the rebels who rose up against freedom and constitutional government Lincoln’s Proclamation would have been a scorned piece of paper that offered false hopes to millions laboring in slavery.

In the Twentieth Century the U.S. Army helped bring World War I to its end, the western republics triumphing over the central monarchies. It was the U.S. Army that not only played the central role in defeating the dictators of central Europe and Japan in World War II, but wherever it went the U.S. Army left free republics in its wake, including among the vanquished nations. Again in Korea, Viet Nam, Grenada, and Panama the U.S. Army fought for freedom and against tyranny. Throughout the Cold War the Army—together with the other important branches of the armed services, equally effective instruments of freedom—remained strong and active to protect the free world against totalitarian communism.

This idea did not originate with me. Our grandfathers knew these things. They were commonly understood until recent generations witnessed the armed services and even national defense itself become open questions with left-wing academics seeking to reintroduce into America, and dress in pseudo-intellectual clothes, the exploded Old World programs of tyranny and rule by elites. That the idea of the liberating role of the American military can seem fresh and insightful is a mark of how much the religions of tyranny have found a place in popular media and even in the education supplied in many government schools.

By contrast the spirit of America silhouetted the other event to which I referred. This was the speech of President Barack Obama before a joint session of Congress, outlining his latest plan to restore job creation that has been so effectively undermined by his economic policies. If you reach through the cloud of rhetoric, President Obama’s proposal does not rise above expanding the size of government and raising taxes on successful people and entrepreneurs. That is not the spirit of America.

That is the spirit of the old nations of Europe and Asia from which our forefathers fled to found something entirely different in the New World. That is the spirit where people get ahead by the favor of those in power, and the people in power take what does not belong to them to reward their supporters and hangers on. A leading news story of this week is the scandal of a bankrupt “green” factory that was awarded nearly half a billion dollars by the Obama Administration and used as a television backdrop to announce how government subsidies to “green” industry would pave the road to national prosperity. That idea is today just as bankrupt as the business. It seems that what made this business green was the color of the money that Washington elites poured into it from the U.S. Treasury.

Together the two events demonstrate what the spirit of America is and what it is not. The first is a legacy of personal sacrifice by free soldiers for the freedom of others. The second, the spirit of tyranny, would sacrifice other people for the expansion of government and the power of Washington elites.

Of Political Combat and Governing the Nation

There is an idea, common in public discourse, that is at best naïve and at all events silly. It is the mistaken idea that the chief problem of American government today is the unwillingness of Republicans and Democrats to set aside their differences and get on with the business of government. It apparently is based upon the assumption that there is very little in the way of principle, belief, or right and wrong in the proposals and policies of the two. In this notion, the two sides are just jockeying to see who will “win.” Perhaps that comes from the view that all too many politicians throughout time have not had much in the way of principles and beliefs, mingled with the approach to politics that sees it as some sort of sports event rather than a combat over how the nation is to be governed. These are certainly the attitudes of the shallow reporting that guides most of the newspapers and major media organizations today.

This view is demonstrably wrong. While strong differences of opinion have always been part of American government since its earliest days, the issues at stake have seldom been trivial. “Winning” in American politics has been and continues to be about how the nation is to be governed, not about who “ended” with the higher score. It takes a very superficial understanding to think that American politics is all some game. At its core, political combat in America has always been about freedom, those who wish to promote and protect freedom and those who seek to limit and control freedom, those who genuinely trust people and those who do not. There is no compromise in this combat that does not either promote or reduce freedom.

The most enduring political battle of the nineteenth century was over trade, whether to have free trade or to place restrictions on the ability of people to buy and sell with whomever from wherever they wished. Every compromise either expanded economic freedoms or reduced them. Average people were made wealthier or poorer by the results of the political fights over trade.

The hottest political battles of the nineteenth century were over slavery, whether to extend it or limit it, whether to preserve or to abolish it. All of the temporary compromises that were reached either expanded freedom or reduced it. In the end over half a million people in the United States died over this issue when the battle left the ground of politics and took to the field.

This exception to political battle in the United States, when we let guns rather than politicians do the talking, was when the political question cut to the core of what we were as a nation, a nation of “We the People.” As Abraham Lincoln correctly saw, America could not forever remain part free and part slave; it would eventually become all one or the other. The nation was becoming steadily freer, slavery being killed by economic reality. When the southern slaveholders could no longer use politics to keep slavery alive within the United States, they sought a solution in disunion and eventually war. They succeeded in ending slavery more quickly than anyone imagined.

Political conflict did not let up in the twentieth century any more than it has in the twenty-first. The important thing is not that we have political battle but that, with the exception of the Civil War, we have been willing to let our battles be fought out in legislatures and elections. The sad truth is, that to the extent we infantilize political conflict into a sporting contest it will cease to be a means by which we fight out the battles of how we govern. Rule of law will break down, and conflict will find its way out of the halls of government and into the arena of the streets.

Of Inflation and Words of Offence

The professional political commentators were all atwitter today about a word. It was one word from a comment that new presidential candidate, Texas Governor Rick Perry, said yesterday in discussion with some likely Republican voters in Iowa. The subject was Federal Reserve Chairman Ben Bernanke and the monetary policies of the Federal Reserve Board. These are the monetary policies that affect the price of everything in the United States and the value of the dollar abroad.

This is what Governor Perry said. Read it carefully, and see if you have any difficulty figuring out what Perry’s message was:

If this guy prints more money between now and the election, I don’t know what y’all will do to them in Iowa, but we would treat him pretty ugly down in Texas . . . I mean printing more money to play politics at this particular time in American history is almost treasonous in my opinion. Because all it’s going to be doing—we’ve already tried this—all it’s going to be doing is devaluing the dollar in your pocket. And we cannot afford that. We have to learn the lessons of the past three years.

Have you figured out what he was talking about, what his message was? This is not a trick question. His message seemed clear and obvious to me. That message was not what the professional commentators were largely talking about. I guess they missed it. As they interviewed each other, pretending that they were somehow reporting news, they zeroed in on Governor Perry’s use of the word “treasonous”. Was Governor Perry accusing the Federal Reserve Board Chairman of “treason” they all asked?

Having been interviewed by the TV talking heads on numerous occasions, I could not help imagining myself responding to their question. Of course they did not ask me, or anyone like me. They were busy interviewing each other.

But if I had been asked what seems to be the important question of the day—or, like Sesame Street puppets, the word of the day—I suspect I might have answered something like this:

“Are you asking me about a word or about the principle that Governor Perry was emphasizing? My religion teaches me not to make a man a transgressor for a word (see Isaiah 29:20, 21), but it is the principle, his message that we should consider if we want to evaluate his candidacy for President. What principles would likely guide him while in office? That is what we need to know if we want to have an intelligent conversation about who should be president.”

I would then add that it seemed to me that Governor Perry’s message was very clear:

Inflation is a bad policy, an especially bad policy at this time of a weak economy. We have tried it before, and it hurts the nation and the people. It would be particularly wrong for the independent Federal Reserve to choose inflation for political purposes.

That would be my recitation of Governor Perry’s message. I think I got it right. And I think that Governor Perry got it right.

Inflation is terrible. It breaks the promise embedded in money and makes it a lie. Remember that money is just a certificate of a promise between two people: I will give you my labor or goods or service in exchange for a promise that I can obtain something of equal value later. That becomes a lie if inflation means that when I redeem that promise I get something that government has reduced in value by depreciating the money that carries that promise. I provide $20 of labor and only get $18 of value in return. That is what inflation means. It corrupts that value of our goods and services. Even worse it corrupts the value of the promises we make and receive.

Inflation is particularly hard on retired people. These are people who set their money aside for 20, 30, 40, 50 years or more so that they could live off of it in their old age. Inflation cheats them, giving them only a fraction—sometimes only a small fraction—of the value that they set aside and hoped and relied upon for the rest of their lives. They lived a lower standard of living so that they could save for the future, only to find inflation make that future poorer for them. That is a life-time theft, when it is all too late to be reclaimed.

So if you want, go ahead and choose whatever word you want to describe inflation and its effects, especially if that inflation were inflicted on the nation for short-term political gain. Choose your word if that political inflation were to be inflicted by those public servants—the Federal Reserve Board—who took on the legal duty and responsibility to maintain stable prices, to fight inflation.

Whichever word you may choose, the policy of national inflation is wrong. Even if governments throughout history and into the modern era frequently resort to inflation when their national debt becomes too heavy to carry, it is still wrong. It is destructive and undermines the economy and robs the people who rely upon honest money.

Governor Perry was right to say, in very clear language, that it would be a major mistake for the Federal Reserve to choose that road, that the Federal Reserve must guard its independence from political pressure and hold to its legal mandate to fight inflation, not promote it.

If you must choose a word to describe it, go ahead. To quote Gilbert and Sullivan,

I conceive you may use
Any language you choose
To indulge in without impropriety.
(Iolanthe)

Of Government Debt and Historic Ratings

Apologists for the Obama administration desperately wish to make light of the unprecedented downgrading of the credit rating of U.S. Government debt from the virtually riskless category of AAA to the slightly riskier rank of AA. The apologists, when they cannot divert attention from the issue altogether, rely upon one or both of two arguments: 1) it was all a big mistake, an irrational and inappropriate decision; or 2) the downgrading does not really matter, it does not mean much.

Apology 1) merits this observation. Maybe it was a mistake. The other two major rating agencies so far have not taken a similar step, even while making noise about the possibility. That kind of public and open debate and disagreement is important for this land of free speech, most particularly with regard to opinions on government policies and their consequences.

The question of the ability of the U.S. to continue to service its debt is certainly open for debate. What is not debatable is that we are now in a condition where it is debatable. We have not been in a situation—since the emergence of the United States onto the world stage of major nations—where our ability to service our debt was at all in question. That we are is new, historic, and not disputed. Under the Obama Administration a lot of unthinkable things have suddenly become all too thinkable, from socializing medicine, or backing away from our support for Israel, to the government taking over the banking system. Add to that list of unthinkables the riskiness of U.S. Government debt.

Apology 2) is without merit. The noise from the Obama Administration suggests that it really does matter, a lot. It is important to note that the S&P decision came after the Congress and the Administration very predictably reached agreement on raising the debt ceiling. The issue is not about the debt ceiling. The issue would still exist if there were no debt ceiling. The issue is the natural debt ceiling, the one that comes when the debtor is no longer able to make good on his promises of repayment. The downgrade is advice to all investors anywhere in the world that the safety of U.S. Government debt can no longer be taken for granted. It has moved from being riskless to an investment that carries some risk—you may debate how much, but you can no longer deny that there is some.

Maybe there is great wisdom in that. Maybe all government debt, from any source, should be recognized as carrying risk. There is always political risk. History is replete with evidence that governments lie to their own people and to their investors, so perhaps a Triple-A “riskless” rating should never be given to any government promises. But apart from willingness to pay, to honor debt agreements, the recognition today is that the U.S. government debt is on a trajectory to where the government cannot—to where it will be unable to—honor its debt commitments.

That is not unprecedented. There are several historical examples where governments amassed debts that were too heavy to repay. It has usually led to the downfall of the governments. The Roman emperors tried to manage their uncontrolled spending on cheap popularity by debasing the coinage (a form of inflation) that wrecked the economy and eventually the empire itself. The debts of the English King Charles I led to rebellion that cost him his head in 1649. A similar chain of events brought on the French Revolution. More recently, the Soviet debt crisis of the 1980s set in motion the final events that broke up the USSR. Other sovereign debt crises are unfolding today before our eyes. All that S&P said was that the U.S. Government cannot act like it is immune from joining the sad list without making major changes in spending and borrowing programs.

Which is to say that the S&P decision matters greatly. There will be much debate about how much it matters, but only charlatans or simpletons will maintain that it does not matter at all. Once you have lost your virginity, there is no reclaiming it. It is a watershed to move from perceived risklessness of debt to the recognition of some risk. Risk costs money, as investors have to hedge against the possibility of some degree of non-payment, whether through changes in terms or through repayment in debased (inflated) currency.

Already investors are starting to move some of their money out of government debt—now exposed to greater market risk—into bank deposits where even with interest rates artificially depressed by the Federal Reserve the principal is not exposed to changes in market values. More significantly, an important anchor of certainty in our economy—the assumption of absolute security of U.S. Government debt—has been pulled up, rougher going for any ships that have to navigate an economy already turbulent with uncertainties.

In the early days of the Obama presidency the media and the President himself were eager to point out how this or that development was history-making, that this or that initiative was historic. Downgrading the credit rating of the debt of the U.S. Government is certainly historic. Let us hope that President Obama does not make any more history.

Of the Love of Christ and the Law of Restoration

When Jesus Christ visited His people in the ancient Americas after His resurrection in Jerusalem He taught them lessons that He had preached to the Jews in ancient Judea. The pre-Columbian American record of Christ’s teachings proves that the Sermon on the Mount and other words of Christ in the Bible are not mere inventions of the Savior’s followers. Separate witnesses to the same message, with an ocean in between them, demonstrate the consistency of Christ’s words and the veracity of the record.

One of those important teachings involves our attitude toward others. In the Americas He taught, as He did to the Jews,

Verily, verily, I say unto you, Judge not, that ye be not judged. For with what judgment ye judge, ye shall be judged; and with what measure ye mete, it shall be measured to you again. And why beholdest thou the mote that is in thy brother’s eye, but considerest not the beam that is in thine own eye? Or how wilt thou say to thy brother: Let me pull the mote out of thine eye—and behold, a beam is in thine own eye? Thou hypocrite, first cast the beam out of thine own eye; and then shalt thou see clearly to cast the mote out of thy brother’s eye. (3 Nephi 14:1-5)

In short, fallible as we are, we are little qualified to judge the faults of others, and doing so puts us in danger of being similarly subjected to imperfect standards. If we prefer patience and tolerance applied to us, then we should practice them when considering others.

Now, let us add to this discussion another important virtue. In modern times, when Jesus Christ restored His Church on the earth He listed the virtues needed to do His work:

Remember faith, virtue, knowledge, temperance, patience, brotherly kindness, godliness, charity, humility, diligence. (Doctrine and Covenants 4:6)

I would particularly draw attention to the virtue of “brotherly kindness”. I would ask, what is the difference between being nice and being kind? I would suggest that being nice is related to manners and politeness, an important but perhaps shallow virtue. I have experienced people who are very nice and polite but who are rather unkind. I have, similarly, known people who were rather rough in their manners and outspoken and direct in their language but who were deeply kind and caring. In this context, I consider kindness related to charity and love. I think that is what is meant by “brotherly kindness” in the scripture. I prefer kind people to nice people, if I had to choose.

Next we turn to a greater and more important virtue, the most important of all. Here is how the ancient American prophet Mormon described charity (again, similar to the definition revealed an ocean away by the Apostle Paul):

And charity suffereth long, and is kind [notice again the connection between kindness and charity], and envieth not, and is not puffed up, seeketh not her own, is not easily provoked, thinketh no evil, and rejoiceth not in iniquity but rejoiceth in the truth, beareth all things, believeth all things, hopeth all things, endureth all things. Wherefore, my beloved brethren, if ye have not charity, ye are nothing, for charity never faileth. Wherefore, cleave unto charity, which is the greatest of all, for all things must fail—But charity is the pure love of Christ, and it endureth forever; and whoso is found possessed of it at the last day, it shall be well with him. (Moroni 7:45-47)

While this is an ideal, it is clear that God does not intend it to be an unreachable ideal. Through the atonement of Jesus Christ charity has been placed within the reach of all of us, and God intends all of us to obtain that supreme virtue.

When the Prophet Joseph Smith was being treated with anything but kindness, in the depth of a dank prison pit in a Missouri winter, the Lord revealed to him how to treat others. The Lord instructed the Prophet, and us, to engage with others “by long-suffering, by gentleness and meekness, and by love unfeigned; by kindness, and pure knowledge, which shall greatly enlarge the soul without hypocrisy, and without guile. . .” The Lord further instructed us to “be full of charity towards all men,” and as we did so, the Lord promised, “The Holy Ghost shall be thy constant companion” (Doctrine and Covenants 121:41, 42, 45, 46).

Thus we see that it is through the atonement of Jesus Christ that we have access to the presence and influence of the Holy Ghost, which influence changes our hearts and fills us with charity, the greatest of all. It is with that changed attitude that God wants us to interact with our fellowmen here and in the eternities.

This may all still seem a bit theoretical. The ancient American prophet Alma explained a very simple and practical approach, one that I have found confirmed over and over again.

For that which ye do send out shall return unto you again, and be restored. . . (Alma 41:15)

Alma called this the law of restoration and explained that, as we show mercy, justice, and goodness toward others, the same will return unto us. The more we try to give away love, the more that love grows within us. As we practice the love of Christ, we will develop the love of Christ as a personal virtue, a practical approach to something that means everything.

Of Families and Everlasting Reunions

Some family traditions are seemingly untraceable; we do not know where or how they got started. We just do them as part of the warp and woof that weave the family together. But there are some of which we know where and when they began, because we began them. In a few days we will start a new tradition in our family that promises to help unite our family forever, because it is intended to remind us that families go on and on through the generations and that the members of the family are connected to the family eternally.

We will gather all members of the family in what is projected to be a biennial reunion. We envision a combination of daily living and recreation, punctuated by family devotionals. The devotionals are intended as a unified worship of the Father of us all upon whose power we rely to make these family relations everlasting.

Inconstancy is one of the constants of mortality. Plans are made and changed or forgotten. Pledges are given and revoked. Promises are made and broken. People are born, mature, grow old, die, and fade from the memory of the living. All earthly things seem to fail and fade.

Yet many wish and hope for the sweetest experiences and relations of life to continue unceasingly. God, the Father of us all, has promised that they can. They are found most bountifully within the family. How in this world of all things temporary and changing do we find the power to make things everlasting and unchanging?

We can only find it by drawing the power and influence of the eternal world into this one. God Himself has to do it. Because our Father in Heaven wants us to bring our families into heaven, He has established heavenly places on earth where heavenly promises can be made by mortals, made eternal by the participation of God in the promise-making and His help in the promise-keeping.

These holy places are the holy Temples of God, built under God’s direction, dedicated by His authority, sanctified by His presence. Inside these holy Temples heaven takes up residence on earth.

Imperfect man and woman can enter into these Temples, there join hands under the authority of God, and make solemn promises that can unite them as a family that may last forever. The promises may last forever, because God is a party to the promises. By those who hold heavenly power and authority to act in His name our Heavenly Father wraps binding cords of eternity around the hearts of the participants. As the mortal husband and wife remain true to God He keeps them united and through the atonement of Jesus Christ overcomes their mortal imperfections. This blessed association is available today to all who will.

Heavenly connections thus made and honored reach through the generations, tying grandparents, parents, and children together, on and on throughout the past and future. As each new child is born, he or she is connected to the family, and as each family member passes beyond this life the connections remain unbroken.

And we do not have to wait to celebrate this family union. We will remember and celebrate it this week, and for every day to come. Our Father intended it that way.