Donald Trump’s Accidental Contribution to the Cause

Sometimes folks on the “kooky” right (I won’t use the term “far” right, because it begs the question about what is “truly right”, and it seems geographically and geometrically confused) can force some serious head-scratching out of those of us trying to change the world, and who have read a book or two in our journey. But other times their hugging of bizarre ideas and obsessions pales in comparison to their political naivete. The latest case du jour involves the man-crush some of these nitwits have on the intolerable Donald Trump, he of universal health care advocacy and so forth and so on. This reality TV star narcissist could have never, ever guessed that there would be this level of useful idiots available in his objective of, well, being on TV. Is he seeking any notable public policy change? Of course not. Does he believe he has an iota of chance to win the nomination? I doubt he will even spend one dollar on this campaign and never, and that he will ever dare how REAL financials (since this blog was published, another of his entities declared bankruptcy). He jumped in this race for some headlines and profile, and voila, the bottom 10% played right into it. Well done. But what is the political naivete of which I speak?

Those in that Breitbart/Ann Coulter/anti-immigrant/”we have to stick it to China” camp for whom economic education is to be thought of the way small children think of lima beans are not likely to support some of the more credible Republican candidates in this field at first glance. Their hope of an outlier “pure” conservative who meets many of the wish list items they have probably goes through Ted Cruz or Rand Paul. And who is Donald Trump going to take votes and attention from the longer he stays in this race? Well, it’s Ted Cruz, my friends. Ted Cruz is not likely to be your President any time soon, but he is a serious candidate until proven otherwise. And Ted Cruz, the one candidate most mysteriously trying to play footsies with this nitwit Trump, is by far the candidate with the most to lose with Trump lingering around priming the pump for a reality show on Fox.

So go ahead tea partiers – celebrate a guy who once favored a 75% tax rate and is threatening to stick a fork in free trade all over the globe. It is YOUR people who will suffer. And when this news cycle ends, there will still be some grown-ups in the room, many of which have a chance of being elected President (Marco Rubio most certainly would be; Jeb cannot win in a general; Scott Walker we shall see; etc.). And what does this little three-week reign of embarrassment bring those of you who jumped on the bandwagon? Shame and pity, and that’s it.

Why I Cannot Support Jeb Bush as the GOP Nominee (Warning: Some on the Right Will Not Be Happy)

If a man named Jeb Smith was running for the GOP nomination, had been the Florida Governor for two terms with the exact same record as the man we know as Jeb Bush, had the exact same immigration policy prescriptions as the man we know as Jeb Bush, and had the support of the same people the man we know as Jeb Bush, I would be interested in monitoring the primary campaign of this Jeb Smith.  The man we know as Jeb Bush is a conservative, who governed to the right of former California Governor, Ronald Reagan, and who has policy prescriptions in the areas of school choice and immigration that I frankly adore.  He is extremely intelligent, articulate, and abundantly qualified to serve as this nation’s leader.  Jeb Bush has voiced some things about common core that are either in desperate need of clarification or outright walk-back, but as far as “conservative credentials”, there is nothing remotely concerning to me about the idea of him being our President.  I have sat quietly for 120 days giving the vocal side of the Jeb opposition to make a substantive case against him.  I have heard nothing but platitudes, empty rhetoric, and mostly incoherent venom.  This is the state of much of the conservative right these days.  And alas, no matter how much it pains me, I have to join them in opposing the nomination of Jeb Bush, NOT because of common core (I think he clarifies this to a point of reasonable understanding at some point, or at least I hope he does), and NOT because of immigration policy (where his views are simply grown-up, realistic, wise, and frankly, inevitable).  Rather, I join the Jeb-haters (not in hating Jeb but in not supporting his nomination) because I believe he will lose to Hillary Clinton, and unlike the 2012 state of nominees, I think we have better candidates available.

If Jeb wins the nomination, a not-at-all unlikely  but certainly not guaranteed prospect, I will have no choice but to pray I am wrong.  That is because I love this country, and part of loving this country means wanting the side which more represents the values and ideals of this country to win.  Today’s obstructionist belligerents on the right are happy to lose, and I oppose their defeatism and insane ideology.  Hillary Clinton is a corrupt, disingenuous, power-hungry, obsessive radical, and I mean all of that charitably.  If I were a member of the left I would move heaven and earth to keep this elitist hypocrite from representing my ideology for a generation.  Today’s left is not my grandparent’s Democratic Party.  They have sunk into a bifurcated party of either ideological radicals like Elizabeth Warren and Bernie Sanders, or corrupt public employee unions who have taken the exploitation of under-privileged in our society to a level never before thought possible.  The voting base is actually neither of these two groups, but rather hopelessly misguided low-information voters who rightly believe one party is offering them more free cookies than the other party.  I prefer an honest ideological debate with the ideological left, but it is mostly elusive.  The political climate in the country is bad, right now, really, really bad.  Which means that absent a very solid GOP candidate I believe the money of the corrupt leftist unions, the noise of the ideological radicals, and the electoral strongholds of the uninformed will lead to a Hillary Clinton victory.  This is a horrifying prospect to me, and I want to win.

Jeb Bush has solid conservative credentials and an extremely impressive resume to run on, but he has the wrong last name, the wrong age, and the wrong reputation to be our candidate to beat Hillary Clinton.  For right or for wrong, he has been branded as the “establishment” guy, the term people use only when they actually don’t have anything smart to say about anything, ever.  It is a dope’s term – someone who has no argument to make and no analysis to rely on – but it is rhetorically effective.  The GOP cannot win with such a high percentage of voters throwing around terms like “moderate” and “establishment”.  They cannot win spending six months tarring and feathering a good conservative Governor and then hoping their voters will show up to beat Hillary Clinton.  They cannot win with the perception out there that Jeb Bush is soft, weak, and outside the core of their excitable virtues.  They cannot win with the right’s version of the low information voter – mostly on the blogosphere and Twitter – bashing the candidate.  The cliché of clichés – that perception is reality – is just plain true when it comes to politics, and I do not believe Jeb Bush can overcome the enthusiasm deficit his candidacy represents to capture the nomination.

His last name will kill him in a general election.  This idea that Jeb needs to find a way to run away from his brother is absurd.  Do you think the media will let him do that, really?  Do you think there is any chance that his candidacy will not be made out to be the third term of George W. Bush throughout the entire campaign?  There is no amount of money he can spend to overcome what the press will do to him.  So why risk it?  Why go there?  Why take on the baggage of that Presidency if we don’t have to?  Well, the answer would be valid if it were “our only choices are Rand Paul or Mike Huckabee”.  Yes, sure, then you really don’t have a choice, but that is not the dilemma we face.  This year, the right has the likes of Scott Walker, Marco Rubio, John Kasich, and Rick Perry in the race (or potentially in the race).  This year we have solid pedigrees, track records of electoral success, and phenomenal executive achievement.  Jeb’s reputation, deserved or not, is not a risk we need to take on.  And neither is his last name.

There is also the issue of charisma, personality, and connectivity.  Jeb is lacking in all three, and another candidate from the great state of Florida is a 20 on a scale of 1-10 in those three categories.  I do not know who will win the nomination, but I do know this: Jeb Bush sees his most viable opponent as Marco Rubio, and Hillary Clinton most certainly sees her most viable opponent as Marco Rubio.  In fact, I do not believe Hillary believes there is any candidate she cannot beat but Rubio, and I do not believe she thinks she has a chance against him.  Most of the country does not know Marco Rubio.  When they meet him, she knows they will like him, because everyone likes Marco Rubio.  Everyone.  Likeability wins elections.  Hillary is to likeability what Elizabeth Warren is to native-American.  And the only way for Hillary’s intrinsic unlikeability to not do her in is, in my opinion, to render that category a draw.

I work in the business of risk/reward propositions each and every day, and for my money, the trade-off in a Jeb Bush candidacy is a bad risk/reward bet.  I’d be more inclined to take that bet on my hypothetical Jeb Smith, but with all the cards we have, I believe we need to play the best hand towards defeating Hillary Clinton.  Whether that candidate be Rick Perry (best economic record of any Governor you will find and stunning ability to make that case), John Kasich (win Ohio, win the election), Scott Walker (seems to have tea party right and more center-right folks needed to win an election happy with him), or Marco Rubio (youth, energy, eloquence, charisma, magnetism, solid conservative ideology), we have candidates better suited to take the fight to Hillary and win this election.  And for that reason, and that reason only, I cannot support the nomination of Jeb Bush.

Wealth Creation and Labor as and for Human Flourishing

The below represents the transcript of a speech I gave June 4, 2015, in Phoenix, AZ at the Collegiate Academy of the Alliance Defending Freedom. The audience was extremely active and ambitious and worldview-oriented undergrad college students in their upperclassmen years. The topic is approached with no pretense that it will be exhaustive, but with an angle that was very much intentional.

I want to preface my comments today on this topic which is so near-and-dear to my heart with a word of gratitude for Jeff Ventrella and his co-laborers at the Alliance Defending Freedom. I assume you all believe this as well and that is why you are here this week, but the work ADF is doing ranks them in the domain of heroes as far as culture warriors and Kingdom warriors go. Jack Nicholson said in A Few Good Men, and if I am speaking to an audience so young that they have never heard of this masterpiece of a movie, I officially give up and count myself as a senior citizen at the age of 41, “deep down in places you don’t talk about parties, you WANT me on that wall; you NEED me on that wall”. For those of us who believe in the vision of the founders for this country, and for those of us who believe in the Kingdom mission assigned to us both in creation and again in the Great Commission, we WANT and we NEED organizations like ADF on the wall. I have been blessed to serve on their Blackstone Institute faculty for over ten years now and have seen firsthand what ADF is doing to prepare the next generation of legal thought leaders. Events like what you are attending this week excite someone like myself who is committed to fighting the good fight because it encourages me to see your enthusiasm and participation as attendees, and because I know the good men and women of ADF are advancing the cause. My pitch for ADF goes beyond their organizational mission and effectiveness, though. Jeff is, in the core of his being, a servant. He doesn’t judge people for their lowest moments but facilitates their highest moments. Only the Lord restores the years the locusts have eaten, but friends and co-laborers like Jeff are setting the table for a glorious banquet ahead.

With that said, I would like to introduce for you the topic I am hear to speak about today, and that is the benign, non-controversial, simple field of economics, wealth, money, calling, vocation, and affluence. Many ideological topics these days provoke great emotion and disagreement, but not this topic. The idea that economic growth is an engine for lifting people out of poverty, even though the “winnings” from that growth may not be equally distributed – indeed, should not be equally distributed – in a market economy is surely not controversial.

But alas, I must remove the tongue from the side of my cheek now. For indeed, the positions I will promote today are exponentially more controversial today – both in society at large, AND in the church – then you would ever imagine them to be. The reality is that some of this controversy is warranted – a theology of wealth is more complicated than the politics of wealth ought to be. And much of the controversy is rooted in ignorance – basic lack of economic premise training has created a world of problems with conclusions generated. Sadly, this is what I suspect takes place in the church more often than not, and it is what folks like myself and my dear co-laborers at the Acton Institute are trying to remedy. But fundamentally, if we get the theology right and then the economics right, will we all draw the same conclusions? Maybe not. Certainly not in all of the details. But let’s at least start with some foundational truisms and see if we can’t improve the odds a bit.

I am going to lay out as my speech’s Thesis Statement the following:

“God’s desire from creation is for man to be economic agents of growth, and laborers who glorify Him in their productivity. The economic and existential implications of this are that we may grow in our material blessings while also growing in joy and contentment for our vocational callings. The responsibilities of this are that we flee from pride and idolatry, and maintain the heart and habits of a tithing cheerful giver”

Now that is sort of a mouthful, and I would not be surprised if you find yourselves unwilling to accept each piece of this thesis statement at face value. So I will now break it apart in pieces.

It is no coincidence that I started with the doctrine of creation. The doctrine of creation is where I get my capitalism, and I get it straight from Genesis chapter 1. It is why secular Randianism does not cut it for me, even when she (or they) often get things accidentally right. I have often said that there are few things more frightening than an evangelical Randian, and what I mean by that is when one gets certain conclusions right with wrong premises it usually falls apart rather spectacularly; but when one falls into that same trap of wrong premises/right conclusions WITH BIBLE VERSES SPRINKLED AROUND, all hell breaks loose. The need of the hour is a better anthropology – an understanding of God’s intentions with men from the outset of creation – and for that to color our worldview as we apply it to economics.

And what that anthropology does is teach us that God made man in His image. It teaches us that God made man with dignity. It teaches us that God made man to grow in communion with Him, while stewarding the earth, and “making it big”. Growing it. Multiplying it. Being fruitful with it. I just said the entire tenet of free market growth economics with three or four buzz words, all of which were plagiarized from Genesis 1:27-28. But the appearance of the words is an inadequate argument – the normative and the theology are where the power lies: God made us special; He made us with souls; and He manifested this dignity and this special creation status by what???? Asking us to work. Asking us to cultivate the garden. Asking us to be creative by naming the animals. Asking us to grow and subdue that creation. In Genesis 1, in the very doctrine of creation, you get BOTH the early foundations of free market capitalism, and you even get the early foundations of environmentalism. Now, the left has so bastardized the term that I can respect folks preferring words like stewardship etc., but the reality is that all of my opposition to statist fraudulent token environmentalism does not change the fact that the Christian man and woman is a worker – a steward – of the earth.

“Okay. So David, we are economic agents of productivity and growth from creation. But sin came? What about the fall? Didn’t that change everything?”

It sure did. What God made beautiful and core to our existential purpose (work) now was accompanied by the curse of toil – of anxiety – of pressure. God didn’t curse work after the fall; He added the curse of toil to the blessing of work. If the work itself is a curse than one has no choice exegetically but to also conclude that the birth of children is also now a curse. We seem to have no problems getting that part right – that the blessing of children and of womanhood (am I still allowed to use the word “womanhood”?) is accompanied by pain in childbirth etc. We don’t throw the baby out with the bathwater, no pun intended. Yet with work, theological laziness has caused us to conclude that work itself is a curse – of no interest to God – and a mere necessary evil.

And this ignores the second theological doctrine we must cover. The doctrine of redemption. I do not merely believe that God created the world, and by the way, created it for us to be economic agents of growth who find much of our meaning and purpose in creation mandate functions (growing – building – developing – etc.). I also believe He is presently redeeming this world to Himself, and that redemption includes His people, which is to say us. I believe that this story of redemption is both soteriological (the salvation of our eternal souls) but also experiential and comprehensive. In our fallen state, we are not static, but living under grace, being redeemed day by day with purpose and calling towards a future Edenic state. I do believe part of this material – the Garden was a material and physical beauty, and the streets paved with gold will be the same – but I really don’t need that point to stick right now. The redemption message becomes important because I will argue that while this canvas gets painted out, it gets painted out with our creation mandate come to fruition. Yes, we work with toil under the curse; yes, we grow and cultivate with the hindrance of sin and this side of the fall; but in this great redemption, we work as image-bearers of Christ, which is to say co-creators with God. He is created us to go create. And whether we have ever heard this terminology before or find it prima facie comfortable, the fact of the matter is that for many of us this co-creation as image bearers of God comes in the marketplace.

Creation and Redemption lay out the exegetical foundation for us to work with dignity, and to enjoy the fruits of our labor as we build. I am offering no specificity at this point as to what that means for you – as to whether or not our building and cultivating and growing is to be as a violinist, an attorney, an entrepreneur, or a portfolio manager. I am making no argument for whether or not the earned wages should be $50,000 per year or $50,000 per week. What I am arguing is that God didn’t make us to work because He hates us, but because He loves us. And in His love, it is His heart’s desire that we be fulfilled in our calling, achieving maximum dignity. “But David, life doesn’t work that way. Sometimes it’s just a miserable grind.” And how right you are! But through that grind is what the incomparable Arthur Brooks calls “earned success”. A minimization of economic productivity, or worse, a welfare state aiming to redistribute wealth so as to change the distribution of prosperity – robs people of a success they can earn – of the dignity that God intended for them in creation.

Perhaps the most tragic contribution the left has made to our basic way of thinking is that they have taken away the very possibility of success in our society, and they have done that, ironically enough, by tirelessly working to take away the possibility of failure. Let me say it stronger, for I am not making a technical point or an academic one. We have strangled the glory and triumph of success right out of our lives when we operate as if failure is something to be ashamed of – something to be loathed – something to be artificially avoided. The unintentional consequence of trying to neuter failure is to annihilate success – to strip away from man the most essential and greatest achievement he can ever feel – the success that comes with overcoming failure. Success does not exist without failure. When you attempt to eliminate valleys you only succeed in eliminating peaks. When a disinterested third party like Uncle Sam comes in with their nanny intentions of delivering everyone a sort of unearned success, they not only strive to do the impossible, they rob man of the drama, the dignity, the glory of real success. This, my friends, is an unforgivable act by an out of control magistrate. It must be stopped.

If it seems like In just upped the ante out of the theological and to the political, you may be right, but I only did so with the explicit theological foundations I tried to present just before. The secular greed-is-good camp that probably thinks the same way I do about minimum wage laws, price controls, and govt regulation misses something pivotally important here: When you START your defense of affluence and achievement with something man-centered and not God-centered, you will HAVE to admit at some point that you have NO BASIS for stopping at what is legal, or what a plurality of people say you should and should not do, or what a market may punish you for doing, etc. YOUR anthropology is Darwinian – you have no right to tell someone that accounting fraud is unproductive, or Ponzi schemes are dangerous – for truth to be told, accounting fraud and Ponzi schemes are HYPER productive IF you do not get caught … And if that is all the Randian secularists want to say – that the highest ethic is not getting caught – let them come out and say it. But for those of us defending the profit motive, defending the accumulation of wealth, and defending the free and open marketplace as the ideal venue for human interaction and exchange, let us do it with the right premises – that God created man with dignity, and that dignity is compromised when we make him a dependent ward of the state. Let us say that the profit motive is good, not for the purpose of creating false idols, or storing up treasures for moths to destroy, but because we are by creation profit-creators – agents of growth. We are entitled to the fruits of our labor, even as we vigilantly maintain hearts of humility, hearts of generosity, and hearts of compassion.

The current political environment is not isolated from the current ecclesial environment. Largely because today’s compromised church spends so much time playing catch-up with the world, but it is both in the church and political paradigm that we find income inequality to be the pressing issue of the day. And with a Bible that so comprehensively discusses motivations, incentives, work ethics, prudence, responsibility for the poor, and other such crucial elements of conversation, is anyone else perplexed that the singular element we have chosen to reign in on is the DELTA – the spread between rich and poor? In an economy struggling to grow at 2%, the delta between rich and poor – a delta that can no more be resolved by policy than most any other economic issue – is the least of our concerns. Would the bottom 25% of earners bemoan the wealth of the top 1% if the whole economy was growing at 5%? I know the answer to this because history has provided it. Emphatically, no. Politics of guilt and envy will always be there, but the sort of systematic obsession with income inequality is a misdirected frustration over absolute growth, not relative growth. The reality is that the poor are richer than they were 20, 30, and 40 years ago, and they are so exponentially. The rich are richer too, and in many cases more so. The late and great Lady Thatcher famously said to her socialist opponents, “You’d rather the poor be poorer, just so long as the rich not be richer.” The Bible provides no ethic centered around relative wealth. The objective of believers and those seeking economic enlightenment is total growth, the absolute kind that lifts all boats. Leftist ideology and statist redistributionism may very well grab on to income inequality for political points, but I believe there is the aforementioned flawed anthropology at play as well. Lest I be so cynical, they may really get this thing that wrong after all! What I mean by that is they may honestly prefer a magic wand of policy to somehow make the rich slightly less rich and the poor slightly less poor, all the while failing to understand that (a) Such a thing is most certainly not sustainably possible, and (b) It denies folks of their dignity, who were created by God to earn success

There are a lot of reasons – some complex and some simple – that income inequality has expanded in our society. I could address some of that in Q&A if so desired. But I don’t want to make this any more political than it has to be. Income inequality is a faddish consequence of the zero-sum fallacy – the belief that there exists a fixed amount of global wealth, and that one actor’s gain in wealth comes about as a result of another actor’s loss of wealth. This is the economic thinking abyss we find ourselves in. And while I want to blame John Maynard Keynes and Paul Krugman and the other great 20th century statist economists who sincerely did get so much wrong, the reality is that our First Things gave us the doctrine of economic growth. One man does not get richer by stealing from another in the Biblical ethic, because stealing is wrong, and dishonors the dignity of he or she who is being stolen from. The rich need not get richer by stealing from the poor, AND THE POOR NEED NOT GET RICHER BY STEALING FROM THE RICH. In the free and virtuous society, they both can get richer together as the total wealth pie expands – regardless of the distribution therein – from activities of growth, productivity, and innovation. You know, then kind of activities we were created for!

There is no dispute as to what the cure for global poverty is. It is not in wealth redistribution, but rather in wealth creation. It is in cultivating a society of not just wealth consumers, but actual wealth producers. It is in generating not just job-seekers, but job creators. As global poverty has decreased by 80% since the year of 1974 when I was born, no person of compassionate intelligence can argue that our work is done. People remain in need, and the resources of the world are such that it need not be this way. But the 80% reduction came about via economic growth. Always and forever, growth.

What I am positing is less complex than a defense of the 1% of the 1%. I am positing a defense of the material blessings that result from vocational calling – from hard work – from the creation mandate. I am promoting the improved mental health and serenity that comes from earning one’s success. I am calling for a Christian church to vigorously embrace their God-given responsibilities to care for the poor, to steward the environment, and to be cheerful and generous givers. And I am pleading for all of us to not just do for the pragmatic efficiencies a market economy represents, but because of the principled foundations we know in our First Things – the doctrines of creation and redemption.

This Incredible Journey

In October of last year I made the decision after seven and a half exhilirating years at Morgan Stanley that I was going to start my own boutique firm.  Two months ago I resigned as a Managing Director and Senior Portfolio Manager at Morgan Stanley, and fifteen minutes later stepped into the temporary office space at 4695 MacArthur Court I had secured for the month of April to begin transitioning my business.  The six months in between the decision to go and the actual moment of departure were amongst the most stressful, busy, anxious, and taxing months of my life.  The two months since we made the actual break have absolutely been the most stressful, busy, anxious, and taxing months of my life.

And I wouldn’t have it any other way.

I don’t often use this blog to discuss my personal work and my actual business, and I still won’t use it to disseminate my own investment worldview and counsel.  I will shamelessly plug my business website,, and would love for you to sign up there if you care at all about my Weekly Market Commentary or “AD HOC blog”.  I LOVE writing about the markets, and new found independence and freedom will allow me to write (1) Without handcuffs, (2) Often, and (3) With unlimited distribution.  I am not saying that as an employee of a large firm I had handcuffs, was limited in what I could write, and was limited in how it all could be distributed.  I am just saying none of those things will be true any more.  [wink]

But the purpose of this blog today is not to discuss investments, it is not to bemoan the deficiencies of large bureaucratic organizations, it is not to advocate for a fiduciary standard in how wealth management is delivered to clients, and it is not to pitch my new firm in partnership with the first class professionals at HighTower Advisors.  Rather, it is to provide any of you who care a brief pitch for chasing your dreams, not settling, and believing that it is okay for you to tie some of your identity as to who you are with what you do.

I am an investments guy.  God made me to manage two things: Clients, and money.  I believe in the core of my being that this is part of who I am.  Very few people even in my inner circle would believe how much I love the capital markets.  From the deeply challenging role of allocating asset classes for a client portfolio, to the hyper-detailed task of security selection, I have had absolutely no dimunition of enthusiasm for my chosen profession since the day I entered it.  I view portfolio construction as a task enjoyable beyond my wildest dreams, but then I view the task of getting to do so on behalf of actual real life people to be an accelerator of joy and existential purpose.   Running a hedge fund for no one in particular would be a lot of fun, but it would not be as meaningful as running real life money for real life people with real life goals.  It provides an incredible added layer of meaning and joy.  With that said, my passion for the business of managing clients and money has taken on new life these last few months, free of the hindrances a large bureaucratic  firm necessarily represented.  Whatever perceived comforts and advantages I enjoyed in the prior structure had to be risked for the upside opportunity to manage clients and money the way I want.  This was the risk I had to take, and in so doing I believe I have set myself up for two decades of client management and portfolio management unshackled from whatever could impede their successful enactment, and unshackled from whatever could suppress my joy and freedom.

Much of the preceding paragraph may only be understood by people in my business.  Much of it may be disagreeable to people in my business still scrambling to defend large and impersonal institutions (I can understand this).  But I am writing to say that apart from my business and my recent move, my broader point is that the pursuit of an optimal work environment – a culture in which you can fully thrive – is to be promoted and recommended at every opportunity.  When someone says that what we do has nothing to do with who we are, they not only have said something intellectually incoherent, they have said something demonstably false.  What we do is exactly who we are, even if what we do is to be defined more than just vocationally.  My journey has caused me to realize that this whole thing was never merely economic.  I have moved my bar of economic success higher so many times over the last twenty years I have lost count.  Economic success is likely a part of the journey for most people, but it is not synonymous with the journey.

For me, my journey has been about an insatiable desire to believe that i am living up to my full potential at something – anything – in my life.  I have had certain advantages in life of which I can claim no dessert (somehow my family got to grow up in Orange County instead of Mississippi, and because my dad taught at the schools involved I got to receive a private school education growing up).  I also have had to deal with some challenges in life (my mom took off when I was 15 years old and I have not seen her since; my dad died when I was barely 21 leaving me with the deathly fear that I would fail in life without a college degree).  Through a combination of some blessings and some hurdles, I entered grown-up life in my early 20’s penniless and parentless, but filled with a theological and existential commitment to productivity.  Twenty years later I am the humble beneficiary of a life and career that God has smiled upon, both because He loves me, and because I have tried to work tirelessly along the way.  I enter the next 20-year block of whatever God has in store for me with the business I should have assembled years ago (I say that only partially believing it – sometimes I think the right thing also has to happen at the right time, and for me the right time was now, not earlier).  I wouldn’t trade this journey for anything in the world, and I hope you won’t either.  Whatever your journey entails, and wherever you are on your journey now, may it be filled with an unwavering confidence in the legitimacy of your journey, the tools needed to see it through, and the grace of a loving God who cares about your work and calling as if He were sovereign over it all.  Because He surely is.

Review of Hall of Mirrors by Barry Eichengreen


Mr. Eichengreen sub-titles his book “The Great Depression, The Great Recession, and the Uses – and Misuses – of History”, and I believe he delivered in producing a book that discussed the depression, discussed the recession, dug deep into history, and sadly, misused so much of it.  The reality is that this 400-page book contains very little, if anything, that I agree with in terms of economic ideology and practical counsel related to the financial crisis of 2008 or the avoidance of a future crisis (even the one area we do agree on – that the Euro was a tragic mistake – comes from diabolically opposed places: His reasoning is that the Euro keeps countries from being able to print at will; mine is that the Euro begged for mal-investment and mal-behavior from day one). However, I will say that I have rarely enjoyed a book so filled with poor economic thinking.  Eichengreen is a Keynesian’s Keynesian, and writes as if the fundamental tenets of Keynesianism have not been brutally undermined over the last thirty years, but he writes without the same bombastic arrogance and confrontationalism that many modern Keynesians are known for (Krugman etc.).  He is gentlemanly, thorough, and frankly, wrote a pretty decent history book.  As for economic analysis, though, he stayed wed to severely flawed premises, and the conclusions came out as expected.

By way of example, and there are many, Eichengreen’s fundamental purpose in writing the book is to criticize policymakers post-2008 not for anything they did, per se, but for the fact that they didn’t listen to the lessons of history enough, and failed to accelerate hard enough with the needed policy prescriptions necessary to create adequate post-crisis recovery.  The prescriptions are the usual leftist bag of tricks: Greater fiscal spending from government, far greater bond purchases from a central bank, a disdain for balanced budgets, and more opportunity exploitation around low interest rates to stir up animal spirits.  There is no point in  writing a book to prescribe these policy solutions: They are vanilla modern Keynesian liberalism.  And there is no point in me writing a review to criticize his prescriptions: They are the topics at the crux of the modern economic disagreement.  However, what Eichengreen does is attempt to use the 1920’s and 1930’s as evidence that “if only policymakers had remembered …”.  Ironically, he does this in crediting Bernanke over one hundred times as the great historian of the depression (and he is certainly that), and commenting ad infinitum that Bernanke’s knowledge of the depression plagues is what enabled him to do A or promote B.  To Eichengreen, though, Bernanke ran into a battle of wills against other Fed governors who only knew the history of the 1970’s, and not the history of the 1930’s.  Bernanke also was stuck with a national climate that became budget-obsessed, as “many non-economists are prone to do”, and committed the fatal “pre-Keynesian fallacy of equating individual budgets with government finance”.

There was a moment in the book where I would say the entire tension between Eichengreen’s neo-Keynesian leftist world and the classical market school of thought hits the road.  He concedes that the Obama stimulus package of 2009 didn’t work, but comments that it worked in the 1930’s, so therefore MORE of the 2009 stimulus surely would have worked.  The idea that, maybe, just maybe, the failed stimulus of 2009 is evidence that he is getting the 1930’s wrong, instead of the 1930’s meaning that our side is getting the 2009’s wrong, never occurs to him.  But he walked right into that logical possibility himself!  I would suggest that his book is riddled with historical data, fascinating narratives, and well-thought-out analysis, but because the most serious parts of all three were uncritically assuming of his Keynesian ideology, readers were robbed of what could have been a fascinating economic investigation.

The one entire page out of nearly four hundred that he devoted to a discussion of Fannie and Freddie’s role in the financial crisis was a disappointing giveaway to a his conclusions being formed before his investigation began.  To Eichengreen, the hundreds of billions of dollars of real-life losses the American taxpayers have incurred at their hands, the role the extinction of their preferreds played one week before Lehman died, and the leverage ratios they took on (with implicit taxpayer support) that led to the government placing these bastard behemoths in receivership, were not strong evidence for their systemic significance.  It was shoddy coverage, and unbecoming a work of reasonably serious scholarship.

Much debate lies ahead about the best deployment of capital in post-2008 American economics.  Monetary policy’s ability to numb damage in times of distress is a legitimate topic for debate, and one that I fear virtually no progress has been made in as seven years later we wait for the slightest step towards policy normalization.  That those of Eichengreen’s school of thought believe unlimited monetary and fiscal tools exist is not up for debate, though what hangover effects that reasoning entails should be.  For me, this book did little to advance that debate, but provided a great and honest look at one gentleman Keynesian’s views of the past, present, and future.