Monthly Archives: November 2008

Obama’s Grand Experiment Columnist
Global Warming Cap-and-Trade Policy
by Tom Borelli


The prospect that President-elect Barack Obama may keep the Bush tax cuts until 2011 has some clinging to hope he will postpone his liberal ideas for the economy’s sake.

There’s little chance of that when it comes to global warming, however, an issue on which Obama puts his ideology first and the nation’s economic growth second.

In a recent video statement to the Governors’ Global Climate Summit, Obama displayed unwavering support for strong federal action to reduce greenhouse gas emissions.

Sounding like he was auditioning for a role in Al Gore’s next film, Obama said, “The science is beyond dispute and the facts are clear. Sea levels are rising. Coastlines are shrinking. We’ve seen record drought, spreading famine, and storms that are growing stronger with each passing hurricane season.”

Obama went on to promote his cap-and-trade policy, which, he said, “will establish strong annual targets that set us on a course to reduce emissions to their 1990 levels by 2020 and reduce them an additional 80 percent by 2050.”

Through regulation, Obama hopes to transform our economy while “saving the planet.” He says he will accomplish his ambitious goals by investing in “solar power, wind power and next-generation biofuels. We will tap nuclear power, while making sure it’s safe. And we will develop clean coal technologies.”

Obama is creating his own version of FDR’s New Deal and LBJ’s Great Society. In the middle of an economic crisis, Obama’s “Grand Experiment” is to build a federal bureaucracy to transform our economy by forcing it to run on costly unproven energy sources instead of established fossil fuels.

Under Obama’s cap-and-trade scheme, the government would set limits on industrial emissions of greenhouse gases such as carbon dioxide. Companies that emit more than their allowance must buy “carbon credits” from businesses whose emissions are under their allotment. Over time, the government ratchets down the allowance for all industry, which will increase the cost of emissions.

Fossil fuels currently supply 85 percent of our energy needs, while non-greenhouse gas-emitting sources (such as nuclear, wind, solar and others) deliver only 15 percent. Since alternative energy supply is limited, emission reductions targets will be met by decreasing demand for fossil fuels by raising prices.

In short, Obama’s “Grand Experiment” will raise energy prices, slow economic growth and increase unemployment.

The coal industry will be the biggest casualty. Obama’s commitment to “develop clean coal” is questionable. During the presidential campaign he said, “[I]f somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.”

Obama’s attitude about coal is consistent with that of the Democratic leadership and its special interest allies.

Senate Majority Leader Harry Reid (D-NV) has said, “That is coal makes us sick, oil makes us sick; it’s global warming. It’s ruining our country, it’s ruining our world. We’ve got to stop using fossil fuel.”

Vice President-elect Joe Biden has said, “We’re not supporting clean coal” and “no coal plants here in America.”

Rep. Henry Waxman (D-CA), the new chairman of the House Energy and Commerce Committee, is a long-time coal industry foe. Activist groups like the Rainforest Action Network demand a ban on coal use because, “‘clean coal’ doesn’t address the massive social and environmental costs of mining, transporting and refining coal.”

It’s clear that coal, clean or not, is not acceptable.

Since coal is used to generate 50 percent of our electricity, cap-and-trade will push utility bills higher.

The Congressional Budget Office found that investors and workers in the energy sector would suffer losses due to the decline in energy-intensive industries. Not surprisingly, since Obama’s victory, investors have punished coal stocks.

The CBO also says the cost of cap-and-trade will be “borne by consumers, who would face persistently higher prices for products like electricity and gasoline.” The CBO adds that these added costs would preferentially harm low-income households.

The cost to consumers in not unknown to Obama, who has acknowledged, “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket…”

Despite overwhelming momentum for a ban on coal, some companies are in denial about the left’s war against coal. Recently, CEO Jim Rogers of Duke Energy – a coal dependent utility – participated in a press conference to voice his support of cap-and-trade legislation.

Rogers hopes a Congress run by Reid and Waxman and a President who promises to bankrupt his company will instead show mercy because he supported their cap-and-trade “solution.” Rogers’ fleeting effort is reminiscent of Neville Chamberlin’s failed appeasement strategy.

Obama’s steadfast support for cap-and-trade is increasingly putting him outside the mainstream, even the European mainstream Obama is said to greatly admire.

The European Union’s cap-and-trade experiment has been a resounding failure. At next week’s United Nations conference on climate change in Poland, nations will seriously discuss reducing commitments to limit greenhouse gas emissions because the price tag is too expensive, especially during a global economic crisis.

Will the economic crisis make Obama think twice about cap-and-trade? There’s no sign yet that it will.

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About The Author

Thomas J. Borelli, PhD. is the editor of, a shareholder activist and a senior fellow at the National Center for Public Policy Research, a Gold partner. The opinions expressed are his own.

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Five Sundays To Nationalization

by Dr. Gary North

As a conservative, I grew up in the threat of socialism: the
nationalization of the tools of production. What no one warned
me was that this could be accomplished by way of a unique form of
nationalization: the nationalization of insolvency.

We have lived through this process in 2008. The process
will continue for several more years.

Insolvency is being transferred from the banking sector to
the government sector. How much insolvency? So far in 2008, the
government and the Federal Reserve System are on the hook for as
much as an additional $7.7 trillion.

Solvency is being retained by the bailed-out banks: the
private sector. Insolvency is being transferred to the those who
depend on Social Security and Medicare, and also to future
investors in U.S. government debt.

This is being done with full compliance of Congress, both
Administrations, Wall Street, and most voters, who do not
understand the nature of the transfer process.

One man does understand it. He shares a common bond with
Treasury Secretaries Henry Paulson and Robert Rubin: he served as
CEO of Goldman Sachs. His name is John Whitehead. He has
watched the financial markets for seven decades. On November 12,
he offered his assessment. The United States faces a slump
deeper than the Great Depression. Unlike the Great Depression,
however, this will be accompanied by the downgrading of Treasury

We’re talking about reducing the credit of the United
States of America, which is the backbone of the
economic system. I see nothing but large increases in
the deficit, all of which are serving to decrease the
credit standing of America. . . .

The public is not prepared to increase taxes. Both
parties were for reducing taxes, reducing income to
government, and both parties favored a number of new
programs — all very costly and all done by the

All this has taken place behind the scenes this year. It
has taken place on five Sundays. Then, on five Mondays, the
announcement of the transfer of insolvency to the U.S. government
has been announced by Treasury Secretary Paulson. The public


It happened again last weekend: another Sunday surprise.
The government on Sunday guaranteed the survival of Citigroup,
which was about to go bankrupt. Citigroup includes Citibank.

Citigroup in 2006 had a capitalized value of $274 billion.
By Thursday afternoon, this was down to $26 billion.

This was not much of a surprise. The stock market had
already anticipated it. The Dow rose by almost 500 points late
on Friday in expectation of the bailout. It was up another 400
points on Monday.

American investors believe in bailouts. For them, salvation
happens on Sunday.

As taxpayers, they shrug it off. “We’ll grow our way out of
this.” They really mean, “Our children will grow their way out
of this, and will pay us our Social Security and pensions as our
government has promised on their behalf.” Think of this as the
equivalent of the United Auto Workers’ faith in the pension
guarantees made by the Big Three American automakers.

As investors, they cheer. “No more losses!” Think of this
as the United Auto Workers’ view of competition in 1965.

To understand the enormous gullibility of investors, let me
cite directly from a Citi document that I downloaded this week.
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It goes on like this for two pages. Inspirational!

Investors believe in government bailouts with the same
confidence that readers are expected to believe this promotional
piece by Citi.

Before I comment on the Citi bailout, let me review the
history of recent Sunday deliverances. I call these Sunday


The first Sunday surprise took place on March 16. The “New
York Times” described it late that afternoon.

Bear Stearns, pushed to the brink of bankruptcy by what
amounted to a run on the bank, agreed late Sunday to
sell itself to JPMorgan Chase for a mere $2 a share,
narrowly averting a collapse that threatened to cascade
through the financial system.

The price represents a startling 93 percent discount to
Bear Stearns’ closing stock price on Friday on the New
York Stock Exchange.

Bankers and policy makers raced to complete the deal
before financial markets in Asia opened on Monday, as
fears grew that the financial panic could spread if
Bear Stearns failed to find a buyer.

The deal, done at the behest of the Federal Reserve and
the Treasury Department, punctuates the stunning
downfall of one of Wall Street’s biggest and most
storied firms.

Less than a week earlier, the CEO of Bear Stearns, Alan
Schwartz, had assured the public that the company was solvent,
that there was no problem. A Reuters story was typical of the
press’s handling of the story.

Schwartz, in a televised interview on CNBC, also said
he is comfortable with the range of analysts’ earnings
estimates for the fiscal first quarter ended Feb. 29.
Results for the quarter are due next week.

“We don’t see any pressure on our liquidity, let alone
a liquidity crisis,” he said.

Bear finished fiscal 2007 with $17 billion of cash
sitting at the parent company level as a “liquidity
cushion,” he said.

“That cushion has been virtually unchanged. We have $17
billion or so excess cash on the balance sheet,” he

Schwartz denied speculation that other brokers were
turning down Bear’s credit on trades for fear of
counter-party risk.

According to an article published weeks later, this
“speculation” was introduced by the CNBC interviewer, who cited
an anonymous source that Goldman Sachs had turned down a Bear
Stearns trade. Schwartz denied it.

“There’s been a lot of volatility in the market, a lot
of disruption. That’s causing some administrative
pressure, getting trades settled. We’re in constant
dialogue with all the major dealers, and I have not
been made aware of anybody not taking our credit,” he

The Reuters article went on the describe the state of the

As one of the largest players in mortgage-backed bond
markets, investors have assumed Bear’s exposure would
lead to crippling losses.

“None of that speculation is true,” Schwartz said. When
speculation starts in a market, one that has a lot of
emotion in it and people concerned with volatility,
“they will sell first and ask questions later,” he
said. “That creates its own momentum.”

The critic of this chain of events argues that there never
was verifiable evidence that Goldman Sachs or any other firm had
turned down Bear Stearns’ business.

The market did not care. This supposed solvency turned out
to be irrelevant within hours. Bear Stearns’ stock price
continued to fall on Thursday and Friday. By Monday morning,
Bear Stearns was no more.

A rumor cannot create this outcome except when fears are
rampant and leverage is high. Bear Stearns was the victim of
high leverage and bad forecasts. It took a fire sale on Sunday,
initiated by the New York Federal Reserve Bank, to keep Bear from
going bankrupt on Monday, March 17: St. Patrick’s Day.

To sweeten the deal, the Federal Reserve absorbed the risk
for $29 billion of Bear Stearns’ debt.

The public outcry and the threat of shareholder’ lawsuit
against the $2 per share price later led to Morgan upping the
price to $10.

As for the $17 billion in liquidity, Morgan must have gotten
it as part of the firm’s assets. We never heard any more about

Paraphrasing Bunker Hunt’s statement in 1980, as he was
going bankrupt, when the FED had to lend him a billion dollars,
“Seventeen billion just doesn’t go as far as it used to.”


On Sunday, September 7, Treasury Secretary Paulson announced
that Fannie Mae and Freddie Mac had been taken over by the U.S.
government. He issued this press release.

Before I turn to Jim to discuss the action he is taking
today, let me make clear that these two institutions
are unique. They operate solely in the mortgage market
and are therefore more exposed than other financial
institutions to the housing correction. Their statutory
capital requirements are thin and poorly defined as
compared to other institutions. Nothing about our
actions today in any way reflects a changed view of the
housing correction or of the strength of other U.S.
financial institutions.

Note these words: “Nothing about our actions today in any
way reflects a changed view of the housing correction or of the
strength of other U.S. financial institutions.” A week later,
Paulson & Co. were at it again. They tried — and failed — to
keep Lehman Brothers Holdings from going bankrupt.

Paulson’s press release then made a statement that will
haunt the financial markets for the news two years — maybe

I have long said that the housing correction poses the
biggest risk to our economy. It is a drag on our
economic growth, and at the heart of the turmoil and
stress for our financial markets and financial
institutions. Our economy and our markets will not
recover until the bulk of this housing correction is
behind us.

I can think of no more accurate statement from Mr. Paulson
during his term of office. The housing correction is in its
early phase. As it accelerates, so will the “the turmoil and
stress for our financial markets and financial institutions.”
Count on it.

This was the nationalization of America’s mortgage industry.
By September 2008, Fannie and Freddie were supplying 90% of all
residential mortgages in the United States. But Paulson did not
use the N-word. He picked another.

I support the Director’s decision as necessary and
appropriate and had advised him that conservatorship
was the only form in which I would commit taxpayer
money to the GSEs.

“Conservatorship.” How reassuring. Nationalization would
have seemed so crass, so anti-free market.

Then he admitted what is still true: the mortgage market is
at the heart of the U.S. economy. The economy was heading for a

And let me make clear what today’s actions mean for
Americans and their families. Fannie Mae and Freddie
Mac are so large and so interwoven in our financial
system that a failure of either of them would cause
great turmoil in our financial markets here at home and
around the globe. This turmoil would directly and
negatively impact household wealth: from family
budgets, to home values, to savings for college and
retirement. A failure would affect the ability of
Americans to get home loans, auto loans and other
consumer credit and business finance. And a failure
would be harmful to economic growth and job creation.
That is why we have taken these actions today.

This is the issue of systemic risk, or, as the old spiritual
put it, “the knee bone connected to the thigh bone. The thigh
bone connected to the. . . .” And so on. Paulson called for
government intervention to keep the market from imposing its
negative sanctions on bad decisions made by the leaders at Fannie
and Freddie.

And policymakers must address the issue of systemic
risk. I recognize that there are strong differences of
opinion over the role of government in supporting
housing, but under any course policymakers choose,
there are ways to structure these entities in order to
address market stability in the transition and limit
systemic risk and conflict of purposes for the
long-term. We will make a grave error if we don’t use
this time out to permanently address the structural
issues presented by the GSEs.

There was no mention of the taxpayers’ price tag on this
“conservatorship.” Combined, the two outfits have guaranteed
over $5 trillion in mortgages. To this was added the Mortgage
Backed Securities (MBS) that had been sold — and borrowed
against — to buy these mortgages. What of these investments?

Because the U.S. Government created these ambiguities,
we have a responsibility to both avert and ultimately
address the systemic risk now posed by the scale and
breadth of the holdings of GSE debt and MBS.

The move was immediately praised by Ben Bernanke. Bond fund
manager Bill Gross also praised it.


A week after the nationalization of the mortgage market,
there was another emergency meeting. This time, the survival of
the huge investment banking firm of Lehman Brothers Holdings was
at stake. So little known was this 160-year-old institution that
knowledgeable commentators still do not know how to pronounce
Lehman: “Leeman” or “Layman.” (“Leeman.”)

Another institution facing bankruptcy was Merrill Lynch, the
largest and most famous retail brokerage form in the United

The result of Sunday’s meeting: Lehman declared bankruptcy
on Monday morning and Merrill was bought by Bank of America for
$50 billion of BofA stock.

All of this was done behind closed doors over a weekend.
That was how desperate the government and the Federal Reserve
were to get the deals done by Monday morning. They failed with
Lehman. No deal.

Lehman had over $100 billion in bonds outstanding. It
reported its debts at $613 billion and its assets at $639

According to its former CEO, Richard Fuld, he took out $300
million in the eight years prior to the collapse of his company.

By the end of the week, September 21, two other investment
banks, Goldman Sachs and Morgan Stanley, filed with the FED for
bank holding company status. That was on a Saturday. This
switch was immediately granted. This entitled them to the
bailout money being offered by the Federal Reserve System and
anything Congress might pass. Congress passed a $700 bailout
plan, plus $150 billion in pork, by the end of September.

That was the last of the Big Five investment banks. The
survivors are minor players that only specialists have heard of,
such as Jeffries.

Goldman Sachs’ press release on September 21 is worth
considering. It mentioned that it had been founded in 1869. It
was a private banking firm open only to “high net worth
individuals.” No longer.

“When Goldman Sachs was a private partnership, we made
the decision to become a public company, recognizing
the need for permanent capital to meet the demands of
scale. While accelerated by market sentiment, our
decision to be regulated by the Federal Reserve is
based on the recognition that such regulation provides
its members with full prudential supervision and access
to permanent liquidity and funding,” said Lloyd C.
Blankfein, Chairman and CEO of Goldman Sachs. “We
believe that Goldman Sachs, under Federal Reserve
supervision, will be regarded as an even more secure
institution with an exceptionally clean balance sheet
and a greater diversity of funding sources.”

That said it all. The rich no longer could survive on their
own. From now on, they will need to be “under Federal Reserve

We are at the end of an era that stretches back to early
nineteenth-century America. The whole nation now looks to fiat
money and government bailouts. The era of American
entrepreneurship has ended in the financial markets.


On the weekend of September 27, FDIC officials met with
officials of America’s fourth largest bank, Wachovia, and
officials of America’s no longer largest bank, Citigroup. They
hammered out a merger. This was done with no public
announcement. The announcement came in a press release on Monday
morning, before the stock market opened.

Citigroup Inc. will acquire the banking operations of
Wachovia Corporation; Charlotte, North Carolina, in a
transaction facilitated by the Federal Deposit
Insurance Corporation and concurred with by the Board
of Governors of the Federal Reserve and the Secretary
of the Treasury in consultation with the President. All
depositors are fully protected and there is expected to
be no cost to the Deposit Insurance Fund. Wachovia did
not fail; rather, it is to be acquired by Citigroup
Inc. on an open bank basis with assistance from the

It was a sweet deal for Citigroup.

Citigroup Inc. will acquire the bulk of Wachovia’s
assets and liabilities, including five depository
institutions and assume senior and subordinated debt of
Wachovia Corp. Wachovia Corporation will continue to
own Wachovia Securities, AG Edwards and Evergreen. The
FDIC has entered into a loss sharing arrangement on a
pre-identified pool of loans. Under the agreement,
Citigroup Inc. will absorb up to $42 billion of losses
on a $312 billion pool of loans. The FDIC will absorb
losses beyond that. Citigroup has granted the FDIC $12
billion in preferred stock and warrants to compensate
the FDIC for bearing this risk.

It was too sweet a deal. Wells Fargo sued Citigroup.
Citigroup was offering $2.2 billion for Wachovia. Wells Fargo
was offering $15 billion. Wells Fargo eventually triumphed.
That move gave Wells Fargo more branches than any other bank,
plus deposits equaling Bank of America.


Citigroup was the institutional heir of the Rockefeller
family, through William, the brother of John D. William’s son
James Stillman Rockefeller became chairman in 1959.

The bank’s history goes back to the War of 1812. So large
was this bank that it was the first contributor to the Federal
Reserve Bank of New York in 1914.

On November 4, 2007, its CEO, Chuck Prince, resigned. The
next day, I told my Website’s subscribers to get out of stocks
and short the S&P 500.

According to a report on Bloomberg, in late 2006, the
capitalized value of Citigroup was $274 billion. It was the
largest bank in the United States in terms of market value, with
Bank of America second. By September 21, 2008, its capitalized
value was in the range of $26 billion.

The extent of the bank’s condition was published only after
the Sunday bailout. At that point, the government and the
Federal Reserve had to come clean. The disaster could no longer
be concealed. What had been the largest bank in terms of market
value had slipped to #6, and was about to go bust. This is why
the government intervened.

The government (you and I) will shield the bank’s
shareholders and creditors against most of the losses in its
portfolio of toxic loans.

Terms of the asset guarantees mean Citigroup will cover
the first $29 billion of pretax losses from the $306
billion pool, in addition to any reserves it already
has set aside. After that, the government covers 90
percent of the losses, with Citigroup covering the rest
from assets that include leveraged loans and so-called
structured investment vehicles.

The government will pay $20 billion for $27 billion of
preferred stock, which will pay 8%. (It will pay 8% only because
the government will pay off the bad loans.)

The government has already provided $25 billion in the
Troubled Asset Relief Program, which is part of the $700 billion
bailout bill, passed in late September.

“This is a partial government takeover,” Christopher
Whalen of Institutional Risk Analytics, a Torrance,
California- based research firm, said in a Bloomberg
Radio interview. “We have been telling people for a
while that some of the top banks were going to end up
controlled by the government next year. It looks like
that’s happening sooner than even we expected.”

In a lengthy, detailed article published in the “New York
Times” on November 22 — two years too late — the reporters
trace the history of bad decisions made by senior managers at
Citi. The article shows that there were red flags, but no one
paid any attention. The article also indicates that there may be
more bad news to come.

Call it “Citi bailout, phase I.


America’s biggest banks are going bust or have gone bust.
Little banks are toppling each week. There is no end in sight.

The government, which is running a trillion-dollar deficit
this fiscal year, is adding ever more debt to save the favored
banks. It is buying the banks’ insolvency in the name of future

The buyers of Treasury debt and the Federal Reserve System
are funding all of this. They think future taxpayers will pay
them back. I don’t. I think there will be a tax revolt: mass

Meanwhile, every dollar that flows into the Treasury does
not flow into the private sector. The nationalization of
insolvency continues.

The authority of make decisions regarding who will get the
shrinking supply of private savings that the banks have not
already absorbed to keep their doors open have been transferred
to a new generation of capitalists, people who live in fear of
government regulators, not depositors.

The year 2008 has seen the end of free market financial
capitalism. Forget about efficiency. Forget about stable
economic growth. Forget about everything except solvency as
defined in fiat money.

Moral hazard is alive and well in the West. Free capital
markets are not.

It was nice while it lasted. But it could not last. State
capitalism always demands bailouts. It always gets what it asks

Senior managers got the gold mine. Taxpayers got the shaft.

© 2008 An Electronic Publication of The American Vision
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Economics In One Lesson

This Book is So Me

Daily Article by | Posted on 11/25/2008

Writing this introduction is a labor of love for me. You know how women sometimes say to each other “This dress is you!“? Well, this book is me! This was the first book on economics that just jumped out and grabbed me. I had read a few before, but they were boring. Very boring. Did I mention boring? In sharp contrast, Economics in One Lesson grabbed me by the neck and never ever let me go. I first read it in 1963. I don’t know how many times I have reread it since then. Maybe, a half-dozen times in its entirety, and scores of times, partially, since I always use it whenever I teach introductory economics courses.

I am still amazed at its freshness. Although the first edition appeared in 1946, apart from a mere few words in it (for example, it holds up to ridicule the economic theories of Eleanor Roosevelt, about which more below) its chapter headings appear as if they were ripped from today’s headlines. Unless I greatly miss my guess, this will still be true another 60 years from now, namely in 2068. Talk about a book for the ages. Other books on Austrian economics, too, are classics, and will be read as long as man is still interested in the subject. Mises’s Human Action and Rothbard’s Man, Economy, and State come to mind in this regard. But those are epic tomes, numbering in the hundreds of pages. This little book of Hazlitt’s is merely an introduction, written, specifically, for the beginner. I wonder of how many introductions to a subject it can be truly said that they are classics? I would wager very, very few, if any at all.

There is nothing that pleases a teacher more than when that expression of understanding lights up a student’s face. The cartoons depict this phenomenon in the form of a light bulb appearing right above the depiction of the character. Well, let me tell you: I have gotten more “ahas” out of introductory students who have read this book than from any other. I warrant that there have been more conversions to the free-market philosophy from this one economics book than, perhaps, from all others put together. It is just that stupendous.

The only thing I regret in this regard is that never again will I read this book for the first time. That, gentle reader, is a privilege I greatly envy you for having.

A word about style. The content, here, we can take for granted. But the number of economists who could really write can be counted upon one’s fingers. Hazlitt is certainly one of them. His verbiage fairly leaps off the page, grabbing you by the neck. In fact, I now venture a very minor “criticism”: the author of this book is so elegant a wordsmith that sometimes, rarely, I find myself so marveling at his presentation that I take my eye off the “ball” of the underlying economic message.

But enough of my personal slavering, drooling appreciation for Economics in One Lesson. Let us now get down to some specifics. The core of this book is, surely, the lesson: “the art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.” Coupled with Hazlitt’s suspicion of the “special pleading of selfish interests,” and his magnificent rendition of Bastiat’s “broken-window” example, the plan of Economics in One Lesson is clear: drill these insights into the reader in the first few chapters, and then apply them, relentlessly, without fear or favor, to a whole host of specific examples. Every widespread economic fallacy embraced by pundits, politicians, editorialists, clergy, academics is given the back of the hand they so richly deserve by this author: that public works promote economic welfare, that unions and union-inspired minimum-wage laws actually raise wages, that free trade creates unemployment, that rent control helps house the poor, that saving hurts the economy, that profits exploit the poverty stricken; the list goes on and on. Exhilarating.

No one who digests this book will ever be the same when it comes to public-policy analysis. I cannot leave this introduction without mentioning two favorite passages of mine. In chapter 3, “The Blessings of Destruction,” Hazlitt applies the lesson of the broken-window fallacy (who can ever forget the hoodlum who throws a brick through the bakery window?) to mass devastation, such as the bombing of cities. How is this for a gem: “It was merely our old friend, the broken-window fallacy, in new clothing, and grown fat beyond recognition.” Did Germany and Japan really prosper after World War II because of the bombing inflicted upon them? They had new factories, built to replace those that were destroyed, while the victorious United States had only middle-aged and old factories. Well, if this were all it takes to achieve prosperity, says Hazlitt, we can always bomb our own industrial facilities.

And here is my all-time favorite. Says Hazlitt in chapter 7, “The Curse of Machinery,” “Mrs. Eleanor Roosevelt … wrote: ‘We have reached a point today where labor-saving devices are good only when they do not throw the worker out of his job’.” Our author gets right to the essence of this fallacy: “Why should freight be carried from Chicago to New York by railroad when we could employ enormously more men, for example, to carry it all on their backs?” No, in this direction lies rabid Ludditism, where all machinery is consigned to the dust bin of the economy, and mankind is relegated to a Stone Age existence.

What of Hazlitt the man? He was born in 1894 and had a top notch education, so long as his parents could afford it. He had to leave school. A voracious reader, he learned more and accomplished more than most professional academics. But he remained uncredentialed.

No university ever awarded him its PhD degree in economics. Hazlitt was all but frozen out of higher education. Apart from a few Austrolibertarian professors who assigned his books such as this one to their classes, he was ignored by the academic mainstream.

When it came to publishing and writing, Hazlitt was a veritable machine. His total bibliography contains more than 10,000 entries. That is not a misprint. (As you can see, those who relish Economics in One Lesson will have a lot of pleasant reading in front of them.) He was at it from the earliest age, initially making his way in New York by working for financial dailies. Hazlitt made his public reputation as literary editor for The Nation in 1930. He was interested in economics but not particularly political.

The New Deal changed all that. He objected to the regimentation imposed by the regime. The Nation debated the issue and decided to endorse FDR and all his works. Hazlitt had to go. His next job: H.L. Mencken’s successor at the American Mercury. Some of the best anti–New Deal writing of the period was by none other than our man. By 1940 he had vaulted to the position of editorial writer at The New York Times, where he wrote an article or two every day, most of them unsigned. Then he met Ludwig von Mises and his Austrian period began. Writing for the paper, he reviewed all the important Austrian books and gave them a prominence they wouldn’t have otherwise had.

It was at the end of his tenure there that he wrote this book — just before coming to blows with management over the wisdom of Bretton Woods, and leaving for Newsweek, where he wrote wonderful editorials, while contributing to every venue that would publish him. He died in 1993.

In summary, I feel like a party host introducing two guests to one another, who hopes they will like each other. I hope you will like this book. But more, I hope it will affect your life in somewhat the same way it has mine. It has inspired me to promote economic freedom. Indeed, to never shut up about it. It has convinced me that free-market economics is as beautiful, in its way, as is a prism, a diamond, a sunset, the smile of a baby. We’re talking the verbal equivalent of a Mozart or a Bach here. This book lit up my life, and I hope you get something—a lot—from it, too.



Lies Vs. Truth: Women In Ministry

A Review of 10 Lies the Church Tells Women by J. Lee Grady

Dorothy Kelley Patterson

Lee Grady, a former Southern Baptist who now edits Charisma magazine, appealed to the Southern Baptist Convention, in June 2001, to rescind changes to the Baptist Faith and Message enacted at annual meetings in 1998 and 2000. Interestingly, he has tied this request to circulation of his book entitled Ten Lies the Church Tells Women. In reading through the volume, I find that, at least in Grady’s mind, Southern Baptists are the major antagonists for oppressing women.

The New Oxford English Dictionary defines lie as an intentional false statement, an untruth, something that deceives — serious charges coming from an outsider (He is not a Southern Baptist; he is not a woman; he is an “award-winning journalist”; he is an ordained minister, although nothing is said about his experience as a theologian). I will not accuse Mr. Grady of lying, but I can surmise that his position and that expressed by evangelical complementarians, when juxtaposed one with the other cannot both be biblical truth because they are, in fact, contradictory.

The question then becomes: What is truth? Again, the New Oxford English Dictionary uses some precise adjectives to describe this term — accurate, faithful, constant. Truth is fact as it really is, and the dictionary even suggests that truth is in accordance to divine standard.

Let me first give you my own presuppositions:

  • Truth is the divine standard expressed in the written Word of God.
  • Scripture, the Bible in its entirety is what Francis Schaeffer called “true truth.” As such, Scripture says what it means (God-breathed through the Holy Spirit) and means what it says (God-mandated for all generations).
  • The church is described in the New Testament as the Bride of Christ, and this body of believers is precious indeed to the Lord Christ, but I do not look to ecclesiastical authority as surpassing or even equal to biblical authority. The same is true of pastors, however godly and orthodox. With Luther I would hold to sola Scriptura.

With these guidelines, I would like to respond to Mr. Grady with Ten Truths the Bible Tells Women. In doing so, I will try to interact with Grady’s Ten Lies so that the women who wish to have different viewpoints before them in wrestling with these issues can do so.


God created the woman from the man. Both are “in His image” (Gen. 1:27; 2:22). The woman from her creation is inseparably linked to the man. The man was formed from the dust of the ground, and the woman was made from the rib (Heb. tsela, meaning “side”) of the man — the same flesh and blood and in her being equal to him in everyway. Thus, her worth and dignity are affirmed even by the act of creation. There is no hint of inferiority. The woman was not a divine afterthought, for the man was created physically, emotionally, socially, and spiritually with her in mind. Adam expresses this unity in Genesis 2:23 with a unique play on words (man, Heb. ish, and woman, Heb. ishshah).


God described His purpose for both the man and the woman. Both bear God’s image fully, but each expresses that image in God-ordained ways according to the created order. God commands husbands to love their wives as Christ loved the church — protecting, nurturing, serving, and edifying. This love is not replaced with, but accompanied by, a loving servant leadership in which a husband is concerned with his wife’s spiritual, emotional, and physical needs (Gen. 2:15-17; Eph. 5:23-29; 1 Pet. 3:7). Wives were created to be helpers to their own husbands (Gen. 2:18). There is no hint of inferiority in this term since it describes function rather than worth. The wife complements her husband through her own unique function in the divine economy. A wife’s submission does not decrease her value but rather increases her worth to the Lord as well as to her husband (1 Pet. 3:4). As headship and submission are enacted within loving, equal, and complementary male-female roles, the image of God is appropriately reflected.


God made our foremother Eve the “mother of all living.” Maternity — the conceiving and nurturing of life — is a unique opportunity given to women. Maternity does not demand the presence of biological offspring. Even women who have never borne a child have this uniquely feminine gift and the opportunity to release a godly legacy to those whom God brings within their influence in extended family circles, churches, and communities.

[Lie #1: God created women as inferior beings, destined to serve their husbands. Grady draws from the ancient Church Fathers to accuse the modern-day Church. However, sometimes what appears to be assigning inferiority to women is merely suggesting the differences between women and men, especially in the physical area.

Clement, for example, was clear in presenting his ideas about the woman’s role in her home, to which he admonished her to give her greatest energies, and in relation to her husband, to whom he affirmed she should be in submission. He expressed no difference in their spiritual responsibilities; rather he saw a division in their spheres of activity or function. When he described the woman’s position as “inferior,” he considered that to be so as a result of the different responsibilities assigned to her.

Often egalitarians insist on linking a woman’s worth to her “authority” on the one hand and to the man’s equity in household chores on the other. Tertullian, who is quoted by Grady, was described as a “woman-hater” because he assigned the difference between men and women to be one of superiority vs. inferiority, but this prejudice was tied to his preoccupation with the woman’s part in the “original sin.” However, in this regard, even feminists remind their readers that sexism and feminism, though very much a part of modern society, were not an issue during the first three centuries.

To judge the Church Fathers too harshly is to fall under the spell of anachronistic revisionism — a foolish methodology for serious historians. These Church Fathers were united in recognizing the home as the place for women and affirming the importance of homemaking. They also wrote letters of praise about women who were important to them. (See Dorothy Jean Kelley Patterson, Aspects of a Biblical Theology of Womanhood, Pretoria: University of South Africa, 1997, pp. 23-30, for direct quotes from the Church Fathers and documentation of points).]


Women are gifted and assigned service in the kingdom. In the Kingdom of Christ, ultimately neither supreme intelligence, unequaled logic, nor extraordinary gifts will determine what women can do. What is relevant for women today may be irrelevant for women in the next generation. In God’s created order, manhood and womanhood are the foundation for maintaining order and purpose.

Southern Baptists have made clear that the church following biblical guidelines does not seek to suppress women. Rather full and proper use of their ministries is ensured in a divinely given framework based upon natural order of creation and appropriateness of function — the theological reasons invoked by Paul as he presented boundaries for women in service to the church (1 Cor. 11:9-12; 1 Tim. 2:13-14).

The home and church are inextricably bound together in the divine order. Both are used in Scripture as metaphors for revealing God and how He relates to His creation. Therefore, we cannot negate truths concerning the divine order within home and church just to satisfy a cultural whim or to accommodate higher plateaus of education and opportunity. The guidelines for women, as well as for men, are grounded in timeless, historical, theological arguments. They are not merely illustrations for a particular church or cultural era; rather they are mandates for believers through the ages.

[Lie #2: Women are not equipped to assume leadership roles in the church. Even if the world views the church as “ignorant, insensitive, and irrelevant,” as suggested by Grady, the church ought not to be squeezed into the mold of the world. For Grady to be credible in his accusations against the church, he needs to be meticulously careful in what he declares to be in Scripture. Consider the following examples:

  • “The women in the upper room . . .” is not in the text (see Mark 14:12-26).
  • “In the story of His visit with the Samaritan woman . . . perhaps one of the clearest pictures in the Bible of Christ as an ordainer of women” (see John 4:7-42 in which there is no mention of ordination; in fact, the word is not used in the New Testament to denote the setting apart of men or women for ministry). According to the text, this woman shared a testimony of her conversion — no mention of a preaching woman evangelist!
  • The text does not indicate that Mary Magdalene was authorized to speak “for” Christ; rather she is to tell the disciples what she saw and what she heard — another eyewitness testimony (very effective evangelism).
  • Where in Scripture is Mary of Bethany identified as a female counterpart to the apostle Peter and what profound doctrinal statement like Peter’s words “You are the Christ, the Son of the living God” did she utter? (see Matt. 26:6-13 where Jesus is the one doing the talking).
  • Miriam is described as “leading congregational worship,” while the text says she “led the women with timbrels and with dances” (Ex. 15:20-21).
  • About Phoebe, Grady says: “Paul refers to her as a diakonon, the Greek word for deacon, the word is translated servant in many Bible versions. But it is more accurate to place her in the category of deacon with men such as Stephen and Philip . . . .” Evidently Grady is unaware that deacon is merely a transliteration of diakonon into English. Such a transliterated word is without meaning in English except for its original meaning in Greek, which happens to be “servant”!
  • According to Grady, “Many scholars note that Paul always uses Priscilla’s name first . . . doubtless because her teaching gifts were stronger . . . .” Actually, Priscilla is mentioned first in three of six references to her and her husband (see Acts 18:2, 18, 26; Rom. 16:3; 1 Cor. 16:19; 2 Tim. 4:19).]


Women are given only two prohibitions to observe in their service in the Kingdom: (1) not to teach men and (2) not to rule over men (1 Tim. 2:11-15). The text of Scripture affirms that women with varied positions of service, influence, leadership, and teaching functioned in the early Church with modesty and order (1 Cor. 11:2-16; 14:40), and these women did not teach or exercise authority over men (1 Tim. 2:11-15; 1 Cor. 14:33-35). Women can work within biblical guidelines, neither seeking recognition nor demanding higher office, but making every effort to serve the Lord and trust Him to open opportunities appropriate to their gifts, giving usefulness in spite of limitations and beyond expectations.

[Lie #3 Women must not teach or preach to men in a church setting. Again Grady ignores the precise wording of Scripture, which simply sets forth the truth already mentioned. He further accuses the church, or perhaps even Paul (the antecedent is unclear) of “seriously flawed” logic and further states that 1 Timothy 2:12 cannot be interpreted “solely on what it says or on what we think it says, but on what the rest of the Bible says . . . .” Again, one must tread carefully when even hinting that Scripture contradicts itself so that the clear message of one passage would be in contradistinction to the rest of Scripture. Nor is it logical to take a completely unrelated passage and use it as a grid to interpret another verse.]


Women are to have provision, protection, and leadership from their husbands. Earlier discussion affirms this from Scripture.

[Lie #4: A woman should view her husband as the “priest of the home.” Grady cites Groothuis in her discussion of headship as “life-giving” in Genesis 2 and “life-ruling” in Genesis 3 after the Fall. The problem arises in that there is no hint of this distinction in the text. Headship in the creation order is affirmed in the description of the woman as the man’s “helper.” Though the entry of sin does indeed taint both the man’s headship and the woman’s submission, God’s redemptive plan as beautifully presented in Ephesians does not erase the standard nor prohibit the effects of sin in the world; rather it presents a way of escape in Christ, who Himself exemplified both servant leadership and willing submission (Eph. 5:21-31). The husband’s headship was established by God before the Fall and was not the result of sin (see Gen. 2:15-17; Num. 1:2-4). Furthermore, I am unaware of any evangelical position that places in the hands of men or women “the authority of Christ” to pull anyone “out of disobedience and unbelief,” as Grady suggests. Prayers do indeed move the heart of the Father, but they are tools for intercession and not keys to spiritual authority. The text rather affirms that a wife’s humble and voluntary yielding to her husband’s leadership becomes a resource for evangelism (1 Pet. 3:1-4).]


Husbands are to encourage and edify their wives. The equality of both husband and wife in Christ is affirmed in the New Testament (Gal. 3:28; 1 Pet. 3:7). As the wife submits to her husband’s leadership, the husband humbles himself to meet his wife’s needs for love and nurture (Eph. 5:25-29; 1 Pet. 3:7). He is also responsible for knowing her so intimately that he can edify her and help her to maximize her potential. God’s plan has a unique reciprocity that enables both the man and woman to fulfill God’s plan for dominion over the earth and in the process to experience their own respective fulfillment.

[Lie #5: A man needs to “cover” a woman in her ministry activities. Grady describes a husband’s “slyly” manipulating a service so that instead of his preaching as the inviting church officials planned, his wife extended her “greeting” to “numerous Scripture references . . . and more than an hour” of “bold” preaching. Again, I am at a loss to find any endorsement of such methodology in Scripture. There follows an account of healing a paralyzed man whose skull was “miraculously repaired.” However, there is no documentation for this from objective sources. I would have thought such a phenomenon would be broadcast abroad through every news outlet available.]


Women who pursue biblical patterns of feminine leadership are a blessing to the kingdom. Of course, women exercised leadership in the Bible — Miriam, Deborah, Lydia, Phoebe. The real issue is not whether or not women can be leaders but rather how they use their leadership. Nothing in Scripture indicates that godly women assumed positions of authority over men in the home or in the church. Miriam is clearly noted to be a leader of women; Deborah was primarily a judge and even called Barak to lead the troops into battle; Lydia hosted a house church; Phoebe delivered a letter, whether as a courtesy during a prearranged business trip or as a service to the apostle.

[Lie #6: Women who exhibit strong leadership qualities pose a serious danger to the church. This statement is a real shocker to me since I am Professor of Women’s Studies in one of six Southern Baptist seminaries, all of which have special programs for women and all of which are supervised by women who are well prepared and capable leaders, yet who willingly and with determination stand under Scripture, including the mandates found in the Pauline epistles. However, a woman does not have to be an “apostle” to exercise leadership. Again I am unaware of any texts in Scripture that would suggest Priscilla functioned “in an apostolic role as a teacher and church planter.” In private conversation Priscilla and her husband explained or expounded (Greek ektithemi, prefix ek meaning out of and root tithemi meaning to expose or advise or set forth) to Apollos a better understanding. This nuance of meaning certainly is no strong case for identifying Priscilla as a teacher.]


Eve was deceived in the garden. This fact is found in Scripture both in the Old Testament, where the record states that Eve chose to believe Satan’s lie, placing her will above God’s will (Gen. 3:1-7), and in the New Testament (2 Cor. 11:3; 1 Tim. 2:14).

[Lie #7: Women are more easily deceived than men. Such a statement is an emotional red herring and not even germane to the discussion. The fact is that Eve was deceived, and Adam was not. God gave the prohibition concerning the forbidden fruit directly to Adam, while Eve received the information second-hand, i.e., through Adam, which could account for her vulnerability. Grady’s discussion of witches and of the inquisition seem out of place. Certainly, as a Baptist and part of the Radical Reformation, I would take issue with preferential treatment for women in the atrocities of the inquisition. Since I am not a church historian, I would certainly want some historical documentation before suggesting that women suffered more than men during this tragic persecution.]


Women find fulfillment in divinely appointed roles, but there is unique joy in marriage and motherhood (Ps. 127). Such does not suggest that contentment and joy are not available to every woman, whatever her family status, if she fears the Lord and obeys Him (Prov. 3:5-6).

[Lie #8: Women can’t be fulfilled or spiritually effective without a husband and children. I know of no complementarian or evangelical leader who holds this position. Having been reared in a Southern Baptist home, I do know a bit about Lottie Moon. Grady would do well to check the earliest biographies and Moon’s own writings before pontificating about how troubled she was about “sexism.” One of the cardinal rules of a serious historian is not to read modern agendas and philosophies into past centuries. Moon did indeed break her engagement to Crawford Toy — more specifically because he did not share her position on the absolute reliability of Scripture. Of course, she did not limit her work to children. She was a fervent evangelist among the women of China, and she did not miss a chance of sharing her faith with any man who crossed her path. However, one would be hard put to come up with any documentation for Moon’s having any aspirations for “preaching” to congregations, conducting public evangelistic campaigns, or seeking to exercise authority over the men in her mission team or in the churches.]


Women who choose to marry and bear children have priorities clearly defined in Scripture. Some do choose to be employed for reasons ranging from what they determine is financial necessity to personal fulfillment; but those who devote themselves to home and family choose a selfless and valuable role that should not be denigrated.

[Lie #9: Women shouldn’t work outside the home. No one is any more committed to the role of homemaking than am I, but I have never made such a blanket statement. First, to phrase it in this way eliminates the employment of single women who have no other means of support and who may be single because God has some special task for them to do in the marketplace or in the kingdom. Second, I am a homemaker by personal choice. Since my marriage, I have given my foremost and freshest energies and creativity, according to the seasons of life, to the keeping of my home, helping my husband, and rearing my children. With the exception of a three-year period in seminary, I have not been gainfully employed; but I have worked hard every day of my life. I do faithfully plead with women who choose to marry to devote themselves to their homes (see my booklet Where’s Mom?). However, I am just as faithful to say that this choice is one every wife/mother must make in tandem with her husband. I am accountable to God for no one but myself. Again, Grady’s statement is not included in any church confessional I have seen. I must also caution Mr. Grady about eisegesis or reading into Scripture modern or personal views. For example, the Proverbs 31 woman, according to the text itself, did indeed center her activities in her home. The system of bartering that was a part of that historical era did prompt her to use her creativity and skills in various cottage industries, and she undoubtedly did leave her property to gather what was needed by her family. Nevertheless, she was committed to her home and family, and her praise from the Lord arose out of these duties, vv. 27-31.]


Wives are called upon to submit themselves to their own husbands in all things. Biblical submission is the yielding of humble and intelligent obedience to a person in authority over you. By nature, it is a choice. Scripture never suggests submitting yourself to abusive tyranny. A wife’s submission is not so much to her husband as it is to God and to His plan for marriage. The only exception to this submission is when you are asked to submit to something in direct violation of God’s Word (Acts 5:29). To obey only “reasonable requests,” of course, could be more selfish license than good judgment.

[Lie #10: Women must obediently submit to their husbands in all situations. Obedience can be forced, but submission by definition in Scripture is a choice. Nevertheless, the Scripture is clear that wives are to submit to their own husbands (Eph. 5:22; Col. 3:18; Titus 2:5; 1 Pet. 3:1, 5). There is consistency and extended coverage for this biblical principle, and it comes from both Paul and Peter. Grady has included the discussion on kephale as “source” instead of “head” in this chapter. I will not even interact with it since Wayne Grudem in Recovering Biblical Manhood and Womanhood and numerous journal articles, not to mention other New Testament scholars and even the editor of Liddell and Scott’s Lexicon, has thoroughly dismantled any such improvisation! Grady also refers to Cathy Kroeger as a “theologian.” Since her degree, as well as her teaching field, is in classical studies, Kroeger might prefer to be identified thus rather than as a theologian or a church historian. I would close this discussion on submission by saying from a personal perspective: I do have rights; and because they are my own personal rights, I can and do choose to give them up when asked to do so by the Lord who created me and the Savior who died for me!]


The Southern Baptist Churches with which I have been associated are committed to standing under Scripture. If Mr. Grady chooses to identify some of the positions in Scripture unpalatable to this age as “lies,” he is free to do so. However, as a Southern Baptist woman committed to our evangelical faith, I am much more concerned with opening the truths of Scripture for myself and sharing them with other women. Biblical womanhood is a beautiful paradigm, and it is presented throughout the whole of Scripture without contradiction for any who would search for its principles with open heart and mind.

Southern Baptists as a people have honored their women. All our major mission offerings are named for godly women. Baptist women traditionally and to this day have been the custodians of our SBC missionary prayer calendar and the architects of our denomination-wide promotion of missions. Women have served as working members on the boards of every denominational agency and institution. Women have served on mission fields from the inception of the SBC missions program. Biographies of Baptist women have continued to surface. Countless female authors have published with our denominational press. Lifeway invests tremendous resources in marketing the products of women and in marketing to women. I am the product of SBC theological education. I have had the opportunity to develop a curriculum for equipping women on the graduate level in theological education. All six SBC seminaries have programs designed for preparing women for service in the Kingdom of Christ. All of this does not mean we must abandon biblical directives; rather it is those directives that guide us to the most effective use of our time and energies.


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Jobarama: Obama’s “Investment”

Daily Article by | Posted on 11/20/2008

With all of the talk of how charismatic Barack Obama is, or of his oratory ability—and especially given his recent presidential victory—it is time to engage in a deeper economic critique of Obama’s actual policies. Once we see the true effects of his policies and the incentives they create, we will see that his leadership skills and abilities make him more of a threat to freedom than if he were less articulate.

In this article we will start with a small part of Obama’s program to “create” jobs, with the aim of tackling poverty. We find the following claim on Obama’s website:

Barack Obama will expand access to jobs. Obama and Biden will invest $1 billion over five years in transitional jobs and career pathway programs that implement proven methods of helping low-income Americans succeed in the workforce.

First, there is the use of the word “investment”—in true government Orwellian fashion—as a euphemism for government spending. Investment signifies an accumulation of savings through lower present consumption, which will then be used to achieve (potential) profitable returns in the future. Obama does not have $1 billion of his own money (even including campaign contributions) that he will be investing. Isn’t it bizarre how the more money politicians say they are “investing,” the more excited people get? Do people not realize that it is their money politicians are referring to? It is as if a thief approached you and, instead of demanding half of your money, said, “Since I really do care about you and your future, give me 90% of your money.” Wouldn’t it be better if Obama could say, “We are going to invest $10 and creates thousands of new jobs”? Talk about a return on investment.

Second, there is no non-arbitrary way to determine whether a government program makes a profit or a loss. Indeed, government typically does not “talk” in those terms. If a private company is making losses for whatever reason, it must change and innovate in order to make a profit or it will continually make losses and go out of business. But with the government, if a program is labeled as failing, it receives more money—just think of FEMA, the current bank crisis, or, no doubt, Obama’s future jobs program.

In contrast, when private companies fail it is not a proof of market failure; on the contrary, it is proof the market is working. It is eliminating failure; in sharp contrast, the government promotes failure: if you want more of something, subsidize it. Government’s solution to government failure is consistent with Mises’s theory of intervention: government meddling seems to require more government involvement (and more money). And there is nothing as permanent as a temporary government program.

Continuing, we read the following from Obama’s program:

Obama and Biden will create a transitional jobs program to place people with extreme difficulties getting and keeping good jobs into temporary, subsidized wage-paying jobs to gain necessary job skills before applying for unsubsidized jobs in the private and public sectors.

Those who are being coerced into subsidizing these jobs should expect more and continued taxation. Obama claims these jobs will be provided by both the private and public sectors. We can assume that politicians want to ensure and, more likely, reassure their voters, that this program is working. After all, it’s a $1 billion investment, right? Well, if private companies aren’t hiring these workers, obviously, what will probably happen will be more government (public) jobs. As for incentives, if someone is guaranteed a “subsidized wage-paying job,” albeit a government one, then they will be less likely to search for an unsubsidized, less-secure job. The obvious effect of this would be fewer private-sector, productive, wealth-creating jobs, and more public-sector, unproductive, waste-creating jobs.

Government investment through taxation means taxpayers must lower their current levels of consumption and investment. As Murray Rothbard points out,

When capital investment takes place in the free market, it deprives no one of consumption goods; for those save who voluntarily choose investment over some present consumption. No one is required to sacrifice present consumption who does not wish to do so. As a result, the standard of living of everyone rises continually and smoothly as investment increases. But a Soviet or other system of compulsory investment lowers the standard of living of almost everyone, certainly in the near future.

Standards of living will decrease as there will be a shift from private production and exchange to political demagoguery, as well as taxes levied on the more efficient to subsidize the less efficient, but privileged, group. As with most government programs, this creates a caste conflict where one man or group benefits at the expense of another man or group. Thus we see government as the true originator of conflict in a society; whereas the market creates mutual harmony, the government engages in exploitation to achieve its ends.

While Austrian economists do not necessarily promote economic growth, it is recognized that true growth can only come through an increase in savings and investment by individuals in the free market, determined by how much they want to consume in the future compared to the present. On the other hand, government “investment” leads to either malinvestment or does not turn out to be an investment at all. An increase in government spending leads to an increase in (government) consumption and a decrease in (private) saving and investment. Thus we see Obama’s jobs program will distort the market by shifting workers and resources from the private sector to the public sector, toward government ends rather than consumers’.

Jobs cannot be created by government fiat. While it is true that neither governments nor entrepreneurs have any way of perfectly forecasting the innovations that will take place in the future, there is, however, one enormous and fundamental difference: entrepreneurs are putting themselves at risk—not taxpayers. An entrepreneur can only originate funds from consumers and investors, i.e., individuals with an interest in the entrepreneur’s success who anticipate a profit. Government, however, can extract funds by taxation and obtain them seemingly at whim. Therefore, the profit-and-loss test functions as a market mechanism to properly allocate funds. Without the requirement of obtaining goods through voluntary exchange, government can neither calculate nor allocate funds rationally.

Without a free price system and profit-and-loss criteria, says Rothbard,

[T]he government can only blunder along, blindly “investing” without being able to invest properly in the right fields, the right products, or the right places. A beautiful subway will be built, but no wheels will be available for the trains; a giant dam, but no copper for transmission lines, etc. These sudden surpluses and shortages, so characteristic of government planning, are the result of massive malinvestment by the government.

Obama’s jobs program will lower the standard of living of nearly everyone in the near future. The solution to any of Obama’s policies would be to eliminate all current and future government “investments.”


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Radical Change

Obama Selecting the Most Anti-Life, Anti-Family Radicals He Can Find for Administration

President-elect unveils plans to dismantle federal legal protection for marriage


By Kathleen Gilbert

WASHINGTON, D.C., November 20, 2008 ( – In light of further actual and rumored appointments, Obama’s future presidential administration is steadily emerging as a regime ominously packed with Obama insiders who promise to help roll out the carpet for the President-elect’s radical anti-life and anti-family agenda.

Media outlets recently named Arizona governor Janet Napolitano as Obama’s probable choice for secretary of Homeland Security. 

An early Obama supporter and campaigner, Napolitano firmly established herself as an extreme abortion supporter by vetoing the partial birth abortion ban, and in one month she vetoed four anti-abortion bills.  In 2005 NARAL warmly praised the governor for vetoing a bill that would have allowed Arizona pharmacies not to distribute the abortifacient morning-after pill due to a moral or religious objection.

Tom Dashcle has recently been named as the likely candidate for the next Secretary of Health and Human Services (HHS), an appointment Tony Perkins of the Family Research Council said gives pro-lifers a “frightening glimpse” into the new Cabinet. 

The former Democratic Senate majority leader gained notoriety for his liberal views on abortion when he opposed the partial-birth abortion ban, endorsed taxpayer-funded military abortions, and supported taxpayer funding to provide morning-after pills to young public school girls.  Perkins also lamented that Daschle, a man with no experience in public health, is on track to become the ultimate authority on federal health issues. 

One of the national co-chairs for Obama’s presidential campaign, Daschle warmed early on to Obama and in 2007 gushed that the Illinois senator “personifies the future of Democratic leadership in our country.”

Another likely future HHS member is Dr. Robin Alta Charo, a highly liberal professor of law and bioethics and former member of Clinton’s Bioethics Advisory Commission, who was appointed to Obama’s transition team Friday.  Charo had been a member of Obama’s pre-election team, where she managed science and health policy matters.

Bioethicist Wesley J. Smith took Charo’s appointment as a further sign that the Obama administration “is going to push full speed ahead” with destructive embryonic stem-cell research.  Charo once called Smith, who is a prominent pro-life advocate in the world of bioethics, a leader of “the endarkenment.”

“We are entering very dark days,” said Smith on the appointment.

Pro-abortion juggernaut Sen. Hillary Clinton, whose liberal views on just about every possible social issue are no secret, has also emerged as Obama’s favored choice for Secretary of State. 

Meanwhile, Mr. Obama is quickly establishing his public solidarity with the homosexual movement. 

Obama recently laid out on his website a “civil rights agenda” that includes, to the satisfaction of homosexual lobbyists, the dismantling of legal protections for marriage.  He intends to repeal the Defense of Marriage Act, the act that protects natural marriage that is currently enshrined in federal law, and accordingly opposes a federal Constitutional amendment to protect marriage. 

Obama has also promised to expand “hate crime” enforcement and legislation by enacting the Matthew Shepard Act, which would allow a perceived bias against homosexuality to be prosecuted.  Obama will also enforce non-discrimination in businesses regarding homosexuality, which could force business owners to hire a certain quota of homosexuals. 

Finally, Obama’s website confirms that the president-elect will push to open adoption to homosexual couples, and make military service more available to homosexuals.

According to gay news outlets, officials in the president-elect’s transition team have so far assigned 7 openly homosexual individuals to transition review panels, 3 of which were high-ranking Clinton administration officials.  Reports also say Obama is considering deputy campaign strategist and open homosexual Steve Hildebrand as the next Chairman of the Democratic National Committee, replacing Howard Dean.

See related coverage:

Obama Solidifies Pro-Abortion Agenda with “Attack Dog” Rahm Emanuel for Chief of Staff

ABC 20/20 Report Says Matthew Shepard Killed During Robbery Not Anti-Gay Hate Crime

CWA Claims Fake “Hate Crimes” Being Used to Force Legislation through Congress

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Posted by on November 22, 2008 in Politics, Religion


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Far as the Curse is Found

 By Eric Rauch—11/20/2008

As a follow-up to last week’s article, I wanted to stress the point that Christians constantly seem to miss in their quest for cultural change and significance. As I discussed last week, and as has been continuously taught by American Vision for thirty years, societal change on the grand scale cannot happen without change first coming to individuals, families, churches, and communities. This may seem absurdly obvious at first glance, but too often I think Christians are so focused on events and happenings at the national level, that they overlook the very mission field that God has given them in their own homes and neighborhoods.


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It has been said that the greatest contributor to the destruction of local communities was the invention of the electric garage-door. The automatic opening and closing of the largest door to our homes with the touch of a button has become the gateway to our “caves of isolation.” Neighbors no longer need to spend face-time with each other as they walk from driveway to front door, they simply glide into their homes on four wheels and safely escape into their homes without ever having to confront the family next door. While I think this blame on the garage-door is a bit simplistic, it does illustrate a very good point. Just because you live next door to someone does not necessarily mean they are your neighbor. I’m sure many of us live next to people that we know no better than people that live on the other side of the world. Although we see them on a regular basis as we zip in and out of our caves and offer the obligatory hand-wave, we actually don’t know anything about them. We live within 100 feet of total strangers and yet we can’t figure out why the culture is in the state that it is.

As Andy Crouch points out in his last part of Culture-Making, influence and change happens on the levels of three, twelve, and 120. The three is the core, the heart of any group or organization that comes together for any unifying reason. It may be a family, business partners, neighbors, or church members. Each of these original three have another three that will share the original vision in some capacity and make up the life-blood of the organization. As these twelve go forth and work hard to fulfill the vision of the first three, more and more people will catch the vision and join in as supporting cast members. These 120, whether a small-business, a church, or a community action group, is the optimal number for being able to maintain the vision of the three while still avoiding the communication problems that seem to plague groups of larger sizes. This 3, 12, and 120 ratio is what is severely lacking in the church today. The mega-church mentality of numbers over effectiveness is causing the church as a whole to lose sight of the possible in favor of the impossible-overlooking small-scale and local and fixating on national or global. 24-hour news networks make events on the other side of the country seem far more important and significant than the immediate needs of those in our own churches and communities.

This is not to say that national and world events are unimportant and beyond the scope of the Gospel, but it does mean that we as individuals and families need to keep our focus where we can make the most impact, changing and bringing change to our local areas with a global, beatific vision. Each of us have a three, a twelve, and a 120. It is up to each of us to identify where they are and what the mission is. Take a look at your family, your neighborhood, your church, your local government. What can you be doing to influence change and live the Gospel out in your local environment. It is not only one thing that will change the world. Homeschooling, politics, entertainment, and the family are all noble causes and need to be addressed and practiced from a Christian worldview, but each of these by themselves are not THE answer. All of them, and a hundred others, are the answer to a cultural reformation. Each of us play a part in the solution, but we are not the solution in and of ourselves. Each of us has a calling, a God-given talent that we are especially-suited to do in this world. Too many of us are chasing areas and topics that are not our callings, we are forcing ourselves to fill a role that we were not meant to fill. The Gospel is global in its application, as the hymn we will soon be singing tells us: “He comes to make His blessings flow, far as the curse is found.” We must be able to identify where the curse is found in our local areas and work to eradicate it, using the 3, the 12, and the 120 that God has given you.


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Black Backing of Barack Should Not Be Unconditional

By Deneen Borelli
November 19, 2008

Barack Obama’s election is a capstone on black Americans’ struggle for equality.


While isolated racial intolerance can be expected to continue, Obama’s electoral landslide and victory in majority-white states such as Iowa and southern states such as Virginia put to rest concerns about a so-called “Bradley effect,” in which whites allegedly publicly support – but secretly vote against – black candidates.


President-elect Obama’s life story is also a tribute to our nation’s greatness and endless opportunity. In few other nations could a fatherless, racial minority of modest means rise to the most powerful position in the world.


There is a misconception, however, about unconditional black support for Obama.


It is quite possible to be black and be proud – even excited – about Barack Obama’s achievement while opposing him politically. This black woman, for instance, did not vote for Obama. Furthermore, I don’t believe his policies are sound.


I find it unfortunate that Obama’s personal keys to success – hard work and perseverance – are tragically absent from the agenda he espouses. Instead of lauding the virtues of self-reliance and independence, he is pushing massive federal growth and government intrusion.


Collectivism replaces individualism, and government intervention replaces self-preservation.


On taxes, we can expect Obama to mandate “economic justice.” His promise of a tax cut for 95 percent of Americans obviously struck a chord during this economic uncertainty, but recent revelations indicate his true beliefs lie in redistributing wealth.


The successful will likely be taxed to provide refundable tax “credits” to those with lower incomes. It’s wealth redistribution because the 40 percent of Americans who don’t pay federal income taxes would be getting the credits.


Don’t take my word for it. When Samuel Joseph “Joe the Plumber” Wurzelbacher asked him about it, Obama replied: “It’s not that I want to punish your success. I just want to make sure that everybody who is behind you, that they’ve got a chance at success, too…” Obama continued: “My attitude is that if the economy’s good for folks from the bottom up, it’s gonna be good for everybody.”


This thinking does punish success and rewards underachievement. That’s not how our predecessors raised themselves up from bondage, poverty and racism. Who’s going to work harder if the extra benefit is taken away and given to someone who didn’t work as hard? It’s no way to set our nation back on a stable economic course.


On energy, Obama picks energy winners and losers. Through an “aggressive” cap-and-trade scheme, he plans to reduce greenhouse gas emissions by punishing the coal industry and coal-based utilities through taxes on carbon dioxide.


Last January, Obama told the San Francisco Chronicle: “[I]f somebody wants to build a coal-powered plant, they can; it’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.”


The problem is that coal provides half of our nation’s electricity. Bankrupting the industry will raise utility bills and make energy less available. During that same interview, Obama added: “Under my plan of a cap-and-trade system, electricity rates would necessarily skyrocket…” and power plants “would have to retrofit their operations. That will cost money. They will pass that money on to consumers.”


There are further problems associated with nationalizing health care, taking the secret ballot away in union organizing and new amnesty and benefits for illegal aliens.


Although it’s amazing that a black was elected President, it’s ironic that Obama’s leftist policies are likely to hurt the very people he claims to want to help.


Life, liberty and the pursuit of happiness – “unalienable rights” cited by our Founding Fathers in the Declaration of Independence – can only be achieved through personal responsibility and self-reliance.


Unfortunately, the “We” in Obama’s “Yes We Can!” literally means collectivism and a statist government that stifles our liberties.


I’d rather endorse a “Yes I Can!” philosophy. I think those who came before me would agree.



Deneen Borelli is a fellow for the Project 21 black leadership network. Comments may be sent to Note: New Visions Commentaries reflect the views of their author, and not necessarily those of Project 21.


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It Takes More than a Theory: Part 2

By Gary DeMar—11/18/2008

Calvinism was set off from Christianity in gen­eral precisely be­cause it has always advocated a comprehensive bib­lical worldview. Quot­ing Francis R. Beattie, Calvinism was de­scribed as “the richest systematic expression of revealed truth yet made, . . . the richest product of Protestant­ism.”[1] What does this greater con­sistency im­ply? “It means gre­at­er Biblical consistency, being more genuinely and more deeply and more richly true to the teaching of the Word of God.”[2] Quot­ing Benjamin B. Warfield:


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He who believes in God without reserve, and is deter­mined that God shall be God to him in all intellectual, moral, spiritual, through­out all his individual, so­cial, religious relations-is, by the force of that strictest of all logic which pre­sides over the outworking of prin­ciples into thought and life, by the very neces­sity of the case, a Calvinist.[3]

Similar to the appeals by Kuyper, Henry R. Van Til, and Meeter, the au­thors of the symposium believed that the comprehensive nature of the applica­bility of the Bible was unique to Cal­vinism. This includ­ed the applicability of God’s law. “In Re­for­med church worship the law is an integral part of the sacred pro­gram. Many Fundamentalist fellow-Christians seem to know the law in only one relation, viz., that of sin and re­demption. . . . The Heidelberg Cat­echism recog­nizes the significance of the law both as a tea­ch­er of sin and as a norm for the Christ­ian’s life of gratitude, and it gives an exposition of that law precisely in the latter context.”[4]The Presbyterian dispensationalist, Donald Grey Barnhouse, had no such high view of the law. He considered it to be a “tragic hour when the Reforma­tion churches wrote the Ten Commandments into their creeds and catechisms and sought to bring Gentile believers into bondage to Jewish law, which was never intended either for the Gentile nations or for the church.”[5] A number of Reformed theologians seem to be more com­fortable with the dispensationalism of Barn­house than the high view of the law of the Reformed confes­sions and cate­chisms. It is time for Calvinists to abandon dispensationalism.There was no such depreciation in the writings of the Calvinis­tic Action Committee. The comprehensive biblical worldview of Calvin­ism includes an “ethical task.” Bouma wrote:

This calls for a Christian witness in every realm of life. A wit­ness in the home, in the church, in the school, in the state, and in every other social sphere. Calvin­ists have always been deeply aware of an ethical task. To them gospel prea­ching and social reform are not mutually exclusive, whatever Fundamental­ists on the one hand and Modernists on the other, may have made of them. To live for the glory of God in every relationship of life, to be a soldier for the King, to battle for the Lord, to crown Christ King in every legiti­mate realm of human endeavor -this belongs to the very essence of being a true, full-orbed Christian, and it is the Calvinist—the true Calvinist, not his caricature—who stands committed to this task. It is to the expo­sition of this ethical task for our day that this book would strive to make a contribution.[6]

With the devaluing of God’s law among fundamental­ists, evan­geli­cals, and some in the Reformed camp we can ex­pect a reevaluation of a supposed worthy substitute. “There has been a tendency among evangeli­cals to give too much credit to the redeemed conscience, as though the con­science itself con­tained the standard of righ­teousness. It has been forgotten that the conscience needs to be guided by the inflexible standard of God’s law. . . . Failure to preach the law of God has left the Christian without a clear sense of direction in his Christian life. For many this has per­mitted a too easy con­science with respect to the need of Chris­tianizing his life and influence.”[7]Notice the indictment on those who “give too much credit to the redeemed conscience.” Some “inflexible standard” is neces­sary to keep even the redeemed conscience in check. This would also include the redeemed conscience’s ability to discern ethical requirements in general revelation. And what about those who give too much credit to the unredeemed conscience? This is the latest trend in ethical pluralism. Supposedly “‘the law written on our hearts’ (Romans 2:15)[8]. . . is the law by which all can­did people know that murder is wrong, for example. It is the law by which our consciences, if they are not too cauterized by sin, judge us.”[9] There are “candid” abor­tionists who daily support the murder of innocent preborn babies. There are “candid” homosexuals who practice “degrading passions, . . . men with men commit­ting indecent acts. . .” (Rom. 1:27).Does the Bible have a clear standard of ethical behavior that should be followed by sinners every­where? Why the need to go to general revelation if the Bible already gives an answer? When you lead someone to Christ, do you point him to general revelation or special revelation? What book did you use for daily devotions this morning? What law have you adopted for the governance of your family? What principles should govern your mind as you enter the voting booth?Kenneth A. Myers has gone so far as to argue that “there is a biblical mandate for not at­tempting to solve all cultural prob­lems with deductions from Scripture.”[10] What about some cultur­al problems? How about the debt crisis and the inflation “cure” (Isa. 1:22)? Abortion? Homosexuality? Foreign policy? Education? Would­n’t it be legitimate to exhaust the Bible for all that it says about answers to “cultural problems” before we lay aside Scripture for the less clear state­ments of general revela­tion?My guess is that advocates of a general revelation ethic are view­ing general revelation through the corrective lens of special revela­tion. For them general revelation is clear only because special revela­tion is clear. This was the point of God-Centered Living.

For the Calvinist law is not a matter of conve­nience, or of protec­tion primari­ly. It is the expression of the will of God; it is based upon eternal principles of right and justice as re­vealed in the Scriptures, for example, in the Ten Command­ments. From them man learns that theft, murder, and immorality are sins. To be sure, not all points of law and justice are directly covered in the Bible. However, the principles which govern them can readi­ly be distilled from these eternal princi­ples of right and justice which are expressed there. Again, government is divinely insti­tuted, and obedience to its ordinances, if they be in accord with these eternal principles, is the duty of the Christian.[11]

It is one thing to talk about the ethical requirements easi­ly dis­tilled from general revelation, but we are still wait­ing for someone to demonstrate that this can actually be done without any regard to the Bible. As our nation moves stea­dily from an ethic that most Americans recognize as being Bible-based, any ethic based on general revelation will dissipate as quickly as a morning fog vanishes at the appearing of a blazing sun. Robert Bork, in the Preface to Herbert Schlossberg’s Idols for Destruction, recognizes the “borrowed capital” principle.

Some few years ago friends whose judgment I greatly respect argued that reli­gion constitutes the only reliable basis for morali­ty and that when religion loses its hold on a society, standards of mo­rality will gradually crumble. I objected that there were many moral people who are not at all religious; my friends replied that such people are living on the moral capital left by generations that believed there is a God and that He makes demands on us. The pros­pect, they said, was that the remaining moral capital would dwindle and our society become less moral. The course of society and culture has been as they predict­ed, which cer­tainly does not prove their point but does provide evidence for it.[12]

G­eneral revelation operates only when it is constantly checked and balanced by special revelation. Even the “Golden Rule” must function within the parameters of a biblical worldview, contrary to what New-Age religionists claim. C. S. Lewis recognized in his book The Abolition of Man that the “Golden Rule,” what he unfortunately called the “Tao,” was universal among all cultures. But this is only true as men and women acknowledge a transcendental law giver. There can be no “Golden Rule” given a materialistic foundation for reality. If there is no God, as the atheist bus campaign declares, then what are the restrictions on a person enjoying his life to the fullest in every way imaginable? Does this apply to someone like Hannibal Lector or Armin Meiwes, known as the “Rotenburg Cannibal”?God-Centered Living almost produced a plane with wings, but like Kuyper, Henry Van Til, and Meeter, the symposium was little more than a version of Howard Hughes’ “Spruce Goose“: a few seconds of flight and then back to the hangar. There was a great deal of discus­sion about applying the Bible to every area of life, but only a few glimpses as to how this might be done.The Chris­tian com­munity would soon put its faith in a pilot named Francis A. Schae­ffer to fly the promised plane. There is no doubt that Schaeffer broadened the appeal for biblical worldview Christianity with his popular writing style and activist philosophy. Schaeffer’s popularity was extensive enough that he was recognized by the secular media as the “Guru of Fundamentalism.”[13]Schaeffer filled the intellectual gap that resided in much of fundamentalism. In a sense, he carried on the tradition of his early mentor, J. Gresham Machen. Prior to 1968, little was known of Schaeffer. He had isolated himself from American evangelicalism by ministering to the roaming discards of society who were trekking through Europe hoping to find answers to life’s most perplexing problems.The publication of The God Who Is There and Escape from Reason introduced him to an American evangelicalism in crisis. Schaeffer had an impact where many Christian scholars had made only a few inroads into the hearts and minds of a disenchanted and impotent Christendom. What did Schaeffer do that was different? Certainly Carl F.H. Henry’s The Uneasy Conscience of Modern Fundamentalism[14] made an impact. Henry’s work was more of a statement than a system of cultural solutions. Schaeffer worked at integrating theory with practice. His desire was to be more than just a critic of culture. This is why he asked the question, How should we then live?First, Schaeffer began at the presuppositional level. Although no credit is given to Cornelius Van Til, the Van Tillian method is evident in the first chapter of Schaeffer’s first published book. In The God Who Is There, Schaeffer introduces his readers to the importance of presuppositions in rectifying the shift from antithesis to relativism in modern thought.

It was indeed unfortunate that our Christian “thinkers,” in the time before the shift took place and the chasm was fixed, did not teach and preach a clear grasp of presuppositions. Had they done this, they would not have been taken by surprise, and they could have helped young people to face their difficulties. The really foolish thing is that even now, years after the shift is complete, many Christians still do not know what is happening. And this is because they are still not being taught the importance of thinking in terms of presuppositions, especially concerning the truth.[15]

Second, with the fuselage of a worldview Calvinism on the runway, Schaeffer began to design wings to get the long overdue plane off the ground to its culture-changing destination: Comprehensive lordship over all of life.In the 1981 Preface to A Christian Manifesto, Schaeffer explains his methodology. He began with “the Lordship of Christ over all of life—philosophy, theology and church, art, music, literature, films, and culture in general. The books that followed dealt with and extended areas of Christ’s total Lordship in all of life.”[16] In this, Schaeffer worked in the shadow of Abraham Kuyper.Third, late in his career, Schaeffer saw extended implications to the worldview he put in motion in his earlier works. “That led to the demand of the next logical step: What is the Christian’s relationship to government, law, and civil disobedience.”[17] It was here that Schaeffer saw where his initial flight plan was about to take him-constructive cultural transformation-and he didn’t like it. A reading of A Christian Manifesto will alert the reader that Schaeffer moves from being a critic of culture—his main contribution to worldview Calvinism—to an advocate of civil disobedience. The missing step was the particulars necessary to bring about cultural transformation. To advocate civil disobedience was an admission that no constructive alternative to the humanistic system existed. While he refused to discuss the particulars of the law of God as the “base” for authority, he knew something had to be done to confront a bold humanistic law system. Schaeffer turned to Samuel Rutherford’s doctrine of Christian resistance while ignoring Rutherford’s biblical approach to the application of the whole law to contemporary society, including, but not limited to, the civil magistrate. The appeal to Rutherford came early in Schaeffer’s writing. Schaeffer rightly decried a de facto sociological law—”law based only on what the majority of society thinks is in its best interests at a given moment”—but offered no worked‑out worldview to counter and replace it. He writes about a “Christian consensus” and how that consensus is found in the Bible, but he does not inform us of its biblical content as it relates to a comprehensive biblical worldview in the particulars. He even makes repeated references to Paul Robert’s painting Justice Instructing the Judges.

Down in the foreground of the large mural the artist depicts many sorts of litigation-the wife against the husband, the architect against the builder, and so on. How are the judges going to judge between them? This is the way we judge in a Reformation country, says Paul Robert. He has portrayed Justice pointing with her sword to a book upon which are the words, “The Law of God.” For Reformation man there was a basis for law. Modern man has not only thrown away Christian theology; he has thrown away the possibility of what our forefathers had as a basis for morality and law.[18]

The emphasis on the law continued to play a part in Schaeffer’s worldview theology. “In Reformation countries,” Schaeffer wrote, “the Old Testament civil law has been the basis of our civil law.” Of course, he wanted to add the obligatory aside that “we are not a theocracy.” Even so, Schaeffer went to argue, “nevertheless, when Reformation Christianity provided the consensus, men naturally looked back to the civil law that God gave Israel, not to carry it out in every detail, but to see it as a pattern and a base.”[19] Schaeffer saw the book of Joshua as “a link between the Pentateuch (the writings of Moses) and the rest of Scripture. It is crucial for understanding the unity the Pentateuch has with all that follows it, including the New Testament.”[20] It was the law of the Pentateuch that was linked by Joshua with the New Testament.Unfortunately, Schaeffer left behind an unfinished legacy. He knew where the answer was, but he was unable, within the confines of his own methodology and his premillennial eschatology, to see it through. How influential have the Schaeffer disciples been? Not very. They continue to offer incomplete critiques of culture, but as of yet, except for musings about how pluralism is the answer, little that is constructive and specific has come from them. Even Schaeffer’s son, Frank, has abandoned much of his father’s work. The Schaeffer crowd has talked a lot about social involvement but little is said about the details. Of course, they are not alone in their ambiguity. Few Christian leaders want to get down to the nitty-gritty of really applying the Bible they say they believe in.

[1]Francis R. Beattie, Calvinism and Modern Thought (Philadelphia, Pennsylvania: West­min­ster Press, 1901), 13, 14. Quoted by Clarence Bouma, “The Relevance of Calvin­ism for Today,” God-Centered Living or Calvinism in Action (Grand Rapids: Baker Book House, 1951), 14.

[2]Bouma, “The Relevance of Calvinism for Today,” 14.

[3]Benjamin B. WarWeld, Calvin and Calvinism (New York: Oxford University Press, 1931), 354-355.

[4]Bouma, “The Relevance of Calvinism for Today,” God-Centered Living, 20.

[5]Quoted in S. Lewis Johnson, “The Paralysis of Legalism,” Bibliotheca Sacra, 120 (April/June 1963), 109.

[6]Bouma, “The Relevance of Calvinism for Today,” 20.

[7]Peter Van Tuinen, “The Task of the Church for the Solution of Modern Problems,” God-Centered Living, 43-44.

[8]While it might not seem to make that much difference to some, Romans 2:15 actually says, “in that they show the work of the Law written in their hearts.”

[9]Thomas C. Atwood, “Through a Glass Darkly: Is the Christian Right Over­confident It Knows God’s Will?,” Policy Review (Fall 1990), 49.

[10]Atwood, “Through a Glass Darkly,” 49.

[11]Garret Heyns, “Calvinism and Social Problems,” God-Centered Living, 236.

[12]Robert H. Bork, “Preface” in Herbert Schlossberg, Idols for Destruction: Christian Faith and Its Confrontation with American Society (Washington, D.C.: Regnery Gateway, [1983] 1990), xvi.

[13]Kenneth L. Woodward, “The Guru of Fundamentalism,” Newsweek (November 1, 1982), 88.

[14]Carl F.H. Henry, The Uneasy Conscience of Modern Fundamentalism (Grand Rapids, MI: Eerdmans, 1947).

[15]Francis A. Schaeffer, The God Who is There (1968) in The Complete Works of Francis A. Schaeffer, 5 vols. (Westchester, IL: Crossway Books, 1982), 1:7.

[16]Schaeffer, “Preface,” A Christian Manifesto (1981) in Complete Works, 5:417

[17]Schaeffer, “Preface,” A Christian Manifesto, 5:417.

[18]Schaeffer, Escape from Reason (1968) in Complete Works, 1:261-262.

[19]Schaeffer, Joshua in the Flow of Biblical History (1975) in Complete Works, 2:298.

[20]Schaeffer, Joshua in the Flow of Biblical History, 2:153.


It Takes More Than a Theory

By Gary DeMar—11/17/2008

As a student at Reformed Theological Seminary in the 1970s, I was taught that certain cultural applications flowed from a consis­tent appli­cation of Calvinism. Calvinism is synon­ymous with a comprehen­sive biblical world-and-life view not just the doctrine of predestination. Simply put, I was told that the Bible applies to every area of life. To be a Calvin­ist is to make biblical application to issues beyond personal salvation (Heb. 5:11-14).


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The first place I turned after reading Abraham Kuyper’s (1837-1920)  Lectures on Calvinism[1] was to Henry Van Til’s The Calvinis­tic Concept of Culture. Van Til, in his discussion of Augus­tine, wrote:

Augustine believed that peace with God precedes peace in the home, in society, and in the state. The earthly state too must be converted, trans­formed into a Christian state by the perme­ation of the kingdom of God within her, since true righ­teous­ness can only be under the rule of Christ.

Not only in the realm of ethics and politics must conversion take place . . . [but also] for knowledge and science. Apart from Christ, man’s wisdom is but folly, because it begins with faith in itself and proclaims man’s autonomy. The redeemed man, on the other hand, begins with faith and reason in subjec­tion to the laws placed in this universe by God: he learns to think God’s thoughts after him. All of science, fine art and technology, conventions of dress and rank, coin­age, measures and the like, all of these are at the service of the re­deemed man to transform them for the service of his God.[2]

Van Til believed, along with Augustine, Calvin, Kuyper,[3] and Klaas Schilder that the building of a Chris­tian culture is a biblical imperative. Van Til castigated the Barthians for their repudia­tion of a Christian culture. “For them,” he wrote, “there is no single form of social, political, economic order that is more in the spirit of the Gospel than another.”[4] Christians today are hearing a similar refrain from within evangelical circles. If there is no specifi­cally bibli­cal blue­print, we are left with a pluralistic blue­print, no blueprint, or a postponed blue­print (dispensationalism).

Second, what do these views mean for economics, law, poli­tics, and education? Does toleration for non-Christian reli­gious groups mean that we should also toler­ate their law sys­tems? If we tolerate the religion of Islam, must we tolerate their views of econom­ics and civil law? Babylonian law called for the “amputation of the right hand of the physi­cian whose patient died during sur­gery.”[5] Should this law be placed on the same plat­ter with bib­li­cal law? If not, why not?

My seminary training never hinted at plural­ism. Noth­ing I read in Van Til’s Calvinistic Concept of Culture led me to embrace plu­r­alism. In rejecting Barth’s repudiation of a specifically Christian cul­ture, he assured us that the

Calvinist maintains that the Word of God has final and abso­lute author­ity, and is clear and sufficient in all matters of faith and conduct. It consti­tutes the final refer­ence point for man’s think­ing, willing, acting, loving, and hating, for his cul­ture as well as his cultus. . . . [F]or all prac­tical purposes, the church through­out histo­ry has ac­cepted the Holy Scriptures of the Old and New Testament as the Word of the living God. Calvinism, also in its cultural aspects, proposes to continue in this historic perspective, not willing to accept the church or the religious consciousness, or any other substitute in place of the Word.[6]

This is the historic position of the church, Van Til assert­ed. This is what I was taught in seminary. This is the view that my pro­fessors defended. But there was one problem. Even after finish­ing Van Til’s book, I noticed a glaring defic­iency: There were few specifics and even fewer references to the Bible as to how it actually applies to culture. Van Til, however, was a few steps beyond Kuyper.

After Van Til, I next turned to H. Henry Meeter’s The Basic Ideas of Calvinism. This work looked promising even though its focus was on politics. The first edition (1939) of Meeter’s work was described as “Volume I.” A subsequent volume never appeared. Again, the Bible was empha­sized as the standard for both Christian and non-Christian.

The Calvinist insists that the principles of God’s Word are valid not only for himself but all citizens. Since God is to be owned as Sover­eign by everyone, whe­ther he so wishes or not, so also the Bible should be the determining rule for all. But espe­cially for him­self the Christian, according to the Calvinist, must in politics live by these princi­ples.[7]

Since God is the Sovereign of all His creatures, He must be recog­nized as the lawmaker for all mankind. How does one determine what that rule is? Me­eter told us that the Bible should be the deter­mining rule for all, not just for Christians and not just for settling ecclesiastical disputes. So far, so good. Meeter then moved on to answer the question as to whe­ther the State is to be Chri­stian.

On the negative side, he made it clear that the State is still a legiti­mate sphere of government even though its laws are not based on the Bible. Is the State obli­gated, when con­front­ed with the truth of Scripture, to implement those laws which are specifically civil in application?

On the affirmative side, Meeter wrote: “Whenever a State is permeated with a Christian spirit and applies Christian principles in the adminis­tration of civil affairs, it is called ‘Chris­tian.’ If that be what is meant by a Christian state, then all States should be Chris­tian, according to the conscience of the Calvin­ist, even though many states are not Christian. If God is the one great Sovereign of the universe, it is a self-evident fact that His Word should be law to the ends of the earth.”[8]

Meeter had moved from “Christian principles” to “His Word should be law.” The goal, then, is God’s Word as the “law.” Meeter continues:

If God is Ruler, no man may ever insist that religion be a merely private mat­ter and be divorced from any sphere of soci­ety, political or otherwise. God must rule every­where! The State must bow to His ordinances just as well as the Church or any private individual. The Calvinist, whose fundamental principle maintains that God shall be Sovereign in all domains of life, is very insistent on having God recog­nized in the political realm also.[9]

In what way is the State to “bow to His ordinances”? Where are these ordi­nances found? “For matters which relate to its own domain as State, it is bound to the Word of God as the Church or the individ­ual.” For Meeter, a “State is Christian” when it uses “God’s Word as its guide.”[10]

Like Kuyper and Henry Van Til before him, Meeter, who asserts that the Bible “is the ultimate criterion by which the State must be guided in determining which laws it must admin­ister” never set forth a biblical methodology. In fact, he never quoted one passage of Scripture to defend his position, al­though there are vague references to biblical ideals! Reading Meeter was like reading an unfinished novel.

I next moved to a symposium produced by the Calvinistic Action Commit­tee: God-Centered Living. God-Centered Living began with this noble goal: “This book seeks to be of help to those who desire to know what the will of God is for the practi­cal guidance of their lives in the complex relations and situa­tions of our modern day.” The Committee encouraged the reader with its intent not simply to “theo­rize,” describing its method as “a call to action” based on the “clari­fication and application of basic Chri­stian principles. There will be no solu­tion for our pressing modern social problems without recourse to the verities of the Word of God.”[11]

Finally, I thought, a plane with wings! This volume was more comprehensive than those mentioned above, touching on the task of the church for the solution of modern problems, Calvin­ism and the missionary enterprise, evangelization of America, education, art, recreation and amusements, political action, economics, business, social problems, and international rela­tions.

[1]Abraham Kuyper, Lectures on Calvinism (Grand Rapids, MI: Eerdmans, [1931] 1970).

[2]Henry R. Van Til, The Calvinistic Concept of Culture (Grand Rapids: Baker Book House, 1959), 87.

[3]Kuyper’s emphasis on common grace as “the foundation of culture” lead Van Til to conclude “that Kuyper can never really get special grace into the picture.” (Van Til, Calvinistic Concept of Culture, 118, 119).

[4]Van Til, Calvinistic Concept of Culture, 44.

[5]Laws of Hammurabi, 218. Quoted in Gary R. Williams, “The Purpose of Penology in the Mosaic Law and Today,” Living Ethically in the 90s, ed. J. Kerby Anderson (Whea­ton, Illinois: Victor Books, 1990), 127.

[6]Van Til, Calvinistic Concept of Culture, 157.

[7]H. Henry Meeter, The Basic Ideas of Calvinism, 5th rev. ed. (Grand Rapids: Baker Book House, [1939] 1956), 99-100. A 6th edition appeared in 1990 with three chapters added by Paul A. Marshall.

[8]Meeter, The Basic Ideas of Calvinism, 111.

[9]Meeter, The Basic Ideas of Calvinism, 111-112.

[10]Meeter, The Basic Ideas of Calvinism, 112.

[11]Calvinistic Action Committee, God-Centered Living or Calvinism in Action (Grand Rapids: Baker Book House, 1951), 5.


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