You are hereSome Thoughts on the Post-Bubble World
Some Thoughts on the Post-Bubble World
by John Evans
Being well aware that I lack the divine inspiration of biblical prophets, I am fond of a quotation attributed to the late business economist Edgar R. Fiedler, namely “He who lives by the crystal ball soon learns to eat ground glass.” Nevertheless, because I have been blessed by having a stronger constitution than I deserve, because I have been a student of economic history and world politics for almost sixty years and a serious student of the Bible for about twenty, and because I have been allowed to post articles at planetpreterist.com, I herein offer an analysis of where America stands politically today and make some predictions about where it in particular and the world in general are headed during the coming decade. It promises to be a very memorable time.Being well aware that I lack the divine inspiration of biblical prophets, I am fond of a quotation attributed to the late business economist Edgar R. Fiedler, namely “He who lives by the crystal ball soon learns to eat ground glass.” Nevertheless, because I have been blessed by having a stronger constitution than I deserve, because I have been a student of economic history and world politics for almost sixty years and a serious student of the Bible for about twenty, and because I have been allowed to post articles at planetpreterist.com, I herein offer an analysis of where America stands politically today and make some predictions about where it in particular and the world in general are headed during the coming decade. It promises to be a very memorable time.In their collective wisdom, American voters have chosen as their next President a man whose background reveals for all who have eyes to see a lifetime of identification with the political left. They have also chosen to increase the control of Congress possessed by members of the political party whose policies paved the way for the emergence of a great financial crisis in September of this year whose effects are likely to prove profound and long-lasting. In effect, the voters have ceded political power to people who intend to replace the free-market, smaller-government model of the Reagan era with an improved version of the European-style welfare state.
Given the phenomenal success of the American economy since the tax reform legislation engineered by Reagan beginning in 1982, the willingness of the American public and its chosen political representatives to turn their backs on the approach to economic policy that was adopted during the Reagan era may seem surprising from the perspective of objectivity, but that perspective has been pushed into the background by other considerations that have obscured the public’s understanding of economic reality and reinvigorated the long-term trend toward increasing the power and influence of the federal government that was set in motion by Franklin Roosevelt’s New Deal in the 1930s. It seems probable that the presidency of Barack Obama will bring with it the biggest expansion of federal power since the New Deal. In my estimation, it is also probable that Obama’s presidency will be a massive failure, not only in the conduct of economic policy but in other areas as well. Because of the pronounced liberal bias in America’s mass media of communication and among many members of its intellectual and cultural elites, however, there will be enormous resistance to the explicit recognition of its failures. Eventually, however, reality will trump spin.
The same liberal bias that is encouraging unfounded optimism about the prospects for the Obama administration has contributed enormously to the public’s underappreciation of the Reagan administration’s accomplishments. An important aspect of this state of affairs has been the de facto alliance between many members of the news media and the liberal Democrats who have led the political opposition to Reagan administration policies and the free-market principles with which they are associated. In addition, the trend toward increasing the already leftward-tilted American education system by people possessing a liberal worldview that manifested itself so explicitly during the Vietnam War strongly reasserted itself during the post-Reagan years and has become steadily more prevalent as memories of the 1980s have faded. With the passage of time, therefore, the voting population has increasingly come to consist of people with little, if any, memory of the Reagan years and what preceded them who have been misinformed about what took place at that time. Included in this voting population are large numbers of immigrants who have been culturally “wired” toward favoring the ideology of the welfare state over that of free-market capitalism.
Beyond these factors there have been the consequences of the human tendencies to take prosperity for granted after it has existed for a while and to indulge in invidious comparisons that invoke envy and discontent. In a culture that places great emphasis upon individual freedom, including economic freedom, great differences in income and wealth inevitably emerge. It is a hard fact of life that a society with a high degree of individual freedom does not produce equality of outcomes. The resulting inequalities provide enormous opportunities to profit politically (and, therefore, economically) by capitalizing on voters’ resentments. Those resentments become intensified to the degree that the perception exists that much of the economic inequality lacks justification.
Ideally in a market-directed economy, those who manage to achieve relatively high levels of income and wealth do so in proportion to their contributions to the economic wellbeing of the nation as a whole. In practice, of course, many wealthy individuals attain their status through inherited advantages or by behaving in ways that hardly measure up to the competitive market ideal. For example, they may use political connections to rig the market in their favor or they may amass fortunes by flouting the law in some way or by catering to desires that fit into the biblical categories of sin and gluttony. That envy and resentment are aroused by the awareness of numerous instances in which accumulations of personal wealth have lacked social justification is easily understandable.
Reinforcing the animosity felt by some voters toward “the rich” is the fact that, as history amply demonstrates, many of the wealthiest members of society have exhibited a pronounced fondness for flouting their status by indulging in what economist Thorstein Veblen called “conspicuous consumption” and “conspicuous leisure.” In general, such behavior has tended to become more pronounced to the degree that the thought processes of the wealthiest members of society have been increasingly liberated from biblical influences. I submit that, everything else being equal, a rich man who takes such biblical verses as Matthew 19:24 quite seriously is likely to behave rather differently from one who scoffs at biblical admonitions. This verse, it will be recalled, states that “it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God” (NIV). I suggest that a great many of the wealthiest citizens of our nation today are included among the scoffers.
The fact that much of the economic inequality that abounds in a “capitalistic” economy is not necessarily based on the production of socially desirable goods and services under competitive conditions provides a political rationale for governmental action to modify it through “progressive” taxation and public expenditures intended to benefit the less fortunate. Ideally, these redistributive efforts should greatly enhance upward social mobility and effect increases in the productive capabilities of the population that dwarf whatever negative impact upon socially desirable entrepreneurial activity that they entail. To the extent that all strata of society benefit from economic growth and it is perceived that there are ample opportunities for advancement for hard-working and talented people, the political resentment that economic inequality tends to generate may be prevented—at least for a long time—from taking over politically and trying to reshape society.
Among the relatively prosperous nations of Western Europe, Anglo America, and a few other places in the world that achieved their lofty status through the release of the entrepreneurial energies and the development of opportunities for economic and social advancement that the institutions of free-market capitalism cultivated, a long-term trend has been at work now for almost a century that has tended to undermine their dynamism and seems to be bringing it to an end. The factors contributing to this loss of dynamism are complex, but I suggest that two in particular that objectively stand out: the political triumph of popular democracy and the decline in the influence of Christianity in the public square..
Although “democracy” is commonly presented as the approach to governance that provides the optimal solutions for what ails mankind, and those who raise serious questions about it in America today are likely to be labeled “elitists,” “fascists,” “ultra-conservatives,” etc. and to be treated by mainstream opinion makers as societal misfits, it has long been well-understood by many students of history that it is inherently vulnerable to capricious shifts in public opinion that can wreck social havoc. The architects of the American political system known as the Founding Fathers were keenly aware of the dangers of “mob rule” and sought to design a system of government that was a republic rather than a popular democracy in which “the will of the people” would be subject to few restraints. That is, they desired a government that would reflect the will of the nation’s economically self-supporting citizens as transmitted through elected representatives, with checks and balances in place that would protect the wellbeing of society as a whole from political demagogues skilled in stoking grievances. They were remarkably successful, but with the passage of time, the barriers that they erected against “mob rule” have been eroded to such an extent that the structural foundation of the nation’s economic system has become severely impaired.
In the political systems that prevail among the high-income “democratic” nations of the world that have most successfully capitalized on the heritage of Western Civilization, the right to vote has evolved over time into systems of almost universal suffrage. The restrictions upon the right of their citizens to vote that still exist are very modest by comparison with what existed before the twentieth century. Therefore, a welfare recipient who satisfies the modest general requirements for voter eligibility has the same individual power to vote as a business tycoon who collects millions of dollars per year in executive compensation. In reality, of course, the tycoon is free to use some of his money and influence to attempt to assure that the legislation and regulations affecting his business operations are not harmful to his interests, and some politicians will encourage him to do so. He may also be able to exert considerable influence upon the people under him and those with whom he comes into contact that inclines them toward agreeing with his political outlook. Nevertheless, the one man (or woman), one vote principle, in combination with the generous extension of the suffrage privilege to the “have nots” of society, has increased the prevalence of “mob rule” and prodded the governments of Western democracies to set up economic systems that are welfare states; i.e. economies in which the production of marketable goods and services remains primarily in the hands of private owners, but the state is heavily involved in oversight activity and redistributive efforts designed to modify the income inequality that tends to result from the operation of unrestrained market forces.
For various reasons, the United States has proven more politically resistant to the development of the full-blown welfare state than most other Western democracies. Among these reasons, the relatively greater adherence of its population to the Christian faith stands out. With its emphasis upon morally upright behavior and the responsibility of the individual for his or her own salvation, traditional Christian doctrine stands in sharp contrast to much of the ideology of the political left; and while it is certainly true that there are religious authorities affiliated with the left who identify themselves as Christians, those authorities strongly tend to favor liberal interpretations of the Bible that impugn its integrity and allow the understanding of it to be adapted as needed to much of the agenda and ideology of their more secular counterparts.
While there are numerous variations of leftist/liberal ideology, they exhibit common features, among which are the tendency to blame the shortcomings of society upon greedy businessmen whose avarice is perceived as causing harm to others and the belief that the key to reforming society is the collective action of governments and dedicated pressure groups. This emphasis upon group membership and action contrasts sharply with the traditional Christian emphasis upon changing the behavior of the individual as a necessary prelude to group political action. In traditional Christian theology, all men are born sinners, and this hard fact places practical limitations upon the social benefits that can be achieved through government. Indeed, since those who act as agents of the state are sinners by nature who are likely to be heavily influenced by considerations of self-interest, it is dangerous to place faith in the power of government beyond a certain point. For a great many conservative Christians, the render unto Caesar what properly belongs to him passages of Matthew 22:21, Mark 12:17, and Luke 20:25 strongly suggest that it is a mistake to entrust government with the primary responsibility for constructing a healthy and prosperous community. For those on the political left, however, entrusting “Caesar” with this responsibility is far more desirable than encouraging people to work things out individually with their maker, assuming that there is one. And rather than embrace the notion that all men are sinners, the left prefers to believe that people can be trained to behave in socially desirable ways through appropriate government action. Therefore, it is reasoned, with proper education and indoctrination, a sense of social purpose can be instilled in the populace that allows the welfare state to overcome the historical tendency of government to become increasingly corrupt and wasteful as it grows larger.
Over the course of more than two centuries since the intellectual assault upon traditional Christianity that became evident in the eighteenth century exploded into view at the time of the French Revolution, secularist worldviews have increasingly come to dominate political life in the nations that comprise what is commonly called Western Civilization. Helping enormously to pave the way for their triumph has been the displacement of republicanism by versions of popular democracy in which politicians with secular outlooks have gained the support of a majority of voters by promising to use the power of government to provide them with benefits from the public purse to be financed, for the most part, by other peoples’ money.
A particularly blatant example of the technique of effectively buying votes by promising benefits to be paid for by others was Barack Obama’s promise to provide a “tax cut” to the 95 percent of America’s “working families” who constitute its “middle class.” Although this language provides an eerie reminder of the world of Big Brother in George Orwell’s 1984 (e.g., “Truth is Falsehood.”), the American news media chose generally to treat it as standard political rhetoric and to ignore its obvious absurdity. It is true that after it was pointed out that many of the people to whom this “tax cut” was to be given did not pay federal income tax, the 95 percent figure was refined so as to apply to “working families” rather than the entire population; and since workers are subject to payroll taxes, the candidate’s “spinmeisters” adroitly suggested that the “tax cut” could be viewed as the equivalent of a payroll tax refund for some. There was, of course, no suggestion from them that the recipients of the “tax cut” would suffer any loss of future Social Security and Medicare benefits. In other words, the supposed “tax cut” was to be what is commonly called a “welfare check” and could be classified as a “transfer payment” in the value-neutral language of governmental accounting; i.e. a government grant for which no good or service is received in return. Furthermore, if 95 percent of America’s working families are in the middle class, what happened to the working poor?
In assessing the chances for success of the new and improved welfare-state model that the Obama administration promises to install, I suggest that it is relevant to briefly examine recent trends and developments in the part of the world in which nations have traveled farther down the road to welfare-state utopia than has the United States. When we do that, I also suggest, the conclusion that should follow is that the chances for the success of the new administration do not look promising. It is to be hoped, however, that lessons will be learned and taken to heart that will allow the political pendulum to swing back to the right and be locked in place for a long time to come.
During the past decade, two obvious trends in the relatively high-income countries that have proceeded farther down the road to welfare state Utopia than the United States have been a loss of economic dynamism and the persistence of a decline in human fertility that is tending to cause population declines in the absence of net immigration. These trends are, of course, interrelated. When their impact is added to that of trends in other parts of the world, notably an overall decline in human fertility and the increasing turmoil among the practitioners of Islam, the prognosis that the world has entered into a great time of trouble that promises to become much worse in the near future seems very much in order. We may now be witnesses to one of the great crisis periods in all of human history.
Prior to the current decade, the European welfare states were able to stave off economic stagnation by moving away from traditional socialist models that place heavy emphasis upon government ownership of the means of production toward approaches to economic policymaking that encouraged economic integration, allowed greater scope for private enterprise, and greatly deemphasized progressive income taxation. At the same time, however, they sought to expand public welfare services. As a result, their total government spending relative to gross domestic product (GDP) has remained quite high. With the exceptions of Ireland and Spain, I am confident that such spending in all of the nations of Western Europe exceeds 40 percent of GDP by at least several percentage points; and in some cases, it exceeds 50 percent. In the United States, total spending by all levels of government is several points below 40 percent of GDP. Australia and Ireland are at about the same level as the United States, while New Zealand, Japan, Canada, and Spain are above the United States but still below 40 percent. Incidentally, the United States has a relatively high level of defense spending relative to GDP, about 4 percent.
According to the CIA’s World Factbook, with the exceptions of the United States and New Zealand, the fertility rates of the world’s most economically advanced nations have all declined below the rate of approximately 2.10 births per female per lifetime that is required to maintain a stable population in the absence of net immigration. In the United States and New Zealand, the fertility rate is very close to the replacement level. In much of Western Europe, including Portugal, Switzerland, Germany, Austria, Italy, and Spain, this rate has fallen below 1.50. There has been an even greater general decline of fertility in Russia and in most of the European nations that were formerly included in the Soviet Bloc or were part of Yugoslavia. The decline among these former Communist states has been less pronounced in Albania, Kosovo, and Macedonia, where there is a relatively large Muslim population; but even in these locations, the fertility rate is below the replacement level. In Western Europe, the decline in fertility would have been somewhat greater than it has been without its net immigration and the relatively high fertility rates of its immigrant population.
In descending order (highest rate of decline to lowest), the CIA lists the following nations as having actual declines in populations in 2008: Montenegro, Bulgaria, Ukraine, Estonia, Latvia, Russia, Belarus, Georgia, Lithuania, Hungary, Japan, Romania, Moldova, Slovenia, Czech Republic, Armenia, Germany, Poland, Croatia, and Italy. In several other nations, including Austria, Belgium, Greece, Portugal, Spain, and Sweden, the CIA indicates that modest declines in national population would have occurred this year (2008) in the absence of net immigration. Moreover, in view of the general aging of the populations of these nations, their trend toward population decline can be expected to continue, barring a sharp turnaround in fertility and increases in net immigration.
Although the trend toward declining fertility is most advanced in Europe and in such relatively high income Asian nations as Japan, South Korea, Singapore, and Taiwan, it has now spread to encompass most of the world. For the world as a whole, the CIA puts the fertility rate in 2008 at 2.61, which suggests a very modest underlying overall rate of population increase. Furthermore, since it is reasonable to believe that fertility rates will continue to fall in many nations, the fear that the world is destined to experience calamity because of overcrowding appears to be greatly overdrawn. Nevertheless, raising living standards for the world as a whole remains an enormous challenge.
While fertility levels among Muslims are generally higher than among non-Muslims, which fact has engendered much optimism among staunch practitioners of Islam with regard to ultimately achieving their jihadist goals, a marked trend toward declining fertility has nevertheless emerged in many nations with large Muslim populations. Indeed, the CIA estimates of fertility rates in 2008 shows the following predominantly Muslim nations with rates that are below the necessary level for sustained population maintenance: Azerbaijan (2.05), Albania (2.02), Uzbekistan (2.01), the Maldives (1.97), Brunei (1.94), Turkey (1.87), Algeria (1.82), Tunisia (1.73), and Iran (1.71). It remains true that some of the highest fertility rates are found in abjectly poor, predominantly Muslim nations, such as Mali (7.34), Niger (7.29), Somalia (6.60), Afghanistan (6.58), and Yemen (6.41); but in such important nations as Pakistan (3.73), Libya (3.15), Bangladesh (3.08), Malaysia (2.98), Egypt (2.72), Morocco (2.57), and Indonesia (2.34), fertility rates have declined sharply and seem destined to continue to fall.
The trend toward declining fertility is also quite evident among the non-Muslim populations of non-European nations. In Mexico, for example, the current estimated fertility rate of 2.37 is only slightly higher than that of the United States, and the birth rate is less than half of what it was several decades ago. The fertility rate of China (1.77) is now well below the replacement level, and while India’s fertility rate is much higher (2.76), it has fallen well below its former level. Moreover, the fact that birth control on the basis of sex selection in such nations as China and India has created a numerical imbalance between their male and female populations has demographic implications that point to a further slowing of population growth.
Among the generally secularly oriented commentators on world demography, there is a pronounced tendency to emphasize the role of economic considerations in accounting for the trend toward declining fertility. This emphasis is readily understandable because there are obvious cause and effect connections between economics and demography. Recall, for example, that the birth rate in the United States fell dramatically during the years of the Great Depression of the 1930s. Consider, too, that in a poor nation with a relatively short average life expectancy that offers little in the way of government financial assistance for the elderly, it may make sense to have a large number of children as a means of preparing for old age—should you be lucky enough to reach it. And I do not doubt that when Muslims leave Turkey, Iran, or Algeria to live in Western Europe in order to improve their economic prospects, the ready availability of welfare benefits for immigrant families means that they often have less incentive to avoid having children than if they had not emigrated.
Nevertheless, I am convinced that a tremendously important factor in explaining the widespread trend toward lower fertility is an overall decline in religious influence on personal behavior. The live-for-the-moment, culturally relativistic, and largely ethical-free lifestyle that is so much in favor in the West greatly impacts upon behavior all over the world; and while Islamic clerics constantly rail against it in their exhortations to the faithful and jihadists in Afghanistan throw acid in the faces of girls who dare to attend school, the intellectual vapidity of the Islamic faith and the emotionally unappealing aspects of living in the way that its clerics prescribe are encouraging rampant hypocrisy among the “faithful” and diminishing the faith’s emotional appeal.
It is well-known, of course, that fertility rates tend to be higher among conservative Christians in the United States than among those who are more socially and politically liberal. But beyond that bit of readily available evidence pointing to the positive correlation between religious belief and fertility, consider for a moment the fact that the decline in fertility has been especially dramatic in nations that were long subject to the rule of Communist parties. I suggest that after being subjected to indoctrination in militant atheism for decades, it is small wonder that such nations as Russia, Ukraine, and Estonia have fertility rates that are far below replacement levels. I take it to be obvious that living for the moment and narcissistic behavior tend to be more prevalent among those who deny the existence of the God of the Bible than among those who do not.
It is to be anticipated that at some point, the nations with the lowest fertility rates will attempt to forestall a complete demographic debacle by offering increasingly attractive incentives to have children. Indeed, some steps in this direction have already been put into effect, and more are sure to occur. I do not doubt that the state has the power to prevent demographic suicide if it determined to do so, though I shudder at the thought of how it may choose to do so. In the meantime, many of these nations are dealing with their declining fertility problem by encouraging immigration. In doing so, particularly when the immigrants are Muslims, they have saddled themselves with problems of cultural assimilation that are proving to be difficult to smoothly resolve.
A very important—but easily overlooked—determinant of a nation’s economic well-being is the percentage of its population that is actually engaged in the production of goods and services. Everything else the same, the larger the percentage of its population that is so engaged, the higher will be its per capita income. Because the vast majority of a nation’s working population will be found within the age range 15 through 64, economic analysts commonly employ a tool of analysis called the “dependency ratio” in which the assumption is made that a nation’s potential labor force is essentially drawn from that age range. One commonly calculated dependency ratio is the population in the age group 0-14 relative to the age group 15-64, and another is the age group 65 and over relative to the age group 15-64.
As a nation’s population structure ages, the “old age” dependency ratio correspondingly increases. At present, this ratio exceeds 20 percent in most of the higher-income nations and in the states that shed their Communist regimes and it is in the vicinity of 30 percent in such nations as Sweden, Germany, Belgium, the Netherlands, France, Italy, Greece, and Portugal. In all of these countries, there is a strong economic incentive to supplement the labor force with adult immigrants who possess needed labor skills; and, in fact, large-scale immigration has been occurring into those countries that avoided the economic stagnation associated with Communist rule.
Inasmuch as relatively few people past the age of 65 are participants in nations’ labor forces, most of them are indeed dependents in the sense that, regardless of how much wealth they possess, their ability to continue to exist depends upon the labor of others. These “retired” dependents survive by living off their personal savings, from what they receive from family members and other private sources, and from what I shall call government “pensions.” The goods and services that they consume are produced by others than themselves, however, which means that countries must find ways to prevent the members of the labor force and their immediate family members from consuming all that they produce. Among those ways, of course, is taxation.
In the countries with relatively high old age dependency ratios and relatively high per capital income levels, younger families that do not receive generous financial assistance from their parents and other family members typically are under pressure to spend more for personal consumption and housing than their disposable income. They therefore have a strong incentive to borrow. Older workers and some retirees tend to be net savers, and they have an incentive to become lenders and investors, provided that the financial system has the ability to offer them returns on their savings that compensate them for risk and the loss of liquidity. The challenge is to work out financial arrangements that permit older people to effectively lend to younger people. In the more economically developed nations, elaborate arrangements have been worked out to meet this challenge.
When a relatively wealthy nation loses its economic momentum because of welfare-state encroachment and demographic trends that adversely affect economic growth, it has a strong incentive to seek opportunities to profitably transfer the use of funds to foreign nations that can offer more attractive financial opportunities. Until the bursting of the great housing bubble this year, an elaborate mechanism had been worked out in which wealthy nations with low economic growth rates were transferring funds into U.S. dollars for employment in its artificially propped-up real estate market. Now that the bubble has burst, where are these funds going to go? Perhaps much of the money will continue to flow into dollars if the United States actually gets serious about becoming more energy independent, but it remains to be seen if the Obama administration will take the necessary steps to counter the influence of the “green” lobby that exercises so much influence among the elites who dominate the Democratic Party. I suspect, however, that ten years from now, just as the Soviet Communists kept promising an eventual workers’ paradise, Democratic candidates for office will still be promising Americans that they will on the road to energy independence in ten years. Perhaps the housing market will stage something of a comeback after investors have concluded that it has bottomed out and the current glut of unsold homes has been eliminated. Meanwhile, the U.S. economy will be struggling with the large-scale adjustments associated with the bursting of the great housing bubble and the binge in consumer spending that accompanied it.
Logically, one might think, there should be great investment opportunities in what is often termed “the developing world.” Thus, even though its people have a high personal saving rate, this does not rule out that China can continue to benefit by applying the capital and know-how of foreigners to some parts of its economy. Perhaps India is also becoming a nation that offers great opportunities for the employment of foreign funds and expertise, and perhaps there are similar opportunities in Latin America and elsewhere. If there actually are many nations with the potential to offer adequate returns on investment in them and it is also true that there are relatively well-off nations with aging populations and pools of savings and talent that are potentially available for international investment, it would seem to make sense to try to overcome institutional barriers to the flow of financial capital and real goods and services across national boundaries
Unfortunately, the “institutional barriers” to investment in many nations with latent growth potential are enormous and will not be quickly overcome. These barriers can be grouped into four broad categories: political opposition, rampant corruption, mind-boggling bureaucratic obstacles (“red tape”), and insufficient security for both persons and property rights. It is to be hoped, however, that there will be some progress will be made in dealing with them in the next few years. In some parts of the world, however, the chaos flowing from the adherents of Islam is likely to make things worse.
This article is longer than I had intended at the outset, and I shall therefore refrain from offering a detailed analysis of why I believe that the relationship of Islam with the rest of the world is nearing a historical turning point. It is my contention that Islam cannot live at peace with the rest of the world because while there are moderate Muslims, Islam is not a “moderate” religion and is never likely to become one. It is, instead, a religion whose scriptures and supporting writings mandate that the entire world is to be brought to embrace the faith through a combination of force and coercion. Although its founder is considered by many of his followers to be the most perfect man who ever lived, the Qur’an and its supporting writings reveal him to have been a pedophile, a caravan raider, a slave-owner, a breaker of treaties, and a man who condoned the assassination of enemies, the execution of prisoners of war, and the rape and enslavement of their wives. Given the sensibilities of the modern world and the desire of most people for peace, he does not seem to be the appropriate model for our time!
Given the difficulties of reconciling Islamic theology and history with modern sensibilities, because many of its spokesmen either are perfectly aware or intuitively sense that their faith is highly vulnerable to objective examination and the negative assessments that would inevitably follow, and because there is no real tradition of religious freedom in predominantly Muslim nations, the adherents of Islam exhibit a firm determination to suppress attempts to engage in the critical examination of their faith. In this effort, they are greatly assisted by the general intellectual atmosphere of multiculturalism and political correctness that prevails in those advanced nations. To a truly remarkable degree, the political and intellectual elites of those nations and their mass media of communication are unable or unwilling to recognize the reality of what is happening. They prefer to indulge in escapism and to behave like the people that Lenin called “useful idiots.” But the conflict between Islam and the rest of the world and the conflicts that exist within Islam itself cannot be wished away, and Islam’s active supporters will not be able to insulate the faithful from the exposure of its shortcomings, which are becoming steadily more obvious. Islam must either conquer the world or destroy itself, and it is my firm belief that the latter outcome is in store. Indeed, I believe that the implosion is now underway.
Although Barack Obama’s background, including his association with Bill Ayers, and his campaign rhetoric suggest that his administration will indeed embrace the strategy of making the United States into a new and improved version of the welfare state, his actions since his election suggest he will act cautiously in this regard because his first priority of business must be to deal with the current economic crisis. In doing so, he will be taking advice from people who have intimate acquaintance with the operation of modern economies, particularly in the financial sphere, and who will avoid the kind of villainization and alienation of the business community that occurred during the administration of Franklin Roosevelt. He will maintain the general strategy of the Democratic Party of following a generally liberal immigration policy that adds substantially to the labor force and helps offset the economic impact of the aging of the domestic population and, more importantly in terms of retaining political power, augments the pool of voters who favor their party. And he will promote “reforms” in education that reflect a thoroughly secularist worldview that will be designed to bring America into greater harmony with the world. The Obama administration will emphatically not be one in which conservative Christians have much of a voice.
That the new and improved welfare state that Obama and the Democrats intend to install can overcome the historical tendency of the growth of government to smother entrepreneurial initiative and produce economic stagnation is, I think, very much in doubt. It may be, however, that through such actions as opening up the domestic development of energy resources, cutting corporate tax rates, expanding spending on social infrastructure, and shelving the promised increases in taxes on high-income recipients—at least for a while—the U.S. economy will be able to avoid a debacle like that which was brought on by failures of government policy after the stock market crash of October 1929. Overall, however, the economic prospects for the coming decade do not look at all promising, but it will be a time of rapid change in which and major adjustments in the world economic system will have to be made and political crises are likely to be frequent.
A big negative for the current economic outlook is that the impact of Christianity on business behavior and the conduct of economic policy appears to be diminishing in much of the world. A big positive, though its effects may take more than a decade to become clear, is that the turmoil in the world will lead to an enormous grass-roots growth in the number of people who claim to be Christians. Unfortunately, the positive relationship that has historically existed between the growth of the Christian faith and economic wellbeing is vastly underappreciated by the very secular cognoscenti of today’s world, and I do not foresee a dramatic turnaround in the religious skepticism exhibited by most of the world’s power elites for some time to come. In the years immediately ahead, however, I predict that the historic role of Christianity in bringing about economic progress will come to be better understood.
1 See The Heritage Foundation’s Index of Economic Freedom summaries for different countries at heritage.org.