Thursday, October 30, 2008
He's right. He's always right. When am I going to clue in to that fact, and stop being so headstrong and so sure that my way is the right way? Sometimes this stumbling thing feels like it's a never-ending struggle.
Tuesday, October 28, 2008
Here's a little background info.
For this English class I'm taking, we had an assignment that required us to write a campaign ad. So, me being me, I did. I put out everything that I felt was the most important to me, and hit on everything from the bunk federal taxation situation to the fact that we're spending so much overseas in wars we have no business being in. I also threw a bunch of other stuff in there regarding fiat money, etc etc...
When it came time for class, however, I grew mightily alarmed when told that we were going to be "producing" and delivering these campaign ads. I mean, serious stage fright, and a big dose of I don't know what else. Anyways, I'm sitting there in this classroom full of people that I will reasonably never in my life talk to again, and I'm trembling, my palms are sweating, and I'm blushing and feeling incredibly sick to my stomach.
Why? Good darn question. I finally realized that I was honestly concerned about the opinion of the class! In particular, one person whom I assumed would be the first to snigger and denigrate what I'd written. I didn't want that to happen, and I was honestly AFRAID of someone's opinion regarding my political views. I take a very strong stance regarding some things, and I could not bear to have those views taken lightly, not right now, not when our country is poised on the eve of a huge embarkment into what I view as a morally wrong course.
Imagine my utter surprise and wonderment when, after having been granted relief by the professor (my ad didn't get 'produced'), I hear the wonderous words of Thomas Jefferson being spoken by one of the 'candidates,' directly referencing the unconstitutional Federal Reserve.
And after class, I just had to know who'd written that specific campaign ad.
Turns out, it was the guy I thought for sure would be the first to mock my own ideals and issues.
So here's a quick lesson for everyone: Be dang careful about what you assume, because apparently, assumptions are for everyone, and they're always WRONG.
p.s. Lew Rockwell, posting in The American Conservative writes that, ". . . we do have the freedom not to vote. No one has yet drafted us into the voting booth. I suggest that we exercise this right not to participate. It is one of the few rights we have left. Nonparticipation sends a message that we no longer believe in the racket they have cooked up for us, and we want no part of it."
It's an interesting argument, but one which I'm skeptical about. Not that I doubt that he has the right of it. Far from it, actually. Perhaps I'm just arrogant and egotistical enough to be able to say to anyone who asks, no, I did NOT vote for either one. I voted my conscience, and it was the morally responsible thing to do. I chose NOT to vote for evil.
Tuesday, October 14, 2008
Big message in today's email from Truth For Life. Very timely. I'm writing an essay regarding the practical applications of non-conformist Christian living. It's a reference to the title of this blog, actually, and the idea came from the essay by Birkerts.
I'm transitioning over to not wearing jeans/pants anymore. I feel incredibly self-conscious in jeans and pants, and seeing how women are wearing their clothes lately is causing me to want to go in the exact and furthest opposite direction possible.
This is just a quick post for me to keep my mental place, so to speak, while I delve deeper into the essay writing. I'll be editing when classes are over today. Stay tuned.
Edited: 10/14/08 11:16pm...
Found this a little while ago. It's a posting regarding the dust up with Russian and Georgian forces, how the U.S. media is basically keeping all note-worthy (and honest) news out of the spotlight, and what's really going on over there. Very good background information based on what I've learned in my own studies of Russian/Baltic history. Interesting perspective, as well.
Monday, October 13, 2008
A Strong Foundation
" . . . fire will test the quality of each man's work. If what he has built survives, he will receive his reward." ~ I Corinthians 3:13-14 (NIV)
Indeed, God cares about the purity of our work. He cares about our motives behind our work, and He cares about the outward appearance of our work. He cares about how our work affects others and how we treat people along the way.
Work is a reflection of the heart, and God is watching. He sees when we cut corners, slip in late, steal supplies, cheat customers and gossip.
He also sees when we are on time and honest, when we serve and encourage others with a loving heart and when we build with excellence upon the foundation that Christ laid.
I once had a job marketing a new product to churches. Before I came on board, however, a previous team of experts had laid the foundation of this new product. They researched, wrote training manuals and student workbooks, designed logos and developed branding. They invested a lot of money and time into laying the foundation that our second team built upon. The first team's efforts were tested and refined as we journey forth. That which was solid remained, and that which was not gave way to change in order to produce higher quality.
This is much like how God "works" us through His divine refining. He challenges or tests our hearts to forge us into greater purity, like pure gold and silver. And our behaviors and works are a reflection of where we are in this process.
In I Corinthians 3, Paul attempted to reestablish morality in the church. He identified areas that were weak or erroneous and corrected them. Imagine the messages the Corinthians were sending to the world in their defamed state. Likewise, what would Paul have to say if he could visit our workplaces? Would he consider our behaviors and works moral or immoral? What messages are we sending to our co-workers? Do they see enough of Jesus in us to desire what we have? Are we winning them to Christ? Reaching out to them with His compassion? Or turning them away with dissension and boasting?
Yes, God expects quality. I Corinthians 3:13 tells us that our "work will be shown for what it is." The Lord's truth will be revealed about us and our work. We and our work will be judged, and we will either receive a reward or a loss. In this, we have a choice. What will we choose? What will we receive?
Are we committed to behaving and performing in God's ways or ours? I Corinthians 3:20 says, "The Lord knows that the thoughts of the wise are futile." I Corinthians 3:18 tells us to not deceive ourselves. I Corinthians 3:19 says, "He catches the wise in their craftiness."
Are we not to humbly build upon that which Christ laid before us and do His work by His grace? The truth is that without His grace, we can do nothing at all.
Make no mistake about it, the Lord led me to these scriptures in I Corinthians at the outset of my job. I knew He meant business, that the business I was doing was His and that I did it by His grace alone.
If you would like to have more of God's excellence reflected in your work, simply confess and invite the Holy Spirit to search your heart and to bring you into a greater realm of His excellence so that you may receive what He longs to give you: His finest reward.
This message is, as always, timely. I am constantly amazed that His messages come shining through, loud and clear, a true reflection and an absolute revelation that He is, indeed, watching me and keeping me in His own heart.
Today's experience at the coffee shop really demonstrated how my own actions influence others, and thank God, I was able to demonstrate true Christian ideals of humility, and honesty. I felt so overwhelmed at the end of this specific experience, and could only just hold back the tears, and realize that I could, indeed, make right a wrong.
Saturday, October 11, 2008
In other news, the other blog was finally unlocked, so now I can start posting again. I'm excited. I weighed myself this morning, after eating breakfast, and I've dropped roughly 5lbs in the last two weeks. Not a whole lot coming off so far, but I do feel a lot better having cut out the majority of the garbage I was eating. And, I think wheat is definitely out for me. Such a shame, really. There's nothing quite like a fresh loaf of Parke's dad's homemade Sourdough. Talk about.... mouth watering.
I've more to post about, but I'm on a time crunch right now (when am I not?) and I've got some serious studying to complete before my early shift tomorrow.
Thursday, October 9, 2008
The Austrian Theory of the Trade Cycle
Compiled by Richard M. Ebeling
Their Cause and Cure
Murray N. Rothbard
We live in a world of euphemism. Undertakers have become "morticians," press agents are now "public relations counsellors" and janitors have all been transformed into "superintendents." In every walk of life, plain facts have been wrapped in cloudy camouflage.
No less has this been true of economics. In the old days, we used to suffer nearly periodic economic crises, the sudden onset of which was called a "panic," and the lingering trough period after the panic was called "depression."
The most famous depression in modern times, of course, was the one that began in a typical financial panic in 1929 and lasted until the advent of World War II. After the disaster of 1929, economists and politicians resolved that this must never happen again. The easiest way of succeeding at this resolve was, simply to define "depressions" out of existence. From that point on, America was to suffer no further depressions. For when the next sharp depression came along, in 1937-38, the economists simply refused to use the dread name, and came up with a new, much softer-sounding word: "recession." From that point on, we have been through quite a few recessions, but not a single depression.
But pretty soon the word "recession" also became too harsh for the delicate sensibilities of the American public. It now seems that we had our last recession in 1957-58. For since then, we have only had "downturns," or, even better, "slowdowns," or "sidewise movements." So be of good cheer; from now on, depressions and even recessions have been outlawed by the semantic fiat of economists; from now on, the worst that can possibly happen to us are "slowdowns." Such are the wonders of the "New Economics."
For 30 years, our nation's economists have adopted the view of the business cycle held by the late British economist, John Maynard Keynes, who created the Keynesian, or the "New," Economics in his book, The General Theory of Employment, Interest, and Money, published in 1936. Beneath their diagrams, mathematics, and inchoate jargon, the attitude of Keynesians toward booms and bust is simplicity, even naivete, itself. If there is inflation, then the cause is supposed to be "excessive spending" on the part of the public; the alleged cure is for the government, the self-appointed stabilizer and regulator of the nation's economy, to step in and force people to spend less, "sopping up their excess purchasing power" through increased taxation. If there is a recession, on the other hand, this has been caused by insufficient private spending, and the cure now is for the government to increase its own spending, preferably through deficits, thereby adding to the nation's aggregate spending stream.
The idea that increased government spending or easy money is "good for business" and that budget cuts or harder money is "bad" permeates even the most conservative newspapers and magazines. These journals will also take for granted that it is the sacred task of the federal government to steer the economic system on the narrow road between the abysses of depression on the one hand and inflation on the other, for the free-market economy is supposed to be ever liable to succumb to one of these evils.
All current schools of economists have the same attitude. Note, for example, the viewpoint of Dr. Paul W. McCracken, the incoming chairman of President Nixon's Council of Economic Advisers. In an interview with the New York Times shortly after taking office [January 24, 1969], Dr. McCracken asserted that one of the major economic problems facing the new Administration is "how you cool down this inflationary economy without at the same time tripping off unacceptably high levels of unemployment. In other words, if the only thing we want to do is cool off the inflation, it could be done. But our social tolerances on unemployment are narrow." And again: "I think we have to feel our way along here. We don't really have much experience in trying to cool an economy in orderly fashion. We slammed on the brakes in 1957, but, of course, we got substantial slack in the economy."
Note the fundamental attitude of Dr. McCracken toward the economy--remarkable only in that it is shared by almost all economists of the present day. The economy is treated as a potentially workable, but always troublesome and recalcitrant patient, with a continual tendency to hive off into greater inflation or unemployment. The function of the government is to be the wise old manager and physician, ever watchful, ever tinkering to keep the economic patient in good working order. In any case, here the economic patient is clearly supposed to be the subject, and the government as "physician" the master.
It was not so long ago that this kind of attitude and policy was called "socialism"; but we live in a world of euphemism, and now we call it by far less harsh labels, such as "moderation" or "enlightened free enterprise." We live and learn.
What, then, are the causes of periodic depressions? Must we always remain agnostic about the causes of booms and busts? Is it really true that business cycles are rooted deep within the free-market economy, and that therefore some form of government planning is needed if we wish to keep the economy within some kind of stable bounds? Do booms and then busts just simply happen, or does one phase of the cycle flow logically from the other?
The currently fashionable attitude toward the business cycle stems, actually, from Karl Marx. Marx saw that, before the Industrial Revolution in approximately the late eighteenth century, there were no regularly recurring booms and depressions. There would be a sudden economic crisis whenever some king made war or confiscated the property of his subject; but there was no sign of the peculiarly modern phenomena of general and fairly regular swings in business fortunes, of expansions and contractions. Since these cycles also appeared on the scene at about the same time as modern industry, Marx concluded that business cycles were an inherent feature of the capitalist market economy. All the various current schools of economic thought, regardless of their other differences and the different causes that they attribute to the cycle, agree on this vital point: That these business cycles originate somewhere deep within the free-market economy. The market economy is to blame. Karl Marx believed that the periodic depressions would get worse and worse, until the masses would be moved to revolt and destroy the system, while the modern economists believe that the government can successfully stabilize depressions and the cycle. But all parties agree that the fault lies deep within the market economy and that if anything can save the day, it must be some form of massive government intervention.
There are, however, some critical problems in the assumption that the market economy is the culprit. For "general economic theory" teaches us that supply and demand always tend to be in equilibrium in the market and that therefore prices of products as well as of the factors that contribute to production are always tending toward some equilibrium point. Even though changes of data, which are always taking place, prevent equilibrium from ever being reached, there is nothing in the general theory of the market system that would account for regular and recurring boom-and-bust phases of the business cycle. Modern economists "solve" this problem by simply keeping their general price and market theory and their business cycle theory in separate, tightly-sealed compartments, with never the twain meeting, much less integrated with each other. Economists, unfortunately, have forgotten that there is only one economy and therefore only one integrated economic theory. Neither economic life nor the structure of theory can or should be in watertight compartments; our knowledge of the economy is either one integrated whole or it is nothing. Yet most economists are content to apply totally separate and, indeed, mutually exclusive, theories for general price analysis and for business cycles. They cannot be genuine economic scientists so long as they are content to keep operating in this primitive way.
But there are still graver problems with the currently fashionable approach. Economists also do not see one particularly critical problem because they do not bother to square their business cycle and general price theories: the peculiar breakdown of the entrepreneurial function at times of economic crisis and depression. In the market economy, one of the most vital functions of the businessman is to be an "entrepreneur," a man who invests in productive methods, who buys equipment and hires labor to produce something which he is not sure will reap him any return. In short, the entrepreneurial function is the function of forecasting the uncertain future. Before embarking on any investment or line of production, the entrepreneur, or "enterpriser," must estimate present and future costs and future revenues and therefore estimate whether and how much profits he will earn from the investment. If he forecasts well and significantly better than his business competitors, he will reap profits from his investment. The better his forecasting, the higher the profits he will earn. If, on the other hand, he is a poor forecaster and overestimates the demand for his product, he will suffer losses and pretty soon be forced out of the business.
The market economy, then, is a profit-and-loss economy, in which the acumen and ability of business entrepreneurs is gauged by the profits and losses they reap. The market economy, moreover, contains a built-in mechanism, a kind of natural selection, that ensures the survival and the flourishing of the superior forecaster and the weeding-out of the inferior ones. For the more profits reaped by the better forecasters, the greater become their business responsibilities, and the more they will have available to invest in the productive system. On the other hand, a few years of making losses will drive the poorer forecasters and entrepreneurs out of business altogether and push them into the ranks of salaried employees.
If, then, the market economy has a built-in natural selection mechanism for good entrepreneurs, this means that, generally, we would expect not many business firms to be making losses. And, in fact, if we look around at the economy on an average day or year, we will find that losses are not very widespread. But, in that case, the odd fact that needs explaining is this: How is it that, periodically, in times of the onset of recessions and especially in steep depressions, the business world suddenly experiences a massive cluster of severe losses? A moment arrives when business firms, previously highly astute entrepreneurs in their ability to make profits and avoid losses, suddenly and dismayingly find themselves, almost all of them, suffering severe and unaccountable losses?How come? Here is a momentous fact that any theory of depressions must explain. An explanation such as "underconsumption"--a drop in total consumer spending--is not sufficient, for one thing, because what needs to be explained is why businessmen, able to forecast all manner of previous economic changes and developments, proved themselves totally and catastrophically unable to forecast this alleged drop in consumer demand. Why this sudden failure in forecasting ability?
An adequate theory of depressions, then, must account for the tendency of the economy to move through successive booms and busts, showing no sign of settling into any sort of smoothly moving, or quietly progressive, approximation of an equilibrium situation. In particular, a theory of depression must account for the mammoth cluster of errors which appears swiftly and suddenly at a moment of economic crisis, and lingers through the depression period until recovery. And there is a third universal fact that a theory of the cycle must account for. Invariably, the booms and busts are much more intense and severe in the "capital goods industries"?the industries making machines and equipment, the ones producing industrial raw materials or constructing industrial plants?than in the industries making consumers' goods. Here is another fact of business cycle life that must be explained--and obviously can't be explained by such theories of depression as the popular underconsumption doctrine: That consumers aren't spending enough on consumer goods. For if insufficient spending is the culprit, then how is it that retail sales are the last and the least to fall in any depression, and that depression really hits such industries as machine tools, capital equipment, construction, and raw materials? Conversely, it is these industries that really take off in the inflationary boom phases of the business cycle, and not those businesses serving the consumer. An adequate theory of the business cycle, then, must also explain the far greater intensity of booms and busts in the non-consumer goods, or "producers' goods," industries.
Fortunately, a correct theory of depression and of the business cycle does exist, even though it is universally neglected in present-day economics. It, too, has a long tradition in economic thought. This theory began with the eighteenth century Scottish philosopher and economist David Hume, and with the eminent early nineteenth century English classical economist David Ricardo. Essentially, these theorists saw that another crucial institution had developed in the mid-eighteenth century, alongside the industrial system. This was the institution of banking, with its capacity to expand credit and the money supply (first, in the form of paper money, or bank notes, and later in the form of demand deposits, or checking accounts, that are instantly redeemable in cash at the banks). It was the operations of these commercial banks which, these economists saw, held the key to the mysterious recurrent cycles of expansion and contraction, of boom and bust, that had puzzled observers since the mid-eighteenth century.
The Ricardian analysis of the business cycle went something as follows: The natural moneys emerging as such on the world free market are useful commodities, generally gold and silver. If money were confined simply to these commodities, then the economy would work in the aggregate as it does in particular markets: A smooth adjustment of supply and demand, and therefore no cycles of boom and bust. But the injection of bank credit adds another crucial and disruptive element. For the banks expand credit and therefore bank money in the form of notes or deposits which are theoretically redeemable on demand in gold, but in practice clearly are not. For example, if a bank has 1000 ounces of gold in its vaults, and it issues instantly redeemable warehouse receipts for 2500 ounces of gold, then it clearly has issued 1500 ounces more than it can possibly redeem. But so long as there is no concerted "run" on the bank to cash in these receipts, its warehouse-receipts function on the market as equivalent to gold, and therefore the bank has been able to expand the money supply of the country by 1500 gold ounces.
The banks, then, happily begin to expand credit, for the more they expand credit the greater will be their profits. This results in the expansion of the money supply within a country, say England. As the supply of paper and bank money in England increases, the money incomes and expenditures of Englishmen rise, and the increased money bids up prices of English goods. The result is inflation and a boom within the country. But this inflationary boom, while it proceeds on its merry way, sows the seeds of its own demise. For as English money supply and incomes increase, Englishmen proceed to purchase more goods from abroad. Furthermore, as English prices go up, English goods begin to lose their competitiveness with the products of other countries which have not inflated, or have been inflating to a lesser degree. Englishmen begin to buy less at home and more abroad, while foreigners buy less in England and more at home; the result is a deficit in the English balance of payments, with English exports falling sharply behind imports. But if imports exceed exports, this means that money must flow out of England to foreign countries. And what money will this be? Surely not English bank notes or deposits, for Frenchmen or Germans or Italians have little or no interest in keeping their funds locked up in English banks. These foreigners will therefore take their bank notes and deposits and present them to the English banks for redemption in gold--and gold will be the type of money that will tend to flow persistently out of the country as the English inflation proceeds on its way. But this means that English bank credit money will be, more and more, pyramiding on top of a dwindling gold base in the English bank vaults. As the boom proceeds, our hypothetical bank will expand its warehouse receipts issued from, say 2500 ounces to 4000 ounces, while its gold base dwindles to, say, 800. As this process intensifies, the banks will eventually become frightened. For the banks, after all, are obligated to redeem their liabilities in cash, and their cash is flowing out rapidly as their liabilities pile up. Hence, the banks will eventually lose their nerve, stop their credit expansion, and in order to save themselves, contract their bank loans outstanding. Often, this retreat is precipitated by bankrupting runs on the banks touched off by the public, who had also been getting increasingly nervous about the ever more shaky condition of the nation's banks.
The bank contraction reverses the economic picture; contraction and bust follow boom. The banks pull in their horns, and businesses suffer as the pressure mounts for debt repayment and contraction. The fall in the supply of bank money, in turn, leads to a general fall in English prices. As money supply and incomes fall, and English prices collapse, English goods become relatively more attractive in terms of foreign products, and the balance of payments reverses itself, with exports exceeding imports. As gold flows into the country, and as bank money contracts on top of an expanding gold base, the condition of the banks becomes much sounder.
This, then, is the meaning of the depression phase of the business cycle. Note that it is a phase that comes out of, and inevitably comes out of, the preceding expansionary boom. It is the preceding inflation that makes the depression phase necessary. We can see, for example, that the depression is the process by which the market economy adjusts, throws off the excesses and distortions of the previous inflationary boom, and reestablishes a sound economic condition. The depression is the unpleasant but necessary reaction to the distortions and excesses of the previous boom.
Why, then, does the next cycle begin? Why do business cycles tend to be recurrent and continuous? Because when the banks have pretty well recovered, and are in a sounder condition, they are then in a confident position to proceed to their natural path of bank credit expansion, and the next boom proceeds on its way, sowing the seeds for the next inevitable bust.
But if banking is the cause of the business cycle, aren't the banks also a part of the private market economy, and can't we therefore say that the free market is still the culprit, if only in the banking segment of that free market? The answer is No, for the banks, for one thing, would never be able to expand credit in concert were it not for the intervention and encouragement of government. For if banks were truly competitive, any expansion of credit by one bank would quickly pile up the debts of that bank in its competitors, and its competitors would quickly call upon the expanding bank for redemption in cash. In short, a bank's rivals will call upon it for redemption in gold or cash in the same way as do foreigners, except that the process is much faster and would nip any incipient inflation in the bud before it got started. Banks can only expand comfortably in unison when a Central Bank exists, essentially a governmental bank, enjoying a monopoly of government business, and a privileged position imposed by government over the entire banking system. It is only when central banking got established that the banks were able to expand for any length of time and the familiar business cycle got underway in the modern world.
The central bank acquires its control over the banking system by such governmental measures as: Making its own liabilities legal tender for all debts and receivable in taxes; granting the central bank monopoly of the issue of bank notes, as contrasted to deposits (in England the Bank of England, the governmentally established central bank, had a legal monopoly of bank notes in the London area); or through the outright forcing of banks to use the central bank as their client for keeping their reserves of cash (as in the United States and its Federal Reserve System). Not that the banks complain about this intervention; for it is the establishment of central banking that makes long-term bank credit expansion possible, since the expansion of Central Bank notes provides added cash reserves for the entire banking system and permits all the commercial banks to expand their credit together. Central banking works like a cozy compulsory bank cartel to expand the banks' liabilities; and the banks are now able to expand on a larger base of cash in the form of central bank notes as well as gold.
So now we see, at last, that the business cycle is brought about, not by any mysterious failings of the free market economy, but quite the opposite: By systematic intervention by government in the market process. Government intervention brings about bank expansion and inflation, and, when the inflation comes to an end, the subsequent depression-adjustment comes into play.
The Ricardian theory of the business cycle grasped the essentials of a correct cycle theory: The recurrent nature of the phases of the cycle, depression as adjustment intervention in the market rather than from the free-market economy. But two problems were as yet unexplained: Why the sudden cluster of business error, the sudden failure of the entrepreneurial function, and why the vastly greater fluctuations in the producers' goods than in the consumers' goods industries? The Ricardian theory only explained movements in the price level, in general business; there was no hint of explanation of the vastly different reactions in the capital and consumers' goods industries.
The correct and fully developed theory of the business cycle was finally discovered and set forth by the Austrian economist Ludwig von Mises, when he was a professor at the University of Vienna. Mises developed hints of his solution to the vital problem of the business cycle in his monumental Theory of Money and Credit, published in 1912, and still, nearly 60 years later, the best book on the theory of money and banking. Mises developed his cycle theory during the 1920s, and it was brought to the English-speaking world by Mises's leading follower, Friedrich A. von Hayek, who came from Vienna to teach at the London School of Economics in the early 1930s, and who published, in German and in English, two books which applied and elaborated the Mises cycle theory: Monetary Theory and the Trade Cycle, and Prices and Production. Since Mises and Hayek were Austrians, and also since they were in the tradition of the great nineteenth-century Austrian economists, this theory has become known in the literature as the "Austrian" (or the "monetary over-investment") theory of the business cycle.
Building on the Ricardians, on general "Austrian" theory, and on his own creative genius, Mises developed the following theory of the business cycle:
Without bank credit expansion, supply and demand tend to be equilibrated through the free price system, and no cumulative booms or busts can then develop. But then government through its central bank stimulates bank credit expansion by expanding central bank liabilities and therefore the cash reserves of all the nation's commercial banks. The banks then proceed to expand credit and hence the nation's money supply in the form of check deposits. As the Ricardians saw, this expansion of bank money drives up the prices of goods and hence causes inflation. But, Mises showed, it does something else, and something even more sinister. Bank credit expansion, by pouring new loan funds into the business world, artificially lowers the rate of interest in the economy below its free market level.
On the free and unhampered market, the interest rate is determined purely by the "time-preferences" of all the individuals that make up the market economy. For the essence of a loan is that a "present good" (money which can be used at present) is being exchanged for a "future good" (an IOU which can only be used at some point in the future). Since people always prefer money right now to the present prospect of getting the same amount of money some time in the future, the present good always commands a premium in the market over the future. This premium is the interest rate, and its height will vary according to the degree to which people prefer the present to the future, i.e., the degree of their time-preferences.
People's time-preferences also determine the extent to which people will save and invest, as compared to how much they will consume. If people's time-preferences should fall, i.e., if their degree of preference for present over future falls, then people will tend to consume less now and save and invest more; at the same time, and for the same reason, the rate of interest, the rate of time-discount, will also fall. Economic growth comes about largely as the result of falling rates of time-preference, which lead to an increase in the proportion of saving and investment to consumption, and also to a falling rate of interest.
But what happens when the rate of interest falls, not because of lower time-preferences and higher savings, but from government interference that promotes the expansion of bank credit? In other words, if the rate of interest falls artificially, due to intervention, rather than naturally, as a result of changes in the valuations and preferences of the consuming public?
What happens is trouble. For businessmen, seeing the rate of interest fall, react as they always would and must to such a change of market signals: They invest more in capital and producers' goods. Investments, particularly in lengthy and time-consuming projects, which previously looked unprofitable now seem profitable, because of the fall of the interest charge. In short, businessmen react as they would react if savings had genuinely increased: They expand their investment in durable equipment, in capital goods, in industrial raw material, in construction as compared to their direct production of consumer goods.
Businesses, in short, happily borrow the newly expanded bank money that is coming to them at cheaper rates; they use the money to invest in capital goods, and eventually this money gets paid out in higher rents to land, and higher wages to workers in the capital goods industries. The increased business demand bids up labor costs, but businesses think they can pay these higher costs because they have been fooled by the government-and-bank intervention in the loan market and its decisively important tampering with the interest-rate signal of the marketplace.
The problem comes as soon as the workers and landlords--largely the former, since most gross business income is paid out in wages--begin to spend the new bank money that they have received in the form of higher wages. For the time-preferences of the public have not really gotten lower; the public doesn't want to save more than it has. So the workers set about to consume most of their new income, in short to reestablish the old consumer/saving proportions. This means that they redirect the spending back to the consumer goods industries, and they don't save and invest enough to buy the newly-produced machines, capital equipment, industrial raw materials, etc. This all reveals itself as a sudden sharp and continuing depression in the producers' goods industries. Once the consumers reestablished their desired consumption/investment proportions, it is thus revealed that business had invested too much in capital goods and had underinvested in consumer goods. Business had been seduced by the governmental tampering and artificial lowering of the rate of interest, and acted as if more savings were available to invest than were really there. As soon as the new bank money filtered through the system and the consumers reestablished their old proportions, it became clear that there were not enough savings to buy all the producers' goods, and that business had misinvested the limited savings available. Business had overinvested in capital goods and underinvested in consumer products.
The inflationary boom thus leads to distortions of the pricing and production system. Prices of labor and raw materials in the capital goods industries had been bid up during the boom too high to be profitable once the consumers reassert their old consumption/investment preferences. The "depression" is then seen as the necessary and healthy phase by which the market economy sloughs off and liquidates the unsound, uneconomic investments of the boom, and reestablishes those proportions between consumption and investment that are truly desired by the consumers. The depression is the painful but necessary process by which the free market sloughs off the excesses and errors of the boom and reestablishes the market economy in its function of efficient service to the mass of consumers. Since prices of factors of production have been bid too high in the boom, this means that prices of labor and goods in these capital goods industries must be allowed to fall until proper market relations are resumed.
Since the workers receive the increased money in the form of higher wages fairly rapidly, how is it that booms can go on for years without having their unsound investments revealed, their errors due to tampering with market signals become evident, and the depression-adjustment process begins its work? The answer is that booms would be very short lived if the bank credit expansion and subsequent pushing of the rate of interest below the free market level were a one-shot affair. But the point is that the credit expansion is not one-shot; it proceeds on and on, never giving consumers the chance to reestablish their preferred proportions of consumption and saving, never allowing the rise in costs in the capital goods industries to catch up to the inflationary rise in prices. Like the repeated doping of a horse, the boom is kept on its way and ahead of its inevitable comeuppance, by repeated doses of the stimulant of bank credit. It is only when bank credit expansion must finally stop, either because the banks are getting into a shaky condition or because the public begins to balk at the continuing inflation, that retribution finally catches up with the boom. As soon as credit expansion stops, then the piper must be paid, and the inevitable readjustments liquidate the unsound over-investments of the boom, with the reassertion of a greater proportionate emphasis on consumers' goods production.
Thus, the Misesian theory of the business cycle accounts for all of our puzzles: The repeated and recurrent nature of the cycle, the massive cluster of entrepreneurial error, the far greater intensity of the boom and bust in the producers' goods industries.
Mises, then, pinpoints the blame for the cycle on inflationary bank credit expansion propelled by the intervention of government and its central bank. What does Mises say should be done, say by government, once the depression arrives? What is the governmental role in the cure of depression? In the first place, government must cease inflating as soon as possible. It is true that this will, inevitably, bring the inflationary boom abruptly to an end, and commence the inevitable recession or depression. But the longer the government waits for this, the worse the necessary readjustments will have to be. The sooner the depression-readjustment is gotten over with, the better. This means, also, that the government must never try to prop up unsound business situations; it must never bail out or lend money to business firms in trouble. Doing this will simply prolong the agony and convert a sharp and quick depression phase into a lingering and chronic disease. The government must never try to prop up wage rates or prices of producers' goods; doing so will prolong and delay indefinitely the completion of the depression-adjustment process; it will cause indefinite and prolonged depression and mass unemployment in the vital capital goods industries. The government must not try to inflate again, in order to get out of the depression. For even if this reinflation succeeds, it will only sow greater trouble later on. The government must do nothing to encourage consumption, and it must not increase its own expenditures, for this will further increase the social consumption/investment ratio. In fact, cutting the government budget will improve the ratio. What the economy needs is not more consumption spending but more saving, in order to validate some of the excessive investments of the boom.
Thus, what the government should do, according to the Misesian analysis of the depression, is absolutely nothing. It should, from the point of view of economic health and ending the depression as quickly as possible, maintain a strict hands off, "laissez-faire" policy. Anything it does will delay and obstruct the adjustment process of the market; the less it does, the more rapidly will the market adjustment process do its work, and sound economic recovery ensue.
The Misesian prescription is thus the exact opposite of the Keynesian: It is for the government to keep absolute hands off the economy and to confine itself to stopping its own inflation and to cutting its own budget.
It has today been completely forgotten, even among economists, that the Misesian explanation and analysis of the depression gained great headway precisely during the Great Depression of the 1930s?the very depression that is always held up to advocates of the free market economy as the greatest single and catastrophic failure of laissez-faire capitalism. It was no such thing. 1929 was made inevitable by the vast bank credit expansion throughout the Western world during the 1920s: A policy deliberately adopted by the Western governments, and most importantly by the Federal Reserve System in the United States. It was made possible by the failure of the Western world to return to a genuine gold standard after World War I, and thus allowing more room for inflationary policies by government. Everyone now thinks of President Coolidge as a believer in laissez-faire and an unhampered market economy; he was not, and tragically, nowhere less so than in the field of money and credit. Unfortunately, the sins and errors of the Coolidge intervention were laid to the door of a non-existent free market economy.
If Coolidge made 1929 inevitable, it was President Hoover who prolonged and deepened the depression, transforming it from a typically sharp but swiftly-disappearing depression into a lingering and near-fatal malady, a malady "cured" only by the holocaust of World War II. Hoover, not Franklin Roosevelt, was the founder of the policy of the "New Deal": essentially the massive use of the State to do exactly what Misesian theory would most warn against--to prop up wage rates above their free-market levels, prop up prices, inflate credit, and lend money to shaky business positions. Roosevelt only advanced, to a greater degree, what Hoover had pioneered. The result for the first time in American history, was a nearly perpetual depression and nearly permanent mass unemployment. The Coolidge crisis had become the unprecedentedly prolonged Hoover-Roosevelt depression.
Ludwig von Mises had predicted the depression during the heyday of the great boom of the 1920s--a time, just like today, when economists and politicians, armed with a "new economics" of perpetual inflation, and with new "tools" provided by the Federal Reserve System, proclaimed a perpetual "New Era" of permanent prosperity guaranteed by our wise economic doctors in Washington. Ludwig von Mises, alone armed with a correct theory of the business cycle, was one of the very few economists to predict the Great Depression, and hence the economic world was forced to listen to him with respect. F. A. Hayek spread the word in England, and the younger English economists were all, in the early 1930s, beginning to adopt the Misesian cycle theory for their analysis of the depression--and also to adopt, of course, the strictly free-market policy prescription that flowed with this theory. Unfortunately, economists have now adopted the historical notion of Lord Keynes: That no "classical economists" had a theory of the business cycle until Keynes came along in 1936. There was a theory of the depression; it was the classical economic tradition; its prescription was strict hard money and laissez-faire; and it was rapidly being adopted, in England and even in the United States, as the accepted theory of the business cycle. (A particular irony is that the major "Austrian" proponent in the United States in the early and mid-1930s was none other than Professor Alvin Hansen, very soon to make his mark as the outstanding Keynesian disciple in this country.)
What swamped the growing acceptance of Misesian cycle theory was simply the "Keynesian Revolution"?the amazing sweep that Keynesian theory made of the economic world shortly after the publication of the General Theory in 1936. It is not that Misesian theory was refuted successfully; it was just forgotten in the rush to climb on the suddenly fashionable Keynesian bandwagon. Some of the leading adherents of the Mises theory who clearly knew better succumbed to the newly established winds of doctrine, and won leading American university posts as a consequence.
But now the once arch-Keynesian London Economist has recently proclaimed that "Keynes is Dead." After over a decade of facing trenchant theoretical critiques and refutation by stubborn economic facts, the Keynesians are now in general and massive retreat. Once again, the money supply and bank credit are being grudgingly acknowledged to play a leading role in the cycle. The time is ripe--for a rediscovery, a renaissance, of the Mises theory of the business cycle. It can come none too soon; if it ever does, the whole concept of a Council of Economic Advisors would be swept away, and we would see a massive retreat of government from the economic sphere. But for all this to happen, the world of economics, and the public at large, must be made aware of the existence of an explanation of the business cycle that has lain neglected on the shelf for all too many tragic years.
This essay was originally published as a minibook by the Constitutional Alliance of Lansing, Michigan, 1969.
Tuesday, October 7, 2008
Took my vitamins, and scrambled to work. Did a bit of "heavy" lifting, moving cases of liquids. Had 12 oz of chicken gumbo for brunch. When I left work at 1pm I was quite ravenous, stopped by the local grocer and grabbed a giant mixed greens/spinach salad with artichoke hearts, olives, tuna, a smidge of grated parm, carrots, corn, and cukes. Topped it all off with some olive oil, and some apple cider vinegar. I don't think my classmates approved of the smell, but my tummy sure did! I also had a 1/4 cup of fresh fruit, strawberries and blueberries. Also had some tangerines mixed in for more color and variety.
In class until roughly 7pm, cut class early, as I was huuuungry again! Grabbed a pound of stew meat from the grocer. Cooked it up, and added two giant handfuls of broccoli (crowns and stems) to the steamer. I bought this broccoli, as well as the giant spaghetti squash, some small butternuts, anaheim peppers, and green tomatoes from Joe's Garden, fresh local food that is grown less than a mile from my domicile. Steamed those up, added a bit of olive oil and some pepper and a touch of salt. YUM. Body felt SO satisfied.... I was able to get quite a bit of homework completed, and fell asleep around 10pm.
So far this morning I've had my vit c tabs, and 1/2 cup of honey greek yogurt. Yum. I'm considering running to the fridge and heating up some of the spaghetti squash from Day Zero for a quick brunch before I hit the books again. That's it so far!
As to God, He is ALWAYS PRESENT and looking out for me. That brings me more comfort than you can possibly know. I've been looking into gardening/farming as a sustainable food source for about 5 years now, but never actually started doing anything. However, I've recently come across quite a few blogs that really move me, that really motivate me. You'll see them listed here, under People of Note. And, they're all or almost all, Christian Agrarians. I also recently discovered this video chronicling some of the changes one woman in Port Townsend has done on her lot. Take a peek:
Monday, October 6, 2008
Week of September 28, 2008
"Bear with each other and forgive whatever grievances you may have against one another. Forgive as the Lord forgave you." ~ Colossians 3:13
When God assigns us to a job in a particular work environment, He has many purposes in mind besides providing for our financial needs. He may have us there to be a light in the surrounding darkness; to minister mercy, grace and prayer to those He puts in our path; to test and purify our hearts through challenges; to prepare us for the next glory--otherwise known as a promotion; to bring excellence, influence and transformation to the organization; to be an example to others; and the obvious purpose: to simply work unto Him.
All of these purposes are disciplines. And all of these disciplines offer opportunities to forgive others and ourselves all along the journey.
The American Heritage Dictionary defines forgiveness as "To excuse for a fault or offense; pardon. To stop feeling anger or resentment against. To absolve from payment of."
Forgiveness does not mean condoning other people's bad behavior. It simply means that, by choice, we cancel any debt we feel others owe us due to a wrong we feel they've caused us because Jesus died to pay all sin debt. When we choose to forgive, we extend mercy and grace to the person who wronged us, just as our Heavenly Father extends mercy and grace to us through Jesus when we have wronged Him, or sinned. Therefore, forgiveness is a reflection of Jesus' character. It is an expression of sacrificial obedience in that our "flesh" surrenders to God's higher ways and His divine love in the process.
Forgiveness can feel unjust to our emotions because the enemy tries to provoke and manipulate our emotions negatively. This is one of his devices for keeping us in bondage. He tries to cause us to focus on the offense or hurt by getting us bound up in a web of anger, woundedness and revenge that can grow every time we think or talk about the issue, or every time we feel sorry for ourselves.
We must not become victims of the enemy's plan. Instead, our emotions must come into alignment with God's word on forgiveness. We must be ruled by the Holy Spirit, not by our emotions. In choosing this truth, God rewards us with divine peace and rest. And He promotes us to a level where former offenses will not bother us, a level where He can trust us even more with more.
We must choose to pass the test by keeping our eyes fixed on Jesus and by asking for His help. Doing so gives us the power to proactively guard our hearts, refusing to allow the enemy to embed hurt, fear and anger long-term. Sometimes, this is a process, depending on the level and the number of hurts.
Over the years, the Lord has taught me that forgiveness is a daily journey (Matt. 18:21-22). It is part of the Christian love walk (I Cor. 3:15). It often helps me to pray, "Lord, please help me see others as You do and love them as You do. I cannot do it alone." It also helps me to remember that no one suffered greater hurt than Jesus, who died on a cross a painful death so that we could be free of all bondage. Indeed, Jesus understands and knows our pain. And by His stripes, our hearts are healed (Is. 53:5).
It may surprise you to know that healing ministries have found that long-term unforgiveness is a leading root cause of disease. Simply put, unattended wounds glorify the enemy by tormenting us inwardly (eating us alive) and persecuting others outwardly (hurting people hurt others). We must choose which master we will serve.
Unforgiveness is also a form of disobedience, selfishness, idolatry and pride. It is haughtiness that rises up and says, "I'm entitled to process this my way because they hurt me." Truth be told, this is a victim mentality. By choosing unforgiveness, we remain controlled by the person who hurt us, claiming this hurt as our portion (a lie from the enemy), and we choose our self and our hurt over God. This choice, this sin, opens the door for the enemy to gain strongholds in our hearts and destroy us, making us an instrument of destruction. Again, we must choose which master we will serve.
Jesus prayed, "Forgive us our debts, as we also have forgiven our debtors" (Matt. 6:12). Therefore, if we forgive others, we will be forgiven. But if we do not, God will not forgive us (Matt. 6:14-15). This is a powerful and loving precept that sets us free. God holds us accountable for what we hold in our heart, even if others have hurt us. When we do our part, He deals with the situation and the person who wronged us for us. Hebrews 10:30-31 says, "'VENGEANCE IS MINE, I WILL REPAY.' And again, 'THE LORD WILL JUDGE HIS PEOPLE.' It is a terrifying thing to fall into the hands of the living God." Let us have faith in God's word, His truth.
If you struggle with unforgiveness, I encourage you to let the hurt go with God's help. Ask the Holy Spirit to reveal to you who you need to forgive. Confess having walked in the sin of unforgiveness. Ask the Lord to heal and purify your heart and convict the other person's heart concerning the wrong. Then sincerely intercede for that person, blessing them, speaking healing and deliverance over them (just as Jesus would do). Then release them to the Lord. Rest assured, the faithful and almighty God we serve will take this burden off your heart and handle it in His higher way for you.
Here is the latest post from his Congressional webpage. Please peruse at leisure.
"The Do-Something Congress
It has not been a good week for the Republic. It took quite a bit of trampling of the Constitution, but the bailout bill passed, as I suspected it would.
The bailout failed the first time it was brought to the House. Undaunted, the Senate pressed on by attaching the bailout as an amendment to another House passed bill that was pending in the Senate. The new bailout version had new taxes, so according to the Constitution it should not have originated in the Senate.
The rallying cry heard all over the Hill the past two weeks was that Congress must act. Our economy is facing a meltdown. Would this bill fix it? Nobody could really explain how it would. In fact, few demonstrated any real understanding of credit markets, of derivatives, of credit default swaps or mortgage-backed securities. If they did, they would have known better than to vote for this bill. All they knew was that this administration was saying some frightening things, and asking for a lot of money. And when has Congress ever been able to come up with a better solution to a problem than to throw more of your money at it? So that is what Congress did, enacting a financial PATRIOT Act in the process.
In its embarrassment at being called a "Do-Nothing Congress" the 110th Congress took decisive action and did SOMETHING. No matter that it was the wrong thing. In fact, it wasn't until the Senate had a chance to load it up with even MORE spending, when it was finally inflationary and horrible enough, at $850 billion instead of a mere $700 billion, that it passed – and with a comfortable margin, in spite of constituent calls still coming in overwhelmingly against it. 57 members switched their vote!
The market went down anyway. Our nation is now just that much more in the hole. You will pay your part of this mess through inflation, and very likely hyperinflation.
Sometimes doing nothing is much better than thrashing about aimlessly. When one is caught in quicksand, for example, or when one doesn't understand economics and finds oneself in the position Congress was in for the past two weeks, with decades of irresponsible monetary policy coming to a head. Why should we trust the same people who said just a few months ago that the economy was perfectly sound? The same people who just knew there were weapons of mass destruction? The same people that crammed the PATRIOT Act down our throats? Why not consult the people who had the foresight and understanding to see this coming? They would have recommended such logical actions as repealing the Community Reinvestment Act, which forces banks to make bad loans, or allowing the market to set interest rates instead of the Federal Reserve system. How about abolishing the Federal Reserve altogether? There are many things that could have been done, but don’t expect Congress take a course of action that comes from a place of understanding and competence when they could just spend money.
This bailout will be the legacy of the 110th "Do-Something" Congress, along with record low approval ratings. Here's hoping the 111th Congress will be a "Do the Right Thing" Congress, and will focus on repealing and abolishing what is wrong with government instead of reinforcing it."
Saturday, October 4, 2008
Just read a post, though, from my friend in Christ, Michelle. Her thoughts really echoed where I am finding myself, this morning, grasping at straws and wondering what I've done, in severing the ties of my most immediate two-year "past".
I'm a new Christian. I am still stumbling. I am still trying to find my way on this journey, and therein lies the problem. Always. It amazes me that my own simple words, and thought processes reveal the actual root of all of my problems:
I am still trying to find MY OWN WAY on this journey.
Wow. Talk about resonance phenomena. Today, is one of those days. I have a choice, right now, in this very moment as I sit typing, the words I am laying down on screen echoing what I hear in my mind's eye. (ear?)
How much do I really trust Christ?
Do I truly believe that God is in control, and has a purpose?
A purpose, just for me? (unworthy, inconsequential, nutty little me.... seriously?)
If I truly DO believe and TRUST, I am definitely NOT acting like it.
Not this morning, and if I'll be honest, not for the majority of the last (almost) year since I accepted Christ into my heart as my savior.
I have done things which must seriously grieve the Lord, simply due to His overwhelming love, for unworthy, inconsequential, nutty little me.
And I was honestly considering repeating some of those very selfsame things, for the last hour and a half.
God truly is great. For without seemingly-coincidental interventions, I would not have had this moment of clarity.
Friday, October 3, 2008
Week of September 28
". . . by making peace through His blood, shed on the cross." Colossians 1:20
Jesus was and is the new blood covenant of peace. This truth was foretold to the prophet Isaiah in 9:6, "For to us a child is born, to us a son is given . . . and He will be called Wonderful Counselor, Mighty God, Everlasting Father, Prince of Peace. Verse 7 goes on to say that there is no end to His peace.
Directly related to salvation through Jesus Christ, peace is a gift, freely given to us. When we accept Jesus as Lord and Savior, we receive Him and His peace.
In the Hebrew language, peace is translated as "shalom," which means safety, completeness, prosperity, fulfillment, victory, success, health and blessing.
Encarta Dictionary defines peace as " . . . the time when a war or conflict ends . . . a state of mental serenity, with no anxiety."
Clearly, peace is directly linked to the presence of God. It is also a reward of careful obedience. In fact, peace is translated from the Latin word "placibilis," which means "pleasing" and from Latin "placere," which means "to please."
Since our primary purpose as Christians is to please God, not people, if we walk in careful obedience to Biblical precepts and the Holy Spirit's directives, no matter what others think or say or do, we walk in peace.
However, when we choose to move from obedience to disobedience and from faith to fear, we distance ourselves from peace (Is. 48:22, 57:21).
Judges 2 has much to say about how choices of disobedience offer defeat, distress and destruction. In this chapter, although God did not break His covenant with the Israelites, He did lift His hand of favor off of them when they disobeyed, allowing them to reap painful consequences.
Even so, our Heavenly Father loves us so much that He will restore peace in our lives when we cry out in repentance to Him. This usually involves a process.
Consider the story of Gideon, a mighty warrior, whom God called to strike down Israel's long-time oppressors, the Midianites, and restore peace (Judges 6:7-24). Gideon was the "least" in his family and had the weakest clan of men. Yet because God had purposed restoration for the Israelites, His favor was upon Gideon to defeat Israel's enemies. No way could Gideon restore peace by himself. Only with God could he complete his mission.
Likewise, only with God's help can we walk uprightly and affect peace for those around us because God, Himself, is the grantor of peace. And peace is a reward of His righteousness.
If there are areas in our lives where the Holy Spirit is prompting us to cry out to God in repentance and restoration of peace, may we trust that He awaits our cry, He will hear us, and He will respond with love.
May we be led forth in peace, experiencing the fullness and joy of this great blessing that is given to us freely as saints in God's Kingdom. And may we share this fruit of the Spirit, the peace that surpasses understanding with those who have yet to receive His truth and love.
Thursday, October 2, 2008
"Awed and intimidated by the availability of texts, faced with the all but impossible task of discriminating among them, the reader tends to move across surfaces, skimming, hastening from one site to the next without allowing the words to resonate inwardly".
The essay really moved me, and I've been considering leaving both myspace and iam for quite some time, as I use the sites only as an expository vault. Feeding my ego, perhaps, but I'm not inclined to look at the pretty pictures everyone has posted, nor am I interested in reading the latest gossip on "our celebrities" or see pictures of half nude women and men strutting across the screens in advertisements for finding a "sugar daddy/momma" for a mate. Truly, not what I am interested in.
A friend moved to this blogsite, and shortly thereafter, another friend left iam, and declared that in doing so, she was leaving behind good friends, but that the call of the Lord should not be sullied with the template/medium of delivery.
Good choice, I think.
And so. Here it is.
Exhortations to Seek Wisdom and Walk with the Lord 1
3:1 My child, 2 do not forget my teaching,
but let your heart keep 3 my commandments,
3:2 for they will provide 4 a long and full life, 5
and they will add well-being 6 to you.
3:3 Do not let truth and mercy 7 leave you;
bind them around your neck,
write them on the tablet of your heart. 8
3:4 Then you will find 9 favor and good understanding, 10
in the sight of God and people. 11
3:5 Trust 12 in the Lord with all your heart, 13
and do not rely 14 on your own understanding. 15
3:6 Acknowledge 16 him in all your ways, 17
and he will make your paths straight. 18
3:7 Do not be wise in your own estimation; 19
fear the Lord and turn away from evil. 20
3:8 This will bring 21 healing to your body, 22
and refreshment 23 to your inner self. 24
3:9 Honor 25 the Lord from your wealth
and from the first fruits of all your crops; 26
3:10 then your barns will be filled completely, 27
and your vats 28 will overflow 29 with new wine.
3:11 My child, do not despise discipline from the Lord, 30
and do not loathe 31 his rebuke.
3:12 For the Lord disciplines 32 those he loves,
just as a father 33 disciplines 34 the son in whom he delights.