November 3, 2011
Last week’s news coverage was dominated by two things—the deal to bail out Greece and the St. Louis Cardinals defeating the Texas Rangers in the 2011 World Series. While the events seem unrelated, I think we can draw an important lesson from them.
i am not a huge sports fan as I think it’s generally a waste of time. I’m not against sports; it’s just that I would rather do something with my time other than watch someone else play a game.
But I have to admit that I tracked the World Series this year via radio (this allows me to multi-task) because I really like the game of baseball and wanted to see the Texas Rangers succeed this time around. I’m biased, being from Texas, but who could not be for the likes of Nolan Ryan or Josh Hamilton?
As the World Series played out, we got word that European leaders had “resolved” the Greek debt crisis and that the US economy had grown more than expected last quarter. All that “good news” was like a sugar high for the markets. US stocks rallied at a record pace, making October one of the single best months of growth since 2002. Wow, were we ever starved for some good news! Perhaps like many of you, I wondered why I had been so cautious and concerned. All of our economic problems were solved!
But the excitement didn’t last long. The next day, serious investors and analysts could not find any substantive details to the bailout plan other than a short-term dodge. The collapse of Greece would be averted by writing off 50% of the nation’s debt while also committing the Eurozone nations to billions more in bailout money.
To make matters worse, solvency problems began to surface in Portugal, raising fears again of a chain reaction of sovereign debt crises across the European Union. The “Europhoria” was very short lived.
France’s largest bank, Societe Generale, just issued an analysis by Veronique Riches-Flores, which stated these sobering words, “We are all Greeks.”
She was bluntly pointing out that the member nations of the Organization for Economic Cooperation and Development (OECD) all have unsustainable levels of debt. Essentially she made the case that both the US and European nations are facing tough choices ahead and that she foresees the need for austerity plans in most of the Western world.
Not only do I agree, but I believe the global economy will not recover until we experience the pain that comes from loss and make necessary corrections. Otherwise, we’re simply passing on to our children and grandchildren the problems we created.
Loss is painful and unpopular, but it’s a real and natural part of life that can’t be avoided forever. It was painful to see the Rangers get so close (twice within one strike in Game 6) and not claim the title.
Compare the two locker rooms following the World Series. The Cardinal players were spraying champagne in each other’s faces, while the Rangers were somber and disillusioned, hoping to escape the glare of media attention. It hurts to lose.
We are all now in a similar contest—call it the Economic World Series—and just as the favored Rangers did not expect to lose, many Americans are in denial about the economic perils we face. We have to stop thinking that we’re “too big to fail.” It can happen here.
We need a dose of economic reality to help us see the urgent need to cut our deficit spending, to take the hit now so we avoid something far worse down the road.
It’s not easy to spend less than you earn, save for the future, avoid debt and learn to be content with less. Will it feel good? Maybe, maybe not. But as athletes know, daily exercise and practice make us stronger and capable of our best effort.
The Bible puts it this way, “Steady plodding brings prosperity; hasty speculation brings poverty” (Proverbs 21:5 TLB).
In the days ahead, I urge you to start your “steady plodding.” Pay down your debts. Begin to save. Expect your elected officials to do the same. It’s Game 7 of the Economic World Series, and we need to be on our best game.
Response to Last Week’s Column
Last’s week’s reaction to my update, “Occupy Wall Street’s Dangerous Confusion of God and Government,” made me think I had kicked over the beehive. I was called the following: idiot, preacher of the false gospel, judgmental, a political hack and uninformed.
Surprised by how many Christians believe the movement is the best way to bring about reforms needed to reign in the “banksters” (a trendy term that puts the professional banker in the same light as a gangster). However, I still think they are supporting a dangerous ideology to bring about the reform they desire. Many sympathize with the stated cause as a way to help the poor. Again, replacing a personal responsibility given us by God with a government program is never the answer.
Winston Churchill said it this way, “Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.”
Our beliefs are important. They are either based upon God’s Word or Man’s Word. When I look at the rifts in our country that are bringing our economy to its knees, I think we need to stop viewing every issue as conservative vs. liberal and start asking, “Is it biblical?”
Disclaimer: The above information is provided for informational purposes. MrHerrera is a Crown Financial Counselor. No remuneration is provided by them to mrherrera. No copyright infringement is intended