Thursday, June 28, 2007

3rd Distinguishing Mark of a Spirit-Led Church

These are characteristics of churches that cannot easily be explained naturally. Much of the behavior and grouping seen in churches is exactly like the behavior and grouping seen outside of churches. When you start to see deviations from that, you have a hard time explaining it naturally and start reaching supernatural conclusions.

To summarize the other previous "marks" of Spirit-led churches:
1. Greater than 10% of the congregation tithe and actively participate. Game Theory and the free-rider effect explain why only 10% of professing evangelicals tithe and share the Gospel, according to Barna, which is a perfectly rational, but not spiritual behavior.

2. The congregation is diverse in race, income, and education. People group themselves by income and race (look at neighborhoods in your city). Studies have shown (as cited in post) that the type of church you attend and what denomination you're a member of is often simply a function of your income and education levels.

These marks should be seen in churches. The Scriptural basis for tithing and participating would be a post in itself. Paul repeatedly blasts divisions by ethnicity and background (Galations 2:11-16). Likewise James blasts making distinctions between people of different income levels (James 2:1-9). A scan of the first church in Acts shows people of many languages and nationalities having "all things in common" (Acts 4:32).

The early church seemed to be struggling with these issues, thus the Apostles wrote to them about it. If you don't see these marks in your church, it doesn't mean it's not Spirit-led, but churches with these attributes don't have natural explanations. They break all the norms and models and natural explanations and are fulfilling the picture of the Church we have in Scripture.

Today, my third and last "mark:"
3. The church stays "small" and multiplies rather than grow larger.

A question I've asked: Why do individual churches mainly grow larger instead of multiplying?
Economies of scale. Big groups have more advantages in some functions than small groups. You go with a group to Six Flags so you can pay less for your ticket. Big churches have more programs and services offered. The music sounds better because there is a larger talent pool, etc. This, in turn, draws more people attracted to those programs. People leave smaller congregations and attend a larger one just like people quit shopping at Mom & Pop stores when Wal Mart moves in.

There's a tipping point where an organization starts to gain these economies of scale and then quickly gains more members as people jump on board to take advantage. It's the same for a Money Market Mutual Fund, a political action committee, or a church. They'll get bigger and bigger.

Individual churches also group together to form denominations to experience those same economies of scale. Economist Charles Zech wrote a paper on "Churches as Franchise Organizations." It's insightful for how different denominations have adopted different franchising models, a good short read for the curious reader.

So, it's natural that when you have a growing number of believers you'll see them pool together into centralized organizations (a local church) and those centralized organizations tend to grow rather than multiply.

When you have a large number of smaller groups that don't cluster into larger groups but instead just multiply into more small groups, this is supernatural.

Hence, we have the buzzword of global missions in the past 10 years that describes this supernatural phenomenon: Church Planting Movement (CPM). The International Mission Board defines a CPM as "
a rapid and multiplicative increase of indigenous churches planting churches within a given people group or population segment." Anyone involved with the IMB gets well-trained in knowing the characteristics of these CPMs. David Garrison's Church Planting Movements: How God is Redeeming a Lost World is required reading for IMB trainees. All IMB missionaries are now "church planters" expected to help start, foster, and be on the lookout for CPMs in their people group.

By "rapid increase" they mean "exponential increase." Two churches become 4, 4 become 16, etc. The real-life numbers are staggering: "
When a strategy coordinator began his assignment (in SE Asia) in 1993, there were only three churches and 85 believers among a population of more than 7 million lost souls. Four years later there were more than 550 churches and nearly 55,000 believers."
Garrison lists the 10 distinguishing characteristics that all known CPMs have in common, and some characteristics that only a few have. The churches are typically characterized by meeting in houses (like many examples in the New Testament...Paul says he taught in Ephesus "from house to house" (Acts 20:20)). "Church buildings do not appear in Church Planting Movements."

They stay small. Rather than build up a centralized organization centered in a building, they multiply instead. In many countries where it's forbidden to congregate in large groups without government permission it has to be this way. For CPMs in open countries, it's just how they happened.
You can look at their characteristics and see that they're spiritual. With a smaller group, it's much harder free-ride and not tithe and participate because everyone knows if you're not. (If they're formed mainly by geographic location they still look segregated, however, since neighborhoods in every culture are segregated).

So, I don't consider numbers growth alone to mean much about a church. There are a lot of ways to get to big numbers that don't require much Spirit, it's a phenomenon that can happen naturally. But, there's not a way to get to small churches rapidly planting other small churches without some supernatural intervention.

Tuesday, June 26, 2007

Book of the Month #2

This morning I was awakened and saddened by a Newsweek poll measuring "what Americans know" across broad categories. 41% still think that Saddam Hussein had a hand in planning 9/11, and 20% think most of the hijackers came from Iraq(!) Only 43% could accurately name Saudi Arabia as the country most of the terrorists were from. I don't think Americans know the causes, the culprits, or the enemies in this war (and the administration clearly doesn't try to tell them). How can "we win the war on terror" without knowing these essential things?

I save my last book review for the best book I've read in years:
Fiasco by Thomas Ricks. This is the most complete history of the Iraq war written to date. It's written mostly from the point of view of the generals and civilian authorities, analyzing their strategies (or lack thereof) and operations.
Ricks spent a lot of time in Iraq and didn't set out to write a book blasting the war. But, as you look at all the events and facts you realize how really messed up the whole thing is.
You'll see about 1,000 mistakes that could have been prevented by having an actual plan, and maybe this whole war could have turned out much better than it's looking now.

He goes step-by-step through Wolfowitz's sincere motivations and planning of the war, the generals' fears about the lack of planning, the commanders whose careers suffered because they dared disagree with Rumsfeld about how the Iraq invasion was being planned, and the constant friction between generals and the civilian leadership. He works chronologically through the war and shows how events that seemed minor to the U.S. media and got little coverage had huge impacts and explain much of the current situation in Iraq.
There was no plan. Rumsfeld and others thought 40,000 troops could do the job in a matter of months and come home by the end of the year. I got quite angry that Rumsfeld and co., who were either oblivious to the situations on the ground or just plain stupid, weren't fired sooner.

L. Paul Bremer III, who headed up the Civilian Provisional Authority in Iraq comes across as completely incompetent. He neither followed the advice of generals on the ground, nor orders from Rumsfeld and even the President. Bremer succeeded in unemploying and embittering about 500,000 educated Iraqis against the U.S. and did well to "snatch victory from the jaws of defeat,"in the words of one angry U.S. commander.

Many of the top generals in the war are profiled. Petraeus comes across the best, as he was a student of Vietnam and counterinsurgency warfare. Many of the other top commanders are shown making the best, or sometimes worse, of a bad situation with very incoherent leadership from Washington. They're often at odds with each other about how to handle crises.

President Bush also comes across as very out-of-touch, making specific public statements in the U.S. that were the exact opposite of what was really happening. I also learned from some of the Army's own studies that in 2004, the vast majority of troops suffered from low morale and had poor opinions of their commanders. This was the opposite of the "morale is high" rhetoric the administration was putting out.

Ricks is a foreign correspondent with the Washington Post and has a couple decades of experience. One criticism I've heard about his writing is that he was writing mostly positive articles for the Post while his book paints a different picture. He later claimed it was because the editors as the conservative Post wouldn't run anything that didn't have positive spin. He's still writing for the Post, and getting good insight from the generals, who still say we're about 30,000-50,000 troops short of being able to accomplish all the stability we want in Iraq.

Ricks also points out that very few Congressmen and Senators actually went to the Congressional library to look at the CIA's intelligence assessment of Iraq during the run-up to the war. I think the number was less than 10. So, when Democrats say they were "misled" by intelligence, they probably never read the available intelligence for themselves.

Every American who cares about our troops should read this book. We should hold our representatives and our President accountable. We should demand better use of our tax dollars. We should demand honesty and better definitions of the word "victory."

Monday, June 25, 2007

Book of the Month #1

A Game as Old as Empire edited by Stephen Hiatt. This was a "sequel" to Confessions of an Economic Hitman by Thomas Perkins, which I read 2 years ago.
This book is a compilation of essays written by former international bankers, development economists, foreign aid workers, and others. It's about offshore banking, bad loan schemes, "debt relief," tax evasion, incompetent World Bank projects. It's about the people who profit from these things, and the developing countries who get hosed by them.

I thought about writing a post entitled "Who was raped in order to make your cellphone?" One chapter explains the war in the Congo and the quest for an element called "coltan" used in cell phones, computers, PlayStations, etc. You can read the link instead for a full story. Some of the ingredients in your cellphone probably comes from the Congo....
The chapter about coltan starts with the story of a Congolese woman who gives birth to a still-born son (the pregnancy was the result of a rape) and minutes later is raped and tortured by men from the plundering Rwandan army. Really messed-up stories from Christian aid workers in the Congo. Why was she raped?

American and European multinationals who are in desperate need of the high-priced ore helped fund the Rwandan and Ugandan armies in their invasion of the Congo, where the ore is located, in order to help facilitate its mining. The armies systematically rape women of all ages and conditions in the villages they come across, like a hate crime. The ore is then exported via Rwanda to the West and the proceeds go mostly to the government who sponsor the atrocities. The multinational firms basically just look the other way at how it's acquired. Many Western companies acquired the mines when the Congolese government sold them off. Many former elected government officials serve on the boards of these firms, like Alcatel. Firms like Hewlett-Packard, Dell, Nokia, etc. claim not to use coltan from the Congo, but it's impossible for them not to.

Think Blood Diamond except with coltan. The violence has really warped these Congolese societies, as you might imagine. Truth is always much more unbelievable than fiction ever could be.
*UPDATE* Nicholas Kristof has an op-ed from the Congo today.

None of the other chapters are this graphic and emotional, however. Most are much more academic and it would help you to have an extensive economics background to read and critique them.

Confessions blew my mind 2 years ago, shook me to the core of my being like few books ever have. If you want an intriguing and sometimes suspenseful read, it's your book. If you're looking for more information and a more academic read then Empire is your book.

The 2 books together have taught me to always be aware of who I'm working for and be careful how I pursue a career in development. It's also made me think again about putting faith in models and being dogmatic about market efficiencies when there are so many caveats out there.

Thursday, June 21, 2007

Retractions and Loose Ends

Today in class we were talking about the importance of forecasting. I remembered a couple of the models I used last year (while taking a Forecasting class) to predict how Allen Iverson and Paul Pierce would perform the next 2 NBA seasons (at the time, there was a rumor that the Celtics were trading for Iverson). I posted my predictions here.

Like a good prognosticator, I'm going to post how I did (the blue represents numbers I felt good about):
I said: "In ’06-07 Iverson will average: 26.4 PPG, 4.5 RPG and 7 APG."

Actual results: Iverson had 26.3 PPG, 3 RPG, and 7.2 APG. I was a little off on the rebounding, but otherwise not bad!

I said: In ’06-07 Pierce will average: 28.7 PPG, 6.4 RPG, and 5 APG

Actual results: Pierce had 25 PPG, 5.90 RPG, and 4.1 APG.

Pierce clearly underperformed. For '07-08 , I had their #'s declining slightly. So, expect Pierce to decline further than predicted as he is a player in clear decline.

NBA GMs should hire me to forecast player performances and negotiate salaries. I'll be available in January!

Last year, I also advocated a boycott of the New York Times. Since it's been my homepage for a while, and I cite articles frequently from it, I guess it's time to retract this statement.
The reason I was upset was because they were now charging for their editorial content. They since have decided to give it to university students for free, so I now can read Friedman, Kristoff, and Krugman. I noticed that I didn't really miss them all that much once I had them back.

Wednesday, June 20, 2007

More on Iraq

Wasn't planning on posting today, but a quick survey of the newspapers this morning, listening to NPR, and after watching the national news last night I don't think Americans really know what's happening in Iraq right now. This is the largest offensive since we invaded 4 years ago. It's actually being well-executed and well-thought-out. Gen. Petraeus is the man, I'll have more on that in the future. But, will it be enough? Skip to my last paragraph for the answer.

Bill Roggio is calling it the Battle of Iraq and I encourage you to read his summary; check out his cool map too.

Our work in Iraq has 7 major strikes against it:

1. Poorly planned (or not planned at all) at the outset.
2. The borders are still open and uncontrolled, allowing insurgents to come and go as they please.
3. Al Qaeda's bases are almost untouched in Pakistan and no one cares.
4. Saudi Arabia is still funding terror through their state-funded mosques and Al Qaeda recruiting centers. We give Saudi Arabia that money via our oil addiction.
5. Sunnis and Shiia hate each other.
6. Al Qaeda and friends have penetrated every major aspect of life and every branch of service in the country.
7. Iran's goal is to create chaos in order to hasten the coming of the 12th Imam and the end of the world.

#1 is being dealt with by Petreus who actually knows what he's doing.

#6 is being dealt a serious blow this week with "Operation Arrowhead Ripper," "Operation Marine Torch," and other aspects of this offensive. We're finally using anti-Al Qaeda insurgents to our advantage and trapping Al Qaeda so they can't escape. Massive use of Iraqi and Coalition forces here.

#4 is at least mentioned today by a Saudi Crown Prince who admits and denounces the fact that Saudi Arabia's religous leaders are encouraging their members to join Al Qaeda and fight the Americans.
"Do you know that your sons who go to Iraq are used only for blowing themselves up?" he says.

My response to the Crown Prince is: "Don't you know that the only reason your regime exists is because you fund those same Wuhabbist clerics and look the other way when they preach terror so they won't tell their adherents to attack you instead?"

I'm hoping #2 is next on the list. Until we deal with #2, #3, and put a stop to #4, the war in Iraq will continue indefinitely.
There's a bee hive in a tree right outside your house. The bees are invading your house and stinging people, and trying to build more nests inside your house. With pain and effort, you can kill all the bees inside the house, sweep up their little nests, etc. But, more bees keep coming in. You can seal off your house (#2 above) but at the first sign of an open window, the bees will come right back in. You can't completely solve the problem unless you go outside and take out the beehive. Destroy the source of the beehive's safety, and cut down the tree. Eliminate the beehive and keep bees from building another one. There will always be bees somewhere in the world, but you can keep them from forming another big beehive (see #3 and #4 above).

Tuesday, June 19, 2007

Packing up

Just wanted to let everyone know that Econometrics of the Soul only has about 5 more posts until I shut it down indefinitely. There are a couple of book reviews I will post, another church post, and then I'll start making the case on here for the work we'll be doing in Moldova.

After that, all posts will be on a separate blog Joni and I will keep about our working toward and in Moldova. I'll keep posting at Thoughts on Scripture as well.

This blog has served its purpose, and now it's time to focus my efforts elsewhere.

By the way, if you didn't see this story on the CBS Evening News last night, you need to watch it now. Everyone needs to watch this. Warning, it was all I could do to keep from crying while watching this. I'm glad our soldiers found and rescued these kids.

Monday, June 18, 2007

Important week in Iraq

The "surge" is complete, and now the operations begin:
U.S. moves into Diyala to support 2 anti-Al Qaeda Sunni militias, the "1920 Revolution Brigades" and the "Diyala Salvation Front." Iraqis and British SFs begin large operation against Iranian-backed forces in the south.
For details, be sure to check out The Fourth Rail's daily updates.

In related news,
Senator Joseph Lieberman returned from Iraq and wrote an op-ed in the Wall Street Journal last week which has as good a definition of "victory" in Iraq as I've seen:

American soldiers are not fighting in Iraq today only so that Iraqis can pass a law to share oil revenues. They are fighting because a failed state in the heart of the Middle East, overrun by al Qaeda and Iran, would be a catastrophe for American national security and our safety here at home. They are fighting al Qaeda and agents of Iran in order to create the stability in Iraq that will allow its government to take over, to achieve the national reconciliation that will enable them to pass the oil law and other benchmark legislation...
And I conclude from my visit that victory is still possible in Iraq."

So, "victory" is creating a unified and stable Iraq with enough infrastructure and government power to implement legislation like an Oil-Sharing Law (which the Iraq Study Group said can never be implemented in reality), free of Iranian and Al Qaeda influence.

That's a very tall order.


I was glad I finally got to watch a NASCAR race yesterday for the first time in several weeks due to rain-outs and the fact that now races are on TNT, which I have to come to campus to watch since we don't have cable at home.

I'm hoping someone from Turner Network Television's public relations staff will come across this post: TNT's coverage of NASCAR was far inferior to FOX's coverage.
Seemed like TNT was doing commercials every 10 laps, which is ridiculous. The last 30 laps or so of the race should be commercial-free because that's when it gets most exciting. To have 2 commercial breaks in there meant we missed exciting lead changes which is unacceptable.

Kyle Petty did a good job as knowledgeable commentator. Just needs to be more confident because
it's like they've paired him with guys who have never watched a NASCAR race before.

There were also several awkward moments when they'd try to throw it to one of their pit reporters who wouldn't respond. Or sometimes would respond with an: "Umm... they're taking the tires off... they're putting new ones on... and he's gone!"

I was sad that Hendrick didn't dominate the race, and that Jimmy Johnson ran out of gas. That was pretty bad. I'm glad Carl Edwards got to do his backflip and that his crew chief gets to shave his 2-year old beard. I guess Roush Racing owns Michigan.
TNT also did a good job with their own "crew chief" who accurately calculated that Johnson wouldn't have enough gas to finish, among other things.

But, overall, I give TNT's coverage 1.5 stars.

Friday, June 15, 2007

Your Tax Dollars at Work

Yesterday was a bad day for your tax dollars. Can we get a refund?

The International Space Station
. Cost: At least $25 billion from the U.S.
so far(wiki), upwards of $100 billion when you consider EU and Russian contributions. Currently broken. The computer systems are RUSSIAN, who's bright idea was that? They crashed yesterday and currently are being "worked on." Apparently they don't work with the new solar panels we installed for the space station to have electricity. Astro/Cosmonauts might have to abandon ship.
Palestinian National Security Headquarters Cost: Unknown, built during the 1990s peace talks by U.S. aid money. As of yesterday, now in the hands of Hamas gunmen. In January, the U.S. gave $86.4 million to the Palestinian government for security, much of it probably went into the security assets seized by Hamas yesterday.

Photos courtesy of the AP.

What happens when you elect a Democratic majority

And you also have 56 Republicans also chiming in with their... ignorance... including usually friendly Kentucky Republican Ed Whitfield voting for H.R. 1252 in an attempt to criminalize "price gouger" gas station owners. (I hope a Whitfield staffer finds this post via Google and knows how unhappy I am with their boss). And of course, Chet Edwards did too. At least the President is going to veto it.

Here is a Mankiw post on why this bill is a bad idea.

Basically, it goes like this:
Suppose you're a gas station owner and a hurricane hits near your area, and all of a sudden it's $2/gallon more expensive to get a tanker truck of gasoline. Common sense dictates you have to raise your prices by $2, but then you risk getting arrested for "price-gouging."

You rely on people buying lottery tickets and slurpees to make profit. Knowing it might be a while before you're able to get another shipment of gasoline, you might raise your prices by a good amount, insuring that fewer people buy your gasoline so that you have enough to last
until the next shipment and you're able to keep your store open to sell slurpees to those who do stop for gas. This also runs a risk of you being arrested for "price-gouging." If you don't raise your prices not only will you be losing money, but there will be long lines and you'll run out of gas by the end of the day.

One of my favorite Milton Friedman quotes is that the "price-gouging" gas station owners in these situations should "all be given medals," for doing the right thing.
It's like I tell my students, most politicians have never had even a basic economics class and can't read a supply/demand schedule. They legislate purely out of populist sentiment.

In a related story, Joni and I aspire to live in Estonia.

Thursday, June 14, 2007

Why Americans don't eat mutton

A long time ago, I posted a poll on the right about mutton (meat from sheep). I found most respondents had tried and liked mutton. Mutton is a common food in other countries, but not in the U.S. It’s expensive if you get it at a restaurant, and you can rarely find it in groceries.
Why don’t Americans eat mutton?
Some would argue that there isn’t a demand for it because Americans don’t like the taste. The poll I ran seemed to contradict that. I love mutton. My dad buys it from a sheep farmer in western Kentucky. The Moonlight in Owensboro, KY (a barbecue hotbed) is one of the few places where you can get barbecue mutton, quite tasty. (Check out this additional post for more on mutton barbecue.) 
The New York Times’ R.W. Apple, Jr. says “most Americans have never tasted mutton,” but “It wasn't always so, and there was in fact a time when mutton was common on American tables.”
Apple thinks it might be because preferences changed. G.I.s in WWII got sick of the canned mutton they were shipped from overseas and wanted nothing to do with it when they got home. However, I think there’s a more plausible economic reason. (Economists aren’t comfortable talking about peoples’ preferences changing, so I immediately discount Apple’s hypothesis).
“Most of the tiny quantity of mutton eaten in America today arrives here frozen from Australia and New Zealand, according to John Gurner of Pilot Brands of Lake Tahoe, Nev., a big importing company, and tends to be used in curries and other spicy dishes.”
A quick read of a Sheep Industry publication tells me that there are no tariffs or quotas on lamb imports. This may account for some of the decline in the sheep-raising industry in the U.S., but not for the lack lamb on the market.
So, if there was a demand, mutton should be widely available at cheap import prices.
Sheep have 2 economic uses: Wool and meat. If the price of wool is higher than the price of meat, then farmers would be wise to shear more and butcher less.
From 1955 to 1995, sheep farmers were heavily subsidized by the government to produce wool through the Wool Act. Price supports of 85-115% of market value were given to farmers through U.S. tax dollars. This is primarily because after WWII, people switched from using wool to synthetic fibers. The farmers were hurt by this, and thus got the government to pay them since the market wouldn’t bear the price of their product (subsidies were $122 million from 1990-1993 alone). Thus, farmers could earn more money producing wool than selling mutton.
The price of other meats relative to mutton also fell, and consumers switched to eating more beef. The mutton industry contracted. In 1993, the Wool Act was phased out, and artificially low domestic prices through government subsidies got higher and the sheep-rearing industry contracted further. As sheep-rearing contracts, so does the number of sheep available for breeding and later slaughter. The relatively low price of beef means that mutton stays relatively expensive, and thus most American’s aren’t trying it.
So, the Wool Act ensured that farmers would raise sheep for wool, not meat. This limited the supply and raised the price of mutton, for which cheaper meats were a substitute. By the time the subsidy was phased out, the demand for mutton was nil as most who had tasted it had died off, and the decline in sheep farming further limited domestic supply.
Hence, we have the situation where most Americans have never tasted the meat. Maybe the government should subsidize mutton production for 3 years and allow cheaper mutton to flood the market. Then, Americans could try it, see how much they like it, and demand will increase (and the subsidies could be eliminated).
Wait, did I just advocate a subsidy? Maybe it would be worth it to find mutton at the local Wal Mart.

This makes me mad

JP Morgan Chase Bank (where we have our checking account) is the 2nd biggest bank in the world. The second wealthiest bank in the world. "It has assets of $1.4 trillion, annual revenues of $100bn and profits of $14bn in 2006, and ranks 11th on the Fortune 500 list of the biggest US companies."

Now, it will receive a government subsidy of $750 million just to move its headquarters a little closer to where the World Trade Center used to be. Goldman Sachs has already received similar deals.

Let's see, mid-town Manhattan, prime real estate area. Let's PAY the richest corporations in the world to locate there!
I guess it's NYC money and not my tax dollars, so I can only shake my head. Somewhere their CFO is laughing and saying "suckers!"

Wednesday, June 13, 2007

The Great Global Warming Swindle

About a month ago, I finally got around to watching Al Gore's An Inconvenient Truth. Before I had seen it, I blogged a little about Al Gore's carbon footprint and the business of carbon offsets.
Gore's presentation is pretty well-done. The huge screens and graphs he draws are quite good at illustrating his point.

However, today while doing some data entry for work, I watched The Great Global Warming Swindle over at YouTube. I had expected it to be a cheesy, low-budget documentary (like the aforementioned JFK II).

I was wrong. It's excellently produced by the BBC and is one of the best documentaries I've ever seen. Extensive interviews with some of the leading scientists and climatologists, they directly rebut some of Gore's data and arguments as well as give a good history of the man-made climate change movement. When you hear one of the co-founders of Greenpeace say that the whole man-made global warming movement is just a political movement not based on scientific facts, it gets your attention.

Did you know that the volcanoes on earth produce much more CO2 than all of the factories combined? That was part of a larger illustration that blew my mind.

As someone who's had a little exposure to econometrics, the whole "CO2 increases cause temperature increases because they're clearly correlated" argument has always bothered me. You have to account for other variables in your analysis. These scientists seem to have done a better job of that.

They provide much more complete data analysis using the same data sources that Gore does: ice core surveys and the like. Lots of wonderful computer-generated charts and graphs, very easy to follow. According to them, CO2 levels are actually lagging temperature increases, meaning that it can't be driving the climate change.

So, what is causing global warming? Solar activity and sunspots. Maybe Fred Thompson is right after all.

30 years ago, as temperatures were falling, scientists were wondering about a new ice age. As temperatures rose again, scientists (like Al Gore's professor) who had previously been outcasts for advocating a link between CO2 and temperature increases suddenly became vogue. But, their hypotheses aren't borne out by the data at all.

As a Christian I'm always asking "What's the real truth here?" and as an economist I'm always asking "What does the data say?" So, I recommend inviting your friends over one week to watch An Inconvenient Truth. Have a little discussion afterwards and play some games. Next week, have all the same friends over and watch The Great Global Warming Swindle, and have another discussion.

The data definitely warrants further analysis. Here is part 1. The whole show is about 74 minutes.

Russian Ninja!

True story from the BBC: Russian 'ninja' arrested in Italy
Italian police have arrested a Russian "ninja" who had been spreading fear across farmlands in the north of the country.

The man, camouflaged in an all black suit, had robbed several farmers and their families at knife point, police say.

Police had been searching for him for several weeks.

Ninjas were trained for stealth. They first appeared in 14th Century Japan and were famed as assassins and spies."

Tuesday, June 12, 2007


I've moved a couple blogs on the right around and created a "Theological Blog" category of those who are in seminary and/or pastoring and mainly post on religion and faith issues.

Steve McCoy pastors a church not terribly far from Chicago. He's a self-proclaimed "Missional Baptist" who has taught me what that means through his blog. He and his wife discipled my wife in college when they were active working with international students at UK. His wife is currently facing surgery for a Chiari I Malformation and they covet your prayers.

Lucas Land is a Truett student who facilitates the Graduate Student Forum on Poverty and Development at Baylor, which is where I met him. He reads my blog and links to it on his blog, which is why he's really cool.

Keith Walters is leaving Master's Seminary (where Chase is) and ministry at USC for Southern and ministry at IgniteUK. He likes my other blog, but probably wouldn't listen to any advice I would give him.

Sok has been linked a long time so he needs no introduction. One of the most voracious readers that I know. He's also getting married in about a month.

By my count we have 3 different seminaries represented: Southern, Master's, and Truett. Sample the blogs and pick which seminary you like the best (j/k :-) ).

On High-Interest Fleecing

So, in a previous post I reviewed a BusinessWeek article about how companies make money by charging really high interest rates to poor people.

One example given was a guy who bought the equivalent of an $800 computer, with bi-weekly payments over a 9 month period. He realized that at the end of 9 months he would have paid $1344.66 for it, and decided to cancel his order (unsuccessfully). The article didn't give the interest rate charged, but I (with the help of a classmate with sharp algebra skills) figured it out:

With compounding interest, we're looking at about 6% a month. I can imagine when the guy made the deal over the phone and thought "Oh, 6%, that's alright. My credit card charges me 18%," not realizing that 6% a month means he's going to pay about 100% as an annual rate.

I'm currently taking a corporate finance class that looks at firms' decision to extend credit. Usually, it's in-house credit, like your Home Depot or J.C. Penney card (unlike a Visa card). We are often given a scenario like this:
"Your firm believes that extending credit to customers will increase sales by 10%. Your bad debt expense will be about 1% of sales, and your collection costs are also about 1%. Will giving 60 days for your customers to pay, and a 2% discount if they pay within the first 5 days, add value to your company?"

You have to compare the loss of value of receiving funds within 60 days (plus the given % of people who pay early and take the 2% discount) to the gain in revenue from the 10% boost.

They don't, however, teach us about how firms market a 100% annual rate as a 6% monthly rate. They also don't mention that J.C. Penney makes more money off its in-house credit via the interest payments than it does in actual sales (according to Dave Ramsey). Extending credit is just mildly alluded to as a profit-generating tool. We had a chapter that focused on collection procedures, and at what point you make the decision to hire a collection agency. But, they don't teach us any of the unethical practices that are common in the businesses we study, and which the BusinessWeek article pointed to, and the incredible amount of consumer debt the U.S. has (about $12 trillion).

Why did I even want to figure out the guy's monthly rate?
Using the present-value analysis in class, we often determine that buying on credit can be helpful to the company. If you buy something for $10, and pay for it in 3 months, then you're better off because the $10 isn't worth as much in 3 months as it is now. Economists have a technique called "discounting," and it's when you see what you could have done with those $10 in those 3 months rather than paying. You could have invested them in a mutual fund that gives a decent rate of return, and generated value for your company while you waited to pay the $10.
I got to thinking: "Well, maybe buying on credit isn't so bad after all. If the guy buying the computer had $800, it's possible that he was making his monthly payments, investing the rest, and still came out on top." Then, I calculated the 100% annual rate. In order to come out "on top" you need an investment that's going to increase your return by more than 6% a month. Unless you dabble in highly illegal markets, you're not going to find that. 20-25% a year would be a great return.

So, it really is a game that you're likely to lose. Only in our very limited classroom models can we make a case that buying on credit (and sometimes even paying late) is worth while. Don't try it at home.

Monday, June 11, 2007

Great Map

This is one of the greatest illustrations I've ever seen. It's a map, with states renamed for the countries with similar GDPs. See this site for more details.

Saturday, June 09, 2007

Bad news...

If true, this story is really bad news. And more news like this could really influence next year's election. You remember that really bizarre and professional attack against an American outpost in Karbala in January that was almost like it was straight out of a movie?

"U.S. reconnaissance spacecraft have spotted a training center in Iran that duplicates the layout of the governor's compound in Karbala, Iraq, that was attacked in January by a specialized unit that killed American and Iraqi soldiers," Michael Mecham reported in the In Orbit section of the magazine. "The U.S. believes the discovery indicates Iran was heavily involved in the attack, which relied on a fake motorcade to gain entrance to the compound. The duplicate layout in Iran allowed attackers to practice procedures to use at the Iraqi compound, the Defense Dept. believes."

I really recommend adding The Fourth Rail to your Google Reader subscriptions, as it's probably the best source for daily news from Iraq. They've been reporting on the "Freedom Fighters" Sunnis turning against Al Qaeda long before CBS finally did last night.

The kind of stuff I can't ignore

Sorry, but I just can't do it. Call me a social progressive, or a liberal, or unkind, or whatever. To me, it goes back to 1 Timothy 3:15: We're to be "pillars and support of truth," and not propaganda or what some people just ask us to believe.

There's an Army Chaplain in Iraq whose blog I subscribe to. Occasionally, he'll post some things that I really disagree with. He often posts quotes from books about previous wars that he uses to boost morale, or justify our need to be resolute in the Iraq war.

This morning, he has written the following post:
Here are a three quotes from President Theodore Roosevelt that I think apply to our current situation in Iraq:

"The things that will destroy America are prosperity-at-any-price, peace-at-any-price, safety-first instead of duty-first, the love of soft living, and the get-rich-quick theory of life. "


"The boy who is going to make a great man must not make up his mind merely to overcome a thousand obstacles, but to win in spite of a thousand repulses and defeats."


"It is only through labor and painful effort, by grim energy and resolute courage, that we move on to better things."

It is worth noting that after the Spanish-American War, in which Roosevelt fought, there was a protracted insurgency in the Philippines. It took years for us to put it down. Roosevelt knew a little bit about courage, perseverance and finishing the job!

Note that last paragraph. The "protracted insurgency" in the Philippines. Does anyone here know their history?
The Spanish-American war ended in 1898 when the U.S. took Manila from the Spanish government, who had ruled the Philippines for hundreds of years. In the ensuing peace treaty, we paid $20 million to Spain for the country, and refused to give any part of the governing to the Filipinos who had helped us defeat Spain (they'd been fighting the Spanish for independence since 1896).
For the next 14 years, the U.S. would fight the Filipinos who wanted their independence. 4,234 Americans died, and at least 250,000 Filipinos would die.
Some of the first machine guns invented were used in this war, as a way to rapidly kill hordes of rushing Filipinos. For what? So we could keep this colony we had paid for.

In the yellow newspapers of the time, the war was called the "Philippine Insurrection," to make it sound the 126,000 American troops were fighting for a noble cause, and because most Americans had no idea the history of the situation. After we defeated the Filipinos' regular army, we fought a guerilla war for 12 years. Concentration camps, slash and burn campaigns, it's an ugly history. Eventually, we granted the Filipinos a bit of autonomy.

I'm not comparing this to the Iraq war, because I certainly hope our motives in Iraq aren't the same as they were in the Philippines! But, this Army Chaplain does compare the two, using the phrase "protracted insurgency" much as the newspapers did back then. Roosevelt's "courage," (and the courage of other presidents who inherited the war) is questionable in my mind. "Finishing the job" in Roosevelt's case meant defending our $20 million investment by destroying a people who just wanted freedom and independence.
In hindsight, we "won" the war but at great cost (with little outright benefit) and to our shame as a democratic, freedom-loving nation.

I don't really fault the chaplain. I think there's a certain number of Americans who think that any talk of America having a brutal history of empire-building is just left-wing conspiracy theory stuff and would like to ignore things from 1898. I remember the first time I studied the Philippine-American war was in an AP History class in high school, and I was shocked. At the time, I had an argument with a former Army Airborne officer who claimed he had never heard of it, and that no such war had happened as it would be contrary to the principles our nation was founded on. He claimed my teacher must just be some "liberal nut." I think that attitude kind of prevails among certain people, and that's why I think it's crucial to post the truth.

Friday, June 08, 2007

On Azerbaijan and the Missile Shield

It's to my utter delight to here the words "Azerbaijan" being spoken on every news network, including my local news. It made my day yesterday to hear Gordon Collier pronounce it well. If you don't know, Putin suggested we put our radar interceptors in Azerbaijan rather than in Eastern Europe.

There's a big radar station in Qabala that Russia has a lease on, and uses to spy on the Middle East. They recently used it to track our air command AWACS movements in Iraq and pass that intelligence to Saddam Hussein and his defense ministers during our invasion (though Russia denies this). Putin suggests we use this base along with the Russians.

Qabala was in the neighboring region where I used to live.

At first, it sounds like Putin is compromising: Let's use this base, which is on a former Soviet state that's less politically charged than Poland or Czech Repub., and share the information together.

But, you know Putin isn't a compromiser. So, here's one analyst's reasons for Putin's decision that isn't being reported on the news:
"They're going to lose the base, the lease on the base is going to expire, and they've already been making plans to relocate the radar to Krasnodar [Krai, in Russia]. And so what they're trying to do here is legitimize their presence in Azerbaijan at the expense of the Azerbaijanis. And they will also permanently make the United States a target of the Iranians, and the Azeris, and it's designed to divide the United States and Azerbaijan. And it creates a Russian military presence there, if I understand the statement correctly."
I don't see how it will make the US even more of a target of the Iranians. We'd be a target no matter where the missile is. But, I agree that they do want to keep their radar station, and they do want to keep or increase their military presence in Azerbaijan.

Azerbaijan is the politically best/worst situated country in the world. Neighbors include Russia, Iran, NATO member Turkey, and enemy Armenia. The U.S. has staked oil claims there, Azerbaijan conducts military exercises with NATO, and there's been rumors of building a NATO base there. Azerbaijan has sent troops to Iraq to help the Coalition. Meanwhile, it tries to keep a cozy relationship with Russia.

I'm going to throw out an option that you're not going to hear on the evening news:

Russia wants the missile interceptor system in Azerbaijan so that it can easily take it over upon invasion.

Once you come to realize that Russia is becoming increasingly autocratic and that Putin never really got over losing all those countries that declared independence, you can come to understand that Russia may have other long-term motives.

Russia has been meddling in Georgia, keeps troops stationed there illegally. The Kremlin has also been conducting cyber attacks against Estonia for its lack of Soviet patriotism.
Azerbaijan has lots of oil, and now has the pipeline that takes it westward, through Georgia, to Turkey.

The situation is similar to 1918. WWI had ended, the Russian government collapsed and was replaced by Lenin and the Communists. By 1920, Lenin ordered Azerbaijan to be invaded, in order to capture its oil stocks. The fledgling, newly-independent country crumbled quickly.

Azerbaijan's army is a weak, poorly armed, low-morale force of mandatory service filled with 18-19 year old boys just wanting to serve their 18 months and go home. I lived next to the main Azeri army base on the border with Russia. If Russia ever invaded, there wouldn't be much of a fight. At least 1/3 of Baku (the capital) is Russian-speaking and wish they lived in Moscow. Plenty of people would welcome the Russians, or at least not resist.

I'm not saying this will happen tomorrow. But, in my reading of Ezekiel, Daniel, and Revelation, I think Russia plays a key part in the end times. If you're a fan of the Left Behind series, you'll remember that the books open with Russia attacking Israel. In order to do that by land, they would have to go through Azerbaijan first.

So, be wary President Bush. Putin now suggests putting the shield in Turkey, or on the sea. Not sure what his game is there. I think he wants to prove that it has nothing to do with shooting down Iranian missiles, but everything to do with shooting down Russian ones. The Poles and Czechs are obviously worried about that for a reason. They're heavily armed EU and NATO allies. How much worse off will Georgia and Azerbaijan be when Russia starts moving?

On the NBA Finals, Game 1

I haven't written about sports in forever. While the pre-draft, draft, and summer league is my 2nd favorite basketball season, the NBA Finals usually draw my interest providing I'm around to watch them.

I took time off yesterday to watch most of Game 1. It was like I thought it might be, inexperienced Cleveland being dominated by veterans at every position. Lebron looking like he's 22 years old. I'm tired of the "Crown him now, we are all witnesses!" hype. In a word: Booooriiiing. If you can't crack 50 points until the 4th quarter, then you're pretty boring.
And how many more re-runs of the Gregg Popovich-Tim Duncan story do we have to watch?
Poltergeist III was on Fox, and I found it much more entertaining.

The Cavs remind me of the '88 Bulls; you've got the makings of a great talent but haven't quite yet put together the formula and experience to win the finals yet. The East is just weak. And that's okay.

Before the series, I predicted the Spurs in 5, and I'll stick with that. They'll slack off enough that Cleveland will win one, likely in Cleveland. The Spurs clearly dominate when they want to.

In other news, last night was Sonic's free 10 oz. Root Beer Float night. I got me some of that action. Between when we left the house to get the float to when we returned, Cleveland had scored a whopping 4 points while San Antonio had scored 15.

Thursday, June 07, 2007

Via Con Dios, Grand Am!

This car has been in my family since before I could drive, 1996. It was first my mom's until 1998, when I traded her my Buick Roadmaster for it. I gave it back to my family in 2002, then got it back from them last year when we sold Joni's Mustang.

I might have gotten less for the car than I could have, but I feel like I still got more than it was worth. It needs about $700 worth to repair a slow oil leak in 3 different places (see my previous post about how all used cars are lemons).

On the same day that Rynoman posted his question about how and why all the cars being towed on I-35 are going to Mexico, I got the answer:
The guy I sold it to is taking it and another car he just bought to Mexico tonight.
So, I took the time to ask him all about this. Since there aren't really any Mexican cars, and everyone wants a better quality car he is able to buy cheaply here and make a profit over there. Arbitrage. His pregnant wife and himself will tow the Grand Am with a recently-bought Jeep Cherokee, sell both, then return to the U.S. in a carpool with someone else.
According to Mexican law, the cars have to be at least 10 years old to enter. That's why the ones you see going down are old.

He says this is how it works:
All you need to take the car into Mexico is $600 and proof that the car has a title, and that the VIN on the title matches the VIN on the car. They don't look at the name on the title, so it could be stolen and no one cares. It's void as soon as the $600 is paid. The cars you see being towed down I-35, or even the ones towing the vehicles aren't insured or registered to the drivers. I imagine they can probably take out a policy on them for just 1 day, enough for them to print out an insurance card and make that trip. But this guy won't with the Grand Am since they're leaving tonight.

He told me he was selling them to his uncle in Mexico who owns a dealership. His uncle will pay him the price he paid for the car, plus the $600 and other travelling expenses, and "at least" an additional $500 on top (i found this information out afterwards, i called him while i was writing this).

So, he'll make a tax-free $1000 profit on this trip (2 cars). He says that's just about enough to pay for the trip because everything is so expensive down there, particularly gasoline. His wife is from Mexico and wants to go back twice a year. The Grand Am will apparently go to her mother.
So, happy trails Grand Am. I feel tempted to feel really sorry for you.

The money we made from the car will (hopefully) go towards our trip. Or to rent the U-Haul to take all our stuff back to Kentucky...

One way to do it

Ah, those folks in Amsterdam, what will they think of next?

Students have invented "powdered alcohol."

"The latest innovation in inebriation, called Booz2Go, is available in 20-gramme packets that cost 1-1.5 euros ($1.35-$2).

Top it up with water and you have a bubbly, lime-colored and -flavored drink with just 3 percent alcohol content."

Since it's in powdered form, and technically isn't alcohol, it can be sold to minors. You can also sell it and avoid any taxes specifically on alcohol.

Where there's a regulation, there will be innovation.

Wednesday, June 06, 2007

If D-Day were in 2007

This is someone's impressive attempt to show what would happen if D-Day (WWII) had happened with today's media "embedded." Courtesy of BlackFive.

Tuesday, June 05, 2007

Conservatives supporting the immigration bill

List of names on a petition found here. Among them, Jack Kemp, Larry Kudlow and Greg Mankiw.

More on Moldova

So, it looks like we're going to have to revise our target upward to about $8500. I received a revised monthly living calculation from the head of CAMED. He also included this statement: "And prices are going up all the time."

Hmm... inflation, eh? Like a good economist, I surfed on over to the World Bank to get the data on Moldova.

GDP has grow at about a 7% rate the past few years. That's good news for Moldovans. The bad news is that they now have a nasty trade deficit. Russia has been blocking some of their agricultural exports which make up about 20% of production. Trade deficit is now 35% of GDP.

With such a high trade deficit (35% of GDP) usually comes a nasty currency appreciation. Indeed, the Moldovan Leu has appreciated against the dollar by 10.7% since 2002. That means our dollars get 10% fewer Leus now than they did 5 years ago. But, what does this mean in real terms?
Much of this is due to Moldovans working abroad and sending their paychecks home. They get paid in Euro or Rubles and then send it home and it's exchanged for Leu. This drives demand for Leu up, thus causing it to appreciate. The government has also apparently been pursuing a strong Leu currency policy, for reasons unknown to me. That's usually a bad thing in a country this small.

CAMED, the company I'll be working with, provides microloans to entrepreneurs looking to start their own businesses in Moldova, so they don't have to go abroad. It helps foster domestic growth, creates jobs, and keeps money in the country.

The bad news is that inflation is pretty bad. Price levels have increased by 83% since 2001. Inflation was 14.1% last year and is predicted to be 10% this year.

In real terms, this means that the value of the Leu is going down at the same time that the value of the dollar against the Leu is also going down. So, as prices in Moldova go up, the dollar happens to also be depreciating meaning it takes increasingly even more dollars to buy basic goods and services. This is not a good thing for those of us eager to raise support.

Monday, June 04, 2007

July 9th

Monday, July 9th is the day that Joni and I will leave Waco.

August 1 is about the day we hope to leave the U.S. for Moldova. I have accepted an internship there with Business Professional Network, which does microenterprise development. I'll be working with a Moldovan company that acts as the middle-man for distributing microcredit loans to aspiring entrepreneurs. You can read about what BPN does in Moldova here. We intend to be there until around Christmas.

The goal is to provide opportunities for business-minded folks to start businesses in Moldova rather than leave the country to find work. BPN helps them by providing some small start-up microloans, training them in Biblical business principles, and often partnering them with American Christian businessmen for coaching and encouragement.

My primary project will be to work with Moldovans and some people in the U.S. to set up a website that the church and business community can use in Moldova to keep in touch with one another. Sort of like a bulletin board. I'll also be hands-on learning how microenterprise development works.

We have to raise at least $8000 by August 1. That's an enormous, God-sized task. That will cover our living and travel expenses. We will be sending out letters very soon to friends and family with more information about how you can partner with us.

If you know someone who needs to be put on our mailing list, or would be interested in supporting our work, please email us. If you know someone who might be willing to donate airline miles to our journey, that would also be very welcome.

This is going to be the great adventure! There are still a lot of unanswered questions, and we're working on that continually. Please continue to lift us up as we join in this new type of Kingdom work!