Sunday, September 28, 2008

Lessons from Isaiah about uncertain economic times

I have been studying the book of Isaiah using some commentaries for insight- Calvin and Brueggemann.

The Scriptures often speak to me in whatever circumstances I find myself in. I found Isaiah 7 particularly relevant to current events.

There is a sense of unease with many that I talk to about the economy. Our nation has experienced problems in the housing market and lending institutions that has threatened to put a lot of banks out of business. Credit is tight. Fear and pessimism are high.

Our federal government has announced a plan to stimulate the economy that could cost taxpayers billions. The byproducts of a poor economy are more government spending, higher budget deficits and higher inflation.

What does Isaiah say to the believer in God's control over all things in this world during this time? Two verses:

Isaiah 7:4, "Say to him, 'Be careful, be quiet, do not fear...'"

Isaiah 7:9, "If you are not firm in faith, you will not be firm at all."

We have a choice: to walk in faith or fear. What a great opportunity for believers to demonstrate that our trust is in Christ and not the fickleness of world economies. It is also a good opportunity to show that biblically based financial planning works.

What are the basic principles of biblical finance?
  1. Keep your lifestyle much lower than your income stream.
  2. Save and give a significant percentage of your income.
  3. Work hard- use your abilities to serve God and others.
  4. Diversify your investment assets- have a plan to manage principal and inflation risk.
  5. Be organized- don't leave your family with an estate mess.
  6. Act in faith, not fear. Pray for the prosperity of the city you live in and be active in seeking the renovation of creation for God's purposes.

What has been formed by God has been deformed by sin and needs to be reformed by Christ.

For God's Glory,

Ashley Hodge

Sunday, September 07, 2008

Education Reform

As I have stated in previous posts, I think the three great opportunities for reinvigorating the US economy lie in energy, health and education reform.

Education reform is a topic that I take particular interest in because I have two young children and have a passion for learning. Unfortunately, most of this passion came after age 22 when most of my formal education days were behind me.

I am the product of public schools all the way through high school and then attended and graduated from Baylor University. I have gone back to school as an adult- taking classes at Westminister Theological Seminary.

I deplore waste- even though I am sure I can be rightly accused of hypocrisy in many areas where I am wasteful. Our government wastes incredible amounts of money on public education. If people knew the truth of how much waste goes on in the name of educating children, there would be cries to overturn the entire system.

Some statistics to support my claim. There were 31 industrialized nations ranked on educational criteria. Who spends the most per child on education? The United States (some studies say Switzerland, but the US is either #1 or #2). How does the United States rank on basic skills? Should be #1 or #2 right?

Math: 19 out of 31

Science: 14 out of 31

Reading: 15 out of 31

Lots of money spent for mediocre results. Switzerland also ranks middle of the pack. The nations that get the bang for their buck are Japan, Finland, Korea and New Zealand. One of the problems is that we have created huge administrative bureaucracies. Compare public education to private education. A 2006 study in Arizona showed these results:
  • Public schools in Arizona spent 50% more per student than private schools.

  • Teachers made up 72% of the employees at private schools. Less than 50% of the employees at public schools.

  • Public school teachers are paid 50% more than private school teachers.

  • The results for private versus public school student performance is virtually the same except for Jesuit schools which hold a significant educational advantage in terms of output.

In other words, we spend a great deal more on public schools for results that aren't better than private schools. The study I read compared students in similar socio-economic categories so that the data wasn't skewed by poverty/inherit advantages.

One more story underlining the need for massive reform. Thomas Sowell writes about this in Economic Facts and Fallacies. The University of Colorado's law school was one of the best bargains around. Tuition was $6,700 per student because they used inexpensive faculty (actual practicing judges and lawyers) and spent much less on a law library than other schools- choosing to use online resources.

Yale University's law school charges $44,000 per year. So what school had a greater number of students passing the bar on the first try? University of Colorado at 92%.

The American Bar Association was horrified at these results and quickly laid more than $40 million in spending requirements to get the University of Colorado up to ABA accreditation standards. Tuition rose 154% at the University of Colorado law school and the bar pass rate fell.

What are some solutions to the educational mediocrity that currently exists in our nation? I have two that should be included:

1. School choice through vouchers.

Competition brings better products. Look at the postal service. Do you think you would be able to ship goods overnight anywhere in the the US for a reasonable fee if UPS and FEDEX weren't competiting with the US Postal Service? Milton Friedman's Foundation releases an annual report on the success of school vouchers here.

2. More emphasis on life skills- personal finance skills; discovering natural giftedness; healthy lifestyle choices- diet, exercise, sleep habits, stress management; managing time effectively.

The leaders who come up with great solutions for energy, health care and educational reform are going to lead our economy into a more prosperous, better future.

For His Glory,

Ashley Hodge