What Would a Mormon Republican Do? How Quick We Forget! Stimulus Anyone?

Call back four years. What do you remember; what have we forgotten? An obliterated economy, giant financial institutions and America's largest manufacturing sector, automotive, in freefall! It was a financial destabilization on the precipice of total collapse that called for extraordinary measures. Even so, there was an ongoing political, rhetorical opposition and obstructive intransigence against those more noble souls who would do what had to be done. An unrelenting, vociferous demagoguery would dampen the spirits of many Americans, a negative force in play to stall economic recovery.

Much has been written about how we got in the economic ditch. But at that particular moment knowing the cause was less significance than the urgency of keeping us out of another Great Depression. Many authors I have read make it clear the cause goes back 30 to 40 years, beginning with the Carter administration when some governmental controls were relaxed, continuing with a special emphasis on deregulation through the Reagan years. "To the applause of liberal Democrats and conservative Republicans alike, the New Deal system of regulation was dismantled in one sector of the economy after another in the late 1970s and 1980s," writes Michael Lind. (Land of Promise)  Increasingly through the years, precipitously in the George W. Bush administration, it was in a cavalier, an unrestrained free-market, the regulators gave deference and fealty to business lords. Unfettered free-market ideology led government officials to resist new regulations and enforce existing regulations lightly or not at all in what became known as “the shadow banking system." Predatory mortgages, bundled overrated securities (e.g. Collateralized Debt Obligations), blind-derivative trading (e.g. Credit Default Swaps), and over-leveraged banking expedited sure economic disaster. Laissez-faire!

In the Bush years there had been a general disregard for governmental fiscal responsibility, when for the first time in American history we failed to oblige taxes to pay for our wars. Not paying for the wars was not enough of a tax-free-ride to economic doom, tax cutting in the name of trickle-down economics, in the face of unpaid Senior Drugs, left an even larger debt. It was a perfect setup to an untenable situation for economic recovery after the "big fall" came. It was as if we burned down the Federal House with no Fire Insurance, no cash reserve; thereby, necessitating a third mortgage to rebuild. But rebuild we must!

So how did we begin the rebuilding? We took advice from a past generation, per se, one Marriner Eccles, a Mormon Republican.

After the stock-market crash of 1929, in lingering, economic devastation, the Herbert Hoover administration and others believed nothing could be done except to balance the federal budget and pay down the debt. "Economists and the leaders of business and Wall Street—including financier Bernard Baruch; W. W. Atterbury, president of the Pennsylvania Railroad; and Myron Taylor, chairman of the United States Steel Corporation—sought to reassure the country that the market would correct itself automatically, and that the government’s only responsibility was to balance the federal budget." (Aftershock)  

Marriner Eccles' father, an immigrate from Scotland, married two women in Utah. Marriner was born 1890, and by age twenty-four he was a millionaire; by forty he was a tycoon—director of railroad, hotel, and insurance companies; head of a bank holding company controlling twenty-six banks; and president of lumber, milk, sugar, and construction companies spanning the Rockies to the Sierra Nevadas.

"When Eccles’s anxious bank depositors began demanding their money, he called in loans and reduced credit in order to shore up the banks’ reserves. But the reduced lending caused further economic harm. Small businesses couldn’t get the loans they needed to stay alive. In spite of his actions, Eccles had nagging concerns that by tightening credit instead of easing it, he and other bankers were saving their banks at the expense of community—in 'seeking individual salvation, we were contributing to collective ruin'.” (Aftershock) Marriner Eccles came to realize Hooverism's conventional wisdom was insanity.

The debilitating economic struggle continued into the Franklin D Roosevelt years, when even Roosevelt was not fully convinced we needed to go deeper into debt to stimulate recovery.

"Eccles made his national public debut before the Senate Finance Committee in February 1933, just weeks before Franklin D. Roosevelt was sworn in as president. The committee was holding hearings on what, if anything, should be done to deal with the ongoing economic crisis. Others had advised reducing the national debt and balancing the federal budget, but Eccles had different advice. Anticipating what British economist John Maynard Keynes would counsel three years later in his famous General Theory of Employment, Interest and Money, Eccles told the senators that the government had to go deeper into debt in order to offset the lack of spending by consumers and businesses. Eccles went further. He advised the senators on ways to get more money into the hands of the beleaguered middle class." ..."His proposed program included relief for the unemployed, government spending on public works, government refinancing of mortgages, a federal minimum wage, federally supported old-age pensions, and higher income taxes and inheritance taxes on the wealthy in order to control capital accumulations and avoid excessive speculation. Not until these recommendations were implemented, Eccles warned, could the economy be fully restored." (Aftershock)

Much of what Eccles recommended was implemented for Roosevelt's New Deal, the stimulus recovery. Eccles went on to be Roosevelt's Feds Chairman, serving fourteen years, 1934 to 1948. The Eccles Building, named for him, which houses The Federal Reserve Board stands on Constitution Avenue in Washington, D.C. (Read the full story of Marriner Eccles .)

Forward to January 2009 when the economy was losing 800,000 jobs monthly, and Keynesian Stimulus was being considered: "The official $478 billion Republican alternative consisted entirely of tax cuts and an extension of unemployment benefits. But the GOP also crafted a second $715 billion substitute that included far more traditional infrastructure than the supposedly lavish Democratic bill. That way, moderates like Cao and Castle who couldn’t back the right-wing alternative could vote yes on something other than the actual bill. Republicans never bothered to explain how $ 715 billion could be good public policy while $ 815 billion was freedom-crushing socialism. In the minority, they didn’t have to." .. "But the Republican argument was never about logic. It was about creating the impression of a mess. Republican leaders argued that the Recovery Act was too slow to be stimulus, but also that it needed more infrastructure projects, which would make it slower. They argued that it would expand the deficit, but also that it needed permanent tax cuts, which would expand the deficit even more." (The New New Deal)

In the end, the good-news package, $787B was the New New Deal, not a "cure all" by any means, but a stimulus that addresses a farsighted recovery, a groundwork for competition in a globalized economy, as we traverse the third industrial revolution, information/Internet/ computer technology.

While Marriner Eccles knew what had to be done in the Great Depression era, leaders at the helm of a thousand-times-over, larger economy knew that Keynesian Economics was absolutely essential, to save an economy from the abyss-pit. But unlike the 1930s, we were in a new era of mobility and transition, it had to be applied differently: e.g. building roads no longer required thousands of people; modern machinery only required a few people to pave many miles of roads or build other infrastructure.

The New New Deal was not about building new parks or digging holes and refilling them; it was essentially a multiple-track plan: Tax cuts: biggest middle-class tax cuts since the Reagan era (A limited stimulus, but has allowed savings and private debt to be reduced.); State governments financials shored up, aid to states to prevent layoffs, real-time; Real-time stimulus, roads, infrastructure, and YES, food stamps to prevent seven million people from falling behind the poverty line, money into people’s pockets; Research and Development: Health IT, digitized medical records, 90 billion for Clean Energy, ---- Race to the Top which is the biggest education program in decades.

Most people know so little about the Recovery Act. They have only heard the voluminous, pessimistic spin, i.e. Solyndra's failure. Michael Grunwald gives a brief critique of the Recovery Act in this video. His book, The New New Deal is an eye-opener for the critics.

To Marriner Eccles the most critical thing, about economic recovery, was to get money in the hands of the middleclass. It was the same principle of the Recovery Act, except that in this new transitional epoch it would require a longer time-span. When for many years a disproportionate flow of income has gone to the top 1%, the importance of getting money in hands of the middleclass and less privileged is brought to clear focus by Grunwald's analysis:  "The percentage of the increase in disposable income that went to the top 1 percent of US households fell from 22– 23 percent in 1929 to a low of 8– 9 percent in the 1970s, before rising to a remarkable 73 percent during the two terms of George W. Bush." (Land of Promise) Over the last many years, this imbalance effectively took from the middleclass, enhanced the very top capitalist, and increased personal debt.

As it turned out World War II was the "mother of all economic stimulus." Everybody had a job; everybody sacrificed; the U. S. National Debt went way beyond GDP. The postwar economy was the longest and fastest growth period in history, even while the wealthy and large corporations paid their share, the highest tax rates in U. S. history.

Since the late 70s, reduced taxes, tax credits, government subsidies and corporate welfare has resulted in brazen, untrustworthy tax-collections to build a mountainous national debt. Above the usual  hypocrisy and disingenuousness, there is a galling, egregious rhetoric from those who claim or imply the 16-trillion national debt as Obama's alone. It is a debt most assuredly compounded by the Reagan and Bush eras of negligent, fiscal management; it's debt-causation necessitating an even higher debt (stimulus and tax reliefs to prime the economy); it is the dismantling of government controls by Republicans and Democrats which were capitalist-protection policies put in place by the New Deal. Had the Mormon Republican, Marriner Eccles, lived through the afore mentioned period, could we safely say? "He would have been dumbfound by such government callousness."

Maybe, we are now winding our way around the fiscal irresponsibility and ineptitude to a brighter day for economic recovery. Fareed Zakaria writes, "And yet, when looking out over the next four years — the next presidential term — the IMF (International Monetary Fund) projects that the United States will be the strongest of the world’s rich economies. U.S. growth is forecast to average 3 percent, much stronger than that of Germany or France (1.2 percent) or even Canada (2.3 percent). Increasingly, the evidence suggests that the United States has come out of the financial crisis of 2008 in better shape than its peers — because of the actions of its government."

Marriner Eccles' heritage as a businessman and economist may be forgotten by most but his political-business acumen lives on. Our current-day Keynesian leaders took a page from his playbook, and we have both to thank.

From somewhere in the Heavens, a Mormon Republican may be saying to another Mormon Republican, "How 'bane' thou art!"

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Postscript: David Wessel, author of Red Ink, writes in The Wall Street Journal, CEOs Call for Deficit Action, Oct, 25th 2012: Chief executives of more than 80 big-name U.S. corporations, from Aetna Inc. to Weyerhaeuser Co., are banding together to pressure Congress to reduce the federal deficit with tax-revenue increases as well as spending cuts.

When The Holy Ghost Spoke!

"²Suddenly a sound like the blowing of a violent wind came from heaven and filled the whole house where they were sitting. ³They saw what seemed to be tongues of fire that separated and came to rest on each of them. ⁴All of them were filled with the Holy Spirit and began to speak in other tongues as the Spirit enabled them." (NIV Acts 2:2-4)

Imagined a similar spirited service 1,900 years later, I don't remember what the preacher said at that service, but Saint John Pentecostal Holiness Church was a rocking place. Hands were waving, feet were dancing, bodies trembling, and alien-voices were thunderously intensifying.

In the Bentonville community, NC, just east of my home church Ebenezer Methodist, about half a mile, adjacent to the Wayne County line, St. John Pentecostal stood. (In fact if the stories are accurate, St. John was an offshoot of Ebenezer Methodist around the late 19th Century or early 20th Century when Pentecostalism was born out of Methodism. Charismatic-other-tongue speakers left Ebenezer to form St. John. In Pentecostalism's history, Reverend Charles Fox Parham was a former Methodist who became an independent Holiness preacher.)

At St. John Mrs. George (Pearl) Lee, its matriarch, had invited my father Cornice to bring his family to this revival one evening in the late 40s. Of course, my dad knew that the services would be quite different from those of our staid Methodist worship, not to mention those of his mother's Disciples of Christ Church or his father's Quaker meetings where the congregants would sit quietly for hours waiting for the Spirit to move. At St. John, the Spirit didn't just move over long stretches of time: it sang, danced, and moaned all the time.

Several Methodist Churches into recent years have retained a very small remnant of other-tongue-speaking. And it was natural that Ebenezer retained a remnant into the 40s as Granny Flowers at times could not contain the Holy Spirit. So charismatic worship, even then, was not totally unfamiliar to me, but at St. John it was emotionally overwhelming for this young child.

That night, Mrs. Pearl and about five or six others tested the very foundation of that solidly constructed wood-frame-church building, and my memory was frozen in the Holy Ghost.

A few years later, 1957-58, the St. John congregation made a decision to build a new, more modern-brick-church structure. A local entrepreneur, William (Bill) G. Flowers, purchased their older, structurally sound church-building and had it moved 3/10 mile back west on his property facing Harper House Road. Bill's dream to turn the church into a commercial feed-mill was on its way to being fulfilled. He knew a local engineer who moved buildings and could make, or engineer, most anything that could be envisioned. William F. (Shorty) Harrell, of our community, lived across the Johnston County line in Wayne County. He was essentially a savant, although he never completed high school or had an official degree of any kind. He was the master of, engineered, a mill complete with all-new corn sheller, hammer mill, mixer, and a large open-top-corn-storage bin. Within a year, Bill's dream came to fruition in the holiness structure. It had a few add-ons, including shelter over the grates where corn or grain was dropped from truck or trailer, for elevation to the corn sheller or hammer mill. The structure of the old church was of impeccable strength, reinforced by Shorty's genius-integrity to make it mill worthy. Shorty's engineering of the wooden constructed open-top-grain bin, its strengthening with twin-steel rods connecting each side, intersecting midway the top, gave proof he knew the calculus: The pressure that would be imposed on the walls when filled to the top.

On completion of the commercial mill, Bill needed, as he would say, "a manager." He came to me knowing of my love for farm life; I was in my third year of diversified farming, livestock and crop productions. "Let me think about it," I said. At twenty-one years of age, I was young, energetic, enthusiastic, somewhat ambitious and physically capable. After significant consideration, I took his offer.

Being Bill's manager was a rewarding experience: working feed-formula ratios, operating the equipment, swiftly spinning a miller's-tie around a bag. Carley Dudley was my main helper and Tommy Rhodes, who trucked, from Norfolk VA, our brand of Wayne Feeds pre-bagged and feed-concentrate products. Bill usually was on standby to help.

Bill and his wife Dinkie's enterprises, which also included farming, did not detract from raising two fine children, Dixie Ruth and a son, Phillip. Phil was 10-years of age and loved to play around the mill when not in school.

One fall day when the corn we purchased had filled the open-top bin to the brim, some of it had to be augered out and loaded on a long transport trailer for market. All the electric motors were humming at full speed, a cacophony of sheller, hammer mill, and augurs churning, moving grains.

Deafeningly the mill made unclear any other sounds. But as I sat at my desk about 30-feet away from the grain bin, I vaguely heard a terrifyingly high-pitched sound coming from above the open-top bin. I raced up the ladder to see what it was. There in the middle of the bin, in a trail of corn kernels vastly cascading to the sinking center point was Phillip. Already halfway up his lanky body, he was stuck, wedged in corn; he had no hope of escape. At the top of my voice, I called to others, about five people in the building, to instantly shut down all switches, I rushed back to the center of the bin, treading the twin-steel rods, to grab Phil's outreached arms, as he was still sinking.

By this time the corn was already on his shoulders. Others raced up the ladder to see, and to surmise what we could do to get him out. Sadly, Shorty Harrell was not there to help us in some genius way. Standing on the steel rods, I dared not relieve my almost-full-strength pull on Phil's arms, he would sink even deeper; he cried, pitifully, "don't pull my arms off."

The only way out was to cut a good-size hole in the side of the wooden bin to relieve the pressure. There had to be as little vibration as possible, so as not to create motions that would sink Phil further. But we didn't have a chain saw at hand; there was only an ax available. As one of the men started slamming away against the bin wall, Phil would sink ever so slightly, kernels were under his chin, and ----- finally, a larger hole released a downpour of grain onto the mill floor that had to be spread across the floor to get even more out. We breathed an exhausting sigh of relief. Once the grain was down to around his knees, we were able to pull him out to safety. 

The Holy Ghost had certainly not left that building, for I knew within that thirty-minutes of frightening apprehension there was for certain an extraordinary Spirit moving within those men.

The masterful spirit lives in men like Harrell and Flowers, who inspired ethics and initiative in a younger generation. Those were men of uncommon skills, remarkable talent. Shorty Harrell, whose raw-engineering genius further endeared him to companies such as Hog Slats, died 5-years ago, and Bill Flowers, who died this past March, left proud legacies to their families. 

A dynamic spirit and initiative lives on in Phillip Flowers, who married my cousin Martha Westbrook. He continues to carry on the Bill Flowers tradition: a most notable entrepreneurship in Greenville NC. Phil's architectural design of buildings, commercial construction, and the Rock Springs Center facility are among his and Martha's enterprises, serving the broader community of Greenville, NC, home of a world-class medical complex and East Carolina University. Phil's community leadership, fostering civic responsibility, combined with his free-market achievements, are a testament to man's most noble undertaking to make a better world and better life for his family and others.

Thanks be to The Great Spirit who gives life!