What could cause another recession?

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What could cause another recession?

April 12, 2012 -

“Honk if you’ve felt the recovery.”  Time‘s recent cover story on the “Wimpy Recovery” suggests that this bumper-sticker captures the way many of us feel about today’s economy.

After five days of declines, the stock market rebounded 89 points yesterday.  Where it will go from here is anybody’s guess.  According to economists surveyed by CNNMoney, a confrontation with Iran could cause an oil spike that would create another recession.  They also worry about the ongoing European debt crisis, budget gridlock in Washington, and an economic slowdown in China.  Speaking of Europe, some are now suggesting that Germany should leave the Eurozone, which would cause the Euro to fall and make it easier for struggling economies in the region.

Why is the economy not doing better?  The Time essay explains that many of our jobs have gone overseas permanently or been replaced by technology.  More than 100 million credit card accounts were closed during the recession; many of us are still paying down personal debt accumulated during better times.  When adjusted for inflation, the average working-class American hasn’t gotten a raise since the 1970s.  Emerging markets in places like China and India have fueled much of the recovery, but they are now slowing down.  And many of the jobs now being created are in lower-paying sectors that haven’t been exposed to global competition.

In our favor is the American ethos of creativity and entrepreneurship.  Automobiles are already on their way back, as innovations have improved profit margins.  And technology appears primed for another boom.

Three imperatives in Jesus’ Sermon on the Mount seem especially relevant to today’s financial fears.  First, we are not to worry about money: “Do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?'” (Matthew 6:31).  Why not?  Because “your heavenly Father knows that you need them” (v. 32).  He is a Father who loves his children.  So name your needs and trust your Lord.  Ask him to lead you and help you, knowing that he wants to meet all your needs with his glorious riches (Philippians 4:19).  As you work, God works.

Second, accumulating wealth is not the purpose of life: “the pagans run after these things” (v. 32).  Benjamin Franklin was right: “Money never made a man happy yet, nor will it.  The more a man has, the more he wants.  Instead of filling a vacuum, it makes one.”

Third, making God your King is the highest priority of life: “But seek first his kingdom and his righteousness, and all these things will be given to you as well” (v. 33).  Your possessions are actually his, loaned to you for a brief time.  When you use them to love God and love your neighbor (Matthew 22:37-39), you fulfill his purpose and find his joy.

Ayn Rand believed that “money is the barometer of a society’s virtue.” What does it reveal about yours?

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