Federal Reserve Ends Quantitative Easing

Buried in the FOMC’s (Federal Open Market Committee) latest report is the belief that the economy is doing well enough that the Federal Reserve can stop its’ program of pumping money into the economy. Since July of 2007, the Feds have pumped $3.62 trillion into our economy. Their balance sheet now stands at $4.5 trillion dollars (compared to $882M in July of 2007).

It’s a basic rule of economics that the more one has of a particular item, the less valuable each item is. If there someone were to find one billion five carrot diamonds, the price of diamonds would go down because they would be more common. If Dairy Queen decided to server one million more milkshakes in 2015, the price of those shakes would go down, unless demand for them diminished proportionally.

In the last seven years, we have seen the number of dollars in circulation increase by 3.62B. I’m not seeing demand for each of those dollars increasing proportionally such that the buying power of each dollar has remained constant. Instead, the dollar has lost nearly 15% of it’s value in the last 7 years, according to the US Inflation Calculator (and here).

I think the long-term effects of the Feds actions will not be known for another five to ten years. Don’t ask me how they’ll extract these dollars from the market – if they even intend to do so. But if these dollars ever get serious velocity in our economy (see the third story in this Friday Five), we’ll see significant inflation. We’ve seen consumer spending slow down in the last few years due, in part, to lower confidence in the economy. This helps keep prices more stable if spending slows down. If confidence ever gets revved up and people start to spend a lot more, there will be more money to spend because it’s already in the market.

I’m glad QE is over. I hope they can retract a good portion of these dollars before something serious happens.

Bill English

Friday Five October 31 2014

Those who supported World War I in the United Kingdom are going to be paid back – finally. Treasury chief George Osborne said Friday the government plans to redeem some National War Bonds issued in 1917 when it refinances 218 million pounds of debt issued as far back as the 18th century.

In September, employee costs went up 0.7% and were up 2.2% for the 12 month period ending in September. Compensation costs for civilian workers increased 2.2 percent for the 12-month period ending September 2014. In September 2013, the increase in compensation costs was 1.9 percent. Wages and salaries increased 2.1 percent for the 12-month period ending September 2014, compared with 1.6 percent in September 2013. Benefit costs increased 2.4 percent for the 12-month period ending September 2014, compared with a 2.2 percent increase for the 12-month period ending September 2013. One wonders how businesses absorbed these costs without increased sales or increases in the prices of their goods and services.

Bring robbed at gun-point in a gun-free zone is not ironic, its’ predictable. The best way to defeat bad guys with guns is to ensure the good guys have guns too.

Homelessness is a big deal. ~25% of all the homeless are in California – but the most disturbing number is this: 23% of all homeless people are under the age of 18. One wonders how we, as a nation or a church, can allow this.

Man’s Best Friend? The police find a man in Alabama by using his own dog. There are reasons to not have pets!

How Much do You Tell Your Spouse?

Running a small business sometimes creates conflict at home.  Spouses have opinions about how the business should be run and what decisions should be made.

Most Christian Business Owners enjoy running their business and enjoy sharing their lives with their spouse. Yet an alarming number of these same business owners struggle with how much to tell their (presumably) non-entrepreneurial spouse about the inner workings of their business. In a recent survey conducted by Faith Radio and this site, the Bible and Business, we learned that just over 25% of Christian Business owners either Agreed or Strongly Agreed with the statement “A very significant challenge to my business or to myself personal is managing my spouse or significant other: how much do I tell them?” (survey results will be released here in the future).

While the survey didn’t give us specifics on what the challenge is for these Christian Business owners, we can still offer some advice on how to answer the “how much do I tell them?” question.

Be Specific Enough that You Don’t Create False Impressions

Be sure that you give enough detail about the health of your business to your spouse that they are not caught off-guard should negative information need to be addressed. If you know that your spouse would be surprised at the current state of your business, then you’re probably creating a false impression. This really is lying. Let’s not lie.

Ask Your Spouse How Much and What Kind of Information They Need

Sometimes, the best way to give your spouse the right amount of information is to simply ask. It’s amazing what asking can accomplish. As business owners, we constantly ask our customers for feedback – so why not do this with your spouse?

Don’t Give Them so Much Information that Your Home Becomes the Board Room Every Night

I’ve seen some spouses who knew so much about the business that there was little emotional or “thinking time” separate between home and the office. Don’t let your evening conversations become so focused on solving business problems that you find yourself joking about “needing a life”. Your business should never consume your entire life – at least not for sustained periods of time.

My Spouse Doesn’t Want to Know

What if your spouse doesn’t want to hear about the details? What if your spouse is sticking his/her head in the proverbial sand? Well, here’s a couple points of advice:

  1. Tell them that they need to know – in this case, ignorance is not bliss – it is dangerous.
  2. How can your spouse pray and support you when they don’t have enough detail to understand what’s going on? They need to pray and support – and that requires adequate information about the health of your business
  3. More than likely, this is probably symptomatic of a larger problem of avoidance in his/her life. Talk with them gently but directly about this. The truth is never the problem. Facing reality is the best way to deal with it. Help them see they need to be involved.

As you go through life together, your spouse will have different emotions about your business and about your abilities to run your business. That’s part of the warp and woof of life. But keep them engaged enough so they can pray and support while not turning the evening dinner table into a board meeting each night.

Bill English

Avoid Hiring Fools in Business (Free Tool Included)

In reading Ecclesiastes 10.5-6 the other day, I was struck by how this directly talked to business owners who hire people in their business. This verse reads as follows:

There is an evil I have seen under the sun, the sort of error that arises from a ruler: Fools are put in many high positions while the rich occupy the low ones.

It’s not a far stretch to equate the ruler with the business owner and fools as (potential) employees. What this passage clearly teaches is that hiring a fool for a position of management and/or influence in your business instead of a non-fool (called “rich” in this verse) is an “evil” and an “error”.

Download our Free “Screening Questions to Avoid Hiring Fools” tool.

So, what is a fool? The Bible outlines this for us and tells us the characteristics of a fool:

  • Does not believe that God exists, Psalm 14.1 (and 53.1)
  • Mock God, Psalm 74.22
  • Rebellious, Psalm 107.17
  • Despise wisdom and discipline, Proverbs1.7
  • Hate knowledge, Proverbs 1.22
  • Complacent, Proverbs 2.32
  • Talk too much, Proverbs 10.8 and 10.10
  • Say things that invite trouble, Proverbs 10.14
  • Spread slander, Proverbs 10.18
  • Lack judgment, Proverbs 10.21
  • Find enjoyment in screwing other people, Proverbs 10.23
  • Do not listen to advice, Proverbs 12.15
  • Quickly show their annoyance, Proverbs 12.16
  • Blurt out whatever is on their mind, Proverbs 12.23
  • Detest turning from doing wrong, Proverbs 13.19
  • Their friends suffer because of the fool’s actions, Proverbs 13.20
  • Mock at making amends for sin, Proverbs 14.9
  • Hotheaded and reckless, Proverbs 14.16
  • Full of talk, but they don’t work hard, Proverbs 14.23
  • Spurn their parent’s discipline, Proverbs 15.5
  • Do not accept advice, Proverbs 17.10
  • Love to give their opinions, Proverbs 18.2
  • Quick to quarrel, Proverbs 20.3
  • See danger, but they don’t change course, Proverbs 27.12

While there are many more verses about fools in the Scriptures, this list gives us a starting point for characteristics that you shouldn’t hire on your staff. Hiring a fool represents poor stewardship for your business.

Now, does one need all of these characteristics to be classified as a “fool”? No. Do we not all have these characteristics at one time or another? Yes. But the point is this: the more one has these characteristics, the more likely it is that one can be discerned as a “fool” in Biblical terminology. So, the question becomes this: How do you assess for these characteristics during the interview process?

Well, I’ve listed out some questions and ideas to use to help screen against these characteristics:

Characteristic Potential Screening Question
Despise wisdom
  • Who do you go to for mentoring?
  • What are the guiding principles for your life?
Despise discipline
  • Tell me about the last person you worked for. What did you like and not like about your last manager?
  • Do you have any authorities in your life that you submit to?
Hate knowledge
  • What are the last three books that you have read?
  • What have you accomplished in the last three years to grow professionally?
  • Would you rather read a book, watch a movie or work with your hands?
  • Are you satisfied with your character development at this stage of your life?
  • Have you ever spent money knowing that you really didn’t need to spend it? If so, did you do it again?
Spread slander
  • Tell me about the last co-worker that you worked with that you didn’t get along with – what were they like and how did you handle it? (The substance of their answer is irrelevant: the point is that if they keep talking about it, giving more details, if they start getting angry, reliving the experience, etc…, then they will likely spread slander to you during the interview)
Lack judgment
  • Give them a scenario in your business and ask them how they would handle the decision
  • If you were to be given $10,000, what would you do with it? (look for how they would manage their money)
  • Run a background and credit check – how they handle money will indicate strongly what kind of judgment they have
Do not listen to advice
  • Ask their references how well they were at listening and heeding advice – be sure to call those with whom they worked that they *didn’t* list as references
Quickly show their annoyance
  • Do something annoying and see how they handle it
  • Ask them questions in rapid succession and see if they show any annoyance
  • Ask their references about this
  • Do you like driving in rush hour traffic? (Even for this question, they might show their annoyance quickly about rush hour traffic)
  • What kind of people annoy you? (See if they display annoyance when they answer this question)
Do not make amends for something they have done wrong
  • Ask them to describe a situation in which they wronged someone and then describe how they tried to make amends
  • Ask them to describe the last business mistake they made and what they did to correct it
Big talk, small work
  • Ask their references about this
Love to give their opinions
  • Ask them about a hot-button issue and see if they proffer their opinions strongly – in an interview, this would not be considered good judgment to give strong opinions on hot button issues
See danger coming, but don’t change course to avoid the danger (most likely because they believe they can overcome the danger or they minimize the danger’s “dangerousness”)
  • A DUI would be a great indicator of this
  • Ask them to describe the last three business decisions they made. Listen for the risk/reward elements and discern accordingly
Quickly show annoyance and/or anger
  • Give them a work task that is frustrating and see how they handle it
Friends suffer from the fool’s actions
  • If possible, see if you can learn about the person’s “wake” – what they have left behind. Is it a wake of broken lives?


Bill English

While the City of Houston Intimidates Pastors, Most Evangelicals are Silent.

One of the core reasons we have the First Amendment is to protect speech that is on the fringe of society. It’s also there to protect the individual’s right to speak without fear of intimidation from their own government.

The city of Houston, Texas and its’ openly gay mayor, Annise Parker, is violating the First Amendment rights of five pastors who have chosen to stand for their beliefs. Houston has devolved to this situation because of HERO – the Houston Equal Rights Ordinance (HERO). The ordinance claimed there was a “public emergency requiring that this Ordinance be passed finally on the date of its introduction as requested in writing by the Mayor” and was approved by a majority vote of 11-6.

Houston City Counsel Meeting on HEROWrapped into this ordinance is a public accommodations section, which essentially says that discrimination on the basis of gender in public accommodations (think bathrooms here) results “in the unjust exclusion of persons and a diminution of their dignity, respect, and status contrary to the public policy of the City and the Constitutional principles on which the United States was founded”. So, to boiled down to common, boorish English, the City of Houston believes mandating people pee in a bathroom consistent with their physical gender diminishes their dignity.

Well, now.

It is stunning to think that a person can’t use a public bathroom free from the possibility that a person of the opposite gender is using the same facility. At some point, this push for a discrimination-free society runs amuck and it appears that Houstonians have reached that point.

The Pastors (and others) oppose HERO mainly on the grounds that opposite-gendered people will be allowed to use bathrooms which could make it easier for sexual deviants to prey on girls and women in public restrooms. This is not an outrageous conclusion, though this opposing view believes it is. Remember Senator Larry Craig?

The unspoken, real issue on both sides is the role and acceptance of homosexuality in our culture. Evangelical Christians oppose the acceptance and increase of homosexuality in any form in American because they believe that it is sin and an abomination in the site of the Lord. They point out that the Bible is clear on this point. The GLBT community believes that homosexuality is good and right because it is an expression of who they are (orientation), not a result of a choice they have made, and besides, the Bible has been interpreted wrongly for thousands of years. In short, Evangelical Christians view this as a moral issue and gays (some of whom claim to be Evangelical Christians) view it as a civil rights issue. The cultural clash point is being played out in the public square. And since a majority of Americans no longer believe that homosexuality is sin, they have no reason to oppose it. So Evangelical Christians are losing to the GLBT lobbies in large numbers in the public square. The GLBT communities are so active and ardent that they are looking for ways to get into court so that the courts can rule in their favor (here too).

But the ordinance tips their hat to the religious community. It has some exclusions as well – including “religion” as a “protected characteristic”. In the ordinance, “Religion means all aspects of religious observance and practice, as well as belief”. So, based on the ordinance itself, what one thinks and believes pertaining to matters of religion is a “protected characteristic” against which Houston cannot discriminate in the areas of housing, employment, public accommodations, and general discourse (“all persons living in, working in or visiting the City are entitled to be treated with equal dignity and respect and have the right to be free from discriminatory and unequal treatment”).

Houston PastorSo, roughly 400 pastors (US Pastor Council) opposed portions of the ordinance. They have filed suit and a hearing is scheduled for January. Recently, a select few of these pastors, who are not parties to the lawsuit that has been brought against the city and its’ ordinance seeking suspension of the ordinance, were recently served with a subpoena demanding their “writings, drawings, graphs, charts, photographs, phonograph records, tape recordings, notes, diaries, calendars, checkbooks, books, papers, accounts, electronic or videotape recordings, any computer-generated or stored matter” that “constitute or contain matters relevant to the subject matter of this lawsuit” be turned over to the city attorneys. This includes, but is not limited to “emails, instant messages, text messages or other responsive data or information that exists in electronic or magnetic form…”

The subpoena went on to demand literally all communications and contact information concerning anyone involved in the petition. It demands, specifically, they show evidence for making certain public statements against the Mayor and her ordinance. These demands, of course, include sermons – whether written or oral.

The Mayor claims she didn’t know these subpoenas were going out and argued through her City Attorney Feldman that “if a pastor is speaking about political issues from the pulpit, it’s not protected [speech]”. Based on the uproar, the city revised the subpoenas and removed the word “sermon”, inserting the word “speech” or “speeches”. But a sermon is a speech. It is pure folly to think otherwise and this legal slight-of-hand won’t fool anyone – unless, of course, the city attorney is stipulating that a sermon is not a speech.

In essence, the City of Houston is on a witch-hunt designed to silence those who support the suspension and reversal of the ordinance – but more imCity Counsel of Houstonportantly, to silence those who oppose the gay lifestyle and their agenda. The cost to comply with the subpoena will be prohibitive for most pastors and that cost alone is a tactic of intimidation. Mind you, this isn’t their first attempt at intimidation. A petition to put the ordinance on the November ballot failed, presumably, because there weren’t enough signatures. In Texas, petitions submitted to the government are not public, yet the Houston GLBT Political Caucus
published the names of the signatures on the petition, violating Texas law. This didn’t seem to bother the Houston Mayor one bit.

In our opinion, these requests from the City Attorneys violates the Freedom of Speech clause of the First Amendment. And since what one thinks and believes is also a protected class within the ordinance itself, the “writings, drawings, graphs, charts, photographs, phonograph records, tape recordings, notes, diaries, calendars, checkbooks, books, papers, accounts, electronic or videotape recordings, any computer-generated or stored matter” are protected within the ordinance itself. The subpoena infringes on religious liberties guaranteed in the First Amendment and on the very ordinance it is intending to protect.

If, as a group of Evangelical Christians, we cannot ban together to fight this – if we’re that apathetic, then don’t be surprised when pastors are told what they can and cannot say in the pulpit – not just in Houston, but in Peoria as well. Frustratingly, the National Association of Evangelicals has no mention of this brewing controversy on their web site (at the time of this writing) as most other major evangelical denomination web sites mention nothing about this as well. I believe our collective silence is grounded in two foundations.

First, Evangelical Christians live out (in many respects) a division between the State and the Church by simply abandoning our rights and responsibilities within the local communities. Put bluntly, many Christians don’t vote and don’t get involved in politics (here, here (a good article on how Christians vote these days) and here).

Secondly, I believe (though I have no research to back this up) that conservative Evangelicals see the events as moving us toward the end times which the Bible clearly states are coming. So I suspect they pray, work hard, sometimes evangelize, but accept the coming persecution as being a fulfillment of that which is prophesied in the Bible. It’s somewhat of a fatalistic view grounded in the hope and belief that in the end, God will reign. In short, let’s get through the bad stuff so we can get to the good stuff.

My view: It’s wrong for us to simply sit back and hope that the City of Houston comes to its’ senses and leaves the pastors alone. Evangelical Christians should be involved in this issue – not just those within the city, but those who live in this county too.

My view: There is a lot of pain in the homosexual community that should not be denied or written off. I’m not unsympathetic to the hate they have endured – many times at the hands of Evangelical Christians, who have often confused hatred of sin with hatred for the sinner. The Evangelical community has sinned in this regard. Our sin has created real, lasting pain in those active in the GLBT lifestyles. But our sin doesn’t change God’s Word or His ability to heal. God is able to heal. Of this, I am fully convinced. But He heals only on His terms, not ours. We often forget this.

Christians can get involved in current events and stay faithful to their Christian beliefs. One organization in Minneapolis is helping Christians do this: the Minnesota Family Council. Many of the issues of our day are aberrations from God’s commands. As Christians get involved and offer reasonable, sound responses to the core questions of our day, we live out being salt and light as described in Christ’s Sermon on the Mount in Matthew 5. If you want to learn how to get involved in your community, organizations like MFC will help you. And at a minimum, you should vote whenever you can. Not just because it is your right, but because it is your Christian responsibility.

Bill English

Partner Principles for a Better Business

In a recent Wall Street Journal article, Chris Myers outlined 3 Principles for Managing a Co-Founder Relationship:

  1. Seek out complimentary skills
  2. Clearly define roles
  3. Work with someone you trust, respect and admire

These principles are well and good, but incomplete. Much can go wrong even when these three principles are followed. Hence, I’d like to add a few more principles to help you better select a partner that will help propel your business forward and not the opposite: a partnership that kills the business.

Take time to get to know your partner before signing on the dotted line

Partnerships are similar to marriages, so take time to get to know the other person before you enter into a partnership with them. It’s not easy to do this in a fast-changing, swiftly-evolving market. But that doesn’t make it any less important. Having a partner or co-founder will be one of the most significant relationships you have in your life – so take time to choose well. Don’t be rushed into a swift decision. Learn to see the other person for who she or he really is. And decide if you can live with them for the long haul.

Build accountability into your relationship

Meet regularly with your partner to go over what s/he was to have accomplished and what you were to have accomplished. Discuss your productivity with your partner. No one else in the organization can hold you or your partner accountable other than you and your partner. So have a process that you use religiously to have mutual accountability.

Sign a Buy Sell Agreement as part of the formation of your partnership

So you have accountability in your partnership. Great! But what do you do when your partner flakes out? What if your partner simply decides they are not going to pull their weight? What if they prove to be incompetent on certain key tasks, even after you have done your due diligence? What if they turn out to behave with incivility and arrogance that damages your employees moral and causes top talent to look elsewhere?

These a tough situations and that’s when you find the existence of a well-written and well-thought-out Shareholder agreement – a.k.a. Buy Sell Agreement (BSA) is critical. The BSA outlines what actions can and cannot be taken given certain circumstances or triggers. What happens when a partner goes through a divorce? Declares bankruptcy? Decides to start working part-time in another business? Becomes difficult to work with to the point where you want out? These and other events should be discussed and covered in the BSA.

Most BSA’s have buyout provisions with a pre-determined formula. Because a partner’s poor behavior often depresses the sales and/or profitability of the business, the buyout provision should not require up-front-cash, but should be flexible enough that if needed, the buy-out of their stock can occur over time.

Do not enter into a partnership or a co-founder relationship without a BSA. Just don’t do it. Could I be anymore clear?

Just because they are a Christian doesn’t mean they have the same values

I understand the Bible talks about being unequally yoked – the concept of two people entering into a significant relationship with different values and how damaging this can be. But just because your potential partner is a Christian doesn’t mean s/he has the same business values that you do. Having Christ as our savior and Lord is the foundation of the relationship, not the total definition of it. Just because your potential partner is a Christian doesn’t mean you’ll have a great partnership. I can tell many stories of partnerships that failed between Christians because one party had radically different values even though both were Christians. For example, I know of one partnership in which one partner borrowed $70,000 personally from the other partner. When the borrower was unable to pay his partner, he simply started another business and never paid his partner back even though his other business was successful. Why? Because the borrower considered it a debt within the first business and did not consider that debt something to be paid out of the second business.

Needless to say, the partner who lent the money felt betrayed – even more so when other Christians who were mutual vendors and customers continued to do business with the borrower, even though it was known he was not paying back his debt. My friend went through deep waters. It was difficult to watch.

My advice: keep the partner relationship at an arm’s length and don’t get too “chummy” with your partner. Keep your business relationship at a business level. Otherwise, it just gets to be so difficult to make the tough choices that you end up not being able to make them without totally severing the relationship all-together.

Risk and reward should be shared equally

A true partner is one who can shoulder the financial risk of the business, not just share in the profits of the company. As part of entering into a partnership, both you and your potential partner should fully disclose your personal finances to each other so that you can both fairly assess if the other can shoulder the financial risk. For example, a partner who has a low credit score can’t co-sign on loans that need to be personally endorsed. Now, while I preach “don’t personally sign for any loans”, sometimes it’s impossible to not do this. A partner who can’t shoulder the financial risk is not a partner at all – they might be an investor or some other type of interested party – but they are not a partner. So they shouldn’t participate in the rewards if they can’t take on the risk.

Conflict resolution is key to a great partnership

Take the time and energy to resolve clash points before they become difficult conflicts. Clearly define your roles and who is responsible for which decisions. Discuss often your values as they relate to your role within the partnership and the organization. And when there is a clash point that cannot be resolved, have in place a pre-determined method of how that clash point is resolved or who has the primary responsibility to make the final decision. Unresolved conflict between partners will kill your business. Count on it. If you find your potential partner cannot resolve conflict with her or her spouse, then don’t get into a partnership with them.


Partnerships can be great if both parties are able and willing to do their part to propel a business forward. But they can be as equally destructive to a business if there are personality clashes, lack of accountability, lack of conflict resolution and/or a lack of shared risk within the partnership. Finding a great partner is not easy and cannot be done swiftly. It takes time and is a process that should not be rushed.

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