Lessons From a Capitalist Thanksgiving With Jerry Bowyer

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Click on Analyze My Investments on the homepage to tailor your portfolio to what truly matters to you. Thanksgiving is just two weeks away. It's become a frenzy of food preparation and football, and perhaps a holiday we just take for granted. Hi, I'm Rob West.

You have to wonder how many people will pause to reflect on what really happened at the first Thanksgiving feast. Well, no worries, because Jerry Boyer joins us today to fill us in and give us a whole new reason to be grateful. And then it's on to your calls at 800-525-7000.

That's 800-525-7000. This is Faith and Finance, biblical wisdom for your financial journey. Well, Jerry Boyer is the president of Boyer Research and our resident economist here at Faith and Finance. You can read his insightful columns for World Magazine at WNG.org. Jerry, great to have you back with us.

And always great to be with you, my friend. Jerry, most folks identify Thanksgiving with the Puritans at Plymouth Plantation and how they survived incredible hardships, but are not aware that part of their suffering was self-inflicted. Tell us about that. Yeah, these hardships didn't just happen and they didn't just end arbitrarily. These hardships were the result of bad economic policy.

And that bad economic policy is what we would call communism. The charter that was granted to them when they came here to form Plymouth Plantation required communal handling of property so that nobody owned their plot of land. You know, the men all worked all of the land and the women all cooked for everybody.

And so in essence, I mean, you know, it's a communal family almost. And what happened is exactly what you'd expect, which is that people who were strong and healthy didn't work because they knew they were working for somebody else. And people started making excuses. And the women would always say, I'm too sick or I'm too tired, you know, to cook the meal because they didn't want to really cook a meal for somebody else's husband or for somebody else's children. And the men didn't want to work the land for other people. And so that's what led to the starvation that is the privation that we hear about the tough times that the Puritans went through.

It wasn't just, you know, just sort of the, quote, bad luck of bad weather, but it was, in fact, bad economic policy. Jerry, some commentators have said that's revisionist history. How do we know this is true? Because they wrote about it in Plymouth Plantation.

William Bradford admitted the mistake. So the only primary sources we have here all describe this. I think revisionist history is just history that some people don't like. So I remember debating with Jared Bernstein, who was about to go to work for the Obama administration on this. He didn't know this story, so he thought it must have been made up. But it's based on primary sources.

We know that this happened at the time that that plantation was formed. The kind of the hot idea back in England among intellectual elites was based on the philosophy of Plato and Plato believed in a communistic system. So they were just doing the best thinking of the time. They were just following what the expert economic thinking was at the moment, which is it'll be more efficient if everybody owns everything. Of course, that's not efficient.

That's extremely inefficient because it doesn't take into account human nature. So they realized their mistake and they essentially went against their charter and they decided to parcel out land so that people own their own little bits of land. And they worked it for themselves and for their family. And it's interesting when they did that, William Bradford saw it as explicitly moving away from what he called, quote, the conceit of Plato.

The conceitedness, the arrogance, the pride of the philosophy of Plato in order to embrace the wisdom of Moses, which we find in the Ten Commandments, which include thou shalt not steal, which is the foundation of private property. So they understood that they had been following pagan economics and that they needed to go back to biblical economics. And when that happens, everything transformed overnight. People would go out. Men would go out and work the fields and even the women would come out and bring the children and say, we're going to work the fields to women who wouldn't even be willing to cook the food. Now we're out there helping in the field because they had gone through a tough time and now they were working for their family's benefits.

And it's amazing how what fathers and mothers will do for the love of one another and for their children in an economic system that allows them to care for those that they love. And by the way, that's something I think we need to talk about a little bit, which is there's a strong tendency to think about focusing on economic productivity as selfish. Fascinating.

All right. When we come back, we'll continue our conversation with Jerry Boyer today. We'll talk about the founders and God's providence and putting those uniquely gifted people together in one place and time to forge the Constitution and how that relates to our economy today. Much more with Jerry Boyer just around the corner.

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So find an option that fits your unique needs. It's available on desktop or mobile. Simply go to FaithFi dot com and click app to get started. Great to have you with us today on faith and finance. Well, as we head toward Thanksgiving, we're joined today by our resident economist, Jerry Boyer, president of Boyer Research. He's taking us back to that first Thanksgiving to help us understand the economics behind the pilgrims and the Puritans there at Plymouth Plantation.

Jerry, what you were sharing perhaps may be a surprise to some. Just recap that for us and then tell us how that intersects with the very first Thanksgiving that we'll be celebrating here very soon. Well, the settlement of Plymouth, which is called Plymouth Plantation, had imposed on it a system of communism. Meaning that property was held in common and that men would all work the whole field and women would cook for the whole community, rather than men working their part of the field for their family and their wives, cooking for them and their children.

And that what happened is human nature being what it is. The men didn't work and the women didn't cook. And everyone made a lot of excuses. And so there was a shortage of food and they went through their provisions and they starved.

Eventually, they decided that they were going to go in a different direction and they threw off what they saw as the pagan philosophy from Plato of communism and embraced the biblical philosophy of Moses, which holds to private property. When that happened, then they went from starvation to abundance. So that's the recap.

Yeah. And where does that then intersect with the story that we're celebrating at that first Thanksgiving? Well, that's what they celebrated. They celebrated the abundance that came when they moved from a communistic system to a private property system. So they had good harvest because they were working hard. They started trading with the Indians. The Indians would share ideas with them.

So there's another capitalist thing there. The idea of trade between people of different tribes. Instead of enmity between settler and Indian, they could share ideas with one another about what's the best way to farm here.

And oh, here's some technology that we have. So there was a mutually beneficial exchange. And then they had abundance and that was their Thanksgiving. They were thanking God for the abundance. But it's not just that abundance comes directly from God. God also gives us the abundance of wisdom that tells us how to properly order an economy. So the first gift that they needed to get from God wasn't the harvest. The first gift that they needed to get from God was the private property system that we find in the Ten Commandments. The wisdom from God then led to the abundance in the field.

Yeah, that's really helpful. Now, Jerry, of course, several other countries have Thanksgiving-like holidays, but ours is rooted in American exceptionalism, isn't it? Yeah, it is, because I think maybe partly because we had this early experiment with communism, we learned in a very painful way about it. But I think the thing that's most exceptional is that William Bradford was a thoroughly committed man of the Bible. In fact, a lot of his writings were in biblical Hebrew.

He would keep his diary in biblical Hebrew. That's how biblically entrenched they were. And so they they had something to turn from.

In a lot of European countries, they see socialism not working. But they say, well, I guess we'll just muddle through or we'll just blame business or whatever. But in this case, they had a better way presented to them because they were saturated in the Bible. The real tragedy is that this was lost. This is a story that schoolchildren would learn for hundreds of years in America. But something has happened, I don't know exactly when, maybe three or four generations ago, where this was dropped. So that when I happened to talk about this story on CNBC with Larry Kudlow in 2008, I was on there with an economist who was about to join the Obama administration as then Joe Biden's chief economist. And he had no idea of this story.

And he thought I was making it up. That's tragic because they went on to repeat the conceits of Plato. They went on to nationalize banks. They went on to nationalize auto companies.

And we actually had economic stagnation, some of which is still with us to some degree. So it's you know, it's one thing to have a tragedy. It's another thing to forget the lessons and repeat them once again. Well, we need these stories to be told again, especially by people in authority.

That's right. I'm glad you're reminding us of them today. All right, Jerry, let's move on then to the founders. You know, the image of the nation's founders has been, well, bashed in recent years, unfortunately. Do you see God's providence in putting those uniquely gifted people in one place in time to forge the Constitution?

I do. And I also see the Providence leading up to it, because this thing that I just talked about, the Puritans really did have an ambiguity about commerce and about the free market system. So they started out with a communistic system and then they moved to basically free market farming. But they were still negative about other forms of commerce, technology, trade, you know, shipping, things like that. They they they saw that as not really being genuinely economically productive. So there's a process of about 100 years where people who are in finance and trading are being accused of not really being biblical in their economic system. Some of them were excommunicated, in fact, and then they would offer defenses in their excommunication trials. And over a period of about 100 years after this, the colonialist, the Puritans gradually come to reconcile their theology with a free market capitalist system, not just for farming, but for everything, for investments, for trade, for finance.

And that happens basically. That's just about done around the time that someone like Benjamin Franklin is growing up. You know, he's kind of he was sort of the oldest of the major founders. So that influence, that theological shift takes place just in the right time before the war for independence and the creation of our own free market private property based system as found in the U.S. Constitution.

Yeah, that's helpful. So then how would you compare that economy at our founding to what we have today? Well, we've drifted far, very far indeed. And in some ways, our economy now is a great deal more like the economy of George the Third that was imposed on us that we saw as tyrannical. The amount of economic control, the level of taxation, the really the lack of representation. I know technically we have representation in Congress when it comes to tax policy.

But when you have such an incredibly complex tax system, it's essentially lobbyist driven. He sent forth his officers to harass us and to eat out our substance is what we said in the Declaration of Independence about the King of England. Well, now our kings are here in Washington, D.C. So we have backslidden in some sense to before 1776, where we are now something more like the tyranny that we rebelled against. Now, I'm not calling for this same solution.

It's different now. Don't I'm not saying anyone should pick up their musket and start suiting at the IRS. Quite to the contrary. We don't need to do that. We have the electoral process. We have cultural change process.

We have evangelism. We have the ability to make our case in the public square. So this rebellion, I think, is more an intellectual rebellion against the bad ideas. They were imposed by London on us. Now they're imposed by Washington on us.

Well, the reaction is to go back to the lessons lost, which are really found in the Bible, which in economics is very much focused on private property as opposed to government control. And we just need to persuade again. That's the job in every generation to go back to those basics and persuade again and again and again in order to be free. And so, Jerry, to head back to that biblical economy, we need to repent. We need to pray. We need to engage and show up. I mean, is that what you're advocating? Yes. And I'm also advocating we need to change ourselves because most of the people listening to us right now are Christians. Right. So we can be economically productive and we can tap into that part of communism that is is falsely adopted, which is the idea of sharing. See, the problem with communism is the compulsion of sharing.

But to the degree that we don't share with one another as Christians, to that degree, we leave a vacuum into which the state tends to try to come in and solve the problem. Well said, Jerry, we're going to have to leave it there. Thanks for stopping by, my friend. Happy Thanksgiving. My pleasure. And to you and yours. That's Jerry Boyer, president of Boyer Research and our resident economist. All right. Your calls are next.

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How are you using God's resources? We're talking about it and the lines are open to take your calls and questions. 800-525-7000 is the number to call.

Let's go to Dothan, Alabama. Hi Ann, go right ahead. Yes, I had a question. I'm 72 years old. I'm on a fixed income with Social Security and I draw a little bit more from my husband who's passed away. And I have to start receiving some income from annuities.

I have three. I was wondering if that is going to cause a tax problem. I don't file taxes right now. And is the IRS going to be looking at anything over a $600 deposit to my bank account? I see.

No, that got pushed back and that actually has to do with what you do through some of the payment, not processors, but the payment platforms like Venmo and others. But essentially, you have an IRA and you're rolling it to an annuity or what's the status of your account? Well, I've had an annuity for years and now I have to start withdrawing from it. One of them is an IRA. I have a Roth and I have a non-qualified or something.

And I don't know if the income from that would cause me to have to pay taxes. Okay. Did you say it's a non-qualified annuity? I do have one that is a non-qualified annuity and then I have a Roth and then I have an IRA. I have three of them. Okay.

All right. Yeah, so if you have a, you know, a withdrawal from an annuity is typically going to be taxed as ordinary income. And so in just about every case, that would be the way that you would treat that. And so the interest or the earnings are taxed as ordinary income. You won't pay taxes on the premium or the principal you initially deposited. And there'd be a calculation to determine what was a return of premium or principal versus what was, you know, interest paid out. And again, coming out of an annuity, it would be added to your ordinary income and then taxed at your marginal tax rate. Withdrawals from a Roth IRA, as long as it's been in there for at least five years, you're not going to pay any tax on that. Both the original contributions, which were after tax contributions, but then also the gains are going to be tax free.

So you would likely pay, you know, ordinary income tax on all or a portion of the withdrawals from the annuity, just depending on whether that was non-qualified or qualified money going in. Uh huh. Okay.

All right. Well, will they send me, will the company send me like a tax form? Yes. Yeah, they will.

So they'll, based on your withdrawals, they will send you a tax document at the end of every year showing exactly what was distributed and then you would pass that on to your CPA. Okay. Okay. All right. Sounds great. Okay.

And by the way, you're welcome. And I will just mention the, uh, you know, the IRS postponed the implementation of that $600 rule where, uh, you know, any, uh, $600 in aggregate payments through a third party, uh, you know, payment system would have to be reported to the IRS. And depending on what type of transaction it was, it may or may not be taxable and you'd have to be able to justify that that was delayed. So that's not in place now for this tax year, but we'll see kind of where that goes in the future. The Biden administration has kind of backed down on that just because it's been, uh, there's been a lot of folks that have been, uh, just concerned over how that would be implemented and then the amount of documentation that would be provided. And, uh, you know, what that would do to, you know, taxpayers who were, you know, selling goods, uh, you know, maybe selling a used couch or something through, uh, one of these, uh, platforms and, you know, having to now pay taxes on that.

So anyway, we'll see how that progresses, but that is not something that's in place currently. And we appreciate your calling today and thanks for being on the program. Uh, let's head to Noblesville, Indiana. Hi, Charles. Go ahead.

Yes. Rob, thank you for taking my calls. I have an annuity. I'm in my 70s and retire. I have an annuity for around 50,000. And I was wondering about, because some company asked me about changing this to a precious metal IRA. And could I change it to a metal IRA, uh, since I'm already retired and in my 70s?

Yes. Uh, yeah, you have the option to, uh, in a role, an IRA, you could essentially transfer, uh, an existing IRA into what they call a gold IRA. Um, and you know, you would retain that tax deferral, uh, on that account.

Now, I think the question would just be, does that make sense from an investment standpoint, even though it's not a taxable event? And what I would say to you, Charles, there is just be careful, uh, you know, in the sense that I don't recommend overweighting in the precious metals. Um, you know, typical allocation would be to precious metals, 5%, maybe 10% at the most. I understand in the midst of the economic uncertainty, a looming recession, not to mention, you know, sky high inflation and just some of the headwinds we have around the US dollar and our debt levels in this country have a lot of folks concerned. And, and therefore the immediate response is, and you see a lot of marketing around this in times like this that we run to gold. The problem is when you look back historically, all those, you know, gold is a store of value. It's just doesn't have the performance and it has more volatility than a properly diversified stock and bond portfolio.

And so I think for that standpoint, from that standpoint, overweighting in gold, although it kind of make, may make you feel better temporarily, especially while there's heightened uncertainty and concern, you know, it just longterm doesn't pay. And so, uh, I would much rather you, you know, be positioned in a, in a heavily bond focused portfolio because as interest rates fall and they will begin to fall next year, uh, because we're going to need to stimulate this economy. Uh, whether we hit a mild recession or a deep recession or we skate by, we're going to need to stimulate the economy. And that means the Fed's going to have to bring interest rates down. That means bond prices are going to go up. We've got good yields right now. And so I think if you're looking longterm and even in your seventies, if the Lord Terry's and you're in good health, you know, the data says life expectancy is 83 and clearly you could live into your nineties or beyond. So you still have the ability to take a longterm perspective with your investments.

And I would just make sure you don't get too heavily concentrated in gold, despite all these TV ads that you're seeing all the time. Does that make sense? Yes, it makes sense. Thank you. All right, Charles, we appreciate it. Thanks for being on the program today. Well, folks, we're almost out of time, but I wanted to let you know that you don't ever have to miss a program. Just download our Faithfi app for your mobile device and take us with you anywhere. Thanks for joining us today. I look forward to talking with you again next time on Faith and Finance. Faith and Finance is provided by Faithfi and listeners like you.