From the Easy Chair

Economic Analysis and Bureaucratic Attack on Church

Professor: Dr. R.J. Rushdoony

Subject: Conversations, Panels and Sermons

Lesson: 198-214

Genre: Speech

Track:

Dictation Name: RR161R32

Year: 1980s and 1990s

Dr. R. J. Rushdoony, RR161R32, Economic Analysis and Bureaucratic Attack on Church, from the Easy Chair, excellent colloquies on various subjects.

[ Rushdoony ] This is R. J. Rushdoony, Easy Chair number 121, March the 28th, 1986.

This evening I have with me James Flanagan who is a commodity broker in Los Angeles.

Jim, it is good to have you with us.

[ Flanagan ] Nice to be here, Rush.

[ Rushdoony ] One of the things that has been quite different in the 80s has been this. Up until now all your conservative economic forecasters have been forecasting almost identically one with the other. But in the 80s it is almost amusing how much they vary and how little agreement there is between your classical economic perspectives with the various economists. What is the reason for that?

[ Flanagan ] Well, there really is a diversity of opinion. You see it most prevalently in my business, in the news letters and professional analysts. And if it seems like the professionals are pretty confused, just imagine how the people that read these news letters feel. They really feel like they are... many of them get two, three news letters and get these diverse opinions and they do not know what direction to take. On the one hand they may be getting an inflationist giving an inflationary argument and then, of course, there is the deflationists which have capitalized on some of the markets and not capitalized on other of the markets. So it really is a time that independence from economic thought and thinking for yourself is so vital, particularly in these markets. And I find that people that are dealing with the markets from the standpoint of listening to the professionals are running into real problems, because it is hard to stay with a professional’s advice when he is right some of the time and wrong some of the time. And many times they run into the problem of following one individual for positioning a market and then another from getting out of a market.

So in terms of the market people, it is easy for me to speak from. In terms of economists, I have not listened too many of them and that really is the nature of my business. I am a technician as far as the markets are concerned. I don’t deal so much with the fundamentals and to describe that, I don't look at statistics so much, supply and demand things. I simply look at charts and look for repetitive patterns and then I would feel very comfortable in a certain school of analysts there.

So you have a lot of diverse opinions and people coming from a lot of different directions and then, of course, you are in historic markets that are different from anything we have seen for centuries, really and in the last 15 years have been really unique unto themselves.

[ Rushdoony ] One of the things that, perhaps, can be classified as unique is that this is a different kind of inflation since World War II or Roosevelt than ever before in history, a credit inflation. So the economists don’t have a track record for that. And no doubt it creates problems for the people in the market.

You have been involved in television work in connection with the market and also with seminars. What do you find apart from the desire to make money is the most reaction you encounter?

[ Flanagan ] Well, as far as... as people getting involved, I would say this, though, that one trap that a lot of analysts fall in is to trap an investor saying that this is in a completely different environment and that we are somehow in a unique period of history where all of the classical workings of the economy are no long effective. And one thing that I have done is try to go back over history and find similar situations in the past. Much of my research has been looking at similar situations and say, “Where are the parallels today for previous history.” Parallels. And sometimes you go back 60 years, sometimes 120 to see things that are... that are appropriate to the situation. And I have found that while the volatility has increased, although that has certainly been, I think, blown out of proportion quite a bit saying that the ... that the sheer numbers that say the Dow Jones and things like that seem like they are astronomical. They really are similar to situations in the past. So I... I have got to pull back a little bit and just qualify that I don’t think the situation has changed much since, say, World War I or World War II. Some of the things like the sophistical of... of... of, you know, credit and the monetization of debt and things like that have changed certain characteristics, but by the same token, you are dealing with psychological reactions to a market and you are dealing with the basics of human nature which is their hopes, fears, greed and then that gets you into what is important to people, many of it... many times people think they have entered the market strictly for monetary reasons and no other run into real problems. They have real problems, because if that is the key ingredient to their trading and that is what they are trying to do, well, those hopes and fears are going to be aggravated tremendously.

[ Rushdoony ] Now what would you say to a young couple who are facing the economy of the second half of the 80s and are worried as to what they should do? Should they be more conservative? Should they take chances? What do you feel that a young couple should do facing the world today?

[ Flanagan ] It is a little bit difficult to ... from the standpoint that I am single and I am a high risk taker class type individual. If I go out and lose everything I have and I don’t intend on doing that, but if I go out and lose everything it is not going to affect me and certainly I would feel that, well, it is a learning experience and I can come back. So I am not coming.... it is... it is tough to put myself in the shoes of a young couple. But there really has to be an independence of thought. They either have to find somebody that they feel competent and confident in, that they can follow almost wholly or they have to do the work themselves and not necessarily be a trader, because these markets do appear that, well, you have to be a trader. You have got to move in and out of this every six months or every year. You do have to move on a shorter time frame which may be two to three years. And different investments do come into vogue. Right now the real glamour investments are the stock market, interest related investments, things of that nature where, had you positioned two, three years ago you would be reaping the benefits of... of purchasing those markets. And then, of course, the cycle will change where you want to get into asset related things such as gold and silver and the various commodities. So you have to shift.

If I was working myself in a capacity other than I am and I do wear this work full time, I would have to say as a couple you are going to have to align yourself with somebody that you believe in, not only economically speaking, but spiritually and philosophically and go with them 100 percent because you can’t do the type of work that some people can do. And if you have confidence you are going to make it and you are going to make some good money and preserve capital, which is probably the most important thing.

[ Rushdoony ] You and Dan Harris also of Chalcedon have been working on some things together. Do you want to tell us a little bit about that?

[ Flanagan ] Well, briefly, we are on the same track. And I... I have known of Dan Harris through you, Rush, for ... for a couple of years now and we have each been knowing... I had no idea what Dan Harris was involved in and... and approximately four to five months ago I got this fantastic brain storm. Maybe I should call this... this person. And so I called him and actually had little inkling about what he was involved in because one person that we have, a friend that we have in common deals with the same type of market related research that we do. And having called him it was very exciting to hear that we are really working on some of the elemental things in our business that are going just be fabulous and a lot of this is just really... it is dog work and leg work involving getting historical price... historical prices from, you know, years and years back and developing a historic database that says, “Yes, history repeats and by knowing what happened in the markets previously you can get a good handle on what is going to happen in the future.” And so we did have some interchange that way and I called him up to tell him I have got silver pieces from 1833. Most people say, big deal. That is exciting stuff for us. And he called me the other day and said, “I have got IBM prices since the beginning of trading in 1915.” And I was on cloud 12 for the rest of the day. So it is exciting.

And the bottom line on it is it is a love of what we are doing. And I would... I... I wonder what I would do if I wasn’t making any money in capitalizing, you know, monetarily speaking from this I wonder if I would be getting IBM prices from 1915 just for the sake of getting IBM prices since 1915. I wonder about that. I don’t know, but it is... it is a real joy and Dan is just a super, super individual and I haven’t had a chance to meet him in person, but I am really looking forward.

[ Rushdoony ] Well, you will enjoy meeting him. Dan is super.

I have here a chart that Matt... Dan has made of home state mining company shares, prices from 1919 to 1985. Do you want to comment on this rather dramatic chart?

[ Flanagan ] Well, I will say this. Dan has a real problem. I can see that right now. I mean, who wants home state prices from 1919? Perhaps he should seek some professional help. But this is the kind of... the type of thing that we are doing here. And, essentially what we are looking at since gold prices have been fixed since 1932, I guess it was, until the gold window was closed in 1971. You ... we had the problem in the analysis that we do which is looking for repetitive cycles. We had the problem of determining, well, how can we know what gold gets since we only have 15 years of data to go buy? How do we know what the cycles are that predominate in the market? And the next best thing that we could figure was, well, let’s get a gold stock that goes back that has been on the board for a long time. And I think home state has been around since 1879 and see if some of the cycles that ... that show up in home state may also be usable as far as our analysis in the gold. And the jury is a little bit out on that, but it is helpful. And I think some of the picture comes into focus with the long term silver prices that we have.

So we are doing some unique work that very few people are doing and the typical trader’s, say, in commodity futures would look ... it... it would... the typical trader would look at six months of price data, believe it or not. They would go back six months and try to make a... some assertions about what the market is going to do. And in terms of trends and knowing what the trend is, the longer term yearly cycles for the {?} it is vital that we have this type of information and it can be extremely profitable.

[ Rushdoony ] Well, one man wrote a book two or three years ago about gold in which he said that contrary to the common opinion which sees gold as an ... the best hedge in a time of inflation, he says, however good it may be in a time of inflation, it is even better in a time of deflation. And Dan’s chart would indicate something like that, because you have something very dramatic here.

When on February the eighth, 1936, at the depth of the Depression, when what was it? Something like 16 million were unemployed, home state shares hit 544 dollars per share. And on December, 1969 when gold was much higher, 16 dollars per share.

[ Flanagan ] Yes.

[ Rushdoony ] How do you account of that?

[ Flanagan ] Well, from a technical standpoint, I haven’t gone back and... and looked at what happened in home state specifically, whether they had some acquisitions at the time or they... they hit the mother load or... or anything like that, so I don’t know, but it is interesting. There is the common perception that in order for gold to go up you have to have inflation. And this chart would certainly say that that is not necessarily the case. In fact, any times of economic holocaust, which, I think, is, you know, gold is a barometer of economic problems wherever they may lie, whether it is deflation or inflation, this chart shows ... pretty dramatically shows that that is ... is, indeed, what has happened. And much of the bull market really got under way through the 1929, but it... it... it didn't even hiccup through the crash from 29 to 32 and ultimately topped out in 1936. So there is some ... there is a number of premises that many analysts... I would say analysts or forecasters go on that really do need reassessing and it is just this going back in history and proving all things good and holding fast to that which is good, which is vital to market making and really some.. some analysts... analysts get in ... into ... to trouble saying that when there is inflation gold prices have to go up. That may be indeed be true, but it may also be true that when there is the prospect of runaway inflation is when gold goes up. And when that prospect isn’t there, gold doesn’t necessarily have to anything but stay flat. So I ... I... I think it is a prospect of runaway inflation that is going not result in gold, again, resurging and it certainly will in the future. And, in fact, the ... the interesting thing is that, you know, much of the talk has been about silver and how that also is an inflation hedge, a poor man’s inflation hedge. And historically it may not be. So if you are looking for... for inflation or economic holocaust, your... your... your move really should be in to gold and silver has an economic value all of its own and supply and demand do affect that market much more than the gold market does. So there really is some interesting corollaries there and... and it is hard to... to hold stand and fast. You have to keep your mind open and see hopefully what, you know, some clear vision.

[ Rushdoony ] Well, I was around when gold went up like that, so...

[ Flanagan ] You were?

[ Rushdoony ] Yes.

[ Flanagan ] Wow, Rush, that makes you... let’s see, 1936.

[ Rushdoony ] I was at the university then. Well, the reason it went up was, first, there was a depression. And people were getting out of paper. There was the threat of Hitler in Europe and people were abandoning paper currencies for gold. And at the same time, Roosevelt raised the price of gold artificially from 19 something to 34 and then 35, over priced it. So that created a tremendous boost for gold.

Well...

[ Flanagan ] Rush, we are looking for a partner. The wages aren’t good, but...

[ Rushdoony ] Now, how do you see the future, rest of the 80s?

[ Flanagan ] Well, in terms of... of the silver, which I have done extensive analysis on and not everybody likes to hear this, it looks to me that we will see lower prices in the silver until 1991. Now that is... that is in a broad sense. Bear market rallies, sure, but the type of market that we had in 1980 in the silver was of monumental proportions. It is a market that comes along, for example, like in the stock market, the 1929 bull market occurred and it has taken 76 years to see a market and... and I am comparing this year’s market the last couple of years to that type of market, although really this is a very... in terms of percentage moves, the 1929 market, this is not even comparable. But the point I am... on a market like this silver comes along about ever 50 to 60 years and it seems to take 60 years for the market to wring out the excesses of what occurred. So I guess the real argument right now is was Nicolai {?} right about his 54 year cycle. And if he was, then we are in a deflationary period and we may, indeed, not see a market like what we saw in 1980 in the silver for another 50 years. That ... that is... that is a tough one that... that is a little bit more academic in terms of... I am a little more interested in what is going to happen in the next 10 years, rather than the next 60.

But long term cycles do suggest 1991 as final low in the silver and the gold market, as I say, they are… they have divorced each other. We have a silver to gold ratio at about 63, 64 to one. And that is historically... I don’t believe it has ever... I know it hasn’t been that high in this century. I believe in the 1800s it was higher. So there is precedence that we could see that... that silver to gold ratio move back towards 30 to one or whatever is more of a reasonable, well, reasonable, of course, is subjective, but historically normal ratio.

So I would, if I was looking for my self as an investor, if I am looking for a hedge against economic difficulties and problems, I would definitely go into the gold. Interestingly enough, Friday on the silver we did hit the March of 85 low so we are sitting at lows that were put in in March of... of just about a year ago and yet the gold is 58 dollars above that low. So you have a higher bottom in the gold and you have silver is absolutely dead in the water and important strategy in terms of market analysis is you stay with the strong sister. You stay with the strong member of the complex, which means you have to buy the gold as ... as either as an investment or as a speculator. Your emphasis should be on the gold and in that sense we could see the gold market move higher from here and the silver market move lower and continue to move the ratio out.

[ Rushdoony ] Now this may be a curve ball question, but I... I really am interested in knowing something on this. One of the curious facts of economic history is that a market sometimes seems to take on a life of its own, divorced from the world around it. For example, in the German inflation of the early 20s, when it took billions of marks to mail a letter across town, people were borrowing money, lending money, going on in the market without any awareness that the most fantastic inflation to that point in all history was underway and that it was going to bring about a collapse. Everybody thought in terms of today and tomorrow in the market. And very often you see that today. Investors are looking on the short term only in terms of what is something going to do today and tomorrow. In fact, I would guess that this has accelerated in the past 20 years so that instead of shares being traded in limited numbers per day, now everybody is continually turning over their shares. They are speculating rather than investing.

[ Flanagan ] Yes.

[ Rushdoony ] Do you have some kind of observation on that general picture?

[ Flanagan ] Yes, I do. Really the sophistication of the markets, if you want to call it sophistication, it is scary is what it is. What has happened to enable the speculator to speculate on virtually anything and it is geared more towards the short term. And the whole nature of the markets, it really... the change occurred... in the 60s I would have been called a commodity broker. In the 80s I am called a futures broker because of the advent of so many financial instruments as vehicles of speculation. And what that includes is ability to trade in the stock index futures which is simply speculating on which way you think the stock market will go and doing so in an index like the S and P 500 or betting on which way the Dow Jones is going to go. You have other financial instruments which are the interest rate futures, would be the T bills, treasury bonds, euro dollars, of course, we... we have the... the euro dollar market has exploded with ... with American dollars, an ability to speculate on... on these vehicles. Other things, currency fluctuations. We have a currency market that is huge. In fact, the futures markets... now when I say futures for... for those who don’t understand it, what they are, are markets where you can put a small amount of money down and control a great deal of assets and... and that... that generally runs between five and 10 percent of the asset value. We have a situation that is the only comparable time would be 1929 and, of course, the speculation ran so rampant in 1929 that following the bear market they... the SEC was... was instituted and margin requirements were raised to 50 percent whereas they had been as low as two to three percent during the bull market, it wreaked such havoc on the economic situation. They were compelled to come in and change the status quo. Now we have a market 55 years later where we have everything in place in 1920. It makes 1929 look like a stroll in the park. It really does. The ... the ... to use an example, we have the bond market, which I mentioned, which is the largest futures market. It is a treasury bond, 20 year treasury bonds, U S government treasury bonds. And that market alone and it is a future’s market, trades somewhere in the neighborhood of 250,000 to 300,000 contracts a day. And the value of each contract is 100,000 dollars. And I ... mathematically I can’t throw that many zeroes after the number to figure out how much money that is, but they do five to six times the dollar gross in a future’s contract that they do in the cash market.

In other words, you have the cash which should be the foundation is the foundation, it is the... it is the.. it.. it..... it is what is behind the futures market being dwarfed by the futures. You wonder, say, well, is the tail wagging the dog or is the dog wagging the tail. And it is the futures is ... is... is the controlling element here.

Now another example is the stock index futures which came in in 1982 and all of the stock index futures do more dollar volume by a long shot than the stock market does itself. So you do have some very ... and nobody knows what this going to happen. They... they... they say, well, what ... what is the... what is going to be the bottom line? What is the ultimate ... what is going to happen ultimately as a result of this just plethora of ... of... of financial instruments. And... and that is a good question. Additionally, I would... I would just add this, that now they have options on all these futures. So they have taken this to the nth degree and you hear in your newspapers you will hear things like, well, buy and sell programs in the stock market is... is probably the... the buzz word you hear mostly about in stock markets and these large funds buying the... the actual stocks and selling, say, the future’s market against it or unwinding them and it is really not necessarily to... to... know specifically what they are doing, but they talk about buy and sell programs and what they are doing is trying to take advantage of the differences between the futures index and the actual cash market.

So it is... it is awesome. It is really awesome. I think you have to go back. You say, well, where have we seen in history a situation like this? And you have to go to 1929 to see it and what was the ... the result of it and they were not very appealing results. So I think that is looking at it realistically.

[ Rushdoony ] Well, that all brings into focus something I have seen more than once. When I was younger I recall what happened when a woman became a widow. She sat down with someone she trusted who said, “Well, your husband has put his money in some good stocks, some good bonds. I have gone over the portfolio. You can leave things as they are for the rest of your life and you are secure.” Now in a comparable situation the widow is told, “You better go to class once a week...”

[ Flanagan ] Yes.

[ Rushdoony ] ... You had better be in touch with someone you trust so that you can learn what to do and to do it quickly, because the whole market is so volatile. I am almost tempted to say maybe she would better off to get it all and put it under her mattress, except it is worthless paper to begin with and likely to be more worthless before it is over. So it does confirm what you said earlier about the fact that we are in a parallel with 29.

[ Flanagan ] Yes.

[ Rushdoony ] We are in a very dangerous situation, because the widow can no longer relax and be sure that the income is coming in the form of dividends regularly for the rest of her life.

[ Flanagan ] It certainly... and it really has aggravated the situation, but I am not ... I am concerned, but by the same token I look at markets previously in history and percentage moves. In other words the Dow Jones looked like many traders in my firm, many of the old stock brokers that have been around for 40, 50 years and we had some there, say, “I have never seen a market like this before in history,” is what they are saying. The Dow Jones goes 18, it is up 40 points one day, down 30 the next, up another 40 the next day. And ... and I do shake my head. I have gone from the unbiased tact of looking back and percentage wise, we have... this is an average bull market. There is nothing outstanding about it. It is a nice bull market, nice and orderly. It is not unlike things that we have seen in the past.

So, by the same token the volatility in sheer numbers seems great, but volatility and price is... is... there is some normalcy there. So I... I... I will pull back and... and kind of hedge myself in the sense of, well, what are all these financial instruments? What is the ... oh, does it... is it axiomatic that this is going to lead to some kind of a crack up? Well, that is possible, but the financial situation of today says that that isn’t a problem near term. In other words, we are ... the... the structure is not in danger even with what is in place of... of running into, you know, any kind of real holocaust. Although in the future if we run... you know, jump back into inflation, these things are going to aggravate the situation a great deal.

[ Rushdoony ] There are quite a few who feel that we are, perhaps, only a year and a half away from inflation. So possibly we may be very close to that danger point.

Well, Jim, I would like to take another direction now in our discussion and I will begin by referring to one of the favorite passages in Scripture of my wife Dorothy. She likes the rules of warfare whereby before they went into battle the men were lined up and told if any of you have a wife at home and you are newly married, go back to her. If you have a field that you have just bought that needs attention, go back there. If you are afraid, go back. In other words, only those ready to face the battle were to fight.

And I would say the Lord has led us to such a time as this where if we are not ready to face the very difficult days ahead, we had better drop dead now, because we are not going to take what is coming.

You have been in the thick not only of the market, but of a very, very important bit of warfare on the church and state front.

[ Flanagan ] Yes.

[ Rushdoony ] And do you want to tell us about that now, Jim?

[ Flanagan ] Well, I would love to. I guess the... the best thing to do is to set the scene. I go to a four square denominational church in Santa Monica, California and it is located... I have lived in... in Santa Monica, Brentwood all my life, so we are located on 20th street just south of Wilshire. And so things were going swingingly well. We have a school there, a high school and also a week day Sunday school for children that are pre school. And, of course, the ... the distinction of weekday Sunday school as opposed to day care center is something that we started because it is an integral part of our ministry here on 20th in the four square denomination.

At any rate, January 14th what occurred was almost just the pseudo real and it really did wreak of Gestapo type tactics, swat team tactics. We were descended upon by perhaps 20 people involved in both... all the... both the police department, fire department, department of social services and district attorney’s office. And the gist of it was that we were running a daycare center that was not licensed.

Now the scene was absolutely incredible. The ... the... the police came over the roofs and climbed the fences. Now this is in Santa Monica. Some people call it the Republic of Santa Monica and, perhaps, right... rightfully so. At any rate the police came over the roofs. They... they broke into some of the gates and came into the school yard where children were playing. Frightened, to say the least, many of the children. They lined them up against the wall, some o the children apparently were vomiting. They were afraid that they were actually going to be shot. And some of the... the district attorney came in with warrants to search everything to... to take documents into his custody and to essentially shut things down.

And as a result of... they took all the names of the kids, of course. They would not let the parents have their kids without giving up names, addresses, telephone numbers, things of that nature. And how they could do it in such a swat like fashion is anyone’s guess when certainly just one police officer, you know, taken to the front door with the department of social services would have... would have sufficed. But we suspect there are some people behind it that wanted to see us punished for what we are doing which is teaching kids in a Christian way.

[ Rushdoony ] That is Jane Fonda, Tom Hayden country, isn’t it?

[ Flanagan ] Yes. Tommy’s Commies as they call them there.

[ Rushdoony ] Well, what has happened on the court front. They have been indicted?

[ Flanagan ] They have been indicted. Eighteen counts for Ron Norris the pastor and Linda Norris the co pastor 16 counts. They were for things anywhere from... for violations, some of them safety violations, safety code violations. And... and of course we are not against those type of code things being, you know, up to snuff. Anyway, for violations such as not having three quarter inch masks for sleeping, not having enough toilets of diapered children, things of that nature. And... and each of these counts carries with it a possible 500 dollar fine and six months in jail. So 18 counts we are looking at possibly nine years in jail and 9000 dollar fine.

And, as it has progressed, as it has worked out, we are hoping and working to see that ... that the people responsible for this have bit off more than they can chew. And they are picking on a church that is very, very strong, both spiritually and politically. There is a candidate who is running for the 27th district in Congress against Noah Vine named Rob Scribner and he has contacts up in Sacramento and also in Washington. So it has been a process where the Church has gotten out now and said that there is a persecution going on and our key note that we have been going by this is to make noise, make noise, let people know what is happening here. Let the churches know the different denominations and it is not just the four square churches, but let churches around the country know. And bring media attention to this. And, of course, it is happening all over the country and they... people need to know. A lot of times it is these things are suppressed and no one knows what is happening and there are... there are religious liberties are being taken away from under their noses and they don’t even know it.

[ Rushdoony ] This church is, by the way, post millennial and Reconstructionist, is it not?

[ Flanagan ] It is. I have been a member of the church, not a member, but I have been attending the church since November and I walked in the door and, Rush, having been ...listened to you for 10 years and having you as our personal pastor, I have never seen anything like this, an activist church. I walked in the door and sat down and they blew my socks off talking about things from right to life people getting out and talking about pro life issues and, you know, trying to keep people from aborting their babies to people street preaching in West Wood on... on Friday and Saturday nights and ... and bringing... trying to bring converts into the church and getting involved politically, just getting ... making noise and trying to make an impact on the situation. And they are situated in a very strategic location in Santa Monica and people are starting to hear the rumblings.

And one of our elders, Bob Hamilton said the other day he thinks that this is the greatest thing that ever happened was to... to send in by these bureaucrats on our church, because it is bringing to light what is going on and you have to take advantage of it. The... the media attention that we have gotten has been good, tremendous. And people need to know that there is... that these liberties are gradually being eroded and somebody has to make a stand somewhere.

[ Rushdoony ] What about the denominational authorities? What has their reaction been?’

[ Flanagan ] Well, the media attention scares them. They have been low profile in terms of... of... of what they have done over the years and what they feel is that the church should be licensed and their feeling is, well, there has never been any suppression of... of our religious liberties previously, so why should we expect there to be any? And yet as the law reads and... and Title 22 of the California code, state code, safety and health, really is anathema to what we believe spiritually. There are... corporal punishment is out of the question. You are not allowed to spank kids in day care facilities. And even from a philosophical basis they can determine what materials are used to teach your children. And, of course, they do not want the Bible as the foundation. They want their secular humanism as far as curriculum, things of that nature. And it is a matter of, I think the four square denomination saying , “Well, they are really not treading too much on our turf right now. If they ever do, then we will get into the thick of things and get into the battle.” And that is not going to work. You have to build your warriors now and you have to stand for what is right, because even though some of these laws may be inert, they are still written on the statute books and they can be enforced.

[ Rushdoony ] Has the denomination issued any kind of statement or ultimatum to Ron Norris, the pastor?

[ Flanagan ] They did. They... they sent him a letter of termination as far as their pastorship there and the... the building and the grounds are owned by the denomination also the... the.... the house that Ron and Linda stay in. And it came at a particularly untimely period. And here we were coming under the scrutiny of the media as far as some of the... a few of the children having been spanked and... and the parents were... had reported it. And here was the denomination stepping back from supporting us all together and terminating the denomination and we could only think that wait a minute, this is the denomination certainly is situated in Los Angeles and they ... they are the overseers of, perhaps, a billion dollars in real estate in various denominations. But the church is us. We are the church here in Santa Monica. The people are the church, not this building, this old termite infested building. And it... it is just amazing the people that have come to fight with us are the people you wouldn’t expect and the people that have abandoned what we are doing are the people you would expect to be right behind you. So it really has been a fascinating, you know, character type assessment for some of the people that we deal with.

[ Rushdoony ] A like situation took place in East Point, Georgia, another in Texas and there are others well where churches have had the concerted action of a sheriff’s men, the police, a considerable body of armed men descending at times on a handful of women conducting classes so that very obviously the powers that be regard the Christian Church as a major threat and as a key enemy, because they certainly have never moved against the mafia with as many officers as they did against your church and others like it. I am sure there are a lot of mafia men within a stone’s throw all through West Wood and Santa Monica area. But have you ever known of a massive raid on a mafia operation comparable to the raid on the church?

[ Flanagan ] I haven’t. We.... we don’t... It is just... it is beyond our scope of thought to think why they would do what they did. And, you know, what their purpose was in... in doing so. Now we weren’t ignorant of the fact that we were violating the code in the sense that we had idea that they were scrutinizing us and saying, “Get the license,” and we were saying, “We cannot do that.” You know, God forbids it and the Bible forbids it. And ... and, of course, a license what it says is that there is an over and an under and the ability to license is also the ability to prohibit and licensing is the first step in prohibiting a ministry and the weekday Sunday school that we have is just simply it is a ministry of the church. We teach the same thing to our kids at the weekday Sunday school Monday through Friday that we do on Sunday morning. And that is the whole premise. And ... and for... they, of course, the... the people that descended on the church have to have known the situation. They had taken pictures, videos of the school, how the school operated and why they felt they had to come in there with the... the artillery is anyone’s guess and ...and it is really tough to speculate on what the motives were, but there are some people that are very angry with what... what ... with what the Lord is doing in that church as they will be with all Christians that are doing the proper things.

And it is a good sign, I think, that we are doing a ... appropriate things and I hope they have stumbled across a stumbling block that is going to cost them dearly and... and wake the Christian community up. We have got to do it. And the more noise we make, the more the authorities are going to come against us. And we have to expect that. And ... and not say, “Well, why would they do this?” Go ahead and do it. If it is going to get people to wake up and get involved, so be it. And that is the way it has been through history and certainly in the New Testament with Jesus and we just have to expect it and ... and rise up to the challenge.

[ Rushdoony ] These safety regulations, let me say, are so detailed and specific that it is possible to walk into any building and find reasons to shut it down.

[ Flanagan ] Yes.

[ Rushdoony ] In fact, some people have walked into public schools after incidents comparable to the one in Santa Monica and have called attention to numerous violations of the code. It is just a case of nit picking rather than saying, “These are things that need to be corrected. We will give you 90 days to take care of them.”

I know I was in a trial in Texas of a church which was cited because the nursery had a gold fish bowl and there was no veterinary doctors certificate of examination, annual check up on the gold fish. And supposedly all animals on the premises had to have an annual inspection, inoculation or whatever was indicated.

Now the amazing thing is the church lost the case. It is on appeal. I don’t know that they will win the appeal. But this is the kind of thing that is routine across the country. The reason for it is they want to condemn the Christians. Any excuse is good enough.

[ Flanagan ] Yes.

[ Rushdoony ] They don’t see the absurdity in what they are doing because they are in dead earnest. Anything to get rid of these terrible people, the Christians.

And, of course, that is the motive in Santa Monica. Have the members stood firm?

[ Flanagan ] They have. It is ... it is... it has really be an cohesive effort by the members. For instance, the.... the hearings that have occurred we have had the... the entire church group down her with signs and... and what have you. We have crowded the court rooms at, I believe, one day it was raining and everybody had gone in there. Financially some help has been forthcoming and a lot more needs to... to come out. Today the news just broke that we are ... we have signed on Howard Weismann who was the... the lawyer in the Delorean case for his drug ... drug case. We just signed him on to ... to work with Ron and Linda and getting the... the charges dropped. And whether there will be a counter suit we don’t know, but some of the... the parents with children in the school are talking about some... some mental anguish. Some... many of these kids had nightmares for days. Some have... have... others couldn’t sleep. Others were wondering whether the police were come back. They had their gun, their holsters, their guns apparently were unbuttoned, some of them. And they came... and so it is... it is... it really is incredible.

[ Rushdoony ] I believe a counter suit would be good, because too often they have been moving in and terrorizing Christians, locking churches and doing this sort without anything being done. Now that Christians are beginning to hold these deputies and police officers and other state and local and federal officers responsible, it is making some of them think twice before they start pushing people around.

[ Flanagan ] Yes.

[ Rushdoony ] So I do hope they will go ahead with it, because injustice should not be tolerated.

[ Flanagan ] Yes.

[ Rushdoony ] Even though it is difficult to win in the courts, it still is way of getting them, because they don’t like being forced to defend themselves. It isn’t cheap.

[ Flanagan ] No I... and I hope that they ... I pray they... they picked on the right church. I think they did. They could have picked a lot of churches and they have really got themselves a problem. Some of the other positive elements that are ... that are... are occurring now. We do have a bill that has been attached up in Sacramento to by H. L. Richardson as backing this. And we are looking to get the legislation passed that will ... that will, you know, omit day cares, Christian day cares from the... the licensing process so that will be on the ballot and we will see how that goes, but it is... it is... it is a starting... it is a scratching of the surface. These things have to... most people don’t even know what Title... how Title 22, the safety regulations rate. And it is a... it is a horror story when you dig in and you read these 50 page manuscripts of laws and regulations that nobody takes any time to read.

[ Rushdoony ] Yes. If, as I indicated earlier, you would take those regulations and apply them to any city, state or federal agency, you could shut them down. And that is the purpose of these detailed regulations. There are always enough things in such rules to enable you to shut down anything you want to shut down.

This is why the letter of these laws is against the spirit in which they are intended. They are intended, supposedly, to protect the public. But in reality they do nothing but harm. It is ironic that not too far south of your church’s situation there has been a case of a ... a day care facility, licensed by the state of California, one which received all kinds of awards and now they are in court for child molestation of a very serious wholesale nature.

[ Flanagan ] Yes.

[ Rushdoony ] And the number of licensed facilities involved in child abuse, in sexual abuse of children is legion. But this doesn’t seem to change these people who advocate controls and licensure, because it isn’t Christian faith they believe that makes a place good, it is their rules and regulations.

[ Flanagan ] Yes. It... it really is amazing. We are not averse to building codes, fire codes, those type of things, certainly we have to abide by and that is important. The children are protected. But, in everything from accreditation to licensing doesn’t change the people and the principles involved in the school. They... because they have a license doesn’t change them as individuals. If the kids are abused, they are going to be abused regardless of whether they have a license. So it... it really is ludicrous, but it is... it is a war.... it is... it is... there is a war out there and it is a war against the Church and it is a war we have to win.

[ Rushdoony ] Yes. If we don’t, we will be in the same position as the Soviet Union. Legally this is the direction we are taking, a total control and ultimately abolition of the Church and of Christianity.

I don’t see any difference in the hostility of these people and those of the anti God people in the Soviet Union. The only difference is we don’t have the laws to accomplish all that those people can do.

I think there are a great many people in local and federal government who if they could go back to the days of Rome and throw Christians to the lions they would. They hate Christ and they hate Christianity. They hate the Church. They hate everything we stand for and their venom is incalculable.

[ Flanagan ] It is. We... we have to pray for these people.

[ Rushdoony ] Yes

[ Flanagan ] Their hearts have to be changed and ... and prayer is so important. It is one thing to get out and... and, you know, to work for the Lord, but we really have to, you know, get down and ... and relationship with him to find out what he wants to do. And these people’s hearts have to be changed for victory and... and I think they will be. But it is going to take a very large effort and that is... it is important that spiritually, you know, we work through God also. And... and, you know, listen intently on what he wants us to do here.

[ Rushdoony ] Have any people left the church since this began?

[ Flanagan ] Well, I... I guess this is before my time. The real purging in the church occurred two years ago from what I understand and that is when the church got involved politically and said we are not going to abide by this, you know, separation of church and state. We are going to get some Christian leaders in... in government and we are not going to ... we are not going to take this. And a lot of people took offense at that and apparently the church was... was halved from what I understand. But as far as the people that are there now, these people are... are a real strong hold and behind the church and Ron and Linda 100 percent and ... and I feel very glad that I am, too. I... I just... I think that it is... it is just tremendous. It is a ... it is a great honor, in a sense, to attend a church and people that are so, you know, so active. And they really are. There is no sitting around and saying, “Well, abortion, it is inevitable and it is the law, you know. To heck with it. We will let it all go.” We have got to get out there and change the law. And that is just one. And there is many of them. And I think all the members in the church feel that way. And I know they do and there has not been a rift in the church. If anything it has worked as a kind of a cohesive type thing that has brought people together for a common cause. And one that is important. And sometimes we ... we just live in a world that is most all of us... it is just the lap of luxury and it is easy to say, “Well, you know, the state is making some small in roads on our individual liberties and religious liberties and it is no big deal and we will be there when it... it matters.” But this is the... it is important right now. And it is ... it is vital right now. And I think the people in the church, our church, realize that and are taking the necessary steps and... and the ... the gravity of the situation is something that I pray the Lord will just keep impressing upon me, because it is a grave situation.

[ Rushdoony ] I think one thing that needs to be stressed here is that cases like this are taking place all over the country and all of us need to be involved. We need to pray for these persecuted peoples. We need to attend the trials and lend our moral support. We need to contribute to the legal defense of these people, because a trial costs a great deal.

[ Flanagan ] Yes.

[ Rushdoony ] It takes from 50 to 100,000 the first step, just in the local court. And with appeals it mounts astronomically. So this makes it an expensive proposition to defend yourself, but if we don’t, we will be destroyed. As a result, I do feel that everyone who hears us should be ready to support those in their area who are persecuted, to support the Rutherford Institute which is fighting these cases all over the country. And to be in prayer about the man cases now in court all the way up to the Supreme Court level.

[ Flanagan ] Amen.

[ Rushdoony ] Our religious freedom is very, very seriously threatened in this country. I could go on about the cases that I personally am involved in, but there isn’t the time. Our time, in fact, is just about over. And so that if you have a last statement you would like to make, Jim, this is the time.

[ Flanagan ] Well, Rush, I would just like to say it is a real pleasure to... to have this type of ministry to get out to people and I really appreciate being able to ... to speak with you and... and, I believe, some of the issues that are important with each of the individuals that you... you have on the tape ministry you know, getting people to understand this and getting the word out is the biggest thing and it is funny how with our church it really is a leveraging thing. And when you can get two people to become as active as you are in making noise, it can really be a leverage thing and it is like a pyramid scheme. And what has happened in our church, it is a small church of 150 people, but it has reached out to thousands and thousands of people, just by the efforts of each of those individuals in there. And you have to... to... to look at it that you as an individual can be effective and o something. You really can. You have to leverage your time through people and take the time to explain to people what is happening, why, what are the laws and what they can do about it.

And in so doing you can make so... so much noise that you will cause the bureaucrats fits and that is what is happening with us. We need to make... we need to make a lot more noise and... and focus people’s attention, but, you know, it is easy to say, wow, there is nothing we can do. There is thing we can do right now and we need to do them.

[ Rushdoony ] Yes. There is another church, a sister church to yours, not too many miles away with five or 6000 members which is no threat to the state because all it is interested in is pious gush. And yet your little group is a threat to the powers that be in ways we haven’t even gone into tonight because of their political involvement.

[ Flanagan ] Yes.

[ Rushdoony ] But because they are shaking up people. They are saying, “You have got to make a stand for Christ in education, in politics, in every sphere.”

Well, as we relate our fait to the whole of life, we are going to frighten the powers that be.

[ Flanagan ] Amen.

[ Rushdoony ] ... because the power of the Lord is with those who make a stand.

Our time is up. It has been good to have you with us, Jim. And I trust all of you who are listening will make these matters a matter of prayer and effort on your part. Thank you and God bless you all.

[ Voice ] Authorized by the Chalcedon Foundation. Archived by the Mount Olive Tape Library. Digitized by ChristRules.com.