Category: Acton Occasional Series

children-600pxWhat is the “border crisis?”

The “border crisis” is the frequently used term for the spike in unaccompanied minors who were caught illegally crossing the border U.S. border over the past few months. According to the Congressional Research Service, the number of unaccompanied alien children (UAC) arriving in the United States has reached alarming numbers that has strained the system put in place over the past decade to handle such cases.

In 2013 the federal government housed about 25,000 minors who were going through deportation proceedings. This year, that number is expected to rise to over 60,000. There has also been an increase in the number of UAC who are girls and the number of UAC who are under the age of 13.

What countries are the minors coming from?

Four countries account for almost all of the UAC cases (El Salvador, Guatemala, Honduras, and Mexico) and much of the recent increase has come from El Salvador, Guatemala, and Honduras.

In fiscal year 2009, Mexican UAC accounted for 82 percent of the 19,668 UAC apprehensions, while the other three Central American countries accounted for 17 percent. By the first eight months of FY2014, the proportions had almost reversed, with Mexican UAC comprising only 25 percent of the 47,017 UAC apprehensions, and UAC from the three Central American countries comprising 73 percent.

Why aren’t UACs turned away at the border?
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comparativeadvantageNote: This is the latest entry in the Acton blog series, “What Christians Should Know About Economics.” For other entries in the series see this post.

The Term: Comparative advantage

What it Means: The ability of an individual or group of individual (e.g., a business firm) to produce goods or services at a lower opportunity cost than other individuals or groups.

Why it Matters: There is a story of the distinguished British biologist, J.B.S. Haldane, who found himself in the company of a group of theologians. On being asked what one could conclude as to the nature of the Creator from a study of his creation, Haldane is said to have answered, “An inordinate fondness for beetles.”

When we examine creation to uncover what it reveals about the character of God, one of the things we discover time and time again is the Creator’s fondness for diversity. Like Haldane, we can see this by looking at biology (e.g., there are more species of beetle than birds or mammals combined). But we can also find it when we turn to economics.

A primary example of God’s enthusiasm for diversity is the concept of comparative advantage. While the definition of the them makes it sounds dull and wonky, comparative advantage is a beautiful, theologically profound norm of creation.

Fully appreciating the nuances of the ideas requires timely reflection. But understanding it can be achieved when a few minutes. In this brief video, economist Donald J. Boudreaux does a masterful job of explaining how, when combined with trade, comparative advantage improves human communities.
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7figuresLast week the Census Bureau released a report on demographic changes in the United States. The median age declined in seven states between 2012 and 2013, including five in the Great Plains, according to U.S. Census Bureau estimates. 

“We’re seeing the demographic impact of two booms,” Census Bureau Director John Thompson said. “The population in the Great Plains energy boom states is becoming younger and more male as workers move in seeking employment in the oil and gas industry, while the U.S. as a whole continues to age as the youngest of the baby boom generation enters their 50s.”

Here are seven figures you should know from the latest report:
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7figuresLast week the State Department released the 2014 Trafficking in Persons Report, a congressionally mandated report that looks at the governments around the world (including the U.S.) and what they are doing to combat trafficking in persons – modern slavery – through the lens of the 3P paradigm of prevention, protection, and prosecution.

Here are seven figures you should know from the latest report:
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7figuresEvery year the Bureau of Labor Statistics releases the American Time Use Survey (ATUS), which measures the amount of time people spend doing various activities, such as paid work, childcare, volunteering, and socializing.

Here are seven figures you should know from the latest report:
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MoneyRoll

Note: This is the latest entry in the Acton blog series, “What Christians Should Know About Economics.” For other entries in the series see this post.

The Term: Money

What it Means: In economics, money is a broad term that refers to any financial instrument that can fulfill the functions of money (more on that in a moment).

There are three basic ways to exchange goods and services: gifting (e.g., I give you a banana, expecting nothing in return); barter (e.g., I give you a banana, in exchange you give me an apple); by using money (e.g., I give you a banana, in exchange you give me $1). Money was invented (and reinvented in every culture) because it makes exchanges easier than the barter system.

What Money Is: Money is a shared belief system used to simplify exchanges of goods and services. To be used as money people have to share a belief that the item —whether paper, gold, rocks, etc. — can perform three main functions: be a store of value, be used as a unit of account, and serve as a medium of exchange.

In the next section we’ll examine these functions. For now, here are two examples of how money serves as a shared belief system:
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ISIS-syriaWhat just happened in Iraq?

Conflicts in Syria and Iraq have converged into one widening regional insurgency and Iraq risks a full-scale civil war after an al-Qaeda-linked militant group called ISIS quickly seized a large section of the country’s northern region. The group has already taken Mosul, the country’s second largest city, and is within striking distance of Baghdad.

Insurgents stripped the main army base in the northern city of Mosul of weapons, released hundreds of prisoners from the city’s jails, and may have seized up to $480 million in banknotes from the city’s banks.

Government forces have stalled the militants’ advance near Samarra, a city just 68 miles north of Baghdad.

How did ISIS take control of Mosul?

The short answer: the Iraqi army ran away. Iraqi officials told the Guardian that two divisions of Iraqi soldiers – roughly 30,000 men – simply turned and ran in the face of the assault by an insurgent force of just 800 fighters. Senior government officials in Baghdad were equally shocked, accusing the army of betrayal and claiming the sacking of the city was a strategic disaster that would imperil Iraq’s borders.

Who is ISIS?
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unemployedNote: This is the latest entry in the Acton blog series, “What Christians Should Know About Economics.” For other entries in the series see this post.

 The Term: Unemployment

What it Means: If you consult a dictionary, you’ll find a number of commonsensical definitions for unemployment: the state of being without a job; being without a paid job but available to work, etc. But like many other economic terms, the dictionary definition can vary significantly from how the term is often used. For example, since your teenage daughter, your neighbor’s stay-at-home spouse, or your retired grandfather are without a job, are they considered “unemployed”? In each case the answer is the same: It depends.

According to the federal government, to be unemployed a person must (a) be jobless, (b) looking for a job, and (c) available for work.

People are considered employed if they have a job (whether temporary, part-time, etc.). People who are neither employed nor unemployed are considered to be not in the labor force.

In America, the labor force consists of all persons 16 years old and over who are not serving on active duty in the military and are not confined to institutions such as nursing homes and prisons and either have a job or are looking for work. The labor force is made up of both the employed and the unemployed.

So unemployment refers to anyone who doesn’t have a job, wants one and is available to work, and is actively looking for work. That last part is particularly important because “discouraged workers” are not counted as unemployed. (See below for more on discouraged workers.)
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coal_power_plantWhat is this latest news about an EPA rule change?

On Monday, June, 2, the Environmental Protection Agency (EPA) issued a proposed rule change on “emission guidelines for states to follow in developing plans to address greenhouse gas emissions from existing fossil fuel-fired electric generating units.”

Specifically, the EPA is proposing state-specific rate-based goals for carbon-dioxide emissions from energy producers (mostly from 600 coal-fired power plants) and setting guidelines for states to follow in developing plans to achieve new state-specific goals.

Is this is an important change?

According to the New York Times, if implemented the change “could close hundreds of the plants and also lead, over the course of decades, to systemic changes in the American electricity industry, including transformations in how power is generated and used.”

How would the rule change work?

States will be required to develop their own plans based on a range of policy options to meet the new stringent goals. They can replace their current systems with wind or solar or join state and regional “cap and trade” programs, that allow states to cap carbon emissions and buy and sell permits to trade those limits with other areas. If they don’t come up with a plan themselves, the EPA will impose one on them.
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economyNote: This is the latest entry in the Acton blog series, “What Christians Should Know About Economics.” For other entries in the series see this post.

The Term: ‘The Economy’ (aka Gross National Product)

What it Means: When people refer to “the economy” they are usually referring to a particular idea—Gross Domestic Product (GDP)—which is itself simply an economic metric. GDP is often used as a single number that “measures” the economy. Imagine you wanted to put a price tag on the value of all the final goods and services produced by every sector of the economy (all of the crops grown, all of the lattes served at the coffee shop, all of the hours billed by lawyers, etc). The total number you’d put on the price tag is the GDP.

Why it Matters: Humans have seemingly unlimited wants and needs—but a limited amount of resources. This is known as scarcity, and it’s the fundamental problem in economics. The primary way we solve this problem is through market exchanges: you make something I want or need and I give you something you want or need in return (we do this indirectly through the use of money). The occurrence of all of these exchanges is what we call “the economy,” which is why we can use the metric that measures the sum of all of these exchanges—GDP—as a synonym. When we say the economy is growing/shrinking, we are saying the total value of the goods and services being exchanged (GDP) is increasing/decreasing.

An economic unit (whether a family, country, etc.) is generally better off when everyone is able to meet all (or nearly all) of their material needs and many of their material non-necessary desires. That is why economic growth is so important. While the issue is complex and requires some nuance to fully explain, the simplistic answer is that economic growth matters because people continue to have babies.
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