Category: Economic Freedom

trump-carrierRecently, when asked if intervention by the White House into private enterprise was presidential, President-elect Trump responded, “I think it’s very presidential. And if it’s not presidential, that’s okay … because I actually like doing it.”

Writing for the Library of Law and Liberty, Greg Weiner asks, “On what authority is the President of the United States pressuring, which is to say intimidating, the leaders of private enterprise to determine where goods are made and sold? Answer: sheer personal will. ‘I actually like doing it.’” This is a serious threat to the Constitutional rule of law, notes Weiner:
(more…)

In a new article at The Christian Science Monitor titled “Can ‘economic nationalism’ keep more jobs in US?” Acton Director of Research Samuel Gregg is interviewed about President-elect Donald Trump’s stated goal of keeping jobs and businesses from leaving for foreign countries. In the analysis piece by reporter Patrik Jonsson, he cites Gregg as a critic of protectionism:

In short, the United States cannot step back from the world without losing out, critics say.

Trump’s plans are in the short-term “likely to have some benefits for some local communities, but in the long term no amount of protectionism is going to stop you from losing your competitive edge,” says Samuel Gregg, research director at the Acton Institute for the Study of Religion and Liberty in Grand Rapids, Mich. “At the moment, the pendulum has shifted toward fixing an immediate problem … but those programs will all have to be wound back precisely because they’ll cause inefficiencies.”

Acton Institute Director of Research - Samuel Gregg

Acton Institute Director of Research – Samuel Gregg

This is not a surprising position for Gregg.  He has been a consistent advocate for free trade and whenever possible has opposed the ideas of protectionism and crony capitalism.

The author closes out his article by quoting Trump’s adviser Stephen Moore, who says this: “Trade and immigration are unambiguously good for the country – but it will have to be done in ways that are supported by the American people, not shoved down our throats by the elites.”  While this is an appealing statement, it comes across in a way that portrays Trump’s economic populist ideas as willing to accept the harmful long-term effects for the short-term benefits.

You can read the full article at The Christian Science Monitor here.

Blog author: KHanby
Wednesday, November 30, 2016
By

“An underlying theme in basic economics says, ‘offering a product for free can destroy the local economy’” writes Luis Miranda.  Miranda recently watched Poverty, Inc and since seeing the award winning Acton Institute documentary he has shared some of its lessons in an article at The Indian Economist.  He begins by explaining how often times aid can harm its recipient more than help them.

A farmer in Rwanda goes out of business because he cannot compete against an American church sending free eggs to feed starving Rwandans. A rice grower in Haiti stops growing rice because he is unable to compete against very cheap rice coming from rich farmers in the US who receive huge subsidies. A local cobbler goes out of business in Africa when TOMS shoes land up in the village and are distributed for free.

In all these cases, the donors had honest intentions. The American church wanted to feed starving people in Rwanda. The US government wanted to feed the disaster-stricken Haitians. Blake Mycoskie, the founder of TOMS, genuinely wanted to help Africans who did not have proper footwear.

Miranda continues to share key takeaways from Poverty, Inc.  Next he shares how although aid can appear to be effective in the short term, it can create negative effects in the long term. (more…)

Growing up, I attended a private, Christian school until 4th grade, when my mother couldn’t afford it any more and my brothers and I switched to a blue collar, suburban public school. Academically, I experienced a clear difference. The worst contrast was in math, where I learned basically nothing for three years. The only subject that was probably better at the public school was science, but I’m not even certain about that. Class sizes were larger too.

None of this is to say that I didn’t have good teachers and experiences and learn a great many things at my public school. I did, and I’m quite thankful for it, in fact. And, of course, private schools are perfectly capable of employing bad teachers and failing to properly educate their students. But this was my experience.

So in high school, for purely anecdotal and self-interested reasons, I supported school vouchers, much to the chagrin of many of my teachers. (There was a state level proposal in the 2000 Michigan election in support of vouchers that I wore a button supporting — I wasn’t old enough to vote at the time. Incidentally, the proposal failed.) After all, I thought, I might not have become such a slacker if I had continued to be challenged in my public school like I was in my private school.

With the recent appointment of Betsy DeVos as Secretary of Education by president-elect Donald Trump, vouchers may become a national issue. She has championed the cause and supported politicians who do for years.

Able now to take a less self-interested look at the issue (or so I tell myself), I’m actually a bit confused by the politics of vouchers — why isn’t there more skepticism on the right and support on the left? (more…)

The Dodd-Frank Act became law in 2010, adding more regulation to a banking industry that was already heavily regulated.  The main purpose of this 2,300 page act was to give consumers protection against big profit seeking banks but the unintended consequences prove to be much greater.  The regulation was supposed to help the little guy but as Acton Director of Research Samuel Gregg writes at The Stream, it actually hurts the little guy.

President-elect Donald Trump claims that he wants to deregulate the financial industry but in order for this to happen successfully, we need to understand the argument for why such actions would be beneficial.  Gregg says this:

Consider, for instance, the costs associated with meeting the ever-growing demands of regulatory compliance. Such costs are more easily borne by large banks than smaller-sized institutions such as community banks. The result is that excessive regulation makes it harder for smaller banks to compete. That often puts access to capital out of reach for many people.

But perhaps the most harm which excessive financial regulation inflicts upon ordinary people concerns the ways in which such regulations can — and have — contributed to financial meltdowns. Such crises are far more likely to hurt those on the lower-side of the economic scale than the already-wealthy.

(more…)

In a new article at The Stream, Acton Director of Research Samuel Gregg offers good reasons why a move toward economic nationalism is not in the best interest of America.  He starts with this:

Whatever the motivations for such policies, their costs vastly outweigh their benefits. In the first place, protectionism discourages American businesses and workers from focusing on producing those goods and services where they enjoy a comparative advantage vis-à-vis other nations. Not only does this undermine productivity, efficiency, and international competitiveness of American businesses. It also encourages American workers to enter industries that, no matter how much protection they enjoy, won’t be able to compete in the long term.

Gregg continues to give reasons against economic nationalist policies throughout his article, but one reason that seems to be quite relevant at the time is crony capitalism.  Gregg says this:

Yet another problem with economic nationalism is that it encourages a growing problem in American economic life: crony capitalism.

Giving certain American businesses subsidies or lumbering foreign products with tariffs may seem like economic questions, but in practice they are ultimately political. Such policies encourage companies prefer to seek profits by lobbying legislators and bureaucrats rather than serving customers and creating value.

(more…)

thanksgiving-assortmentFamilies across the country are about to celebrate Thanksgiving, expressing gratitude for God’s overwhelming grace and abundance. And yet even as we offer thanks to God for his provision — materially, socially, spiritually, or otherwise — how often do we pause and reflect on the freedoms and channels that God uses in the process?

Will we remember that the very foods we are sure to enjoy on Thanksgiving Day required a great deal of investment, cultivation, and risk-taking? Will we reflect with gratitude on the labor it took to grow and harvest, package and ship, market and sell these items? It’s but one small window into the innumerable hands working together each and every day in service of the common good.

And will we recognize that this mysterious, creative activity is not only due to human hands, but that such dominion and stewardship mirrors that of a Creator God who so loved that he gave?

Whether we talk about this phenomenon in terms of an “invisible hand” (Adam Smith), “spontaneous order” (Hayek) “the magic of the marketplace” (Reagan), or a “great and mysterious collaboration” (Grabill), we’d do well to remember that even as we pour gratitude and honor out to our neighbors, we should be careful that we orient things before and beyond the work of human hands. “The price system is indeed an amazing creation, but of the divine mind,” ” writes Joe Carter. “It’s one of God’s means of coordinating human activity for the purposes of human flourishing.”

At Carpe Diem, Mark Perry dusts of a Jeff Jacoby column that beautifully explains this very point, and does so in the particular context of Thanksgiving. “Isn’t there something wondrous — something almost inexplicable — in the way your Thanksgiving weekend is made possible by the skill and labor of vast numbers of total strangers?” Jacoby writes. (more…)