Category: Economics

Note: This second article in a two-part series on the Republican Party Platform. Part I can be found here.

In the previous article we looked at summary outline of the Republican platform as it relates to several non-economic issues covered by the Acton Institute. Today, we’ll look at the GOP’s economic agenda as laid out in the platform. Because the document is long (66 pages) and covers an extensive variety of economic-related areas (agriculture, energy) this list won’t be exhaustive. But it does cover the primary economic positions that are being supported or opposed by the Republican Party.

(Next week, after the Democratic National Convention, we’ll examine their platform’s stance on the same and related issues.)

A solid case could be made that the most powerful natural law in the universe is the “law of unintended consequences.” It’s definitely the dominant force when it comes to public policy.

For example, in 2007 Congress created the Public Service Loan Forgiveness program, which was designed to encourage young workers to seek government and nonprofit jobs that pay far less than what they’d get in the private sector. The program forgives the remaining balance on direct loans after a borrower has made 120 qualifying monthly payments under a qualifying repayment plan while working full-time (30 hours per week) for the government or a non-profit. The payments are capped at 10 percent of discretionary income, defined as a borrower’s adjusted gross income minus 150 percent the federal poverty level. Any balance remaining after the 120 payments is forgiven, tax-free.

The intention was to encourage people to become schoolteachers or social workers. But there’s another group that found a way to take advantage of this subsidy: doctors.

Photo courtesy of Wikimedia.

Photo courtesy of Wikimedia.

What is the biggest economic problem that the U.S. is currently facing? Depends who you ask.  Some social justice warriors would tell you that capitalism is ruining our economy, yet many who have studied and understand economics would argue the opposite. Capitalism is not to blame, but rather cronyism and protectionist policies are the ones wreaking havoc on the economy.

In a previous post, I discussed how occupational licensing as a form of cronyism is trapping people in poverty. However, cronyism is a much bigger problem than just occupational licensing. The U.S. struggles with other forms of cronyism too, such as protectionism through quotas, tariffs, and corporate welfare.

Quotas and tariffs make it extremely difficult for international firms to sell their product in the U.S., thus protecting U.S. firms from international competitors.  Corporate welfare is government support of a private business usually through direct money transfers (subsidies) or tax breaks, often protecting big firms from the competition of smaller firms.

This form of cronyism typically occurs for two reasons:  First, in an attempt to create new domestic jobs or prevent jobs from being sent overseas and second, because politicians promise “goodies” to corporations and individuals that help them get elected. (more…)

halo-effect1As church attendance continues to decline across the West, many have lamented the spiritual and social side effects, namely a weakening of civil society and the fabric of community life. What’s less discussed, however, is the economic impact of such a decline.

In a new study published by Cardus, Dr. Michael Wood Daly of the University of Toronto explores this very thing, researching the “economic value” of ten Toronto congregations, and finding “a cumulative estimated economic impact of approximately $45 million,” based on a combined budget of only $10 million. The study refers to this as the “halo effect,” noting the church’s value to the community, whether through social capital, community services, or physical resources and infrastructure.

The research builds on an existing framework from a pilot study done in 2010 by Partners for Sacred Spaces and the University of Pennsylvania, which resulted in similar findings. Focusing on 12 congregations, the Pennsylvania study found an economic contribution of roughly $52 million, concluding that local congregations can “now be viewed as critical economic catalysts.” Both studies evaluated a range of variables in the seven key categories, including (1) open space, (2) direct spending, (3) education, (4) magnet effect, (5) individual impacts, (6) community development, and (7) social capital and care. (more…)


Profile of Adam Smith, 18th century

In a new piece written for Public Discourse, Research Director for Acton Institute, Samuel Gregg, revisited crucial points made by Adam Smith in his classic Inquiry into the Nature and Causes of the Wealth of Nations which argued for an embrace of international trade. Unfortunately, many of Smith’s ideas have today been cast aside for a stronger cry of economic nationalism. Gregg combats some misconceptions of free, global trade by revealing the dangerous results which would occur if nations chose to only implement ‘neo-mercantilism’ in the name of national interest.

Gregg organizes Smith’s insights into three categories, first addressing how Smith proved that a country’s economy “flowed from the development and extension of the division of labor within and between nations…the wider and deeper the size of the market, the greater the division of labor and the subsequent gains in productivity and growth.” Smith’s understanding of the benefits of international trade has been undermined however by ideas encroaching on rights to property and on labor. In the wake of growing restrictions, “a retreat from free trade would not only worsen this situation. It would also raise the price of a good number of foreign-made products and services, thereby putting many such goods beyond the reach of lower-income Americans.” (more…)



Vox recently published an article claiming that Charles Koch is right and Bernie Sanders is wrong about how the economy is rigged. Both agree that there are laws that unfairly favor some financially over others. Sanders often claimed during his campaign that the rich have used their money to lobby for laws that favor their interests over those of everyone else.  Meanwhile, Charles Koch has condemned excessive regulation and restrictions on economic freedom that allow the few to bend laws in their financial favor against the many. In looking at the real problem in the economy, Charles Koch’s analysis of the problem comes closer to the truth.


Poverty rates in America’s largest cities; such as Indianapolis, Charlotte, and Detroit; have risen in the last decade. New York City however, stands out as an exception, as its poverty rate has conversely declined. The combined actions and innovations of individuals have proven yet again to be effective in producing economic flourishing. The hope of New York City springs from the ability of people made in the image of God to use their skills and rise up out of poverty.

Believing that poverty is best combated with the rise of the job force, Robert Doar (Morgridge Fellow in Poverty Studies at the American Enterprise Institute) stresses that it is not in government which we should rely, but rather in the people.