Category: Economics

milton_friedman2The Book: Milton Friedman: A concise guide to the ideas and influence of the free-market economist by Eamonn Butler

The Gist: As the subtitle suggests, this short book provides a concise overview of the ideas and influence of the late economist, Milton Friedman

The Quote: “[T]he supporters of tariffs treat it as self-evident that the creation of jobs is a desirable end, in and of itself, regardless of what the persons employed do. That is clearly wrong. If all we want are jobs, we can create any number—for example, have people dig holes and then fill them up again, or perform other useless tasks. Work is sometimes its own reward. Mostly, however, it is the price we pay to get the things we want. Our real objective is not just jobs but productive jobs–jobs that will mean more goods and services to consume.”

The Good: The book includes numerous direct quotes from Friedman . . .

The Blah: . . . but far too many of the quotes are taken from an interview in Playboy magazine rather than from Friedman’s own writings.

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Calvin_Coolidge_and_Israel_Moore_Foster“The Power of the Moral Law” is the title of an address delivered by Calvin Coolidge at the Community-Chest Dinner in Springfield, Massachusetts on October 11, 1921. Published in The Price of Freedom, the text is only available online through Google Books.

Coolidge’s main point in his remarks was to reinforce the truth that it is prosperity not grounded in a deeper meaning that threatens our American Republic. Displaying his conservative thought, he challenges materialism of government interventionists and reminds proponents of business and the market that material success alone is insufficient. True progress must have a deeper foundation.

There are many lines that stand out in his address, but perhaps few stand out more than this simple sentence: “Ideals and beliefs determine the whole course of society.” Currently, we see this playing out powerfully in our culture today. The ideals that have held our Western and American civilization intact for centuries have largely eroded. Ideals and commonly held standards, especially in the academy, are attacked as backwards and oppressive.
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stronger economyIs a “profit alone” mentality enough for a business or for a nation? If the economy is running well, should we bother to look any deeper, or just leave well enough alone?

Carly Andrews, at Aleteia, says profit alone isn’t good enough, based upon a presentation that professors Alberto Quadrio Curzio and Giovanni Marseguerra made at a recent Vatican conference. The pair spoke primarily about three parts of Catholic social teaching that they believe would help the global economy.

Examined first is the issue of subsidiarity. This is the teaching that says those closest to an issue or problem should be the ones to deal with it. For instance, local church food banks are best equipped to assess needs in their area, know where to get food, what types of food are best for their consumers, etc.

In a call for subsidiarity we therefore see a call – to some extent – for government decentralization, that is, a limited government, allowing for an increase in personal freedom and responsibility, which prof. Curzio and Marseguirra claim puts the “creativity of the person” into action, “stimulating the participation of social intermediary bodies, including communities, in the production of goods and services and constructing and aggregating in solidarity.”

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shutterstock_119092402-580x331In his latest column, David Brooks examines the limits of data and “objective knowledge” in guiding or directing our imaginations when it comes to solving social problems.

Using teenage pregnancy as an example, he notes that although it may be of some use to get a sense on the general drivers of certain phenomena, such information is, in the end, “insufficient for anyone seeking deep understanding”:

Unlike minnows, human beings don’t exist just as members of groups. We all know people whose lives are breathtakingly unpredictable: a Mormon leader who came out of the closet and became a gay dad; an investment banker who became a nun; a child with a wandering anthropologist mom who became president.

We all slip into the general patterns of psychology and sociology sometimes, but we aren’t captured by them. People live and get pregnant one by one, and each life and each pregnancy has its own unlikely story. To move the next rung up the ladder of understanding you have to dive into the tangle of individual lives. You have to enter the realm of fiction, biography and journalism.

For the solution, he points to Augustine:

[Augustine] came to believe that it take selfless love to truly know another person. Love is a form of knowing and being known. Affection motivates you to want to see everything about another. Empathy opens you up to absorb the good and the bad. Love impels you not just to observe, but to seek union — to think as another thinks and feel as another feels. (more…)

Terminator-2-Judgement-Day-posterI oppose implementing Skynet and increasing minimum wage laws for the same reason: to forestall the robots.

It’s probably inevitable that a T-1000 will return from the future to terminate John Connor. But there is still something we can do to prevent a TIOS from eliminating the cashier at your local McDonalds.

In Europe, McDonalds has ordered 7,000 TIOSs (Touch Interface Ordering Systems) to take food orders and payment. In America, Panera Bread will replace all of their cashiers with wage-free robots in all of their 1,800 nationwide locations by 2016. There is even a burger-making robot that can churn out 360 gourmet hamburgers per hour.

I, for one, welcome our new fast-food robot overlords. I’m just not ready for them yet.
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raphaelsanzio_healingofthelameman - CopyJohn Teevan’s recent profile of Bob Woodson and the Center for Neighborhood Enterprise (CNE) reminded me of a profoundly impactful tour I took of George Wythe High School in Richmond, Va., which was led by Mr. Woodson as a case study of CNE success.

The tour was part of a seminar with the DeVos Center for Religion and Civil Society, and was intended to showcase effective solutions to social problems. In this, it greatly succeeded, highlighting that any such solutions can only be effective insofar as they take into account the full needs and dreams of the human person.

The school had recently emerged from a season of heavy violence and crime, due in large part to its partnership with CNE’s Violence-Free Zone Initiative, which seeks to restore peace and trust to broken communities by equipping local schools with on-the-ground “Youth Advisors” and partnering with local organizations, churches, and law enforcement.

Rep. Steve Southerland, who also joined the tour, wrote a brief account of the trip, which includes a good summary of the initiative and how it’s benefited George Wythe:

This violence-reduction and high-risk student mentoring program prepares students to learn by equipping them through relationships with the skills and knowledge necessary to overcome violence. The Richmond public schools system has worked in conjunction with CNE to create the Violence-Free Zone. Youth advisors who are affiliated with the Richmond Outreach Center, a local church, and who have overcome similar challenges, work as hall monitors, mediators, character coaches, and trusted friends.  For the 2009-2010 school year, George Wythe reported a 26% decrease in fighting, a 68% decrease in truancy, and a 63% reduction in dropouts since the inception of the Violence-Free Zone program. (emphasis added)

Led by Woodson, we able to interact with several Youth Advisers and local pastors, each of whom poured out their hearts, telling numerous stories of reconciliation and restoration with students and explaining how, thanks to the people and programs now in place, many conflicts are being promptly defused while students see greater and greater levels of success and empowerment—spiritually, socially, academically, and beyond. (more…)

The gorilla-whale is back. And he’s here to stimulate the economy.

On Friday, theaters across the country will be debuting the fourth American remake of Godzilla (the name is a romanization of the original Japanese name “Gojira” — which is a combination of two Japanese words: gorira (‘gorilla’) and kujira (‘whale’). Over its opening weekend the film is projected to earn $78,000,000, and cumulative revenues of over $240,000,000. While that could be a generous stream of income for Hollywood, it’s a drop in the $17 trillion ocean that is the U.S. economy.

But what if instead of releasing the movie, the government were to convincingly lie to the American people about an imminent invasion by a 150 foot tall gorilla-whale? What would be the effect if the government said we must take action now to protect our way of life from the monster?

According to some liberal economists, it would lead to an economic boom. In defending President Obama’s stimulus proposal in 2011, Paul Krugman proposed a peculiar solution for economic recovery that is similar to an invasion by Godzilla:

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lincThis is only one powerful and horrific story that highlights the severe problems with Veterans Affairs Medical Centers. Unfortunately, there are easily thousands of stories like the one experienced by this veteran. Kay Daly sums it up well in the article from the American Thinker,

Fighting a bureaucracy the size of the VA leviathan is not only physically exhausting, it is soul crushing as well. My brother was literally losing his will to live. That’s what I saw in the picture he sent to me — a man who was defeated.

The VA is a giant maze of a bureaucratic nightmare. Claims often go missing, unfairly denied, or simply lost. I worked on VA casework for a U.S. Congressman over a decade ago, and the extensive problems with the system predate my experiences.

The VA healthcare system does of course serve as a model for what the future for care looks like most Americans with more government involvement. In 2009, I wrote a commentary on VA healthcare and noted that since government can’t meet the obligation to its veterans, more government control of health care will only “increase the likelihood and scale of injustice.” The VA offers us on a smaller scale a perfect picture of healthcare rationing.

In 2013, I highlighted the killing of veterans at VA hospitals. In some instances, individuals waiting for their colonoscopy procedures had Stage 1 cancers go to Stage 4 before diagnoses.

Now, at least five VA treatment centers are being investigated for keeping a secret list of appointment waiting times for patients. Those secretive actions are facilitated so hospital administrators and healthcare providers can secure bonuses for scheduling appointments in 14 days. It would be more shocking if these incidents are only contained to five VA hospitals. Of course the cover up is more widespread.

The American Legion
has called for Veterans Affairs Secretary Eric Shinseki to resign. A necessary action perhaps, since one of the main short terms problems is lack of accountability. But the federal government continues to prove that it cannot handle socialized medicine on an even smaller scale. It may be prudent to focus on clearing up the massive backlogs of VA disability and medical claims and offering vouchers for care elsewhere. This is one bureaucracy that is becoming more notable for collecting body counts. That’s never a good image for a healthcare facility.

castilloYou’ve probably never heard of Tony Castillo. Even if you live in West Michigan and have eaten at one of his three McDonald’s franchises you probably don’t recognize the name. But an inspiring profile of Castillo by MLive provides a number of lessons about economics and business that everyone should learn from this entrepreneur.

Lesson #1: To be a successful business owner you should care about your stakeholders (customers, employees, suppliers, etc.)

Ask Tony Castillo what he loves about owning and operating McDonald’s franchises, and he will tell you it’s the people.

By that, he means both his customers and employees.

The purpose of a business is to serve the needs and wants of people. While that may sound like an obvious point, it is surprising how many people—including many business owners—tend to overlook or ignore that reality. Sure, one of the goals of business is to make a profit. But if all you want is to make money there are easier ways to do it than owning and operating a business, especially a customer-service oriented business.

Lesson #2: Serving the poor doesn’t always look like you’d expect

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Regulatory Climate IndexThe revitalization of cities has become a significant focus among today’s Christians, with many flocking to urban centers filled with lofty goals and aspirations for change and transformation.

Last summer, James K.A. Smith expressed concern that such efforts may be overly romanticizing certain features (community!) to the detriment of others (government), concluding that “farmer’s market’s won’t rescue the city” but “good government will.” Chris Horst and I followed up to this with yet another qualifier, arguing that while both gardens and good governance are indeed important, so is business and entrepreneurship.

Families, churches, institutions, businesses, and governments all need to be in right relationship if cities are to flourish, and this means that Christians need to gain a clear understanding of what these relationships look like. How do the economies of love, creative service, wisdom, wonder, and order interact and intersect, and how do we orient our actions and attitudes accordingly?

For example, if a city’s economic future is driven, among other things, by entrepreneurialismhigh levels of human capitalclustering of skilled workers and industries, or in the case of North Dakota’s Bakken region, bountiful natural resources, what role should the People of God play therein? What role do families play in those endeavors? What about churches, community associations, organizations, or businesses? How ought public policy to guide (or not guide) various efforts? Christians are called to be concerned with all of the above.

In a new study by the U.S. Chamber of Commerce Foundation — Regulatory Climate Index 2014: The Cost of Doing Business in America — we see a great example of the types of questions we ought to be asking. Focusing on 10 cities across America, the study investigates “the efficiency of local regulations that apply to small businesses,” demonstrating the full impact that the dirtier, more “boring” and mundane elements can have on whether and how individuals are empowered to invest, serve, and sacrifice within and for their cities. (The project was led by Michael Hendrix, who has contributed here on the blog in the past.) (more…)