Category: Economics

Blog author: jcarter
posted by on Wednesday, April 2, 2014

money-and-justice-scales“If a society regards governmental manipulation of money as the antidote to economic challenges,” writes Acton research director Samuel Gregg at Public Discourse, “a type of poison will work its way through the body politic, undermining justice and the common good.”

Money: it’s on everyone’s mind sometimes. In recent years, however, many have suggested there are some fundamental problems with the way money presently functions in our economies.

No one is seriously denying money’s unique ability to serve simultaneously as a medium of exchange, a measure and store of value, and a means of calculation. Yet deep reservations about the current workings of the world’s monetary systems, both foreign and domestic, have been expressed by people ranging from Senator Rand Paul (who is fiercely critical of the Federal Reserve), to Pope Francis (who has denounced what he calls “the cult of money”) and France’s François Hollande (who once described “big finance” as his “greatest adversary”).

Read more . . .

bitcoin“For federal tax purposes, virtual currency is treated as property.”

With those ten words, the IRS has made it more difficult — if not impossible — for bitcoin and other virtual currencies from gaining widespread, mainstream acceptance as a currency for commercial transactions. Because they are now treated as property, virtual currencies are considered, like stocks, bonds, and other investment property, as capital assets and will be subject to capital gains tax.

But why does this hinder bitcoins use a currency? The answer is fungibility: Bitcoins are no longer completely fungible.
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Pope Francis

Pope Francis

In today’s New York Post, Acton’s Michael Matheson Miller discusses Pope Francis’ views on poverty, in light of the pope’s upcoming meeting with President Obama. Miller reminds the reader that the pope is not an economist or a politician. Trying to view him through that type of lens is a mistake, says Miller.

Pope Francis is not an economist or technocrat laying out policy; nor does he see the government as the primary solution to all of our problems. He is a pastor exhorting us to take seriously the “joy of the Gospel” and to integrate it into every aspect of our lives, including economics.

I think it is fair to say that some of the pope’s words on economics lacked precision, yet his comments about the corrosive effects of consumerism and the exclusion of the poor are incisive.

Miller acknowledges that the  pope remains skeptical about free markets, which is problematic, given how much free markets have to offer the poor.

In La Cava, an impoverished neighborhood on the outskirts of Buenos Aires, I spoke with a pastor and a local city councilman. They explained that within La Cava there is no private property, and no rule of law. The police don’t even go inside, but only drive around the perimeter. (more…)

Amity Shlaes

Amity Shlaes – Graphic Novelized!

In November of last year, we had the privilege of welcoming bestselling author Amity Shlaes for a visit here at the Acton Building while she was in Grand Rapids to speak about Calvin Coolidge at Grand Valley State University’s Hauenstein Center for Presidential Studies. Aside from being a fine author of some very thought provoking books on history and economics, she’s a delightful lady, and it was a pleasure to have an opportunity to make her acquaintance personally. At the time, she was very excited about a project that she had been working on which was soon to be released to the public – a graphic novel adaptation of her best-selling book, The Forgotten Man. Her enthusiasm for the project was infectious, and I’ve been looking forward to its release ever since. (You can pre-order a copy of the book, which is set to be released on May 27.)

But how does one take a nearly 500 page hardcover book that revisits the economic history of the Great Depression and translate it into a visual presentation on the printed page? It wasn’t a simple process. Paul Rivoche is the artist who worked with Shlaes on the project; in this interview at Graphic Novel Reporter, he describes how the original book was reworked in order to create a compelling visual story:

The original book was nonfiction and of course not at all structured to be a graphic novel. It’s an economic history of the New Deal/Great Depression era, described from an alternative viewpoint. It has a huge cast of characters — all real people — and discusses many abstract ideas. To make it work as a graphic novel, we had to find a new structure for the same material; we couldn’t follow the exact arrangement in the print book. For example, there are many jumps in location in the real-life story we tell, and all these characters coming and going. In prose, it worked because you imagine it in your head, stitching it together, following the steady guidance of the author’s voice. In comics form, the same thing was disorienting. We learned that if the visuals change too fast, without enough explanation, the reader easily becomes confused when dealing with such complex events, all these different scenes and faces. To solve this, we decided to introduce a “framing story” using a narrator, Wendell Willkie. In telling the story, he guides us — at times directly, and in other scenes we hear his voiceover narration in captions. Also, we had to make the story as visual as possible, not all “talking heads,” which make for dull comics. Instead, we highlighted interesting locales: the Hoover Dam, the great flood of 1927, Willkie’s famous debate, and many others. In every scene we aimed to introduce as much movement, action, and characterization as possible.

The full interview has more detail on the project; After the jump, you can listen to an August 2012 Radio Free Acton interview with Amity Shlaes on her then-forthcoming biography on Calvin Coolidge.

Paul_Rivoche_The_Forgotten_Man

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College Freshman

College Freshman

Consider the following (emphasis added):

“Higher education is an industry in danger,” says Clayton Christensen, the Harvard Business School guru and a senior advisor (unpaid) at Academic Partnerships. “It’s very plausible to say that 15 years from now half of the universities that exist will be bankrupt and in some fundamental way facing extinction and the need to totally change themselves.” (Caroline Howard, “No College Left Behind,” Forbes, 2/12/14)

Richard Lyons, the dean of University of California, Berkeley’s Haas School of Business, has a dire forecast for business education: “Half of the business schools in this country could be out of business in 10 years—or five,” he says. (Patrick Clark, “Half of U.S. Business Schools Might Be Gone by 2020,” Businessweek, 3/14/14)

What do you think? Are the doomsayers about the higher ed bubble generally too pessimistic? Are there discernibly different markets for different kinds of higher ed.? If Lyons is right about the dynamics of B-schools, are there similar dynamics at work for divinity schools and seminaries? Are such religious institutions more or less vulnerable?

There’s no shortage of those warning about various iterations of a higher education bubble. It’s almost a cottage industry. Are they Chicken Littles or true prophets?

For more reading, consider the Controversy in the Journal of Markets & Morality, “Should Students Be Encouraged to Pursue Graduate Education in the Humanities?”

Blog author: ehilton
posted by on Friday, March 14, 2014
Todd Wilemon

Todd Wilemon

Admittedly, “stop being poor” sounds a bit like “let them eat cake.” The remark was made by Todd Wilemon, a managing director at NYSE Euronext, when he was asked what people should do if they could not afford health insurance. “Stop being poor,” was his answer.

Callous? Crude? Mean? Not really. Kevin D. Williamson explains how the ineptly-named Affordable Care Act isn’t providing insurance for all who can’t afford it.

Appropriating a certain amount of money and labeling it “health care for the poor” is not the same thing as providing poor people with access to doctors, hospitals, and medicine. It is easy to move money from one pocket to another, which is how we manage to spend a figure approaching a half-trillion dollars per annum on Medicaid with very little to show for it in terms of better health outcomes for poor people. In Tennessee, Medicaid alone spends about $10,000 annually for every poor person in the state, and poor Tennesseans of retirement age or older already have access to Medicare.

We spend the money, but we do not get the health care.

Why not? Because there aren’t enough doctors, there are too many doctors who won’t accept Medicare, and all the subsidies and mandates in the world aren’t going to fix that. The solution? Stop being poor.

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Blog author: abradley
posted by on Friday, March 14, 2014

Untitled 4As much as progressives balk at the “imposition” of religious morality and the church in public and social spaces, secular humanism’s moral relativism is not working in America and continues to leave children vulnerable to profound evil. For example, the Urban Institute recently released a report on the economy of America’s sex industry — and the numbers are astounding.

The Urban Institute’s study investigated the scale of the underground commercial sex economy (UCSE) in eight major US cities — Atlanta, Dallas, Denver, Kansas City, Miami, Seattle, San Diego, and Washington, DC. Across cities, the UCSE’s worth was estimated between $39.9 and $290 million in 2007, but decreased since 2003 in all but two cities. In the study, interviews with pimps, traffickers, sex workers, child pornographers, and law enforcement revealed the dynamics central to the underground commercial sex trade.

Here are some of the key findings regarding those who manage the sex economy:
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One month ago, I posted a link to a survey asking ten questions about what people look for in a pastor, promising to post the results one month later. The idea was to try to shed some light on the disconnect between supply and demand when it comes to ministers looking for a call and churches looking for a minister.

The first thing that should be said is that, while I am grateful to all who participated, the sample size is too small to be significant. 71 people took the survey. Nevertheless, we can still reflect on the results with the hope that future studies may yield more insight.

By tradition, there were 1 Anabaptist, 7 Baptists, 1 Church of Christ member, 4 Eastern Orthodox, 2 Episcopalians or Anglicans, 2 Lutherans, 21 Prebyterians or other Reformed, 3 Methodists, 13 Non-Denominational Christians, 2 Pentecostals, and 16 Roman Catholics. (more…)

College-Fund-by-Tax-CreditsSenator Elizabeth Warren (D-MA), a potential 2016 presidential candidate, recently argued that Congress should hike taxes on families and small businesses making more than $1 million, then use the tax revenue to let debt-ridden students refinance their college loans.

As a progressive redistribution scheme it’s rather ingenious: It allows the government to take money from private individuals and businesses and give it to other businesses (i.e., college and universities), all while giving the impression of helping another group of private individuals (i.e., students who take indebt themselves by taking out college loans). Warren’s proposal is an brilliant blend of cronyism, special interest pandering, and “soak the rich” class envy – which is why it has a high likelihood of becoming law.

But if we look past the proposal we discovers something else that is fueling the student loan debt “crisis.” Whenever a nanny state solution like this is proposed, we should ask why the government is needed to serve as a governess. In this case, it appears the government is being asked to be a surrogate parent because of the failings of actual parents.

According to a study by sociologists at Rice University, college students whose parents are not married to each other face significantly heavier financial burdens for the simple reason that married parents, relative to other parents, contribute significantly more to their children’s college education:
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Comedian Andrew Heaton uses the move “Dallas Buyer’s Club” to explain economic issues, brought to life on the silver screen. Enjoy!