Category: Economics

Blog author: ehilton
Thursday, July 9, 2015
By

greece-bandaidGreece’s economic problems are so vast, comprehension is difficult. Over at NPR, Greg Myre breaks it down for us.

25: The unemployment rate, and that’s probably low-balling. For those under the age of 25, the unemployment rate hovers around 50 percent.

92: The average income earned by a typical citizen is under-reported by 92 percent, on average, to the government.

Tax evasion is endemic in Greece and a major contributor to the government’s budget shortfalls. Creditors are demanding this be addressed in return for a new rescue package.

(more…)

frederic-bastiat-john-lToday is the 214th birthday of Frederick Bastiat, one of the greatest political and economic thinkers of the 19th century. Bastiat, a farmer turned politician and pamphleteer, had a inimitable gift for explaining economic and political concepts in way that make them not only understandable but seem downright commonsensical.

Bastiat, as Charles Kaupke notes, drew on his Catholic faith and the writings of Adam Smith and John Locke to articulate a vision of limited, efficient government that respects each citizen’s God-given dignity. And as Religion and Liberty adds,

He typified that rare breed of liberal who holds a deep and powerful belief in a personal and transcendent God, and who incorporates this belief in a wide ranging social philosophy centering on the proposition that when left alone society will most clearly display the wisdom and intent of the Creator.

A particular concept of Bastiat’s that has profoundly influenced my thinking is the idea that God arranged the social world. “I believe that He Who arranged the material world,” wrote Bastiat, “was not to remain foreign to the arrangements of the social world.” I wholeheartedly agree. That is why I never tire of arguing about how God created such economic phenomena as the price system and comparative advantage in order to coordinate human flourishing.

There are dozens of ideas in his writings like this one that are worthy of close attention, but here are four particularly important concepts of Bastiat’s that you should know:
(more…)

BuyLocal.inddOver the past few decades buying locally produced goods and services over those produced farther away has become increasingly fashionable. However, this “modern” trend is really a reversion to an earlier period when most all products were produced and bought from people in a localized area. For most of human history, “buying local” was the only option.

There may be many reasons we may want to buy local goods and services—but improving the local economy is not one of them. As economist Don Boudreaux explains in the video below, there are many reasons why it’s foolish to ‘buy local’ if your goal is to improve the economy of the locale in which you live.

heart in handCompassion is a marvelous virtue. Feeling concern for others and acting sacrificially — especially on behalf of those that cannot return the favor — reveals mature character and contributes to human flourishing.

Compassion moves missionaries and monks to great efforts as they plant churches, pioneer institutions, and work for justice across cultures and geographies. Paul’s words are the motivation for his apostolic proclamation that, “…the love of Christ compels us…” and, “one died for all, therefore all died. And those who live should not live for themselves but for him who died and rose again.” (2 Cor. 5)

This agape love includes moral conviction and missional wisdom.

“Unsanctified mercy” (thank you, Jill Miller, for this term) arises when compassion becomes compromise and our fear of offending subverts biblical truth. The American church is increasingly guilty of doctrinal, moral, and spiritual compromise under the guise of compassion and misplaced historical guilt.

At the risk of offending tender sensibilities, it is time to confront our own hearts and our public ministries with gospel truth. Progressive Christians have served the kingdom well as they expose the excesses of consumerism, capitalism, and colonialism that often mark American and Western ecclesial efforts. Conservative Christians serve God’s reign as they remind the church that there are timeless beliefs and values not subject to one’s “evolution.” The sanctity of life, the definition and marriage, and the historical foundations of the gospel and Scripture are among these convictions. There is much room for civil family debate on a variety of issues and strategies.

The events of the past half-century and the last few months are cause for grave concern and I am unashamedly speaking truth to power as unsanctified mercy leads the church down pathways of compromise, irrelevance and ineffective witness. (more…)

Coal power plant Datteln 2 Crop1Today at The Federalist I explore “Why Big Oil Wants A Carbon Tax.” Perhaps such advocacy isn’t just made out of a sense of global citizenship and environmental stewardship.

On the surface such advocacy may seem counter-intuitive. Why on earth, other than out of selfless benevolence, would a firm (or group of firms) advocate for higher taxes on their products? But on reflection, it makes some sense, and the reasoning is similar to why an online retailer like Amazon might be in favor of the collection of sales tax at the state level.

As Adam Smith famously put it, “People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

Companies are often happy to raise prices if it hurts their competition or provides them with a competitive advantage. And in the case of carbon taxes, it’s important to recognize that not all fossil fuels are equally carbon-intensive, just as not all renewable sources are equally sustainable and resilient.

This is one of the economic realities that I wish Pope Francis had recognized more clearly in Laudato Si’, although I may have more to say about this later. For now, David Brooks expresses a similar desire in his column, “Fracking and the Franciscans.”

“For as the soil makes the sprout come up and a garden causes seeds to grow, so the Sovereign Lord will make righteousness and praise spring up before all nations.” -Isaiah 61:11

Jean Marie owns a restaurant and farm in southern Rwanda. After his first year in business, he worked with Urwego, a local micro-finance partner with HOPE International, to secure a loan to purchase more animals and improve his land’s fertility.

Today, he employs 8 people, supports 11 orphans, and has 5 children:

His story is another great example of how something as simple as access to capital can be a key to achieving success and stability in the developing world. And yet Jean Marie’s story points to something even more crucial: a love for Jesus, faithful obedience, and the fruit of both across family, community, and enterprise. (more…)

george horrifiedIn today’s Public Discourse, Acton’s director of research, Samuel Gregg, discusses the enormous debt crisis the U.S. and many nations currently face. While debt crises are hardly new, Gregg states, America’s current debt situation is frightening.

America’s public debt amounts to approximately 105 percent of GDP. Since 20 January 2009, America’s total outstanding public debt has grown from $10.626 trillion to $18.152 trillion as of May 8 this year. Such an increase reflects a consistent disparity between government revenues and expenditures that has long plagued America’s public finances.

What’s driving this debt? Gregg’s response: the welfare state. (more…)

Doug Bandow, member of the Advisory Board at the Acton Institute and Senior Fellow at the Cato Institute, penned an exclusive article for the Acton Institute on the economic effect of the encyclical:

In Calling on Government, Laudato Si Underestimates Power of the the Market

by Doug Bandow

Pope Francis’ new encyclical, Laudato Si, offers a challenging read. That’s why he addresses his message to “every person living on this planet.” In his view “the earth herself, burdened and laid waste, is among the most abandoned and maltreated of our poor.” He advocates not only a practical political response, but more importantly calls mankind to a new “ecological spirituality.”

Indeed, his role, the Pontiff explains, is to help the rest of us apply the “rich heritage of Christian spirituality, the fruit of twenty centuries of personal and communal experience,” to the world around us. The Gospel should affect how we think, feel, and live. We should relate through it not only to people around us, but the entire environment.

(more…)

Blog author: ehilton
Tuesday, June 23, 2015
By

Economist Nicole Gelinas, a fellow at the Manhattan Institute, explains the recent financial crisis in this brief video. Did banks fail us? No, she says. The problem is that the U.S. government has become too closely tied to banks, enabling their bad financial practices.

Doug Bandow, advisory board member of the Acton Institute, praises the new encyclical for its understanding of man and religion, but criticizes it for its lack of knowledge of economics and politics in an article for The American Spectator.

Despite his commitment to ecological values, the Holy Father acknowledges that “a return to nature cannot be at the expense of freedom and the responsibility of the human being, that is the part of the world tasked with cultivating its ability to protect and develop their potential.” He also rejects “deification of the earth, which would deprive us of the call to collaborate with it and protect its fragility.”

Nevertheless, humanity’s responsibility for the environment is complex and the Pope discusses ecological values in the context of economic development and care for the poor. How to creatively transform but at the same time gently preserve the natural world is not easy. Unfortunately, in its policy prescriptions Laudato Si sounds like it was written by an advocate, largely ignoring countervailing arguments. The resulting factual and philosophical shortcomings undercut the larger and more profound theological discussion.

Read the full article “Praise ‘Be Praised’ for Its Intent, not Execution” at The American Spectator.