Category: Economics

Samuel Gregg, Director of Research at the Acton Institute and author of Becoming Europe: Economic Decline, Culture, and How America can Avoid a European Future, and more recently Tea Party Catholic:The Catholic Case for Limited Government, a Free Economy, and Human Flourishing, delivered a lecture on November 7th in the Acton Building’s Mark Murray Auditorium focusing on the subject of his latest book as part of the 2013 Acton Lecture Series. We’ve embedded the video of his lecture below; if you’re interested in Gregg’s lecture on his earlier book, you can find that one after the jump.

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occupy pennJames Lott is in the fabled “1%”: the folks the Occupy Wall Street movement says are those who are “writing the rules of an unfair global economy” because of massive inequality of income. But Lott doesn’t feel particularly rich or powerful.

I definitely don’t see myself as rich,” says Lott, who is saving to purchase a downtown luxury condominium. That will be the case, he says, “the day I don’t have to go to work every single day.”

Did Lott inherit a great family fortune or earn a CEO’s salary at the expense of workers in a multinational company? Not exactly. (more…)

Rush Limbaugh kicked up some controversy over the past week with his analysis of Pope Francis’ Evangelii Gaudium:

…the pope here has now gone beyond Catholicism here, and this is pure political.  I want to share with you some of this stuff.

“Pope Francis attacked unfettered capitalism as ‘a new tyranny’ and beseeched global leaders to fight poverty and growing inequality, in a document on Tuesday setting out a platform for his papacy and calling for a renewal of the Catholic Church. … In it, Francis went further than previous comments criticizing the global economic system, attacking the ‘idolatry of money.’”

I gotta be very careful.  I have been numerous times to the Vatican.  It wouldn’t exist without tons of money.  But regardless, what this is, somebody has either written this for him or gotten to him.  This is just pure Marxism coming out of the mouth of the pope.  Unfettered capitalism?  That doesn’t exist anywhere.  Unfettered capitalism is a liberal socialist phrase to describe the United States.  Unfettered, unregulated.

You can read his complete critique at the link above. The Catholic Channel on Sirius XM Satellite Radio responded by calling upon Acton President Rev. Robert A. Sirico to provide a critique of Limbaugh’s statements. You can listen to that interview via the audio player below:

minimum_wage_custom-8614e5bd8d516fbadd22d4a09fff441a70ba1596-s6-c301. Both sides of the debate believe they are arguing in defense of the poor. Most people who support or oppose minimum wage laws and/or increases share a common objective — helping the working poor. Because both sides have noble intentions, the merits of the debate over minimum wage laws and minimum wage increases should be based on empirical evidence that it will actually help, rather than harm, the poor.

2. Economists disagree about the effects of small increases in minimum wages. It’s true that economists disagree about the effects of the minimum wage on employment and the living standards of minimum wage earners. But almost all of the disagreement is about relatively small increases (less than 20%). Almost all economist agree that significant increases to the minimum wage or attempts to bring it in line with a “living wage” (e.g., $12-15 an hour) would lead to significant increases in unemployment. (President Obama’s proposal would only increase the federal minimum wage by $1.75 an hour.)

3. The primary argument for minimum wage increase is that is increases the value of the worker’s labor. — The efficiency wage theory of labor holds that higher real wages improve labor productivity by reducing worker turnover and the associated costs of hiring and training new workers, by reducing the incentive for workers to unionize, and by increasing the opportunity cost of being fired—thereby giving the worker incentive to be more productive. Under this view, small increases to the minimum wage will have no deleterious employment effects.

4. The primary argument against minimum wage increases is that it discriminates against those who have low-skills. Milton Friedman once described the minimum wage as a requirement that “employers must discriminate against people who have low skills.” As Anthony Davies explains, “the minimum wage prevents some of the least skilled, least educated, and least experienced workers from participating in the labor market because it discourages employers from taking a chance by hiring them. In other words, workers compete for jobs on the basis of education, skill, experience, and price. Of these factors, the only one on which the lesser-educated, lesser-skilled, and lesser-experienced worker can compete is price.”

5. The minimum wage redistributes wealth from the low-skilled poor to the more skilled working poor and middle class. Many supporters of minimum wage increases mistakenly believe that increases in wage rates are transfers of wealth from employers and investors to the workers. But as Anthony Davis explains, the money to pay for the increased wage must come from at least one of four places: higher prices for consumers, lower returns to investors, lower prices to suppliers, or a reduced work-force. Empirical research has shown that the primary effect of minimum wage increases is reduced employment, which essentially transfers the wealth (in unearned wages) from the less skilled to the more skilled working poor and middle-class teenagers.
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grouchomarxThe Obama Administration seems to think that moving money from one place to another constitutes economic stimulus. A Washington Times editorial points this out. First, the administration is pushing food stamps, or SNAP (Supplemental Nutrition Assistance Program), as a way to get the economy moving.

“I should point out,” Agriculture Secretary Tom Vilsack said on MSNBC two years ago, “when you talk about the SNAP program or the food-stamp program, you have to recognize that it’s also an economic stimulus … . If people are able to buy a little more in the grocery store, someone has to stock it, package it, shelve it, process it, ship it. All of those are jobs. It’s the most direct stimulus you can get in the economy during these tough times.”

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disapear doctorNo, it’s not a Sherlock Holmes book. It’s reality: American is losing doctors.

When most of us have a medical concern, our first “line of defense” is the family physician: that person who checks our blood pressure, keeps on eye on our weight, looks in our ears and our throat for infections, and does our annual physicals. And it’s these doctors that are becoming scarce.

In American Spectator, Acton Research Fellow Jonathan Witt takes a look at this issue. (more…)

workingpoorAfter reading a comment thread in which her online friends were complaining about poor people’s self-defeating behavior, Linda Walther Tirado wrote an articled titled “Why I Make Terrible Decisions, or, Poverty Thoughts,” which chronicled her struggles with near abject poverty.

I think that we look at the academic problems of poverty and have no idea of the why. We know the what and the how, and we can see systemic problems, but it’s rare to have a poor person actually explain it on their own behalf. So this is me doing that, sort of.

Tirado’s article went viral. A literary agent contacted her, and after a few readers emailed offers to contribute to a book project, Tirado started a GoFundMe page. Her initial goal was $10,500; she raised more than $60,000.

But there was a problem with her story: it wasn’t true.

As Angelica Leicht of the Houston Press discovered, Tirado doesn’t fit the mold of the working poor: She went to a fancy boarding school, speaks both German and Dutch, works as a political consultant, and is married to a Marine. Tirado eventually clarified that her piece was “taken out of context, that I never meant to say that all of these things were happening to me right now, or that I was still quite so abject. I am not.”

While the article seemed to confirm what many people already believed, for those who are actually poor – or at least once were — the article likely didn’t resonate. It doesn’t even live up to the title’s claim of an explanation for why those in poverty “make terrible decisions.”

The fact is that the working poor do tend to make terrible financial decisions — and not just because they lack resources. The working poor think about money differently than other economic classes. I’d like to take a crack at explaining why that’s the case.
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Vatican PopePope Francis’ Apostolic Exhortation Evangelii Gaudium continues to stimulate conversation, especially in the arena of economics. According to Francis X. Rocca at the Catholic News Service, many are heralding the pope’s call for doing away with “an ‘economy of exclusion and inequality’ based on the ‘idolatry of money.’”

Sam Gregg, Acton’s Director of Research, weighed in on the pope’s economic viewpoint. (more…)

Last night on CNBC’s The Kudlow Report, PovertyCure director and Acton Research Fellow Michael Matheson Miller joined host Lawrence Kudlow and Rusty Reno, Editor of First Things magazine, to discuss the position of the Roman Catholic Church on global capitalism in light of Pope Francis’ Apostolic Exhortation ‘Evangelii Gaudium.’ The video is embedded below.

Acton Institute Director of Research Samuel Gregg has been busy on the interview circuit over the past few days as news organizations look for intelligent analysis of Evangelii Gaudium, Pope Francis’ Apostolic Exhortation that that was released last week. On Monday, the Wall Street Journal called upon Gregg to provide his thoughts on the economic content in the exhortation on Opinion Journal Live; we’ve embedded the video below.