Category: Economics

Joe Carter
posted by on Wednesday, April 10, 2013

“Crime has been in decline,” says Acton Research Fellow Jonathan Witt, in an article for The American Spectator, “but current government policies are bound to reverse this trend.”

Against the backdrop of sluggish growth and high unemployment, one bright spot has been declining crime rates, with levels in the United States now about half what they were 20 years ago. This gradual decline holds true even in the perennially high-risk demographic of young men, suggesting it isn’t merely a knock-on effect of an aging population. That’s the good news.

Read more on Crime and the Nanny State…

The best show on TV over the past five years has, in my not-so-humble-opinion, been AMC’s Breaking Bad. This is one over-hyped show that lives up to all of it (and more). .

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While the on-air sage of Walter White concludes this summer, Breaking Bad‘s pop-culture legacy may take a back-seat to it’s legislative and fiscal ones.

From The Hollywood Reporter:

New Mexico Gov. Susana Martinez signed into law Thursday the state’s “Breaking Bad” bill, which will increase subsidies on film and TV productions shot in the state now famous for the AMC drama.

The law increases New Mexico’s rebate for series television production to 30 percent of a producer’s total qualified spend in the state. Feature films will get 30 percent back on resident labor if using a qualified production facility. They will also get 25 percent back on all other expenses. In addition, a roll-over of $10 million in unused credits per fiscal year will be allowed.

The news comes after Martinez, a Republican who previously has tried to rein in production subsidies, vetoed the bill March 15. The state previously offered a 25 percent tax refund on qualifying productions, with a cap of $50 million per year. Martinez put the cap in place in 2011, with members of the film and TV industry blaming it for a drop in New Mexico productions.

As a recent transplant to Los Angeles with many friends currently working at various levels of the entertainment industry, I’ve seen and heard about the effects of studios taking their film and television projects to other states (and countries) first-hand. Read more on New Mexico Wisely Breaks With Bad California Tax Policies…

Marc Vander Maas
posted by on Monday, April 8, 2013

On October 5, 2011, Acton welcomed John Blundell, Distinguished Senior Fellow at the Institute of Economic Affairs, to deliver a lecture as part of the 2011 Acton Lecture Series. His address was entitled “Lessons from Margaret Thatcher,” and provided insight into the Iron Lady from a man who had known Thatcher well before she became the Prime Minister of Great Britain. You can watch his lecture below.

Read more on Video: John Blundell on Thatcher…

marriage_moneyFrom an economics perspective both getting a college degree and getting married are beneficial for one’s earning potential. So why do economists promote the college wage premium while downplaying or ignoring the marriage wage premium? As Pascal-Emmanuel Gobry says,

In contemporary societies, there is a strong college wage premium. That is to say, people who go to college make more money on average than people who don’t. While a minority of economists (including Cowen) have questioned why this premium should exist, the majority of economists generally take the existence of this college wage premium to mean that college is good and important, that more people should go to college, and that public policy has some role to play in promoting and subsidizing college attendance. I would bet a goodly sum of money that if you picked at random ten tenured economists from top-20 economics departments, and asked them to list what an 18-year-old should do to increase his chances of getting high wages, a majority would say “go to college.”

There also exists a marriage wage premium, which is roughly as significant and as consistent as the college wage premium. To say that the marriage wage premium doesn’t get the same amount of attention is an understatement. Economists recoil at the idea of praising marriage and supporting public policies that increase marriage. They are much more likely to dismiss the marriage wage premium as reflecting selection bias (it’s not that marriage makes people earn more money, it’s that people who would have earned more money anyway tend to get married) or intone that “correlation is not causation”–criticisms that apply equally to analyses of the college wage premium. I would bet a goodly sum of money that if you picked at random ten tenured economists from top-20 economics departments, and asked them to list what an 18-year-old should do to increase his chances of getting high wages, none of them would say “get married and stay married”–even though the data on the marriage wage premium supports this conclusion to the same extent as it does going to college.

Gobry posits that the reason is bias: economists have an education bias because to become an economist requires numerous years of higher education and they have a liberal-cosmopolitan bias against government encouraging people to make intimate choices.
Read more on Why Do Economists Urge College But Not Marriage?…

Sarah Stanley
posted by on Thursday, April 4, 2013

Connecting CommunitiesA recent report by the United Nations states that out of the world’s seven billion people, six billion have a mobile phone, but only 4.5 billion have a modern toilet. In India, there are almost 900 million cell phone users, but nearly 70 percent of the population doesn’t have access to “proper sanitation.” Jan Eliasson, the UN Deputy Secretary General has called this a “‘silent disaster’ that reflects the extreme poverty and huge inequalities in world today.”

Despite the lack of sanitation, most people are able to afford a mobile phone with a wide range available for [$15] or less and the price of calls reducing from [15c] a minute to [3c] a minute in the last decade.

This report focuses on the negative: the lack of sanitation for those in abject poverty, but it fails to note the extraordinary fact that people living in poverty have access to a device that was, until recently, a luxury item for wealthy Americans. Tim Worstall, a contributor on Forbes.com, addresses this report in a recent article:

It’s possible to be a little cynical about this phones versus thrones number though. Actual flush toilets aren’t in fact the problem. What is the provision of water to flush them and a sewage system to flush them into. Both of which are largely government provided. While mobile phone systems are largely private company provided. Whether you want to call it the lust for profit or the greater efficiency of the private sector, it won’t surprise the more right leaning of us that phones do have a greater market reach than toilets.

Andreas Widmer, president of The Carpenter’s Fund in Switzerland, has spoken a great deal about small businesses, aid, and investing in Africa. In an interview with PovertyCure, he explains causes of poverty: Read more on Cell Phones, Microfinance, and Poverty…

Economists did not need psychology to tell them that people can act irrationally and unjustly, says Michael Hendrix. They just needed to listen to theologians:

Why don’t we study the links between the two fields? Both economists and theologians operate on the basis of certain fundamental beliefs on the nature of humanity. They are subjects under the sway of irrationality. They are both, as Michael Jinkins put it, “in the business of constructing belief systems based on faith assumptions, and both of us are subject to irrational forces.”

Read more on Why Economists Should Learn From Theologians…

There is much talk about raising minimum wage, even to the absurd rate of $22 per hour. President Obama has promised an increase to $9 per hour. Some small business owners, feeling the pinch of these raising wages, are turning to technology to solve their economic issues.

Read more on Raising Minimum Wage Means More Jobs … For Technology…

I was thinking about just this thing after reading an opinion piece in today’s Detroit News from yet another technocrat who thinks he’s got a solution to the city’s deep, decades-old problems. His plan, dressed up with a lot of happy talk about building “vibrant central cities,” defaults to (surprise) convincing Michigan taxpayers that they should fund “local services” for Detroiters. This sort of abstract theorizing, divorced from political and public policy reality, always defaults to more taxes, bigger government and “public-private partnerships” led by corporate execs and teams of technocrats. This has been going on for close to 50 years in Detroit.

The writer of this article, Lou Glazer of the nonprofit Michigan Future, Inc., says the city, and places like Flint, Grand Rapids, Lansing and Kalamazoo (full disclosure: I’m from Pontiac) need new “delivery systems” for services. And light rail and bike paths. “If Michigan will not reinvest in cities, then there needs to be some new system of municipal finance put in place,” he writes. Yes, investment. Nowhere, however, amid all the talk of growing the city with “young, mobile talent” does he suggest that there might be some people in Detroit with new ideas about how to come to grips with the city’s problems. Or do they all lack what it takes to turn Motown into a “talent magnet,” as he puts it. Read more on Why Technocrats Should Stay Out Of Politics…

Blurring the distinction between religious faith and totally unrelated political activism has attained new levels of absurdity during the 2013 proxy resolution voting season.

One needs look no further than the network neutrality proxy resolutions submitted to AT&T Inc. by a host of clergy and religious organizations for evidence. These groups assert that net neutrality – described in their resolution as “open Internet policies” – “help drive the economy, encourage innovation and reward investors” when nothing could be further from the truth on all three counts.

Instead, the only groups advocating for net neutrality are left-of-center organizations who wish to shackle the profitability of Internet providers and stifle the growth of what has become one-sixth of the nation’s economy over the past 20 years. Joining these organizations with the AT&T proxy resolutions are the following Interfaith Council of Corporate Responsibility members:

  • Benedictine Sisters of Mount St. Scholastica, Rose Marie Stallbaumer, OSB;
  • Trillium Asset Management Corporation, Jonas Kron;
  • Benedictine Sisters of Virginia, Sr. Henry Marie Zimmermann, OSB;
  • Christus Health, Delia Foster;
  • Congregation of the Sisters of Charity of the Incarnate Word, San Antonio, Carolyn Psencik;
  • Nathan Cummings Foundation, Laura Shaffer Campos;
  • Congregation of Benedictine Sisters, Boerne TX, Sr. Susan Mika, OSB.

The resolution filed by these groups reads: “AT&T expects mobile data traffic to grow more than eight times from 2011 levels.

“A critical factor in this growth is the open (non-discriminatory) architecture of the Internet. Non-discrimination principles are commonly referred to as ‘network neutrality’ and seek to ensure equal access and non-discriminatory treatment for all content.”

Keep in mind that Comcast sued the Federal Communications Commission over net neutrality regulations in 2010 – and won in a unanimous decision by the three judges on the U.S. Court of Appeals for the District of Columbia. Read more on ICCR Proxy Resolutions Back Net Neutrality…

Last night on Real News on The Blaze TV, Acton Institute Director of Research Samuel Gregg joined the panel to add his analysis of the current financial crisis in the nation of Cyprus, and the potential impacts that this crisis could have for other European Union nations that are currently trying to deal with financial issues of their own.

Read more on Video: Samuel Gregg on Cyprus and the EU…

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