Category: Economics

MallOfAmerica3Is the middle-class economically stagnant? And is “middle-class” a misnomer? Should we really be talking about the bottom of the economic pile? After all, isn’t the 1% controlling everything?

Cato Institute Senior Fellow Alan Reynolds says the government’s claim of middle-class stagnation is based on faulty statistics. In Monday’s Wall Street Journal, Reynolds quotes Sen. Elizabeth Warren (D., Mass.), speaking at an AFL-CIO conference: “Since 1980, guess how much of the growth in income the [bottom] 90% got? Nothing. None. Zero.”

Reynolds take on this?

Real personal consumption per person has tripled since 1968 and doubled since 1980, according to the BEA. Are all those shopping malls, big box stores, car dealers and restaurants catering to only the top 10%? The question answers itself. (more…)

the-corporationWhat makes a company great? To find the answer, Jim Collins’s 21-person research team (at his management research firm) spent five years reading and coding 6,000 articles, generating more than 2,000 pages of interview transcripts, and creating 384 megabytes of computer data. His research identified 11 companies that met the criteria for transforming from a “good company” to one that had achieved “greatness.” Collins wrote about these companies in his book, Good to Great, which became a massive bestseller, selling over four million copies.

But the companies themselves didn’t always fare as well as the book about them. Circuit City went bankrupt in 2009, Fannie Mae was involved in the home mortgage scandal and was delisted from the New York Stock Exchange in 2010. Wells Fargo had to receive a government bailout in 2008 to keep from shutting down. As economist Steven D. Levitt noted in 2008, the returns on those 11 companies was not so great: a portfolio of the “good to great” companies would have underperformed the S&P 500.

Collins’s book sold well (and continues to do so, 14 years later) in large part because Americans of all stripes have an almost religious belief in the almost unlimited power—for good or ill—of corporations. We like to think that companies know what they’re doing and can largely control their futures (and ours). This is part of what Megan McArdle refers to as “corporation theology“:
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Blog author: dpahman
Friday, February 27, 2015
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Yesterday the FCC reclassified Internet Service Providers (ISPs) as a telecommunications service under Title II of the Communications Act, with additional provisions from Title III and Section 706 of the Telecommunications Act of 1996. This was done for the purpose of ensuring net neutrality or open internet access, requiring ISPs to treat all data on the internet equally. Notably, yesterday’s Order also includes mobile broadband for the first time as well.

In a press release, the FCC claims,

Together Title II and Section 706 support clear rules of the road, providing the certainty needed for innovators and investors, and the competitive choices and freedom demanded by consumers, while not burdening broadband providers with anachronistic utility-style regulations such as rate regulation, tariffs or network sharing requirements.

I have expressed concerns in the past about the smattering of regulations available under Title II, far beyond what would be required for net neutrality. On the surface, the press release would seem to indicate that the recent Order was designed to attempt to prevent those further regulations from being available to the FCC: (more…)

patricia-arquette-oscars-acceptance-speech-w724During last night’s Oscar ceremony, Best Supporting Actress winner Patricia Arquette used her acceptance speech to rail against unfair pay for women:

To every women who gave birth to every taxpayer and citizen of this nation, we have fought for everybody else’s equal rights. It’s our time … to have wage equality once and for all and equal rights for women in the United States of America.

The wage equality that Arquette is referring to is the gender wage gap—the difference between male and female earnings expressed as a percentage of male earnings. Because she frames the issue as a matter of equal rights, Arquette presumably believes that the problem is caused by intentional discrimination.

The gender wage gap certainly exists, but there is considerable debate about the size of the gap and whether it is caused primary by discrimination or by other factors, such as education and work hours. Much of the confusion is caused by the use of misleading statistics by politically motivated groups. For example, last night the Department of Labor (DOL) posted on their Twitter account:
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In the following clip from the PovertyCure series, Doug Seebeck explains how U.S. agricultural subsidies have significant negative consequences both at home and abroad — misaligning human action, distorting market signals, and diminishing opportunities for the least of these.

Haiti used to be self-sufficient in rice. Now they get all their rice from the U.S. This is what we do to Africa. We subsidize our agriculture. We overproduce. Then we ship it as aid with a handshake, and we put them out of business. We disempower them. But you’re also putting the U.S. small farmer out of business. And it gets bigger and bigger and you’re squeezing out free enterprise….

How do I best love my neighbor in this rapidly integrating world…so that everybody has the ability to have what I have? It doesn’t mean we give it away. It means allowing them to succeed.

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The Assembly of Canonical Orthodox Bishops of North and Central America has published a new report on Orthodox Monastic Communities in the United States (here). The report contains a lot of great information (“great” for nerds like me, anyway), including a whole section entitled, “‘Monastic Economy:’ Ownership of Property and Sources of Income in US Orthodox Monasteries.”

According to the report,

In summary, the three most common sources of income in US Orthodox monasteries are:

  • Occasional private donations including bequests and offerings for performed sacraments (87% of all monastic communities mentioned this source of income);

  • Sale of religious items (except candles) that are not produced by monastery (52% of all monastic communities mentioned this source of income);

  • Production and sales of candles (24% of all monastic communities mentioned this source of income).

Thus, after private donations, the top two sources of income are through commerce: 52% sales of items not produced by the monastery and 24% candles produced by the monastery. Income from other items produced by monasteries, such as books, devotional items, and food items, was also significant. Our Merciful Saviour Russian Orthodox Monastery in Washington state, for example, lists sales of their “monastery blend” coffee as their primary source of income.

This does not come as a surprise to me.

The most recent volume (vol. 8, 2014) published by the Sophia Institute, of which I am a fellow, includes a paper by me entitled, “Markets and Monasticism: A Survey & Appraisal of Eastern Christian Monastic Enterprise.” While my paper is not a comprehensive history, it does include a section on modern Orthodox monasteries in the United States.

I write, (more…)

?????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????????Over the past 60+ years, Israel has emerged as an economic powerhouse despite all odds. With only 7.1 million people, no natural resources, and surrounded by enemies and constant threats, it has somehow managed to attract nearly $2 billion in venture capital. It produces more start-up companies than large countries like Japan, India, Korea, and the United Kingdom, and has more companies on the NASDAQ than any country other the United States. Given its range of challenges, how can this be?

In their book, Start-up Nation: The Story of Israel’s Economic Miracle, Dan Senor and Saul Singer set out to explore the question. Indeed, as countries across the world struggle to develop the human, cultural, and institutional capital necessary for a thriving economy, Israeli society appears to cultivate these features with ease.

What might the rest of us learn from such an example? “The West needs innovation,” the authors write. “Israel’s got it. Understanding where this entrepreneurial energy comes from, where it’s going, how to sustain it, and how other countries can learn from the quintessential start-up nation is a critical task for our times.”

The lessons are many, and throughout their book, Senor and Singer outline a host of competing theories and hypotheses. But of all the potential drivers, I was struck most by the role the nation’s military plays in cultivating Israeli culture and bolstering its unique ethos of innovation and entrepreneurship. As peace and prosperity have largely prevailed throughout much of the West (compared to most of human history), what “built-in” lessons of human existence might now need more of our attention? (more…)

Through Christian’s Library Press, the Acton Institute has published four tradition-specific primers on faith, work, and economics, including Baptist, WesleyanPentecostal, and Reformed perspectives. Each offers a distinct contribution to the subject, and when taken together provides a rich and coherent framework for Christian stewardship. The books are part of Acton’s growing Oikonomia Series.

primer-group1

This week, Acton and CLP will be giving away two complete sets of the series (that’s 4 books total for each winner!), including Chad Brand’s Flourishing FaithDavid Wright’s How God Makes the World a Better Place, Charlie Self’s Flourishing Churches and Communities, and John Bolt’s Economic Shalom.

The contest will end Friday night (February 13) at 11:59 p.m. To enter, use the interface below. To get started, all you need to enter is your email address! After that, there are five ways to enter, and each will increase your odds (with extra points for tweeting).

a Rafflecopter giveaway

Note: Due to certain constraints, print copies are only available to contestants who live North America. Winners who reside elsewhere will receive a digital copy.

flowers-saleWhen Christians think of the majesty of God’s handiwork we tend to think of the visible aspects of nature. We agree with King David that, “The heavens declare the glory of God; the skies proclaim the work of his hands” (Psalm 19:1). But there are intricate and beautiful aspects of God’s creative genius that we don’t often think about—or don’t think about as being created by God.

Take, for instance, the price system. As economist Alex Tabarrok says in the video below, “If it had been invented, the price system would be one of the most amazing creations of the human mind.” The price system is indeed an amazing creation—but of the divine mind. It’s one of God’s means of coordinating human activity for the purposes of human flourishing.

As with most good gifts given by God to humans, we are able to corrupt it and use it in ways that harm our neighbors. Yet for the most part, the price system is an ingenious method of communication that have been used to improve the human condition.

In this video, Tabbarrok explores the mystery and marvel of prices and discusses how the price system allows for people with dispersed knowledge and information to coordinate global economic activity.
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1.21411In the latest addition to Mike Rowe’s growing catalog of pointed Facebook responses, the former Dirty Jobs host tackles a question on the minimum wage, answering a man named “Darrell Paul,” who asks:

The federal minimum wage is $7.25 and hour. A lot of people think it should be raised to $10.10. Seattle now pays $15 an hour, and the The Freedom Socialist Party is demanding a $20 living wage for every working person. What do you think about the minimum wage? How much do you think a Big Mac will cost if McDonald’s had to pay all their employees $20 an hour?

Rowe begins by recounting a job he had working at a movie theater for $2.90 per hour (the minimum wage in 1979). He served his customers, learned a host of new skills, and received several promotions in due course. Eventually, he decided to move on, pursuing areas closer to his vocational aspirations.

He worked. He learned. He launched.

Turning back to the present (and future), Rowe is concerned about the ways various labor policies have prodded many business owners to innovate ever-closer to full-blown automation, leading to ever-fewer opportunities for unskilled workers. “My job as an usher [at the theater] was the first rung on a long ladder of work that lead me to where I am today,” Rowe writes. “But what if that rung wasn’t there?” (more…)