Category: Economics

President Lyndon Johnson, Kentucky, 1964

President Lyndon Johnson, Kentucky, 1964

This year marks the 50th anniversary of Lyndon B. Johnson’s “War on Poverty.” Nicholas Eberstadt, an economist at the American Enterprise Institute, has published a monograph entitled, The Great Society: The Triumph and The Tragedy at Fifty. Eberstadt calls Johnson’s vision for the war on poverty “the most ambitious call to date” in American political history. At the time of Johnson’s speech unveiling this “Great Society,” the United States had only one nation-wide social program, Social Security. Johnson wanted more:

The Great Society proposed to reach even further: to bring about wholesale renewal of our cities, beautification of our natural surroundings, vitalization of our educational system. All this, and much more—and the solutions to the many questions encountered in this great endeavor, we were told, would assuredly be found, since this undertaking would “assemble the best thought and the broadest knowledge from all over the world to find those answers for America.

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Henry Parsons Crowell

Henry Parsons Crowell

Over at the Kern Pastors Network, Owen Strachan uses the example of Quaker Oats founder Henry Parsons Crowell to demonstrate the level of stewardship Christians are called to.

Bringing his ingenuity and a variety of innovations to his company and the market at large, Crowell delivered value to his shareholders, employees, and customers. “But he didn’t stop there,” as Strachan notes, using the wealth he created not just to re-invest in material prosperity, but continuing to tithe around 70 percent of his earnings and invest in Christian education and missions.

Crowell “defied the way of the world,” Strachan argues, and in doing so, he illustrated how Christians ought not be bound either by poverty theologies or prosperity gospels, convenient though either may be:

Henry Parsons Crowell made a lot of money, but he didn’t make it for himself. He genuinely believed that he could serve God by using his entrepreneurial gifts to advance the gospel of Christ’s kingdom. There was a marvelous synergy in his life, in other words. His brilliant marketing wasn’t separate from his simple piety.

I want to be frank: some Christians might have a problem with all this talk about huge amounts of money. They might fundamentally distrust all money-making and embrace what’s sometimes called “poverty theology.” It’s certainly good to be on the alert about the temptation of riches. The love of money really does stimulate all kinds of evil desires and actions (1 Timothy 6:10). And the Bible condemns lusting after poverty or riches (Proverbs 30:8). It’s notable to us that Judas sold out Jesus not for fame and glory, but for a bag of money. What could be more evocative of the temptation of riches than that? (more…)

Repurposed library card catalog

Repurposed library card catalog

I am not an economist. Truth be told, I only took one class in economics as an undergrad. However, I’ve learned a lot in the past few years, and one of the things I’ve learned is that most people don’t understand economics.

Pascal-Emmanuel Gobry knows this as well, and explains it far better than I could. In today’s Forbes, Gobry breaks down the understanding of economics into two broad camps: the “productivist” view and the “creativist.” First, the productivist:

Violently compressed, the productivist view of the economy holds that an economy works because it gives people stuff to do and stuff to buy. The reason why an economy which hums along hums along is because it produces enough stuff and people have enough money to buy that stuff so that people buy stuff and that gives jobs to the people who produce stuff, and in turn the stuff that is produced makes people want to buy them. To the productivists, the key thing is to keep the machine running and, hopefully, make it run faster, and more efficiently. But, fundamentally, what makes the economy run is this consumerist dynamic.

This, Gobry says, is the way most people – even economists – understand economics. It’s right in the short-term, but flawed. This viewpoint holds that economics is merely an endless cycle of buying and selling. As long as there is products are made, bought and sold, everything should be okay. (more…)

milton_friedman2The Book: Milton Friedman: A concise guide to the ideas and influence of the free-market economist by Eamonn Butler

The Gist: As the subtitle suggests, this short book provides a concise overview of the ideas and influence of the late economist, Milton Friedman

The Quote: “[T]he supporters of tariffs treat it as self-evident that the creation of jobs is a desirable end, in and of itself, regardless of what the persons employed do. That is clearly wrong. If all we want are jobs, we can create any number—for example, have people dig holes and then fill them up again, or perform other useless tasks. Work is sometimes its own reward. Mostly, however, it is the price we pay to get the things we want. Our real objective is not just jobs but productive jobs–jobs that will mean more goods and services to consume.”

The Good: The book includes numerous direct quotes from Friedman . . .

The Blah: . . . but far too many of the quotes are taken from an interview in Playboy magazine rather than from Friedman’s own writings.

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Calvin_Coolidge_and_Israel_Moore_Foster“The Power of the Moral Law” is the title of an address delivered by Calvin Coolidge at the Community-Chest Dinner in Springfield, Massachusetts on October 11, 1921. Published in The Price of Freedom, the text is only available online through Google Books.

Coolidge’s main point in his remarks was to reinforce the truth that it is prosperity not grounded in a deeper meaning that threatens our American Republic. Displaying his conservative thought, he challenges materialism of government interventionists and reminds proponents of business and the market that material success alone is insufficient. True progress must have a deeper foundation.

There are many lines that stand out in his address, but perhaps few stand out more than this simple sentence: “Ideals and beliefs determine the whole course of society.” Currently, we see this playing out powerfully in our culture today. The ideals that have held our Western and American civilization intact for centuries have largely eroded. Ideals and commonly held standards, especially in the academy, are attacked as backwards and oppressive.
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stronger economyIs a “profit alone” mentality enough for a business or for a nation? If the economy is running well, should we bother to look any deeper, or just leave well enough alone?

Carly Andrews, at Aleteia, says profit alone isn’t good enough, based upon a presentation that professors Alberto Quadrio Curzio and Giovanni Marseguerra made at a recent Vatican conference. The pair spoke primarily about three parts of Catholic social teaching that they believe would help the global economy.

Examined first is the issue of subsidiarity. This is the teaching that says those closest to an issue or problem should be the ones to deal with it. For instance, local church food banks are best equipped to assess needs in their area, know where to get food, what types of food are best for their consumers, etc.

In a call for subsidiarity we therefore see a call – to some extent – for government decentralization, that is, a limited government, allowing for an increase in personal freedom and responsibility, which prof. Curzio and Marseguirra claim puts the “creativity of the person” into action, “stimulating the participation of social intermediary bodies, including communities, in the production of goods and services and constructing and aggregating in solidarity.”

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shutterstock_119092402-580x331In his latest column, David Brooks examines the limits of data and “objective knowledge” in guiding or directing our imaginations when it comes to solving social problems.

Using teenage pregnancy as an example, he notes that although it may be of some use to get a sense on the general drivers of certain phenomena, such information is, in the end, “insufficient for anyone seeking deep understanding”:

Unlike minnows, human beings don’t exist just as members of groups. We all know people whose lives are breathtakingly unpredictable: a Mormon leader who came out of the closet and became a gay dad; an investment banker who became a nun; a child with a wandering anthropologist mom who became president.

We all slip into the general patterns of psychology and sociology sometimes, but we aren’t captured by them. People live and get pregnant one by one, and each life and each pregnancy has its own unlikely story. To move the next rung up the ladder of understanding you have to dive into the tangle of individual lives. You have to enter the realm of fiction, biography and journalism.

For the solution, he points to Augustine:

[Augustine] came to believe that it take selfless love to truly know another person. Love is a form of knowing and being known. Affection motivates you to want to see everything about another. Empathy opens you up to absorb the good and the bad. Love impels you not just to observe, but to seek union — to think as another thinks and feel as another feels. (more…)

Terminator-2-Judgement-Day-posterI oppose implementing Skynet and increasing minimum wage laws for the same reason: to forestall the robots.

It’s probably inevitable that a T-1000 will return from the future to terminate John Connor. But there is still something we can do to prevent a TIOS from eliminating the cashier at your local McDonalds.

In Europe, McDonalds has ordered 7,000 TIOSs (Touch Interface Ordering Systems) to take food orders and payment. In America, Panera Bread will replace all of their cashiers with wage-free robots in all of their 1,800 nationwide locations by 2016. There is even a burger-making robot that can churn out 360 gourmet hamburgers per hour.

I, for one, welcome our new fast-food robot overlords. I’m just not ready for them yet.
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raphaelsanzio_healingofthelameman - CopyJohn Teevan’s recent profile of Bob Woodson and the Center for Neighborhood Enterprise (CNE) reminded me of a profoundly impactful tour I took of George Wythe High School in Richmond, Va., which was led by Mr. Woodson as a case study of CNE success.

The tour was part of a seminar with the DeVos Center for Religion and Civil Society, and was intended to showcase effective solutions to social problems. In this, it greatly succeeded, highlighting that any such solutions can only be effective insofar as they take into account the full needs and dreams of the human person.

The school had recently emerged from a season of heavy violence and crime, due in large part to its partnership with CNE’s Violence-Free Zone Initiative, which seeks to restore peace and trust to broken communities by equipping local schools with on-the-ground “Youth Advisors” and partnering with local organizations, churches, and law enforcement.

Rep. Steve Southerland, who also joined the tour, wrote a brief account of the trip, which includes a good summary of the initiative and how it’s benefited George Wythe:

This violence-reduction and high-risk student mentoring program prepares students to learn by equipping them through relationships with the skills and knowledge necessary to overcome violence. The Richmond public schools system has worked in conjunction with CNE to create the Violence-Free Zone. Youth advisors who are affiliated with the Richmond Outreach Center, a local church, and who have overcome similar challenges, work as hall monitors, mediators, character coaches, and trusted friends.  For the 2009-2010 school year, George Wythe reported a 26% decrease in fighting, a 68% decrease in truancy, and a 63% reduction in dropouts since the inception of the Violence-Free Zone program. (emphasis added)

Led by Woodson, we able to interact with several Youth Advisers and local pastors, each of whom poured out their hearts, telling numerous stories of reconciliation and restoration with students and explaining how, thanks to the people and programs now in place, many conflicts are being promptly defused while students see greater and greater levels of success and empowerment—spiritually, socially, academically, and beyond. (more…)

The gorilla-whale is back. And he’s here to stimulate the economy.

On Friday, theaters across the country will be debuting the fourth American remake of Godzilla (the name is a romanization of the original Japanese name “Gojira” — which is a combination of two Japanese words: gorira (‘gorilla’) and kujira (‘whale’). Over its opening weekend the film is projected to earn $78,000,000, and cumulative revenues of over $240,000,000. While that could be a generous stream of income for Hollywood, it’s a drop in the $17 trillion ocean that is the U.S. economy.

But what if instead of releasing the movie, the government were to convincingly lie to the American people about an imminent invasion by a 150 foot tall gorilla-whale? What would be the effect if the government said we must take action now to protect our way of life from the monster?

According to some liberal economists, it would lead to an economic boom. In defending President Obama’s stimulus proposal in 2011, Paul Krugman proposed a peculiar solution for economic recovery that is similar to an invasion by Godzilla:

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