Category: General

In addition to internal logical inconsistencies which raise serious concerns of long term economic sustainability regarding the Affordable Care Act (ACA), recently analyzed by John MacDhubhain, Robert Pear reports in the New York Times over the weekend how confusion over certain ambiguities in the law (ironically over the meaning of the word “affordable”) would end up hurting some of the people it is precisely designed to help: working class families.

Pear writes,

The new health care law is known as the Affordable Care Act. But Democrats in Congress and advocates for low-income people say coverage may be unaffordable for millions of Americans because of a cramped reading of the law by the administration and by the Internal Revenue Service in particular.

Under rules proposed by the service, some working-class families would be unable to afford family coverage offered by their employers, and yet they would not qualify for subsidies provided by the law.

Read more . . .

Blog author: dpahman
Tuesday, August 14, 2012
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I have written on several recent occasions about the role of incentives in education, both for teachers and for students (see here, here, and here). Yesterday, David Burkus, editor of LDRLB, wrote about a recent study by Harvard University economic researchers on the role of incentives in teacher performance. Interestingly, they found that incentives (such as bonus pay) are far more effective if given up front with the caution that they will need to be returned if the teacher’s performance is not up to par. When teachers regarded the bonuses as already their property, they fought far more effectively to protect them.

Burkus writes,

A total of 150 teachers were randomized into several groups, including a control group, a traditional pay-for-performance group, and another group given a $4,000 bonus up front and told it would be reduced in relation to their students’ performance. The results were as impressive as they were surprising. On average, the students taught by the upfront bonus group outperformed students with similar backgrounds by up to 10 percentage points.

One possible explanation for this effect is “loss aversion.” Simply put, we’re more motivated to protect assets that we already have than to attempt to gain more assets. Once we are given an object or sum of money, we begin to build psychological connections to it, picturing the ways we’ll enjoy owning it or remembering fondly the ways we’ve used it. Perhaps what was missing from the incentives equation was the subtle push provided by the thought of loss.

Read more . . .

Blog author: jcarter
Tuesday, August 14, 2012
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Jail a new church-state option for bishops?
Terry Mattingly

“I could see myself going to jail possibly at some point over the next 15 years, if God spares me, if I speak out,” the 61-year-old bishop told STV News.

The Market Is an Ecosystem
Joy Pullmann, Values & Capitalism

Farming, like a free market, is an ecosystem. No action a businessman takes is without consequences. My uncle, for one, knows crop farmers suffer when dairy farmers suffer, because both depend financially on exchanging their goods (crop farmers get money, dairy farmers get feed for their cows, which eventually becomes money).

Is This Really the Worst Economic Recovery Since the Depression?
Catherine Rampell, New York Times

Economists often assert that we are in the worst recovery since the Great Depression. Are we? Not technically, but it’s still unusually bad.

Casinos as the Bleak New Senior Citizen Center
Amy Ziettlow, The Atlantic

Are we turning a blind eye to a government-sponsored movement that creates false community, drains money, and undermines dignity for those most vulnerable among us?

Blog author: jcarter
Monday, August 13, 2012
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Obamacare Mandate Harms the Poor: A Case Study of Catholic Charities
Melanie Wilcox and Luciana Milano, Heritage Foundation

In order to be exempt from fines, Catholic Charities of D.C. would only be able to employ and serve Catholics. That stands in stark contrast with the organization’s mission.

The Images of Progressive Citizenship
Ted McAllister, Library of Law and Liberty

Progressives operate with a very modern almost Rousseauian anthropology in which they assume humans to be naturally good but corrupted by society. Understanding their anthropology and how Progressives conceive of the relationship among individuals, society, and government are essential to understanding both their objectives and their strategy.

Does The President Really Make A Big Difference In The Economy?
Dan Flaherty, CatholicVote

How realistic is it to think the policy differences between President Obama and Republican challenger Mitt Romney are really going to drastically affect all this one way or the other?

Does Wisdom Bring Happiness (or Vice Versa)?
Robert Wright, The Atlantic

What’s correlated with well-being, say Nisbett, Igor Grossman, and three other authors, isn’t reasoning ability in the abstract but rather “wise reasoning”–reasoning that is “pragmatic,” helping us “navigate important challenges in social life.”

Blog author: jcarter
Friday, August 10, 2012
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Private Debt Is Crippling the Economy
Anthony Randazzo, Reason

There won’t be a recovery until credit card and household debt levels come down.

For the Love of Country: Why We Should Tax Olympic Medalists
Alexis Hamilton, Values & Capitalism

While the Olympics have injected much excitement into the dwindling days of our summers, many media outlets have given significant coverage to what some might see as the most unexciting aspect of these international games: taxes.

Top Ten Books on Faith & Work
Hugh Whelchel, Institute for Faith, Work & Economics

Last week we recommended ten books for people beginning to explore economics. Economics needs context, however. Today I’d like to recommend ten books on integrating faith, work, and culture.

Poverty and Politics
Peter Wehner, Commentary

As the election nears — it is now less than 100 days away — the issue of poverty in America will hopefully play a somewhat more central role.

Last week, I commented on Grand Rapids Public Schools’ new attendance policy and Michigan’s tenure reform bill. To summarize, while applauding GR Public’s new policy as effectively incentivizing students to show up to class and take their studies more seriously, I was skeptical about MI’s new bill which ties teacher evaluations to student performance. In their article “Can Teacher Evaluation Improve Teaching” in the most recent issue of EducationNext, Eric S. Taylor and John H. Tyler share the results of their study of the unique teacher evaluation system of Cincinnati Public Schools. (more…)

People do not love markets,” says Pascal Boyer of the International Cognition & Culture Institute, “there is a lot of evidence for that.” Sadly, Boyer is right and I suspect he’s right about the cause too: People do not like markets because people seem not to understand much about market economics.

We don’t fully understand this antipathy, Boyer notes, because there hasn’t been much research on folk-economics, a study of “what makes people’s economic modules tick.” But I think Boyer has identified one of the key reasons why people tend to prefer government interventions to market-driven solutions:

(more…)

Blog author: jcarter
Thursday, August 9, 2012
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Libby A. Nelson at Inside Higher Education reports on the latest trend in clergy training:

Dual degrees for seminary students aren’t entirely new. For decades, some seminaries and their nearby or affiliated colleges have graduated students with masters’ degrees in both divinity and social work. The combination of a master’s degree in divinity with a master’s in business administration is newer, but growing, says Dan Aleshire, executive director of the Association of Theological Schools, an accrediting body.

In the past five years, programs that combine master’s degrees in divinity with business credentials have sprung up, Aleshire says. He sees two reasons: leadership studies have become more common as an academic field, and Christian ministry has expanded beyond the church into nonprofit organizations and social entrepreneurship — start-up businesses that try to serve a larger good.

Read more . . .

French President François Hollande has promised a 75% tax rate on those in his country who earn an annual salary above one million euros ($1.24 million). Not surprisingly, this number has struck fear into the hearts and wallets of quite a few of France’s top earners, including some who are contemplating leaving and taking their jobs with them. The New York Times has the story:

Many companies are studying contingency plans to move high-paid executives outside of France, according to consultants, lawyers, accountants and real estate agents — who are highly protective of their clients and decline to identify them by name. They say some executives and wealthy people have already packed up for destinations like Britain, Belgium, Switzerland and the United States, taking their taxable income with them.

They also know of companies — start-ups and multinationals alike — that are delaying plans to invest in France or to move employees or new hires here.

The potential tax increase threatens to handcuff “les Riches” and, ironically enough, undercut France’s prized notion of egalité, taking with it liberté and fraternité, the remainder of the country’s tripartite maxim. In Hollande’s France, these principles may not apply to the wealthy.

Of course, Hollande’s tax initiative is sure to have some beneficiaries. No, not the poor or the middle class. The real winners? Well, they live on the other side of the border. Also from the Times:

“It is a ridiculous proposal, but it’s great for us,” said Jean Dekerchove, the manager of Immobilièr Le Lion, a high-end real estate agency based in Brussels. Calls to his office have picked up in recent months, he said, as wealthy French citizens look to invest or simply move across the border amid worries about the latest tax.

“It’s a huge loss for France because people and businesses come to Belgium and bring their wealth with them,” Mr. Dekerchove said. “But we’re thrilled because they create jobs, they buy houses and spend money — and it’s our economy that profits.”

The entire story reminds me of a passage from Rev. Robert Sirico’s latest book, Defending the Free Market: The Moral Case for a Free Economy. In a chapter titled “The Idol of Equality,” Sirico addresses the unsustainable nature of simple redistribution. Instead, business development and job creation are essential–and lasting–tenets of economic growth. From the book:

When most people picture the 1 percent and their wealth, what comes to mind is designer clothing and jewelry, yachts and limousines, mansions and penthouses—all sorts of alluring and attention-grabbing luxuries. Luxuries so distracting, in fact, that we tend to lose sight of the fact that most of the wealth of the wealthiest is invested. It is put to work in the businesses they own and manage, and in stocks and other financial vehicles that provide the capital for countless other businesses. These are the businesses that provide the 99 percent with the goods, services, and employment that they regularly enjoy and often take for granted.

Whether it’s a big automotive plant or a small bakery on the corner, a microchip manufacturer or a family farm, all businesses that produce goods and employ people are owned by someone. It’s businesses that make up most of the wealth of the 1 percent. Confiscating that wealth and giving it to the other 99 percent would mean shifting much of that wealth from investment and production to consumption, since the poor and middle class consume a far higher percentage of their income than the wealthy do. This sudden shift from investment and production to consumption would demolish the infrastructure that makes jobs, goods, and services possible.

Hollande would be wise to read Defending the Free Market. Doing so might save his nation and preserve liberty, equality and brotherhood in the process.

Brett M. Decker, editorial page editor of The Washington Times, recently interviewed Rev. Robert Sirico, president and co-founder of The Acton Institute, in response to Rev. Sirico’s latest book, Defending the Free Market: The Moral Case for a Free Economy. In his answers, Rev. Sirico addresses the market’s moral potential as well as the present state of the nation. Excerpt:

Decker: Your new book is about the moral case for a free economy. What is the morality of the marketplace and how does it work? How does the market take care of the masses better than a government safety net?

Sirico: The morality of a market is rooted in the morality of the human person who is the center of that market. In precise terms, the market itself is neither moral nor immoral, but it becomes a vehicle for the moral and economic expression of the acting human person, who has the free will to choose good or bad.

When we speak of taking care of the masses, we usually mean taking care of their material needs (though there is much, much more to people than their material needs). The material needs of people are best met in societies that are prosperous, both in terms of the abundance of economic opportunities available to them and the amount of superfluous wealth that can be used generously to support the needs of those unable to provide for themselves. The one thing we know about markets from a wide array of economic studies is that the less taxed and regulated a society is, the more prosperous it is.

Entire interview here.